Chwee Kin Keong and Others v Digilandmall.com Pte Ltd

• Judge: V K Rajah JC
• Judgment Date: 12 April 2004
• Neutral Citation: [2004] SGHC 71
• Court: High Court (Singapore)
• Published date: 05 May 2004
• Subject Matter: Seller's unilateral mistake as to price of goods posted on website,Whether automated e-mail responses from seller amounted to acceptance of buyer's offer,Civil Procedure,Mistake of fact,Whether amendment of particulars of pleadings at conclusion of submissions allowed,Consideration,Mistake,Electronic Transactions Act (Cap 88, 1999 Rev Ed),Whether promise by buyer to pay for goods, in exchange for delivery of goods, constituted sufficient consideration,Contract,Amendment,Mutual promises,Whether online buyer entitled to enforce contract against seller,Pleadings,Online transaction,Formation,Facts raised in proposed amendments addressed during trial and submissions,Whether surprise or prejudice caused
• Year: 2004
• Defendant Counsel: Philip Fong Yeng Fatt and Doris Chia Ming Lai (Harry Elias Partnership)
• Citation: [2004] SGHC 71
• Plaintiff Counsel: Tan Sok Ling, Malcolm Tan and Mohan Das Vijayaratnam (Tan S L and Partners)

12 April 2004 Judgment reserved.

V K Rajah JC:

1 In the early hours of the morning of 13 January 2003, six friends, the plaintiffs in this case, placed orders over the Internet for 1,606 sophisticated Hewlett Packard commercial laser printers (“the laser printer(s)”). Though the actual price of the laser printer was $3,854, the defendant had on 8 January 2003 mistakenly posted the price at $66.00 on its websites. The plaintiffs assert they were not aware of the defendant’s mistake when they placed their orders, and had believed the offer was genuine. The plaintiffs’ orders were processed by the defendant’s automated system and confirmation notes were automatically despatched to the plaintiffs within a few minutes. When the defendant learnt of the error, it promptly removed the advertisement from its websites, and informed the plaintiffs as well as 778 others who had placed orders for a total of 4,086 laser printers that the price posting was an unfortunate error, and that it would therefore not be meeting the orders. The plaintiffs refute that the error exonerates the defendant; they insist that a concluded contract is sacrosanct and must be honoured. If the defendant were right, they maintain, uncertainty would prevail in the commercial world and more particularly in Internet transactions. They assert that spending only $105,996 to procure laser printers with an actual market value of $6,189,524 is wholly irrelevant; they are entitled to a good bargain. The defendant, on the other hand, contends that the law should not penalise a party who has unwittingly and genuinely made a unilateral mistake – which was known or ought to have been known by the plaintiffs.

2 Who is correct? This, in a nutshell, is the issue at the heart of these proceedings.

Factual matrix

3 All six plaintiffs are graduates, conversant with the usage of the Internet and its practices and endowed with more than an adequate understanding of business and commercial practices. From time to time they communicate with each other via the Internet and the short messaging system (“sms”). A number of them have very close relationships, with some of them even sharing common business interests. They are described by their counsel in submissions as “risk takers”, “business minded and profit seeking”.

Genesis of the mistake

4 The defendant is a company that sells information technology (“IT”) related products over the Internet to consumers. As part of its business, it operates a website owned by Hewlett Packard (“HP”) at http://www.buyhp.com.sg (“the HP website”) where only HP products are sold. The defendant also sells HP products on its own website at http://www.digiland.com (“the Digilandmall website”).

5 A related website for corporate clients and re-sellers (“the Digiland commerce website”) is owned and operated by a related entity, Digiland International Limited (“DIL”). The price of the laser printer, prior to 3.36pm on 8 January 2003, was stipulated as $3,854 (exclusive of GST) on both the Digilandmall and HP websites (“the websites”), and as $3,448 on the Digiland commerce website.

6 On Wednesday, 8 January 2003 between 3.00pm and 4.00pm, DIL’s employees conducted a training session at the defendant’s premises. Part of the training module included hands-on training with a new template for a “Price Mass Upload” function. This new template was designed to facilitate instantaneous price changes allowing them to be simultaneously reflected in the relevant Internet web pages. A real product number “HP 9660A” was inserted in the new template as the prototype for which fictional prices were to be changed on the three relevant websites. This was presumably to render the training more lifelike.

7 At about 3.36pm, Samuel Teo, an employee of DIL, inadvertently uploaded the contents of the training template onto the Digiland commerce website operated by DIL, in place of the test website allocated for the training. The programme trigger on that website automatically and instantaneously initiated the insertion of similar contents onto all three websites.

8 The proper description of the laser printer, “HPC 9660A Color LaserJet 4600”, was, as a result of the accident, replaced by the numerals “55”; while the numerals “66” replaced the correct price of the laser printer priced at $3,854 and the numerals “77” replaced the original corporate price of the laser printer priced at $3,448. Samuel Teo had used all these notional numerals on the training template.

9 The defendant’s assertion that Samuel Teo had neither the authority nor the intention to make any alterations to the laser printer’s price is now accepted by the plaintiffs. Nor is it disputed that Samuel Teo, or any of the other employees of the defendant, was unaware at all material times of the dramatic chain of events so unwittingly initiated by the former.

10 News of the rather extraordinary laser printer pricing began to spread like wildfire within the local Internet community. There were altogether 1,008 purchase orders for the laser printers placed by 784 individuals between 8 and 13 January 2003. Though the six plaintiffs accounted for only 18 of these purchase orders, they figure prominently among the 11 individuals who ordered more than 50 laser printers. The first and fifth plaintiffs ordered exactly a hundred laser printers each. The second, third, fourth and sixth plaintiffs are the only individuals who ordered more than a hundred laser printers each.

11 The single most controversial issue in these proceedings is the knowledge possessed and/or belief entertained by each of the plaintiffs when they entered into each of the transactions for the purchase of the laser printers. Needless to say, this goes to the very heart of the claims’ sustainability.

12 The plaintiffs both collectively and individually maintained adamantly that while they thought that the price of $66 appeared to be a “good deal” they did not think that the website prices had been mistakenly placed or inserted. They deny having had any communications amongst themselves about the possibility, let alone probability, that the price posting on the website could have been a mistake. They stoutly assert that they were too preoccupied with the realisation of potential profits through a so-called arbitrage position between different markets to contemplate that an error had been made. As this is a critical issue, it is imperative that each of their positions be carefully evaluated. Being fully conscious of the pivotal nature of this point, I have duly accorded particular attention to the evidence and credibility of each of the plaintiffs.

The first plaintiff

13 The first plaintiff, Chwee Kin Keong, is 29 years old. He graduated from NTU as a bachelor of business studies, specialising in financial analysis. He is currently self-employed and is intimately involved in the multi-level marketing sales of aromatherapy products under the Bel-Air label. Prior to being self-employed, he was a corporate banker with Standard Chartered Bank, Singapore, for four years. He is also a director and shareholder in a company engaging in wholesale trade, together with the second and third plaintiffs. He is described by his counsel in submissions as a “prudent and careful person”.

14 The first, second and fourth plaintiffs became acquainted with each other when they studied at the Nanyang Technological University (“NTU”). They have a common interest in bridge and this helped to cement their friendship. The fifth plaintiff was also a member of this bridge group

15 Early on the morning of 13 January 2003 at about 1.17am, the first plaintiff received a message from a friend, Desmond Tan (“Desmond”), through an Internet chatlink. The unconstrained exchange that followed between the two is both revealing and compelling. The first plaintiff’s callname in this exchange is “Scorpio”. The following excerpts are particularly relevant:

Desmond: 13/01/20 01:17 go hp online now

Scorpio: 13/01/20 01:17 what hp online??

…

Desmond: 13/01/20 01:24 just ordered 3 colour lazer printer for S$66.00 each

Scorpio: 13/01/20 01:24 huh?? How come got such thing?

Desmond: 13/01/20 01:25 keep trying

Scorpio: 13/01/20 01:25 ok but how come got such a good deal?

Desmond: 13/01/20 01:25 I think one of the wrong posted price

…

Scorpio: 13/01/20 01:25 damn don’t tell me they realised their error already

…

Scorpio: 13/01/20 01:32 shiok ... can make a quick profit by selling them cheap … shd buy more

Desmond: 13/01/20 01:33 how many u intend to get?

Desmond: 13/01/20 01:33 10? 20?

Scorpio: 13/01/20 01:33 as many as I can!

Scorpio: 13/01/20 01:33 why not?

…

Desmond: 13/01/20 01:40 if any friend got extra printer … u want?

Desmond: 13/01/20 01:41 u want it for profit or personal use?

Scorpio: 13/01/20 01:42 I want at least one for personal use … 2 would be good coz my gf needs one too … any more than that would be a bonus …;-)

…

Scorpio: 13/01/20 01:43 anyway, I don’t mind buying over if you have frens who want to sell … buy at twice the price!! hahaha means S$132

…

Desmond 13/01/20 01:43 even $500 is a steal

Scorpio: 13/01/20 01:43 yeah man ... what’s the original price?

Desmond: 13/01/20 01:43 coz the HP laser colour printer sells for at least 3 to 4k outside

…

Desmond 13/01/20 01:44 from US I heard is about USD 2k

Desmond 13/01/20 01:44 its HP and Laser and Coloured

…

Desmond: 13/01/20 01:44 if they dont honor it ...

Scorpio: 13/01/20 01:45 sell me one lah … name your price ;-) sue them lor …

Desmond: 13/01/20 01:45 I think they will give vouchers or special deals

…

Scorpio: 13/01/20 01:46 hahahaha yeah lor .. aiyah why u only buy 3?????

…

Desmond: 13/01/20 01:47 wasn’t greedy before I tok to u

…

Scorpio: 13/01/20 01:47 yeah.. S$1 mio then no need to work liao?? u think this is the 1970s??

Desmond: 13/01/20 01:47 u make me greedy

Scorpio: 13/01/20 01:47 ok lor if you insist …

16 When the first plaintiff eventually succeeded in accessing the HP website, he immediately placed an order...