Holland Leedon Pte Ltd (in liquidation) v C & P Transport Pte Ltd

• Court: High Court (Singapore)
• Judge: Lionel Yee JC
• Judgment Date: 31 December 2013
• Neutral Citation: [2013] SGHC 281
• Citation: [2013] SGHC 281
• Hearing Date: 04 October 2013,09 September 2013,27 June 2013,17 April 2013,26 June 2013,18 April 2013,30 April 2013,10 April 2013,24 April 2013,19 April 2013,22 April 2013,23 April 2013,08 April 2013,03 April 2013,29 April 2013,24 June 2013,25 April 2013,26 April 2013,25 June 2013,04 April 2013,09 April 2013
• Published date: 10 February 2014
• Docket Number: Suit No 239 of 2009
• Plaintiff Counsel: Anthony Lee, Gan Kam Yuin, Cheng Geok Lin Angelyn and Eu Li Lian (Bih Li & Lee)
• Defendant Counsel: Jimmy Yim SC, Darrell Low Kim Boon and Ong Yuan Kun (Drew & Napier LLC)
• Subject Matter: Bailment,Negligence,Contract,Contractual terms,Unfair Contract Terms Act,Damages,Assessment,Contributory Negligence

Lionel Yee JC: Introduction

This dispute arises out of the storage of metal coils in a warehouse.

The plaintiff, Holland Leedon Pte Ltd (in liquidation) (“the Plaintiff”), is a company registered in Singapore and is presently in members’ voluntary liquidation. Prior to the commencement of the liquidation process, the Plaintiff was in the business of metal stamping, tools and die making, clean room assembly, and manufacturing hard-disk drive covers. In 2004, the Plaintiffs sold its business to a company known as Metalform Asia Pte Ltd. The defendant, C & P Transport Pte Ltd (“the Defendant”), is also a Singapore registered company and is in the business primarily of providing logistics, transportation, and warehousing related services.

The background facts

As the background facts to the present claim are somewhat drawn-out, I will for the purposes of this introduction only set out the significant events leading up to the trial. In so far as any further details are relevant to my findings, they will be discussed further in my analysis of the evidence.

The Plaintiff’s stock of metal coils

After the Plaintiff sold its business to Metalform Asia Pte Ltd (“Metalform Asia”) in 2004, they continued to hold stocks of metal coils and steel sheets, and these were stored in a warehouse owned by Transware Distribution Services Pte Ltd (“Transware”). According to the Plaintiff, it discovered sometime in August 2005 that Metalform Asia was improperly appropriating its stocks. It therefore decided to move its coils and steel sheets to a different warehouse and the Plaintiff decided on storage of the stocks with the Defendant at its warehouse at 47A Jalan Buroh, Singapore 619492 (“the Defendant’s warehouse”). Most of the coils were made of stainless steel and these could be sub-divided into two main categories: Type SUS 304 coils (“SUS 304”) and Type SUS 430 coils (“SUS 430”). These differed in the amount of nickel present in the steel – in respect of the former, 8–10%, and in respect of the latter, less than 1%. Within each of these types, the coils could also be sub-divided into differing finishes of their surfaces with the main ones known as 2B and 2D. While most of the stainless steel coils were large so-called “mother coils”, there were some coils which were denoted as “small coils”. There were also some stainless steel cut sheets which are not the subject of the present proceedings. Apart from stainless steel coils, there were also smaller numbers of carbon steel coils and some aluminium coils known as Type ALUM H24. All the carbon steel and aluminium coils were mother coils.

Over a number of days in August and September 2005, the metal coils and steel sheets were transported by the Defendant from the Transware warehouse to the Defendant’s warehouse. By the Plaintiff’s estimate, these goods were worth a prime value of S$11,667,090. The following quantities and weights of coils and steel sheets were moved:

Description	Quantity	Weight (kg)
Mother coils	716	3,130,890
Small coils	134	64,387
Cut sheets	88	40,545

The warehousing arrangement or contract (“the Warehousing Contract”) was, according to the Defendant, governed by a quotation dated 26 August 2005, in which it was stated to be subject to the Defendant’s “Standard Terms and Conditions”. This quotation was never signed by the Plaintiff. It is not, however, disputed by the parties that the Plaintiff would pay the Defendant warehousing charges of S$11,240.36 per month (before Goods and Services Tax).

The missing coils and damage to the coils

Sometime in May 2008, 11 mother coils were discovered to be missing from the Plaintiff’s stocks kept at the Defendant’s warehouse. The Defendant has not denied that these coils were lost. The Plaintiff also alleged that a larger number of the coils were damaged by flooding and handling by the Defendant. There were two known incidents of flooding during periods of rain at the warehouse – on 18 June 2008 and 22 October 2008. The damage to the metal coils was particularised by the Plaintiff as taking the form of water damage, handling or packaging damage, or severe deformation. Some coils were alleged as having suffered only one type of damage, while others suffered a combination of different types of damage.

The 1st Miller survey and report

Arising from such discovery, the Plaintiff engaged a surveyor, Miller International Loss Adjustors (S) Pte Ltd (“Miller”), to survey the goods at the Defendant’s warehouse and to assess any damage by a visual inspection. An inspection was conducted by William Thomas Selby of Miller (“Selby”) from 20 to 22 October 2008. A survey report dated 5 January 2009 was produced (“the 1st Miller Report”). In this 1st Miller Report, Selby divided the coils into two categories: “sound” and “unsound” (hereinafter referred to as “the ‘sound’ coils” and “the ‘unsound’ coils” or described as “sound” or “unsound” as the case may be, respectively), with the latter being those where significant damage was identified. He also noted briefly the external condition of the coils he inspected.

On 17 March 2009, a writ of summons endorsed with a statement of claim was filed by the Plaintiff. This statement of claim was for the 11 missing coils, and for the 173 coils classified by Selby in the 1st Miller Report as “unsound”, and also a further five coils classified as “sound” which were described by Selby as exhibiting “coil damage”.

The move to the Sagawa warehouse

In July 2009, the Plaintiff removed its metal coils and cut sheets from the Defendant’s warehouse to another warehouse run by a different warehouseman at 14 Tuas Avenue 1 known as the Sagawa warehouse (“the Sagawa warehouse”).

The joint survey

From 30 November 2009 to 7 December 2009, a joint survey of the coils classified as “unsound” in the 1st Miller Report was conducted by Selby and the Defendant’s surveyors, Insight Adjusters and Surveyors Pte Ltd (“Insight”). During this survey, the 173 “unsound” coils were taken out by forklift from the stacks of coils in the Sagawa warehouse and a visual inspection was conducted.

From this joint survey, Mohamed Ferdaus bin Mohamed Yusoff (“Ferdaus”), who was then an employee of Insight, produced a report dated 4 March 2010 (“the Insight Report”). Selby also produced a report which was part of what is known as the 2nd Miller Report as described in the next few paragraphs. This report and the Insight Report are identical in so far as the description of the damage to each “unsound” coil inspected is concerned.

The second Miller survey and report

On 3 December 2009, the Plaintiff’s solicitors wrote to the Defendant’s solicitors inviting them to also conduct a joint survey of the coils which had been classified earlier as “sound” in the 1st Miller Report, intimating that the Plaintiff might wish to claim damages in respect of those coils as well. The Defendant declined the invitation. The invitation was repeated on 8 December 2009 and 9 December 2009 and the Defendant’s position remained unchanged. On 10 December 2009, the Defendant’s solicitors wrote to state its position that any deterioration of the coils was due to storage in the Sagawa warehouse, and so they would not participate in the inspection of the “sound” coils.

From 10 to 15 December 2009, Selby inspected the “sound” coils by a visual inspection of their external condition. On 19 January 2010, Selby produced a second report (“the 2nd Miller Report”) covering his findings from the joint survey (with Insight) of the “unsound” coils as well as his survey of the “sound” coils.

Laboratory testing

Because the inspections thus far were only based on visual observations, the parties decided that it was necessary to appoint steel experts to determine the “cause, nature and extent” of the damage to the coils. In June 2010, the Plaintiff engaged Dr Qiu Jianhai (“Dr Qiu”) of WebCorr Corrosion Consulting Services (“WebCorr”) and the Defendant engaged Mr Liam Kok Chye (“Liam”) of Matcor Technology & Services Pte Ltd (“Matcor”) as their respective experts. Dr Qiu and Liam were both metallurgists.

Representatives of both parties participated in a joint inspection at the Sagawa warehouse on 2 September 2010. Seven “unsound” coils (which I will refer to as “Coil No 1”, “Coil No 2”, etc) were selected as representative samples of the “unsound” coils which formed the subject matter of the Plaintiff’s claim at that time. Both WebCorr and Matcor used all seven coils to conduct their tests. The selected coils were partially uncoiled in a joint exercise and each side took samples from them for further laboratory tests and analysis. During this exercise, Dr Qiu decided to partially uncoil and take a sample from a coil which was classified as “sound” (“Coil No 8”) for testing, and as a result, Liam also took a sample of that same “sound” coil. Expert reports were produced by Dr Qiu and Liam on 30 November 2010 and 20 December 2010 respectively.

The amendment to the statement of claim

On 21 March 2011, the statement of claim was amended by the Plaintiff to claim for loss and damage for an additional 415 metal coils on the basis of the 2nd Miller Report and the fact that Dr Qiu’s report disclosed damage to the eighth (“sound”) coil which was alleged to be worse than that sustained by the seven representative “unsound” coils. Due to what the Plaintiff says was a combination of oversight and misunderstanding between it and its solicitors, the 2nd Miller Report was not disclosed to the Defendant when it was produced and this was done only some time later.

The reports on the quantification of the damage

Finally, on the basis of the data collected from the above mentioned reports, the Plaintiff’s expert, Dr Roger Hooper, a consultant in the stainless steel industry, produced a report dated 20 December 2011 (“the Hooper Report”) on the quantification of the damage suffered...