Chuan Hiap Seng (1979) Pte Ltd v Progress Manufacturing Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 23 January 1995
• Date: 23 January 1995
• Docket Number: Suit No 562 of 1989
• Court: High Court (Singapore)

Chuan Hiap Seng (1979) Pte Ltd

Plaintiff

and

Progress Manufacturing Pte Ltd

Defendant

[1995] SGHC 17

G P Selvam J

Suit No 562 of 1989

High Court

Commercial Transactions–Sale of goods–Sale by description–Right of buyer to reject goods on ground that goods did not conform to description–Right of seller to make second delivery within contractual time of delivery–Whether buyer could produce fresh ground to justify rejecting goods after giving wrong reason or no reason–Contract–Contractual terms–Whether provision of mill certificate was condition–Whether failure to provide mill certificate entitled buyer to reject goods–Warranty–Whether implied term to provide mill certificate simultaneously with goods

The plaintiff contracted to purchase six lots of steel pipes of varying diameter and thickness from the defendant. The defendant sent the invoice, together with the mill certificate, about two weeks after delivery of the pipes. The plaintiff paid the full price of the invoice.

Disputes arose concerning the first four lots of steel pipes. For the first two lots, the plaintiff claimed that the pipes were longer than the stipulated “20 feet + 100/-0” length and they were pitted. The plaintiff's reason for refusing to take delivery of the third and fourth lots was the absence of the mill certificate.

The defendant admitted that the first two lots exceeded the stipulated length but denied liability because the plaintiff's only ground for rejection at the time of delivery was that the pipes were pitted. The over-length and the absence of the mill certificate were not mentioned. A surveyor appointed by the plaintiff subsequently found no pitting, while the over-length could be addressed by shortening. As for the mill certificate, the defendant tendered a fax copy and undertook to send the original within three weeks. The defendant argued that the over-length and non-delivery of the mill certificate did not entitle the plaintiff to reject the goods. The plaintiff had accepted lots five and six even though there was excess length and there was no accompanying mill certificate.

Held, dismissing the plaintiff's claim:

(1) Where there was a contract for the sale of goods by description, there was an implied condition that the goods would correspond with the description. A buyer was entitled to a reasonable opportunity to examine the goods before deciding whether to accept or reject them. If a buyer rejected goods on the grounds of non-conformity, the seller could make another delivery of goods that satisfied the terms of the contract provided the second delivery was within the contractual time for delivery. If a buyer rejected goods by giving no reason or by giving a wrong reason, he could provide a fresh ground of rejection later provided such ground did in fact exist at the time of rejection, but this would not apply if the seller could have rectified the non-conformity and made another delivery within the contractual time: at [11] to [15].

(2) On the evidence, the plaintiff had a reasonable opportunity to examine the goods, and could have raised both the over-length and the absence of the mill certificate as grounds to reject the goods. If this had been done in a timely manner, the defendant could have corrected the non-conformity and offered a second delivery. The protracted delay meant that the plaintiff had waived these grounds which could not then be revived: at [16], [17] and [18].

(3) The provision that “ [m]ill certificate will be provided” was a warranty, and not a condition, of the contract. Failure to provide the mill certificate on delivery did not entitle the plaintiff to reject the goods. Even if the requirement of the mill certificate was a condition, the plaintiff should have raised it at the time of initial delivery so that the defendant would have an opportunity to redeliver the goods with the mill certificate within a reasonable time. The plaintiff's failure to do so precluded its claim on this ground in respect of all four lots of pipes. Furthermore, as a term might only be implied into a contract if it was necessary, and the evidence indicated that the mill certificates were of no importance to the plaintiff, it was not an implied term of the contract that the mill certificate must be provided simultaneously with the delivery of the goods: at [21] to [24].

(4) Even if the holding that the defendant was not in breach of contract was wrong, there was no basis for calculating damages for the plaintiff. It could not substantiate its claim that the market value of the goods had risen because there was no evidence of a market price. Its subcontract with an Indonesian party was not a reliable basis for calculating damages: at [27].

Amixco Asia (Pte) Ltd v Bank Bumiputra Malaysia Bhd [1992] 2 SLR (R) 65; [1992] 2 SLR 943 (refd)

Comptoir Commercial Anversois and Power, Son and Company, In re An Arbitration between [1920] 1 KB 868 (refd)

E E & Brian Smith (1928) Limited v Wheatsheaf Mills Limited [1939] 2 KB 302 (refd)

Heisler v Anglo-Dal Ltd [1954] 1 WLR 1273 (refd)

Wallis, Son & Wells v Pratt & Haynes [1910] 2 KB 1003 (refd)

Sale of Goods Act 1979 (c 54) (UK) ss 13, 34

Simon Yuen (Khattar Wong & Pnrs) for the plaintiff

Jeffrey Beh (Y M Jumabhoy & Co) for the defendant.

Judgment reserved.

G P Selvam J

The contract

1 This is a claim for damages for breach of contract for the sale of goods. The...