Chartered Electronics Industries Pte Ltd v Comtech IT Pte Ltd

JudgeKarthigesu JA
Judgment Date20 July 1998
Neutral Citation[1998] SGCA 43
Citation[1998] SGCA 43
Defendant CounselSee Tow Soo Ling and Gan Theng Chong (Patrick Wee & Co)
Published date19 September 2003
Plaintiff CounselAlvin Yeo and Nish Shetty (Wong Partnerhsip)
Date20 July 1998
Docket NumberCivil Appeal No 255 of 1997
CourtCourt of Appeal (Singapore)
Subject MatterNot too remote to be recoverable,Value of kits awarded in damages not accurate value of unworkable and defective kits,Lack of evidence as to value of defective kits,Whether trial judge's award of damages for conversion of kits correct,Damages,Defect such that material kits unworkable,Respondents suffered no actual loss from conversion of defective kits,Measure of damages,Whether respondents only entitled to nominal damages,Tort,Value of goods taken at time of conversion,Whether correspondence between parties regarding return of defective material kits included 4,500 PCBAs,Supply of defective material kits,Conversion,Whether specific and unconditional demand made for return of 4,500 units of printer circuit board assemblies (PCBAs),Value of goods flowing from conversion together with any consequential damages


(delivering the grounds of judgment of the court): This appeal arises out of the decision of Judith Prakash J in respect of various contractual and tortious claims and counterclaims. The claims, in essence, fell under two broad categories - damages for breach of contract for the sale of goods and damages for the conversion of goods.

2.The learned judge below made the following orders: (i). With respect to the respondents` claim for the price of goods sold and delivered, namely, inkjet printers and accessories, judgment was given to the respondents. The issue here was the rate of conversion from US dollars to Singapore dollars. It was held that the rate of conversion was that prevailing at the time the respondents obtained judgment and not at the time of execution. The appellants were thus liable to pay the respondents US$45,824.95 converted into Singapore dollars less the sum of S$18,632.95 which the appellants were entitled to set off plus interest.

(ii). With respect to the respondents` claim for breach of contract to assemble inkjet printers (they alleged that the appellants failed to assemble the printers) and the appellants` counterclaim for breach of the same contract (they alleged that the respondents supplied them with defective printer material kits such that they were incapable of being assembled into working printers), the respondents` claim was dismissed and judgment was given to the appellants in the counterclaim for damages to be assessed.

(iii). With respect to the respondents` claim in conversion for the abovesaid material kits and other equipment used to assemble the printers, it was held that there was conversion by the appellants of the material kits and 4,500 printer circuit board assemblies (PCBAs) but not the other equipment. Damages for the sum of $101,025 for conversion were awarded.

(iv). With respect to the appellants` counterclaim for damages for breach of contract to assemble the PCBAs (the appellants alleged that the respondents contracted for the assembly of 24,000 PCBAs but failed to pay for them), judgment was given to the appellants for the supply of 17,000 PCBAs for damages to be assessed.

3.There was an appeal only as against findings (iii) and (iv) above. The appeal came up for hearing before us on 25 May 1998. After hearing detailed submissions from both parties, we allowed the appeal in part. We will now set out the grounds of our decision.

4. The facts

Both the appellants and respondents were manufacturers of computer products, including inkjet printers. The appellants are a member of the Singapore Technologies group of companies. The respondents have ceased operations since 1995. The respondents lodged three claims against the appellants, two for breach of contract and one for conversion, and the latter had two counterclaims against the respondents for breach of contract.

5.First, the respondents claimed the price of inkjet printers and accessories sold and delivered to the appellants. The only substantive issue raised by the appellants was with regards to the respondents` use of the exchange rate of S$1.51 to US$1. The accuracy of the figures used hinged on whether the sum claimed ought to have been converted to Singapore dollars only at the time of execution or at the time of judgment, which was an earlier date. Secondly, the respondents claimed damages against the appellants for breach of contract in that the latter failed to assemble and deliver the requisite number of inkjet printers (2,500 units) as required under the contract. The appellants counterclaimed, contending that the respondents were in breach of the express terms of the agreement by supplying material kits that were incomplete and/or defective and were of such poor quality that it was practically impossible to assemble the printers. They argued that, as the printer material kits supplied by the respondents were unsuitable for mass assembly as a result of numerous defects, they were unable to comply with the contract and earn the profits they would otherwise have made. Under the contract, the respondents were responsible for shipping the printer material kits to the appellants` Indonesian company (PT Surya Teknologi) and to provide all dedicated presses, jig/fixtures, testing equipment (CPU, monitor, keyboard, power supply) and accessories required for the assembly of the printers. Thirdly, the respondents claimed for the conversion of the material kits and the other additional equipment necessary for the assembly of printers (including the computer system, production fixtures, test jigs and vortec packing boxes). Fourthly, the appellants counterclaimed for damages arising out of a contract in which the appellants were to supply 24,000 units of PCBAs to the respondents. We examined the circumstances arising out of the claim in conversion (the third claim) and the contractual claim in relation to the sale of the PCBAs (the fourth claim) in further detail.

6.With respect to the claim in conversion, in the original statement of claim, the respondents claimed only for the conversion of the 2,500 printer material kits. In the amended statement of claim, they included the additional equipment in their claim for conversion. According to Ben Ang (Ang), the appellants` head of offshore operations, he informed the respondents sometime in October 1994 that they should remove and retake possession of their material kits as they were occupying too much space on the appellants` factory floor. Ang further informed the respondents that the appellants were going to renovate the factory premises and would therefore need to remove the materials. On 9 December 1994, Ang wrote to the respondents setting out the same. It added that, should the appellants not hear from the respondents, they would dispose of or scrap the material kits on the latters` behalf:

We have informed you that we shall be carrying out a major factory renovation this month and have requested the (sic) you to make arrangement to receive these materials which we shall be returning to you. You have told us that you do not have enough warehouse space in Singapore at that time and will inform us immediately once you have other alternatives. However, we have not heard from you till today. We have now no choice but to give you our final notice that if we do not hear from you concerning any arrangement to receive these materials by December 16, 1994, we shall assume that you longer (sic) need these materials and we shall take the liberty to dispose/scrap it on your behalf.

On 14 December 1994, the respondents` solicitors replied, denying that the respondents had ever been informed by the appellants in October 1994 about taking back possession of the kits and warned the appellants against disposing of or scrapping the materials lest they be made liable for the consequences. On 4 January 1995, the respondents` solicitors wrote to the appellants again, stating that they would take delivery of the material kits but would require reasonable time to do so. On 13 January 1995, Singapore Technologies wrote to the respondents` solicitors on the appellants` behalf, seeking the respondents` advice as soon as possible as to when they could take delivery of the defective printer material kits as the appellants were unable to store them at their Batam premises for very much longer. The respondents wrote back on 17 and 24 January 1995 with regards to the loading of the material kits onto the containers in order for them to be shipped back to Singapore. However, on 2 February 1995, the appellants had a change of heart and decided that they would want to retain the material kits. Singapore Technologies wrote to the respondents` solicitors, stating this:

Material Kits in Batam

CEI`s position is that the material kits delivered by ComTech are in fact defective. As ComTech has now asserted that the kits are not defective, CEI intends to retain the material kits to support its assertion.

In October 1996, after they obtained a report by one Dr Chew Chye Heng of the National University of Singapore which stated that the kits were indeed defective, the appellants offered to return the material kits but the respondents refused to accept them. In their amended statement of claim, the respondents claimed $244,655.67 for the value of the kits. Together with the value of the additional equipment and loss of profits, the respondents sought damages set at $390,297.67 for the conversion of the printer kits and the additional items.

7.We turn next to the facts with regards to the counterclaim in respect of the sale of the PCBAs. In April 1993, the parties entered into the sale contract which was evidenced by two documents, the appellants` quotation dated 14 April 1993 and the respondents` purchase order No 1108 dated 15 April 1993. The relevant part of the quotation stated:

We are pleased to quote the turnkey supply of the above board assembly basing a (sic) order quantity of 4,000 pcs/mth starting from July to December 1993 (total of 24,000 pcs).

Comtech shall place an order for the full 24,000 pcs of which 8,000 pcs are firm order (non-cancellable). Comtech shall confirm order for the remaining 16,000 pcs at least 12 weeks prior to the desired delivery dates.

The pertinent part of the purchase order states:


8,000 pcs firm order

16,000 pcs subject to confirmation

Another crucial document is highlighted. On 14 May 1993, the respondents sent a letter to the appellants with a production schedule, the contents of which were set out in their entirety:

Please note following expected delivery schedule (July-Sept).

We reserve the right to make changes provided CEI is informed of the changes at least two weeks in advance.

5 July 1,000 1,000
12 July 1,000 2,000
19 July 1,500 3,500
26July 1,500 5,000
2 August 1,500 6,500
9 August 1,500 8,000
16 August 1,500 9,500
23 August 1,500 11,000
30 August 1,500 12,500
6 September 1,500 14,000

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