CHAN TAN & PARTNERS ISSUE 2 OF 1995 NO.

1 COLOMBO COURT #09-26/27 SINGAPORE 179742

Insurance - clause in sub-contract required for the insurance clause was that in the event of damage
plaintiffs to "provide insurance for the beam, all to the crane, P would recover his loss from the insurance
equipments, machineries and personnel" - claim by moneys and in that event there would be no further claim
plaintiffs against the defendants in negligence, and against D. The insurance clause did not seek to exempt
breach and repudiation of contract - defence that D from liability but stated how the parties agreed to deal
because of the insurance clause - the plaintiffs were with such liability. In coming to its decision the Court
not entitled to pursue claim against defendants for relied upon the following cases :Greenwood Shopping
damage to the equipment Plaza Ltd v. Neil J. Buchanan Ltd (1980) 99 DLR (3d)
289, Eaton Co Ltd v. Smith (1977) 92 DLR (3d) 425
Walter Wright Mammoet (Singapore) Pte Ltd v. and Mark Rowlands Ltd v. Berni Inns Ltd [1986] QB
Resources Development Corp Pte Ltd [1994] 3 211) where the courts had to construe the effect of a
SLR 121 similar insurance clause in lease agreements in which
either the lessor or lessee covenanted to insure the
In this case, the Defendants (D) appointed the premises against fire and other risks. The Court however
Plaintiffs ( P) as their sub-contractors to lift and distinguished the case from cases where the insurance
position a number of concrete viaduct beams. It was a clause is a contract at large.
term in Defendants' letter of award that P was required
to provide insurance for their "beam, all equipments, EDITORIAL COMMENT
machineries and personnel" ("the insurance clause").
During lifting operations, damage was caused to the The Plaintiffs have appealed against the Court's decision
boom and the main body of P's crane due to the to the Court of Appeal. In the light of the above decision
subsidence of the ground under the crane. P was and pending the outcome of the appeal, it would appear
compensated by their insurers who became subrogated that the inclusion of a similar insurance clause in a
to P's rights against D. P commenced an action against contract would effectively prevent the party (or his
D for the sum of $1,019,291.00 based on negligence insurers) whose equipment or property was damaged
and/or breach and repudiation of contract. One of the from claiming against the other party notwithstanding that
defences raised by D was that by reason of the the other party may be liable for the loss. This assumes
insurance clause in the contract, P was not entitled to payment of the insurance monies by the insurers.
pursue their claim against D. The parties sought a However, on the above decision, the innocent party would
preliminary ruling of law by the Court on the meaning still be able to claim against the other party for loss of
and effect of the insurance clause. For this purpose, it profits, prolongation costs, consequential losses and all
was assumed that D had not adequately prepared, other losses not covered under the insurance policy since
compacted and levelled the ground and was thereby the insurance clause is not intended to serve as an
liable for the subsidence of the ground and accordingly exclusion clause under the contract. In the situation where
was in breach of contract. the insurance company repudiates liability under the
policy and the innocent party is unable to recover the
The Court (per Selvam J.) held that on the assumption insurance moneys, would he still be entitled to pursue his
that D were in breach of contract and had caused the claim against the other party? The key to the
damage to the crane, the insurance requirement in the interpretation of the insurance clause is to determine
contract disentitled P (and their insurers) from whether the clause was intended to benefit one or both the
proceeding against D for the alleged breach of contract. contracting parties. If it was for the benefit of both the
The obligation to procure insurance in respect of the parties, then it would appear this clause would preclude
crane and beam was an integral term of the contract. a claim against the other party for damages to equipment
This was one of the items for which D had paid the or property after compensation has been received from
consideration of $48,000. The premium for the the insurance company under the policy. Accordingly, it
insurance to be secured by P was included in the total may be prudent to draft an insurance clause to
consideration paid by D. The insurance clause was not specifically provide for the parties' intention rather than
for the benefit of P alone but for D as well. It further let the Court decide what was the intention of the parties
held that the intention of the parties in providing under the contract.
 Conference Announcements - Call for Papers

The built environment is a significant contributor to the

We have received the following notices/ consumption of resources and production of waste
announcements by e-mail over the internet from the products. The selection of appropriate construction
organisers: materials, methods, processes and products at the design
stage can reduce the adverse impacts of development on
W55 7th International Symposium on Building the natural environment. Papers and case studies are
Economics, Zagreb, Croatia, 4-8 September 1996 invited which address practical approaches to benign
Abstracts are called for before April 1995 to theCIB products and building design.
W55 7th International Symposium on Building
Economics, Zagreb, Croatia, 4-8 September 1996 (b) Social impacts of design.
organized by Faculty of Civil Engineering, University There is a growing wealth of literature on environmental
of Zagreb Department of Construction Management design as a technical problem. However, little attention
Fax: +385 1416 621 has been paid to the relationship between the design of
the built environment and social transformation. Papers
For more information you may contact the Coordinator are invited which explore how environmental design
of CIB W55, Mr. Dan Ove Pedersen, Denmark, shapes the relationships between, and attitudes towards,
E-mail: <dop@sbi.dk> humans, the community and the natural environment.

Title of the 7th International Symposium is: Objectives

The conference will create the opportunity to generate
Economic Management of Innovation, Productivity and action groups and networks to focus on various aspects of
Quality in Construction redesigning the built environment.

The subject areas are: Publication

Building Economic Methods The conference papers will be published to fill a
Evaluation Methods in Construction significant gap in the literature concerning social change
Design Economics and sustainable development. In addition, some of these
Building Cycles and the Construction Industry papers will be selected for publication in a book to be
Building Market Forecasting edited by the Faculty.
Environmental Economics of Construction
International Building Market Final papers should be submitted by August 31, 1995 to
Central Europe Construction Industry and Investment be considered for publication. The address for submission
Strategies of the abstract is:
Management of Construction in Transition Economics
Att: Dr. Janis Birkeland
Catalyst '95, The Design & Environment Conference Centre for Environmental Philosophy, Planning and
Design, University of Canberra,
Rethinking the Built Environment P.O. Box 1, Belconnen ACT 2616 Australia,
Where: Faculty of Environmental Design, University Phone: (06)2012693; Fax: (06) 201 5034. International
of Canberra, Belconnen, prefix: (616)
ACT, Australia, 2616 E-mail: jlb@design.canberra.edu.au.
When: 13-16 July 1995
Readers with any questions or comments on the contents
Content: of this issue are welcomed to write to us or send us an e-
There are two fundamental areas to be addressed by mail to our internet address at chantan@singnet.com.sg
this conference:

(a) Ecological impacts of design.