Hakko Products Pte Ltd v Danzas (Singapore) Pte Ltd and Another

• Jurisdiction: Singapore
• Judge: Goh Joon Seng J
• Judgment Date: 09 March 1999
• Neutral Citation: [1999] SGHC 59
• Docket Number: Suit No 1906 of 1995
• Date: 09 March 1999
• Year: 1999
• Published date: 19 September 2003
• Plaintiff Counsel: M Ramasamy and Anparasan K (William Chai & Rama)
• Citation: [1999] SGHC 59
• Defendant Counsel: Koh Ching Ian (Drew & Napier),Tan Boon Leong (Loo & Partners)
• Court: High Court (Singapore)
• Subject Matter: Contractual terms,Delivery of machine,Defendant's entitlement to rely on clauses,Contract,Whether damage occurring during unloading operation,Exemption and limitation of liability clauses,Bailment,Bailees,Whether onerous clauses must be brought to notice of other party,Whether defendant breaching duty,Duty of care,Machine's damage due to exposure to water,Duty to take reasonable care,Whether defendant breaching duty of care,Incorporation of clauses into main contract,Tort

: The plaintiff`s claim against the defendants is for damages for breach of their duty of care in the delivery of a Stencillaser machine (`the machine`) from the first defendant`s warehouse at the Changi Cargo Complex to the plaintiff`s factory on the third level of the industrial building at 164, Kallang Way, [num ]03-24, Singapore. At the close of the hearing, I found for the plaintiff. I awarded it S$218,143.27 being costs of replacement of the damaged parts inclusive of installation, less the salvaged value. This sum is to carry interest at the rate of 6% per annum from the date of service of the Writ. I also awarded costs to the plaintiff. The defendants have appealed to the Court of Appeal [the appeal was withdrawn - Ed]. I now give my reasons.

The parties

The plaintiff is a company incorporated in Singapore. It is engaged in producing stencils for use as solder paste printing in circuit boards.

The first defendant is a freight forwarding company incorporated in Singapore. It is associated with another freight forwarding company, Danzas GmbH, Hanover-Airport, Germany (`Danzas GmbH`).

The second defendant undertakes the transportation of cargo for the first defendant within Singapore as its subcontractor providing vehicles, equipment and manpower.

Events leading to these proceedings

In January 1995, the plaintiff purchased the machine from its manufacturer LPKF CAD/CAM SYSTEME GmbH, Hanover, Germany (`LPKF`) for DM497,000 inclusive of installation and commissioning, FOB Hanover. It was to be used for cutting stainless steel into stencils. The accuracy required is 20 micron. It is therefore a very high precision and sensitive equipment.

For airfreighting the machine from Hanover to Singapore, LPKF entrusted the job to Danzas GmbH. Danzas GmbH informed first defendant of this on or about 16 January 1995.

On receipt of the information, the first defendant`s Senior Sales Executive, Steven Ong, made an appointment to see Ms Koh Mui Khim (`Ms Koh`), the plaintiff`s Accounts Supervisor.

On 17 January 1995, Steven Ong called on Ms Koh, offering the first defendant`s services for airfreighting the machine from Hanover to Singapore and then transporting it to the plaintiff`s factory.

Subsequent to the meeting with Ms Koh, Steven Ong submitted a quotation for, inter alia, the following:

(i) airfreighting the machine from Hanover Airport to Singapore Changi International Airport (`Changi Airport`) at DM 2.50 per kilo.

(ii) transporting same from Changi Airport to plaintiff`s factory at S$0.15 per kilo.

(iii) charges for the use of a Hiap crane - S$150.

(iv) uncrating and disposal of crates - $120.

The Hiap crane was required because the weight of the consignment was about three and a half tons. The quotation contained a clause (`the incorporating clause`) at the bottom. It read:

All business transacted in accordance with SAAA`S standard trading conditions. Copy available on application.

SAAA stands for `Singapore Aircargo Agents Association`.

Clauses 15 and 16 of SAAA`s Standard Trading Conditions read:

Clause 15

Limitation of liabilities

(i) The Company shall only be responsible for any loss of or damage to goods or for any non-delivery or mis-delivery if it is proved that the loss, damage, non-delivery or mis-delivery occurred whilst the goods were in the actual custody of the Company and under its actual control and that such loss, damage, non-delivery or mis-delivery was due to the wilful neglect or default of the Company or its own servants. The Company`s liability begins from the time of receipt of the goods in the contracted condition and state and terminates at the time of delivery to other carriers or the consignees.

(ii) The Company shall only be liable for any non-compliance or mis-compliance with instructions given to it if it is proved that the same was caused by the wilful neglect or default of the Company or its own servants.

(iii) Save as aforesaid, the Company shall be under no liability whatsoever however arising, and whether in respect of or in connection with any goods or any instruction, business, advice, information or service or otherwise.

(iv) Further and without prejudice to the generality of the preceding sub-conditions (i) or (ii) or otherwise, be under any liability whatsoever for any consequential loss or loss of market or fire or consequence of fire or delay or deviation however caused.

Clause 16

Rate of limitation

In no case whatsoever shall any liability of the Company howsoever arising and notwithstanding any lack of explanation exceed the value of the relevant goods or a sum at the rate of SGD1,000.00 per tonne of 1,000 kilos on the gross weight of the goods whichever is the lesser on a pro-rata basis.

As LPKF had entrusted the airfreighting of the machine from Hanover to Singapore to Danzas GmbH with `freight collect` at Singapore, the plaintiff accepted the first defendant`s quotation.

In the meantime, in mid-January 1995, Tony Wong Cheok Ban (`Tony Wong`), a service engineer, and Azman Shah (`Azman`), an engineer, of the plaintiff, were sent to LPKF`s plant in Hanover to familiarise themselves with and be trained in the operation of the machine. While on attachment, they tested the machine and witnessed the packing. They returned to Singapore on 30 January 1995. The machine arrived the next day. The first defendant took delivery of the machine consigned in three crates from the Airfreight Terminal and stored them in its warehouse at the Changi Cargo Complex on 1 February 1995. The crates had markings of an arrow pointing upwards, umbrella and glass. The arrow marking denotes that the crate must face upwards. The umbrella marking means that the cargo should not be allowed to come into contact with water. The glass marking indicates the fragility of the contents.

The first defendant engaged as its subcontractor the second defendant to transport the machine from its warehouse to the plaintiff`s factory.

On the morning of 4 February 1995 at around 1000 hours, the three crates arrived at 164, Kallang Way on board two trucks. Two smaller crates containing the control unit and the laser board were on board the bigger truck with a fixed canopy cover. It was driven by Yap Peng Huak. The bigger crate containing the marble table and the X-Y positioner (`the X-Y unit`) was on board the smaller truck which did not have a fixed canopy cover. It was driven by Chua Cheng Huat. The crate was covered with a canvas sheet. It was a wet day in the vicinity of Kallang Way, with alternating rain and drizzle.

On arrival at 164, Kallang Way, the two trucks were parked at the rear loading bay. The crate containing the control unit was unloaded onto the loading bay where it was unpacked. The control unit, mounted on wheels, was pushed to the plaintiff`s factory and placed in position pointed out by Azman. The second crate was similarly unloaded and moved into position by the second defendant`s workers using a pellet jack.

The crate containing the X-Y unit could not be unloaded without the Hiap crane. The Hiap crane had been ordered by the second defendant. But it arrived late.

While waiting for the arrival of the Hiap crane, the second defendant`s workers removed the canvas sheet covering the crate. They then removed two side panels of the crate. The X-Y unit wrapped only with a plastic sheet, was thus exposed to the rain.

Seeing that the two side panels had been removed, Azman checked and found the X-Y unit wet with rain water. He informed Steven Ong who touched it and confirmed it was wet.

When the Hiap crane eventually arrived, it could not operate at the rear loading bay because of an overhead shelter. So the truck with the X-Y unit on board was driven round the building to the front loading bay. This was done without the side panels and without the canvas sheet being put back in place. There was also a thick piece of wood resting on it.

After the truck arrived at the front loading bay, the X-Y unit was uncrated. A belt was slung around it. It was then lifted by the Hiap crane from the truck and placed on the loading bay.

The second defendant`s workers then discovered that their pellet jack was not of suitable size and could not be used to move the X-Y unit from the loading bay to the plaintiff`s factory. Chua Cheng Huat then went to look for a suitable pellet jack. Pending his return, the X-Y unit was left on the loading bay. All this while, it was still raining/drizzling.

When Chua Cheng Huat returned later with a suitable pellet jack, the X-Y unit was transported and placed in position in the plaintiff`s factory as directed by Azman.

According to the plaintiff, the whole operation was completed at 1900 hours. The delay was caused by the late arrival of the Hiap crane at 1500 hours and the lack of a suitable pellet jack. The defendants however said that the Hiap crane arrived at 1300 hours and the delivery was completed at 1500 hours. At 1900 hours, Azman spotted rust on the X-Y unit indicating that corrosion, due to contact with water, had taken place. Azman informed Tony Wong who then tried unsuccessfully to remove the rust by wiping it with a piece of cloth.

On 5 February 1995, LPKF`s engineers arrived to reassemble, hook up and commission the machine. They installed it on 6 February 1995 and tested it. The cutting was wavy. The machine had lost its required accuracy due to the corrosion of the X-Y unit. On 7 February 1995, they tried unsuccessfully to repair it by fine-tuning. The X-Y unit was eventually replaced, on the advice of LPKF that repairs could not restore the machine to its required accuracy.

These proceedings

On 25 October 1995, these proceedings were commenced against the first defendant. The writ with the statement of claim was then amended to join the second defendant. The claim against the defendants is for breach of duty of care.

The issue before me was whether the corrosion was...