Global Customs & Forwarding Limited (formerly known as Loha Customs and Forwarding Ltd) v Ping Siong International Pte. Ltd.

• Jurisdiction: Singapore
• Judge: Lim Mei Yee Elaine
• Judgment Date: 19 June 2023
• Neutral Citation: [2023] SGDC 117
• Court: District Court (Singapore)
• Docket Number: District Court Suit No 8 of 2020
• Hearing Date: 23 February 2023,29 May 2023
• Citation: [2023] SGDC 117
• Year: 2023
• Plaintiff Counsel: Rakesh Pokkan Vasu, Winnifred Gomez (Gomez & Vasu LLC)
• Defendant Counsel: Koh Kok Kwang, Kenii Takashima (CTLC Law Corporation)
• Subject Matter: Contract,Implication of terms in fact,Unjust enrichment,Failure of basis
• Published date: 10 November 2023

District Judge Lim Mei Yee Elaine:

In this Suit, the plaintiff seeks the return of partial payments totalling US$139,335 which it had made to the defendant pursuant to an agreement between the parties for the sale and purchase of two sidelifters.

After considering the pleadings, evidence and submissions of the parties, I dismiss the plaintiff’s claim. These are the reasons for my decision.

Background Facts

The plaintiff is a company incorporated in Papua New Guinea (“PNG”). The defendant is an exempt private company incorporated in Singapore.

At all material times, the plaintiff was represented by its director and sole shareholder, Mr Harupa Peke (“Mr Peke”) and the defendant, by its director and shareholder, Mr Koh Han Xiong (“Mr Koh”).

In or around November 2014, the parties entered into an agreement under which the plaintiff agreed to purchase a 20’ sidelifter and a 20’/40’ sidelifter (collectively, the “Sidelifters”) from the defendant at a total price of US$344,000 (the “Agreement”).¹ For context, a sidelifter is a specialised semi-trailer used to load and/or unload containers via a pair of hydraulic-powered cranes mounted at each end of the vehicle chassis. It consists of two main components: the cranes and the trailer.²

The following are the material terms of the Agreement:³ the plaintiff shall make an initial payment of 30% of the purchase price of the Sidelifters (i.e., US$103,200) to the defendant (the “30% Payment”); the plaintiff shall pay the balance 70% of the purchase price of the Sidelifters (i.e., US$240,800) to the defendant, prior to delivery of the Sidelifters. In other words, the plaintiff had to make full payment of the purchase price of the Sidelifters before the defendant delivers them⁴; the Sidelifters were to be delivered by the defendant to Port Moresby, PNG, within three months from the date of the Agreement.

These terms are set out in the Sales Quotation no. PSI/S14/LCF/2 dated 7 November 2014 (the “Quotation”) which was issued via email by Mr Koh to Mr Peke that day,⁵ save that the “50% telegraphic transfer deposit” stipulated in the Quotation was reduced to 30% of the purchase price by the parties’ agreement later that month.⁶

From December 2014 to May 2015, the plaintiff made eight partial payments to the defendant totalling US$139,335 towards the purchase price of the Sidelifters (the “Partial Payments”).⁷

By 5 March 2015, the Sidelifters were ready for delivery to the plaintiff.⁸ However, the plaintiff faced difficulties in making full payment of the balance purchase price to the defendant due to circumstances beyond its control (see [70] below for more details). Thus, in late May 2015, the parties agreed via email that the defendant could sell the Sidelifters which had been manufactured, and that upon full payment being made by the plaintiff, the defendant would then begin manufacturing a new set of Sidelifters for delivery to the plaintiff. The defendant subsequently sold the Sidelifters to third parties.⁹

From April 2016 to December 2016, the plaintiff made further payments totalling US$192,873 to two Malaysian companies, Sri Monee Venture and My World Resources (the “Malaysian Companies”), under the belief that it was doing so on the defendant’s instructions emanating from emails purportedly issued by Mr Koh from kpmsotor@yahoo.com.sg and that the Malaysian Companies were receiving the payments for and on behalf of the defendant for the Agreement.¹⁰

On 14 February 2017, Mr Peke forwarded to Mr Koh’s email account kpsmotor@singnet.com.sg, a chain of email correspondence exchanged between Mr Peke and a party purporting to be Mr Koh who was using the email account kpmsotor@yahoo.com.sg. Upon receipt of that email, Mr Koh replied on the same day, advising Mr Peke to contact the plaintiff’s bank to try to retrieve the monies paid to the Malaysian Companies and stating that all the forwarded correspondence had not been made from Mr Koh’s company email account and he did not know until then that the parties had been communicating with the wrong email accounts.¹¹

Between mid-February 2017 and March 2017, the parties and/or their solicitors exchanged various emails and letters which culminated in the plaintiff’s demand for the return of the Partial Payments. Mr Peke also made police reports in Singapore and Malaysia against Mr Koh, alleging that he had been cheated by Mr Koh. The stated basis of these allegations was that: the plaintiff had made the 30% Payment, and nearly the full amount of the balance 70% to the Malaysian Companies on Mr Koh’s instructions; however, the plaintiff still had not received the Sidelifters, and Mr Koh was now claiming that a fraudster had created a fake email address kpmsotor@yahoo.com.sg to defraud the plaintiff into making payments to the Malaysian Companies.¹²

The parties’ cases

The plaintiff brought two causes of action for the return of the Part Payments.

The first cause of action hinges on the existence of an alleged term of the Agreement, implied by way of business efficacy, that:¹³

in the event that the defendant does not receive full payment from the plaintiff for the 20’ Sidelifter and/or the 20’/40’ Sidelifter within reasonable time, the defendant shall not be entitled to retain any partial payments made by the plaintiff to the defendant in relation to the same and the defendant shall be liable to refund to the plaintiff within a reasonable time any said partial payments received without delivering either the 20’ Sidelifter and/or the 20’/40’ Sidelifter.

(the “Alleged Term”)

The plaintiff’s case is that the defendant had committed a repudiatory breach of the Alleged Term in refusing to return the Part Payments to the plaintiff even though it did not deliver the Sidelifters to the plaintiff, and that the plaintiff had accepted the repudiation by way of its solicitors’ letter to the defendant’s solicitors dated 13 March 2017. As a result of the repudiation, the plaintiff suffered loss in the amount of the Part Payments.¹⁴

The second cause of action is in unjust enrichment. The plaintiff’s case is that the defendant has been enriched at the plaintiff’s expense as it has received the Part Payments, and that the enrichment is unjust as there was a total failure of basis. Such failure laid in the fact that the defendant had acted in repudiatory breach of the Agreement by breaching the Alleged Term.¹⁵

The defendant denies liability for the plaintiff’s claim on the following grounds.

First, there is no basis to imply the Alleged Term into the Agreement. As part of the Agreement, the parties had orally agreed in or around November 2014 that the first payment would be 30% of the purchase price upon confirmation of the order and that the remaining 70% of the purchase price would be paid before the order was shipped out. In this regard, it was agreed and/or understood by the parties that: the first payment of 30% of the purchase price was required as the defendant would commit resources towards production of the goods to be supplied, and that upon receipt of such payment as a deposit, the defendant would begin production of the goods; and the balance 70% was to be paid upon completion of manufacturing, before delivery of the goods was to be effected.

Hence, the appropriate term to be implied into the Agreement is not the Alleged Term, but instead the following term:¹⁶

i) In the event of the Agreement being performed, the part payments would be taken into account as part of the purchase price; and ii) In the event that the Agreement was not performed, the part payments would remain the property of the defendant.

As the Alleged Term cannot be implied into the Agreement, there can be no breach of the said term resulting in repudiation of the Agreement. To-date, the Agreement remains valid and subsisting. The defendant was and is at all material times ready and willing to perform its obligations under the Agreement. It is the plaintiff who has breached the Agreement by failing to pay the full purchase price of the Sidelifters.¹⁷

Second, there is no unjust enrichment based on total failure of basis, as the Alleged Term does not exist and the defendant is not obliged to deliver the Sidelifters until full payment has been made.¹⁸

Further or alternatively, if it is held that the Agreement is rescinded, the defendant has suffered losses of approximately S$332,826 as a result of the plaintiff’s breach, being the profit that it would have earned had the plaintiff performed its obligations under the Agreement. The defendant is entitled to set off such losses against any amounts claimed by the plaintiff.¹⁹

The trial of this Suit was held on 23 February 2023. The witnesses who testified at the trial were Mr Peke for the plaintiff, and Mr Koh for the defendant.

Issues to be determined

At the conclusion of the trial, the parties agreed that there are four issues to be determined:²⁰ First, whether the Alleged Term should be implied into the Agreement; Second, if the Alleged Term is implied into the Agreement, whether it has been breached and whether the breach amounts to repudiation of the Agreement; Third, whether the plaintiff has made out its claim in unjust enrichment on account of a total failure of basis; Finally, whether the defendant is entitled to set off its loss of profit under the Agreement against any amounts awarded to the plaintiff and if so, whether it has proven the alleged quantum of profit.

For completeness, I note that it is disputed: whether the parties had, in or around mid-April 2015, agreed to a US$5,000 discount on the purchase price of the Sidelifters; and whether the plaintiff’s payments to the Malaysian Companies were made on the defendant’s instructions and received by the defendant.

However, the parties agreed that it is not necessary for me to decide these two issues for the purposes of adjudicating the...