ABSTRACT
Hong Kong: see Lin, “On saleable area” (2013) 29 Const LJ 284, and is also the subject of at least one Singaporean judgment: Yap Boon Keng Sonny v Pacific Prince International Pte Ltd [2008] SGHC 161 at [122]–[129], per Judith Prakash J). The position may be different where a person agrees not to provide a product but to maintain it so that it is “defect free”. A maintenance contract to that effect will require the contractor to ensure that the product in question is functional and sufficiently operative, which is different from requiring the contractor to ensure that the product is kept in “brand new” condition: see Kone Elevator (HK) Ltd v Citybase Property Management Ltd [2012] HKCFI 1022 at [44]–[50], per Mr Recorder H Wong SC. 7 However, the fact that a contractor’s works are not “defective” for the purposes of a construction contract, because the contractor has fulfilled his contractual obligations, does not mean that those works will be treated as adequate for all purposes. Works may comply with a contract, yet fail to comply, eg, with building or planning standards and regulations. In such cases the works may be regarded as “defective” for the purposes of those standards or regulations, and certain consequences may flow from that, eg the work may be condemned by the relevant building or planning authority, and ordered to be re-done in compliance with the applicable standard or regulation. 8 As in Lynch v Thorne [1956] 1 All ER 744, where a house was found not to be defective where the external walls were susceptible to water penetration. The builder had constructed the walls in accordance with the agreed design, using good materials and good workmanship. The position may well be different where the contractor has assumed responsibility for the design or adequacy of the structure. 9 Indeed, it is substantially for this reason that if works are damaged by peril or accident, this will usually entitle a contractor and/or the owner to an indemnity under the contractor’s all risks policy of insurance, whereas defective works are not covered by such insurance, and must be insured separately: see Skanska Construction Ltd v Egger (Barony) Ltd [2002] BLR 236. More generally (ie, leaving aside any agreed allocation of contractual risk for accidental damage to the works), where a contractor performs its works in accordance with the applicable contract, and due to conduct for which the owner is responsible the works are damaged or destroyed, the owner will be liable to compensate the contractor for the cost of reinstating the works, and any associated losses: see Richardson v Dumfriesshire Road Trustees (1890) 17 R 805 [Court of Session].
