Carriernet Global Ltd v Abkey Pte Ltd

• Judge: Kan Ting Chiu J
• Judgment Date: 07 April 2010
• Neutral Citation: [2010] SGHC 104
• Citation: [2010] SGHC 104
• Docket Number: Suit No 269 of 2007
• Published date: 08 April 2010
• Hearing Date: 18 May 2009,08 July 2009,21 May 2009,19 May 2009,26 June 2009,22 May 2009,20 May 2009
• Plaintiff Counsel: Jimmy Yap Tuck Kong, Wong Shyen Sook and Rasanathan s/o Sothynathan (Colin Ng & Partners LLP)
• Date: 07 April 2010
• Defendant Counsel: Boey Swee Siang, Leong Jia Rong Lynette, Chou Tzu (Rajah & Tann LLP)
• Court: High Court (Singapore)
• Subject Matter: Contracts (Rights of Third Parties) Act,Breach,Privity of Contract,Contract

Kan Ting Chiu J: Background

This is an unusual case. Bob Teo Seng Kee (“Bob Teo”) invented a computer key board which was believed to be an improvement on the ubiquitous Qwerty keyboard. He obtained a patent on it and had plans for the defendant company, Abkey Pte Ltd (“Abkey”) to realise the commercial promise of the invention.

As Bob Teo and Abkey did not have the necessary funds or the development and manufacturing capability to produce the keyboards, the plaintiff company was invited to participate in the venture.

The plaintiff company purchased 300,000 shares in Abkey and also entered into an agreement on 21 May 2004 under which the plaintiff was to develop and manufacture the keyboards for Abkey (“the manufacturing agreement”). The relationship did not endure. The project did not progress to the parties’ expectations and the manufacturing agreement was terminated by mutual consent in September 2005.

The termination of the manufacturing agreement left other issues between the parties unresolved, including the shares that the plaintiff company held in Abkey and the parts and components for the keyboards that the plaintiff company was holding. Further negotiations followed in December 2006 and January 2007 for the plaintiff company to sell its shares in Abkey back to Bob Teo for $300,000, to release the board moulds, stocks and materials (except membranes) for the manufacture of the keyboards (collectively referred to as “the inventory”) to Abkey and to extinguish Abkey’s debts to the plaintiff company.

Bob Teo took the position that the negotiations resulted in a concluded settlement agreement, but the plaintiff company maintained that there was no concluded agreement. This led to Bob Teo’s filing of Suit No 243 of 2007 (“Suit 243”), against the plaintiff company for a declaration that there was a concluded agreement and for specific performance of the agreement. The action resulted in a judgment on 30 May 2008 in favour of Bob Teo: see Teo Seng Kee Bob v Arianecorp Ltd [2008] 3 SLR(R) 1114.

The present action

In the present action, the plaintiff company sought relief from Abkey for loss and damage incurred as a result of the termination of the manufacturing agreement. Abkey made a counterclaim for the loss and damage it had incurred from the termination of the agreement.

In the course of the trial, attention was drawn to the consensual termination of the agreement and the judgment in Suit 243. The plaintiff company then decided that it would not proceed with its claim, and Abkey limited its counterclaim to the damages arising from the plaintiff company’s delayed delivery of the inventory to Abkey until 19 December 2008. (This counterclaim was incorporated into the counterclaim on 19 January 2009.)

The counterclaim for damages for the late delivery of the inventory is based on two issues that were raised in Suit 243, ie, whether there was a binding settlement agreement, and whether the plaintiff company was obliged to deliver the inventory to Abkey.

Against this background, it was necessary to consider whether with the final disposal of Suit 243, any claim for damages for late delivery is extinguished under the doctrine of res judicata.

In Suit 243, Bob Teo had sought the delivery up of the inventory, and...