Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd

• Jurisdiction: Singapore
• Judge: Philip Pillai J
• Judgment Date: 03 December 2010
• Neutral Citation: [2010] SGHC 351
• Citation: [2010] SGHC 351
• Court: High Court (Singapore)
• Published date: 07 December 2010
• Docket Number: Suit No 989 of 2009
• Plaintiff Counsel: Jonathan Yuen and Joana Teo (Harry Elias Partnership LLP)
• Defendant Counsel: Sathiaseelan s/o Jagateesan, Kenneth Lim and Ramesh Kumar (Allen & Gledhill LLP
• Subject Matter: Contract
• Hearing Date: 28 June 2010,06 July 2010,02 July 2010,05 July 2010

Philip Pillai J: Introduction

The plaintiff is a painting contractor in the business of mixed construction and renovation services, including paint application works. The defendant is a manufacturer and supplier of paints. The defendant has been supplying the plaintiff with paint for three separate projects since 2005.

The first proposal given to the plaintiff by the defendant only included paint manufactured by the defendant for use on the external surfaces. However, in relation to a project at Toh Guan that the plaintiff was working on, the defendant submitted a proposal in January 2006, which included the use of its paint for internal surfaces: Internal Concrete Surfaces Including Ceiling Primer Coat : 1 coat of Berger Decora Emulsion Finishing Coat : 1 coat of Berger Decora Emulsion

The product data sheet provided to the plaintiff stated that as surface preparation, one had to, inter alia, “apply a suitable sealer coat such as Berger Plastaseal or Berger Water-Based Sealer” prior to application of the Berger Decora Emulsion. This was not reflected in the proposal submitted by the defendant to the plaintiff. The plaintiff had then inquired whether a sealer coat was necessary, as a result of which, the defendant wrote a letter dated 12 January 2006, that read as follows:

Proposed Paint System For Toh Guan Road East Capital One With reference to the above subject and our discussion regarding the coating for the internal concrete surfaces including ceiling.

We are pleased to forward our letter for your submission to your client that it is not a [sic] necessary to apply a sealer coat before applying Berger Decora Emulsion even though it was stated in our product datasheet.

In addition to the above letter, there was a further communication by the defendant on 13 January 2006, granting the plaintiff a warranty on the proposed paint:

Warranty With reference to the above subject, we will be providing you with five (5) years warranty on our products used in any of your up coming project as long as is base on our proposed paint system.

The effect of this warranty, in particular, has been hotly disputed The plaintiff claims it is an open warranty that applies to all future projects undertaken by itself, but the defendant maintains that the warranty only applied to the project at Toh Guan. I will return to this point later. However, for now it suffices to say that the plaintiff relied on these communications in relation to the project at Toh Guan and ordered Berger Decora Emulsion. The paint was applied to the internal surfaces of the project at Toh Guan without a sealer coat. There were no problems.

In July 2007, the defendant approached the plaintiff with a proposal to use its paints in a project located at Bukit Batok Street 23 (“the Project”). This proposal also suggested, inter alia, the use of Berger Decora Emulsion on internal surfaces: Internal Concrete Surfaces Including Ceiling Primer Coat : 1 coat of Berger Decora Emulsion Finishing Coat : 1 coat of Berger Decora Emulsion The defendant’s proposal was included without alteration in the plaintiff’s quotation for the Project. There was in this instance, no request or provision of confirmation that no sealer coat was necessary for the Project, notwithstanding the data sheet to the contrary, unlike the case in the previous Toh Guan project. Berger Decora Emulsion is a low cost paint that was supplied to the plaintiff at a cost of S$1.125 per litre. Based on the defendant’s proposal, the plaintiff tendered a quotation of S$1,900,000.00 for the painting works at the Project to the main contractor. This was accepted and the plaintiff was appointed to carry out painting works.

Painting works at the Project were carried out between September 2007 and April 2008. Between August 2007 and April 2008, the defendant supplied the plaintiff with, inter alia, Berger Decora Emulsion from 31 different batches of manufacture (“the Paint”) for a total sum of S$49,250.00. As and when the plaintiff required paint, it would place an order with the defendant. The paint would be delivered together with a delivery order on which the plaintiff had to sign against receipt. After that, the defendant would issue a tax invoice against which the plaintiff would make payment. Significantly, in each tax invoice, it was provided:

CONDITIONS OF SALE “Except to the extent that the customer has the benefit of any non-excludable statutory rights whether as a consumer or otherwise Berger Paints Singapore Pte. Ltd’s liability in relation to the goods is limited to replacing the goods or reimbursing the cost of acquiring equivalent goods. This liability shall not arise unless Berger Paints Singapore Pte. Ltd. receives notification of the alleged liability within a reasonable period of the event alleged to give rise to liability. Berger Paints Singapore Pte Ltd. will not be liable for ay loss or damage whatsoever arising out of:-

(i) information given by the supplier in relation to pre-application procedures and application methods, or (ii) faulty surface preparation, product preparation or product application.” In each delivery order, the following terms were provided:

CONDITIONS OF SALE

…

2. No claim shall be entertained unless made in writing to the Seller within 7 days of receipt of goods by Buyer and Seller’s liability in relation to the goods and services rendered is limited to replacing the goods or services. 3. Seller may provide Buyer in good faith, with advice on surface preparation, painting system and application procedures, but as the Seller does not exercise any control over the final choice of the surface preparation procedures, or of the choice of the painting system nor exercise any control over the surface preparation, painting system or application procedures carried out, Seller shall not be liable for any loss, damage or injury arising from surface preparation, the choice of the painting system or the application procedures. 4. As the Seller cannot exercise control over the handling, storage, mixing, application or use of any goods supplied, all conditions, warranties and representations, express or implied, statutory or otherwise, made as to the quality of the goods after they have undergone handling, storage, storage, mixing, application or use, or fitness for any purpose of the goods supplied shall be excluded, and the Seller shall not be liable for any loss, damage or injury, howsoever caused. 5. Defective goods, agreed to be defective by the Seller shall be replaced as originals ordered if required and practicable, but shall not form the subject of any claim for consequential loss, damage or expense. Defects in quality of goods contained in any delivery shall not be a ground for cancellation of the remainder of the contract.

On 18 April 2008, however, the plaintiff complained to the defendant that various internal surfaces in the Project had discoloured subsequent to the application of the Paint. The surfaces had turned pinkish and there were patterns of discolouration (collectively “the discolouration”). It alleged that the Paint was defective and was the cause of the discolouration.

Various meetings and on-site inspections were held thereafter to investigate the plaintiff’s complaint and to ascertain the cause of the discolouration. Subsequently, the defendant made a goodwill offer to the plaintiff to provide replacement paint of a superior grade. The labour cost of repainting would have to be borne by the plaintiff. The plaintiff rejected the offer and insisted that the defendant bear the full costs of rectifying the problem.

On 15 May 2008, the plaintiff sent the defendant a letter stating that the total cost of repainting, excluding the cost of paint used, was S$443,243.20. The plaintiff demanded that the defendant bear the cost in full. The defendant disputed its liability.

Absent any resolution of the problem between the parties, the plaintiff carried out repainting works between June 2008 and September 2009 using paint bought from another manufacturer. The plaintiff purchased paint from Haruna (S) Pte Ltd at a total cost of S$52,242.75 for repainting the Project (“the Haruna paint”). Subsequently, it brought the present action against the defendant, claiming the costs of rectifying the problem. It quantified these costs at S$1,185,545.60 in its Statement of...