Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd

• Jurisdiction: Singapore
• Judge: Philip Pillai J
• Judgment Date: 29 November 2010
• Neutral Citation: [2010] SGHC 348
• Court: High Court (Singapore)
• Hearing Date: 26 July 2010,05 August 2010,28 July 2010,04 August 2010,27 July 2010,03 August 2010,28 October 2010,30 July 2010,29 July 2010,02 August 2010
• Docket Number: Suit No 439 of 2009
• Plaintiff Counsel: Gopal Perumal (instructed) and Ms Tan Siew Gek Suzanne (K Ravi Law Corporation)
• Defendant Counsel: Chooi Yue Wai Kenny, Kong Tai Wai David and Fong Kai Tong Kelvin (Yeo-Leong and Peh LLC)
• Subject Matter: Contract
• Published date: 19 October 2011

Philip Pillai J: Introduction

The plaintiff, Chai Cher Watt, trading as Chuang Aik Engineering Works, brings this suit against the defendant, SDL Technologies Pte Ltd, for the refund of deposits paid under two contracts for the supply of a drilling machine (“Drilling Machine”) and a lathe machine (“Lathe”), and for damages resulting from the breach of the two contracts.

Background facts

The plaintiff entered into the following written contracts with the defendant: (a) a contract dated 21 August 2007 for the supply, delivery, installation and commissioning of one Deep Hole Boring and Drilling machine (Model Number: DB2125/4000) (“Drill Contract”); and (b) a contract dated 21 December 2007 for the supply, delivery, installation and “power-up” of one Heavy Duty Conventional Lathe (Model Number: CW611800 X 2000) (“Lathe Contract”).

The Drill Contract was the result of prior consultations between the defendant and the plaintiff in which the defendant advised him on the appropriate drilling machine which would meet his requirements. In this regard the plaintiff’s requirements related to the drilling capacity of the Drilling Machine, to be installed and operated in his new factory site. The Drill Contract signed by both parties set out the technical description of the Drilling Machine and in particular, its drilling capacity of a maximum boring depth of 4000mm. It also set out the instalment payment of the purchase price of a 30% deposit upon confirmation, 50% payable upon inspection at manufacturer’s plant before shipping to Singapore and the remaining 20% payable upon delivery and commissioning. Other relevant terms include that the customer is to “prepare floor base and foundation before the arrival of the machine” and for “1 people [sic] from customer will be provided round trip air ticket and 2 days accommodation for machine inspection/test run at manufacturer plant upon manufacturing completed [sic]”.

The Drilling Machine was delivered on 19 August 2008 to the plaintiff at Block 3017A Ubi Road 1, #01-17 (“Factory”) pursuant to the Drill Contract. The plaintiff thereafter rejected the Drilling Machine and sought repayment of the deposit paid under the Drill Contract on the basis of the defendant averred to be in repudiatory breach of the Drill Contract, by reason of the following: (1) the machine was not new but refurbished; (2) the machine was not 11m long as stated in the Drill Contract but was 13.5m long; (3) the model number was not DB2125/4000 as stated in the Drill Contract but TK2125A; (4) the defendant did not pay for the plaintiff’s return trip to China to inspect the drill machine; and (5) the defendant failed to notify the plaintiff of the completion of the manufacture of the machine before arranging for shipment.

The principal terms of the Lathe Contract signed by both parties set out the technical description of the Lathe and in particular, instalment payment of the purchase price of 30% deposit upon confirmation, 60% after machine inspection at the manufacturer’s plant before shipping to Singapore and the remaining 10% upon on-site commissioning at the plaintiff’s workshop. It set out the Delivery Time to be “approx. 6 months manufacturing completed upon received of deposit”. It also provided a 12 month warranty against manufacturing defects and 12 months local service and technical support by the defendant. The Lathe Contract contained a printed term which had been deleted and cancelled by hand on the same date as the Lathe Contract which provided for “1 person to be provided a round trip air ticket including 2 days’ accommodation for machine inspection and buy-off at manufacturer plan upon on site acceptance”.

The plaintiff claims that the defendant had been in repudiatory breach of the Lathe Contract because (1) the Lathe was not delivered to the plaintiff within 6 months from the payment of the plaintiff’s payment of the 30% deposit (the Lathe machine arrived in Singapore on 8 September 2008, the Lathe Contract date being 21 December 2007), (2) the defendant did not give notice of completion of the Lathe, and did not arrange for the plaintiff to inspect the Lathe in China before its shipment to Singapore; and (3) the defendant failed to provide a 12 month warranty against manufacturing defects from date of installation and setup of the Lathe.

My decision Drill contract

I first consider the issue of whether the plaintiff is entitled to reject the Drilling Machine. It is trite law that in order to repudiate the Drill Contract, it would be necessary for the plaintiff to establish that the defendant had breached a condition of the contract or breached a warranty the consequence of which was to deprive the plaintiff of substantially the whole benefit of the Drill Contract. Section 13(1) of the Sale of Goods Act (Cap 393, 1999 Rev Ed) (“Sale of Goods Act”) provides that where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description.

The Drill Contract and the Lathe Contract insofar as they contain specifications are contracts of sale by description within the meaning of s 13 of the Sale of Goods Act: see Chuan Hiap Seng (1979) Pte Ltd v Progress Manufacturing Pte Ltd [1995] 1 SLR(R) 122. Where the contract contains a detailed description of the goods, minor discrepancies between the delivered goods and their description may entitle the purchaser to reject the goods: Arcos Ltd v E A Ronaasen & Son [1933] AC 470 at 479. In certain cases, in the absence of detailed commercial description, goods having considerable discrepancy from their described characteristics would nevertheless fall within s 13(1): Benjamin’s Sale of Goods (Sweet & Maxwell, 8th Ed, 2010) at para 11-019. Thus, where a contract for a new Singer car was made, it was not satisfied by the delivery of a second hand model: Andrew Bros Ltd v Singer & Co Ltd [1934] 1 KB 17. Also, a contract for a one-year-old second-hand reaping machine which had been used to cut only 50 acres, was held not to have been performed by a very old machine which had been mended: Varley v Whipp [1900] 1 QB 513.

The plaintiff claims that he...