Gema Metal Ceilings (Far East) Pte Ltd v Iwatani Techno Construction (M) Sdn Bhd

• Jurisdiction: Singapore
• Judge: Chan Seng Onn JC
• Judgment Date: 14 March 2000
• Neutral Citation: [2000] SGHC 37
• Court: High Court (Singapore)
• Year: 2000
• Published date: 11 March 2013
• Plaintiff Counsel: William Da Silva (W P Da Silva & Co) and Lee Mong Jen (Leong Chua & Wong)
• Defendant Counsel: Danny Chua and Mohd Goush Marikan (Joseph Tan Jude Benny)
• Citation: [2000] SGHC 37

JUDGMENT:

GROUNDS OF JUDGMENT

1 The plaintiffs claimed the sums of S$143,250 and RM 232,943.45 from the defendants, being amounts due in respect of certain security clips and metal strip ceilings sold and delivered by them to the defendants at the defendants' request. The defendants denied the plaintiffs' claim and counterclaimed, inter alia, for loss and damage suffered by them on the ground of the plaintiffs' breach of contract in failing to supply a proper metal strip ceiling system of merchantable or satisfactory quality or one which was fit for its purpose, or alternatively, that there was a separate contract for the design of the metal ceiling system and that the plaintiffs had breached their obligations under this contract.

2 At the start of the trial, the parties agreed that only the question of liability was to be determined at this stage with damages to be assessed separately at a later date. As such, this judgment is concerned only with liability.

Background facts

3 The plaintiffs were manufacturers and suppliers of strip ceiling systems. They were incorporated in Singapore in 1992 as a subsidiary of the well-known Swiss corporation Gema Metaldecken AG, one of the world's leading metal ceiling manufacturers.

4 The defendants, a company incorporated in Malaysia, were the nominated sub-contractors engaged by Perspect-Tasisei Kajima Shimizu Hazama Consortium ("the main contractor") for the construction of Hyperbolic-Parabolic and Curved Metal Linear Strip Ceilings on the underside of the roof to the main terminal building, contact pier and baggage handling system of the Kuala Lumpur International Airport at Sepang in Malaysia ("the KLIA Project").

5 By the terms of the contract between the defendants and the main contractor, the defendants were responsible for the design and installation of the metal ceiling system in both the internal and external areas of the KLIA. The present dispute relates only to the external metal ceiling system at the KLIA.

6 Annexed to the sub-contract documents between the defendants and the main contractor was a list of specifications issued by the airport authorities as part of the main contract documents. In the section titled 'H31 Architectural Specifications - Metal Sheet Covering: Roof and Combined Ceiling', it was specifically stated at Clause 42 that the installation shall withstand a wind loading relative to a maximum wind velocity of 35.5 m/s. At the same time, the sub-contract document itself also specified that Chapter V: Part 2 of the British Standard Code of Practice for the structural use of aluminium was to be the applicable design code for wind loads in relation to the KLIA Project.

7 Between late 1995 and early 1996, negotiations ensued between the plaintiffs and the defendants concerning how they could work together in respect of the KLIA Project. Throughout this time, many meetings were held by the parties either at the plaintiffs' or the defendants' office. Any negotiation or correspondence between the parties would be conducted mainly through Mr Werner Bolt (PW1) on behalf of the plaintiffs, and Mr Masahito Nanko (DW1) on behalf of the defendants.

8 On 13 November 1995, PW1 and DW1 met at the defendants' office in Kuala Lumpur. At this meeting, the following matters were agreed upon:

(i) The plaintiffs would appoint someone from their side as a Design Manager to provide Computer Assisted Drawings (CAD) and attend site meetings in Kuala Lumpur;

(ii) The Design Manager appointed by the plaintiffs would be responsible for preparing most of the drawings required by the main-contractor in respect of the KLIA Project;

(iii) The plaintiffs would issue their official quotation for the strip ceiling system to the defendants as soon as possible; and

(iv) The submitted price in the quotation would be inclusive of the cost of supplying the Design Manager and the work to be undertaken by him..

9 On 23 November 1995, the plaintiffs submitted a quotation in writing to the defendants for the supply of strip ceilings. It stated, inter alia, that:

The price reduction for supply only without any technical and drawing service would be 20%.

10 On 13 January 1996, the defendants issued a letter of intent ("the letter of intent") to the plaintiffs confirming their intention to enter into a contract with the latter for the design and supply of metal ceiling materials for the KLIA Project. This letter was expressed to be subject to satisfactory negotiation of terms and conditions.

11 Various other correspondence and meetings between the parties followed, although no formal contract was ever entered into between them. A practice soon developed whereby purchase orders for various components of the metal ceiling system would be issued by the defendants to the plaintiffs and the said components would subsequently be delivered by the plaintiffs to the defendants. The plaintiffs also issued invoices for payment in respect of the deliveries made. Aside from the invoices for goods supplied, separate invoices were also issued by the plaintiffs containing the words 'Being costs for design, engineering and draughtsman work' in the column titled 'Description'. The date of the first purchase order issued by the plaintiffs was 11 June 1996.

12 At this juncture, it is perhaps pertinent to set out in some detail the structure of the external metal ceiling system at the KLIA.

Structure of the external metal ceiling system at the KLIA

13 The entire external metal ceiling system used in the KLIA can be described as a sort of suspended ceiling system. It can roughly be divided into two separate sections. The first, or upper section consists of layers of stainless steel sheets, cement boards and rock wool which are firmly attached to the steel roof structure of the ceiling by way of steel purlins (Exhibit D5). Attached to the purlins by way of special clips are the vertical ceiling hangers which hang perpendicularly to the roof structure. At the lower end of each hanger is a feature called the Primary Angle, an elongated L-shaped steel bar which is attached to the hanger via nuts and bolts. This entire upper section of the ceiling may be referred to as the suspension system or simply, the upper section.

14 Below the suspension system is the lower section of the ceiling which consists of supporting carrier rails (Exhibit D2) that are screwed on to the Primary Angles in such a way that they run horizontally, or parallel to the steel roof structure. Attached at cross-angles to the underside of the carrier rails are the metal strip ceilings (Exhibit D1). Each strip is made of a thin, flat piece of aluminium measuring about 100mm in width and up to 3.2m in length. One side of the strip consists of a timber finish. In order to install the strips onto the ceiling system, the ends of each strip along its length are bent inwards, so that the curved edges can be secured to the carrier rails by way of clip-ins, or flaps in the carrier rails which are punched-out and folded down to allow the curved edge of the ceiling strips to be clipped around them. The ceiling strips are placed closely together with its timber surface facing downwards. Each strip is separated by what is known as a capping profile (Exhibit D3), a long, thin and flat strip of metal which, together with the clip-ins, aid in securing the strips to the carrier rails. The distance between each carrier rail is not fixed and can be varied depending on the design of the system. Before or at the time of the incidents (described below), the carrier rails used at the KLIA were supported at a distance or spacing of 1.2m.

15 For the purposes of the KLIA Project, only D1, D2 and D3 were supplied by the plaintiffs to the defendants. The other parts of the metal ceiling system, particularly, those comprising the upper section, were sourced by the defendants from local suppliers in Malaysia and elsewhere. The total surface area of strip ceilings supplied by the plaintiffs to the defendants for the KLIA Project was in the region of about 120,000 square metres, while the total value of the plaintiffs' charges for the external ceiling system amounted to about RM5m.

The incidents

16 On 27 June 1997, a few of the metal ceiling strips (i.e., D1) dislodged from the carrier rails and fell. This was followed by one or two similar incidents over the next six months. It is significant that on each occasion in which the strips dislodged, the carrier rails and everything else above them, i.e., the upper or suspended section of the ceiling system, remained intact and did not fall.

17 Subsequently, a series of wind-pressure and wind-tunnel tests were carried out on a mock-up of the KLIA ceiling system in Hong Kong by a firm of engineering consultants called J A Shillinglaw & Associates. It appears that the first test on 11 December 1997 was commissioned by the plaintiffs, while subsequent tests carried out on 12, 13, 30 and 31 December 1997 ("the later tests") were commissioned by the defendants only. There was some measure of disagreement at the trial whether or not the plaintiffs were aware or approved of the later tests carried out by the defendants. In the same vein, much argument was also raised before the trial regarding the admissibility of the later tests' results and/or the opinion given thereon on the ground of hearsay. I shall address these arguments later on in my judgment.

18 Following the above tests, the defendants requested the plaintiffs to design and produce a security clip which would prevent the strip ceilings from falling. The plaintiffs subsequently manufactured and supplied these security clips (Exhibit D10) to the defendants, although it appeared that no agreement was ever reached regarding payment for the clips.

19 Apart from installing the security clips which served to fortify and strengthen the grip or connection between the curved edges of the strip ceilings and the capping profiles,...