Additive Circuits (S) Pte Ltd v Wearnes Automation Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 26 July 1991
• Date: 26 July 1991
• Docket Number: DC Suit No 6418 of 1990
• Court: High Court (Singapore)

Additive Circuits (S) Pte Ltd

Plaintiff

and

Wearnes Automation Pte Ltd

Defendant

[1991] SGHC 103

Lai Siu Chiu JC

DC Suit No 6418 of 1990

High Court

Commercial Transactions–Sale of goods–Breach of contract–Plaintiff contracted to deliver goods to defendant in four equal instalments–Plaintiff attempted to reschedule delivery dates–Plaintiff delivered first two instalments and part of the goods in the third instalment–Plaintiff failed to deliver final instalment–Whether defendants entitled to terminate contract–Whether plaintiff's non-delivery was a fundamental breach–Applicability of s 31 (2) of the Sale of Goods Act 1979 (c 54) (UK)–Sections 10, 29 (3) and 31 (2) Sale of Goods Act 1979 (c 54) (UK)–Contract–Breach–Contract for supply of goods–Non-delivery of final instalment of goods–Whether defendants entitled to terminate contract–Whether plaintiff's non-delivery was fundamental breach–Whether fundamental breach test applies where no further obligations to be performed by innocent party–Sections 10, 29 (3) and 31 (2) Sale of Goods Act 1979 (c 54) (UK)

The plaintiff contracted to deliver 20,000 pieces of printed circuit boards in four equal instalments to the defendant. Subsequently, the plaintiff attempted to vary the delivery schedule. Nevertheless, the plaintiff adhered to the first and second delivery dates, and in respect of the third delivery, the plaintiff delivered 3,640 pieces instead of the agreed 5,000 pieces. The plaintiff did not make the fourth delivery.

The defendant then cancelled the undelivered balance of 6,360 pieces. The plaintiff argued that the defendant had attempted to unilaterally cancel the balance of the purchase order and claimed for the value of the work in progress for the balance of the purchase order, which was for a sum of $33,941.60. In the alternative, the plaintiff claimed for a sum of $35,934, which represented the plaintiff's loss of bargain being the difference between the value of the purchase order ($113,000) and the sum already paid by the defendant by the time of the alleged breach ($77,066). The plaintiff also alleged that the defendant had not intimated that it had rejected the plaintiff's rescheduling and therefore, the plaintiff believed that the defendant had accepted the said rescheduling.

The defendant countered that it was the plaintiff who had attempted to unilaterally vary the contractual delivery schedules without the defendant's consent. The defendant also denied that it had approved or acknowledged the plaintiff's variation of the delivery dates. In fact, the defendant claimed to have protested against the plaintiff's attempts to reschedule the delivery dates. The defendant therefore counterclaimed for damages.

On 4 April 1991, the deputy registrar awarded the plaintiff judgment for a sum of $35,934 with taxed costs. He also granted a stay of execution on the judgment pending the trial of the defendant's counterclaim. The defendant appealed against the deputy registrar's decision, and the plaintiff cross-appealed against his decision to grant a stay of execution on its judgment.

The matter came on for hearing before the court on 30 May 1991, whereupon both the defendant's appeal and the plaintiff's cross-appeal were dismissed. The defendant then applied for further arguments to be heard. The application was granted and further arguments were heard on 18 July 1991.

The only issue for consideration before the court was whether the defendant was entitled to terminate the contract, or whether its rights, if any, only entitled it to damages for the plaintiff's failure to deliver the third instalment in full and for the plaintiff's failure to deliver the fourth instalment.

Held, allowing the defendant's appeal and dismissing the plaintiff's cross-appeal:

(1) The defendant had no unperformed obligations after the last delivery date. As such, the test whereby the court had to consider the ratio which the breach bore to the entire contract and the degree of probability or improbability that such a breach would be repeated, which in turn depended on whether the failure to deliver went to the root of the contract, had no application. The test propounded by the plaintiff on whether a breach was “fundamental” only applied to situations where the innocent party had further undertakings to perform : at [14], [16] and [22].

(2) The plaintiff was required to deliver to the defendant specific quantities of goods on specific dates. Failure to do so constituted a breach of contract by the plaintiff, which sounded in a claim for damages by the defendant: at [23].

(3) There was no conduct by the defendant to lead the plaintiff to believe that a new agreement could be implied allowing for an extended time for delivery. There was nothing on the facts to support the plaintiff's argument that the defendant acquiesced to the lateness in delivery: at [29].

(4) The plaintiff's argument that s 31 (2) of the Sale of Goods Act 1979 (c 54) (UK) applied to the contract was rejected. Section 31 (2) of the Act was inapplicable, as the dispute between the parties did not relate to defective deliveries but to non-delivery of the final instalment. Further, the purchase order did not provide for payment to be made separately for each instalment. The defendant was hence entitled to rescind the contract: at [33] and [34].

Bunge Corp v Tradax Export SA [1981] 1 WLR 711; [1981] 2 All ER 540 (refd)

Cornwall v Henson [1900] 2 Ch 298 (distd)

Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 (distd)

Freeth v Burr (1874) LR 9 CP 208 (distd)

Hartley v Hymans [1920] 3 KB 475 (refd)

Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26; [1962] 1 All ER 474; [1962] 2 WLR 474 (folld)

Maple Flock Co Ltd v Universal Furniture Products (Wembley) Ltd [1934] 1 KB 148 (distd)

Maradelanto Compania Naviera SA v Bergbau-Handel GmbH; “The Mihalis Angelos” [1971] 1 QB 164 (folld)

Mersey Steel & Iron Co, The v Naylor Benzon & Co (1884) 9 AC 434 (distd)

Regent OHG Aisestadt Und Barig v Francesco of Jermyn Street Ltd [1981] 3 All ER 327 (refd)

United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 WLR 74; [1968] 1 All ER 104 (refd)

...