DNKH Logistics Pte Ltd v Komori Southeast Asia Pte Ltd

• Jurisdiction: Singapore
• Judge: Patrick Tay Wei Sheng
• Judgment Date: 08 August 2019
• Neutral Citation: [2019] SGMC 41
• Court: Magistrates' Court (Singapore)
• Docket Number: Suit No 19681 of 2017
• Year: 2019
• Published date: 31 August 2019
• Hearing Date: 12 June 2019,17 July 2019
• Plaintiff Counsel: Aqbal Singh a/l Kuldip Singh, Wong Yi Ping, and Cheng Cui Wen (Pinnacle Law LLC)
• Defendant Counsel: Savliwala Din (Bogaars & Din)
• Subject Matter: Contract,Terms,Incorporation
• Citation: [2019] SGMC 41

Magistrate Patrick Tay Wei Sheng:

The defendant (“Komori”) stored goods at a warehouse operated by the plaintiff (“DNKH”). On 9 August 2015, a fire broke out at the warehouse and damaged some of those goods. In the weeks thereafter, the parties corresponded by email, and also met face-to-face at the office of Komori on 31 August 2015 (the “Meeting”). They discussed among other things the air-freighting by DNKH, on behalf of Komori, of replacement goods from China to Singapore. These goods were urgently required by a customer of Komori. On 2 September 2015, the parties signed a document (DNKH/AF120 (rev 2)) that set out the details of the air-freighting (the “Quotation”). Thereafter, DNKH performed the air-freighting, and invoiced Komori.¹

In this Suit, DNKH claims against Komori for the invoice sum of $36,992.20 and interest thereon at 2% per month from 8 October 2015. Pursuant to District Court Order of Court No 7245 of 2018 and the subsequent agreement of the parties before me,² District Court Suit No 3471 of 2016, in which Komori claims against DNKH for the losses that it suffered due to the fire, will be heard immediately after this Suit.

Pleadings

DNKH pleads that the air-freighting arrangement was a separate and distinct contract from the warehousing arrangement between the parties, and that Komori had agreed to pay for the air-freighting without set-off or deduction on account of the fire damage.³ As evidence of this agreement, it refers to the Quotation, which had been signed by the parties and which expressly incorporates the Singapore Logistics Association Standard Trading Conditions (“SLASTC”).⁴ It highlights cl 19(a) of the SLASTC, which when incorporated into a contract requires all sums due thereunder to be paid immediately when due without deduction or set-off.⁵

The Customer [ie, Komori] shall pay to the Company [ie, DNKH] in cash or in such manner as the Company may agree all sums immediately when due without deduction or deferment on account of any claim, counterclaims or set-off and the Customer agrees to waive the right of set-off, if any, as against the Company.

Komori denies that it had agreed to pay for the air-freighting without set-off or deduction,⁶ and pleads that DNKH had at the Meeting agreed to perform the air-freighting for “no charge” (“No-Charge Agreement”).⁷ It adds that it had signed the Quotation simply as “documentation” to facilitate an insurance claim by DNKH for the costs of the air-freighting.⁸ It contends that cl 19(a) of the SLASTC does not form part of the air-freighting arrangement because a copy of the SLASTC had not been extended to it.⁹

Quotation

I find that the parties had agreed to the air-freighting in the terms of the Quotation and not of any No-Charge Agreement.

First, the Quotation was negotiated then signed by Komori and DNKH. During the negotiations, Komori had cancelled two clauses on a draft of the Quotation (DNKH/AF120).¹⁰ The draft was amended to become what is now the Quotation. Komori signed the Quotation thereafter.¹¹ The Quotation is the only document relating to the air-freighting that both Komori and DNKH signed (apart from the draft Quotation, which neither party suggests is binding). Allen Tan, the managing director of Komori at all material times, conceded in cross-examination that the Quotation is a “contract”.¹²

Second, Komori expressly admits in its Defence to a key pleaded allegation by DNKH: that Komori had asked DNKH to “proceed with the air-freighting” and had agreed to “pay [DNKH] the sum of US$25,910.00 for the air-freighting without any deduction or set-off upon being invoiced for the same.”¹³ When asked about this pleading during cross-examination, Allen Tan confirmed that he had “told [DNKH] to go ahead and pick up and the cargo and … [Komori] will claim against [DNKH] for all the consequential loss.”¹⁴

Third, the notion that Komori had agreed to pay for the air-freighting and then apply to recover the same against DNKH is borne out in an email sent by Allen Tan between the time of the Meeting and the signing of the Quotation. This email states that Komori would, “accept the S$35,361.97 air freight charges”, albeit “unwillingly”, and will “claim this bill form the insurance consequences loss”.¹⁵ This unwillingness does not diminish the effectiveness of Komori’s acceptance. Rather, it shows that Komori knew of the payment obligations that it was assuming under the Quotation.

At the same time, the evidence does not bear out a No-Charge Agreement between the parties.

First, the allegation by Komori of a No-Charge Agreement is not borne out in any objective documentary evidence. Komori points to emails that it had sent to DNKH before the Meeting stating that “the costs of freighting and all related costs will be the responsibility of DNKH”¹⁶ and that “DNKH has agreed to settle this and resolved the claim [sic] yourself with your insurer.”¹⁷ But these emails reveal only a unilateral or subjective understanding on the part of Komori of a No-Charge Agreement, and not an agreement on the part of DNKH to the same. In any event, extrinsic evidence of any such subjective intent by Komori is inadmissible. The Quotation is a written agreement and extrinsic evidence is inadmissible for contradicting or varying its terms (s 94 of the Evidence Act (Cap 97, 1997 Rev Ed) (“EA”)). Also, the Quotation on its face plainly applies to the air-freighting arrangement and extrinsic evidence is inadmissible to prove that it does not so apply (s 96 of the EA). Further, the absence of latent ambiguity in the text of the Quotation as to the payment obligations of Komori thereunder (see [24] below) leaves no room to admit extrinsic evidence of the subjective intentions of Komori in signing the Quotation (Yap Son On v Ding Pei Zhen [2017] 1 SLR 219 at [44]).

Second, Komori had no reason to sign the Quotation if the parties had in fact a No-Charge Agreement. Rather, Komori would have had every reason not to sign the Quotation because it controverts a No-Charge Agreement. Komori pleads, nevertheless, that it had done so because DNKH “required documentation to be produced and signed to show what the cost of the freight would have been, so that [DNKH] could show the document to their own insurers.”¹⁸ Yet Komori not only signed the Quotation but also negotiated the terms therein as to payment duration and late payment interest. It is difficult to see why Komori would have gone to the trouble of negotiating these terms if it had believed that the Quotation was to be mere “documentation” and of no substantive legal effect as between itself and DNKH.

Third, Komori gives inconsistent accounts of the contents of any No-Charge Agreement. At Paragraph 13 of the Defence, it pleads that DNKH had agreed to undertake the air-freighting “without charge”.¹⁹ At Paragraph 15 of the Defence, it states that “payment for the freight charges would not be made until it was determined whether [DNKH] were liable to [it] for damage to the goods caused by the fire” and that “payment would only be made in the event [DNKH] were not liable for the fire”.²⁰ During cross-examination, Allen Tan was asked to clarify these pleadings. He replied: “What actually we want is if DNKH insist the payment, after letting us know that they can or they can’t claim from the insurance, then we will make a decision from there.”²¹

Accordingly, I find that the parties had agreed to the air-freighting in the terms of the Quotation and not of any No-Charge Agreement.

I note the submission of DNKH that it made limited profit (S$615.95) from the air-freighting, and could not therefore have agreed to perform them unless it was “fully paid for its services and [would] not be out-of-pocket.”²² But this does not take DNKH far. No evidence was led as to the typical level of profit on an air-freighting arrangement, and it is unclear how the S$615.95 that would DNKH would earn under the Quotation compares to that. More importantly, even if the profit made by DNKH under the Quotation was low, it is a stretch to conclude thereby that DNKH would not have agreed to the air-freighting unless it was paid immediately. As DNKH admits, it provided the air-freighting services at least partly in the belief that Komori would “give future work to [it]” and “to maintain the business relationship between the parties.”²³

SLASTC properly and validly incorporated

I find also cl 19(a) of the SLASTC to have been properly and validly...