Abani Trading Pte Ltd v PT Delta Karina Mandiri and Another

• Jurisdiction: Singapore
• Judgment Date: 12 October 2001
• Date: 12 October 2001
• Docket Number: Suit No 587 of 2000
• Court: High Court (Singapore)

Abani Trading Pte Ltd

Plaintiff

and

P T Delta Karina Mandiri and another

Defendant

[2001] SGHC 307

Kan Ting Chiu J

Suit No 587 of 2000

High Court

Damages–Assessment–Inducement and procurement of breach of charterparty–Whether loss incurred by claimant unavoidable–Conversion–Market value of cargo at time and place of conversion–Tort–Conversion–Constituent elements–Cement loaded on vessel pursuant to sale to claimant on fob terms–Second defendant taking over cement together with vessel when charterparty cancelled–Whether second defendant's actions amounted to conversion–Tort–Inducement of breach of contract–Constituent elements–No direct evidence of inducement–Whether inducement could be inferred from relevant facts

The plaintiff (“Abani”) purchased cement from an Indonesian company (“Indo Energy”) under a contract dated 16 June 2000. It had earlier chartered a vessel on 14 June from the first defendants (“Delta”) to ship the cement to a buyer in Madagascar. Abani also negotiated for the purchase of cement from the second defendant (“Poh Fang”) but no agreement eventually materialised.

On 14 July, Abani received a notice of readiness (“Nor”) that the vessel was ready for loading from both Delta and its agent (“Shoreline”). On the same day, Abani paid freight in advance and also agreed to pay a further sum on 20 July if 50% of the cement was loaded by that day.

On 21 July the advance freight Abani paid was also refunded to it by Delta, with Poh Fang providing the funds. On 23 July, Delta informed Abani that the charterparty was cancelled for non-payment. Poh Fang also took over the charter of the vessel and the cement on board.

As a result, Abani was unable to meet its own contractual obligations. It claimed against Poh Fang damages for the inducement and procurement of the breach of the charterparty, and conversion of the cement. Poh Fang contended that it contracted to buy cement from Indo Energy on 7 July for sale in Madagascar, and had chartered the vessel from Delta on 12 July.

Held, allowing the claim:

(1) There was no agreement between Poh Fang and Indo Energy for the purchase of cement on 7 July. The documentary evidence showed that the agreement was only concluded on 29 July: at [26].

(2) Poh Fang did not charter the vessel on 12 July. Its letter of 21 July to Indo Energy showed that it secured the charterparty only on that date. Furthermore, the NOR issued by Delta and Shoreline on 14 July showed that Delta recognised Abani, and not Poh Fang, as the charterer: at [27] to [29].

(3) The basis of the tort of inducing a breach of contract was the knowing procurement or inducement of a third party to break his contract to the detriment of the other contracting party without reasonable justification or excuse. However, inducement per se was not actionable, and the plaintiff must satisfy two further requirements in order to found a sustainable cause of action, viz,that the procurer (a) acted with the requisite knowledge of the existence of the contract, although knowledge of the precise terms was not necessary; and (b) intended to interfere with its performance: at [34] and [35].

(4) Direct evidence of inducement need not be shown in every case. Where one party sets out to subvert another's contract, it may not leave direct evidence of its actions. In such a situation, all the relevant facts should be considered, and where appropriate, inducement can be inferred. Although there was no direct evidence that Poh Fang induced Delta to cancel the charterparty in the present case, inducement was inferred on a balance of probabilities. There is clear evidence that Poh Fang and Delta were acting together when Delta terminated Abani's charterparty: at [33] and [36].

(5) It was also clear that Poh Fang knew of the Abani's charterparty and intended to interfere with its performance. Poh Fang was unhappy that Abani would be a potential competitor in the Madagascar cement market. It thus provided the funds for Delta to refund the advance freight payment, and agreed to take over the vessel and accept the cement already on board although no NOR had been issued to it. Further, it falsified the dates of the purchase agreement and the charterparty by antedating them to conceal its intervention when Abani's contracts were already in force: at [37] and [38].

(6) To constitute conversion, there must be a wrongful act of dealing with the goods in a manner inconsistent with the owner's rights, coupled with an intention to deny the owner's rights, or to assert a right inconsistent with them. Knowledge of the wrongdoer that the goods belonged to someone else was unnecessary, nor need there be any positive intention to challenge the true owner's rights: at [40].

(7) Poh Fang had converted the cement. It knew that Abani had chartered the vessel and had already commenced loading when it induced the cancellation of the charterparty. As Abani's contract with Indo Energy was on fob terms, title to the cement passed to Abani when the cement was loaded on the vessel, and Poh Fang converted it when it took over the cement and the vessel on 23 July: at [41] to [43].

(8) Damages were to be assessed by the Registrar as the court was unable to determine the proper quantum on the available evidence. In respect of damages for the inducement of the breach of the charterparty, Abani failed to show that its loss was unavoidable as it could have, but did not, continue the sale by chartering another vessel to ship the cement. Furthermore, the exact quantity of cement sold to the Madagascan buyer was unknown: at [45].

(9) In respect of damages for the conversion, the proper basis for calculation was the market value of the cement at the time and place of conversion, and not the cost price under the contract dated 16 June. Furthermore, Abani did not specify the quantity of cement converted by Poh Fang: at [46] and [47].

Jag Shakti, The [1986] AC 337; [1986] 1 All ER 480 (folld)

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