Hua Khian Ceramics Tiles Supplies Pte Ltd v Torie Construction Pte Ltd

CourtHigh Court (Singapore)
JudgeG P Selvam JC
Judgment Date30 November 1991
Neutral Citation[1991] SGHC 173
Citation[1991] SGHC 173
Docket NumberSuit No 1336 of 1990
Defendant CounselChandra Mohan (Tan Rajah & Cheah)
Plaintiff CounselManjit Singh (Manjit Darshan & Partners)
Publication Date19 September 2003
Date30 November 1991
SubjectSummary judgment,Misleading the court,Set-off claim by defendant,Loss of reputation caused by other party's breach,Damages,Contract,O 18 r 17 Rules of the Supreme Court 1970,Civil Procedure,Remedies

In 1989 the government embarked on a project to improve the promenade in the vicinage of the Padang. The project was managed for the government by the Public Works Department (`PWD`). The PWD awarded the contract for the construction works to the defendants, Torie Construction Pte Ltd (`the defendants`). The value of the contract was $3,090,700. The defendants were required to deposit $154,535 being 5% of the contract value as security for due performance of the contract, which they did by an insurer`s guarantee. The project called for the walkways to be laid with granite tiles imported from Spain. The contract stipulated completion of the works by 19 April 1990 and imposed liquidated damages for late completion at $800 per day.

The plaintiffs by an agreement evidenced by two letters undertook to supply the granite tiles to the defendants. The particulars of the tiles and the pricing were agreed as follows:

Description Qty/M2 Price/M2 Total amount

595 [times ] 595 [times ] 25mm 5,060 $129 $652,740

295 [times ] 295 [times ] 25mm



$ 66,306

300 [times ] 300 [times ] 75mm



$ 67,348

720 [times ] 245 [times ] 20mm


$ 27

$ 10,287


The effective delivery schedule extended from mid-December 1989 to mid-January 1990.

There was no term requiring the plaintiffs to pay liquidated damages for any delay in the supply of the granite tiles. There was also no express provision in the agreement requiring the plaintiffs to indemnify the defendants in respect of any claim from the PWD which the defendants might face.

The claims

The plaintiffs admittedly failed to adhere strictly to the delivery schedule. The defendants remonstrated against the delay. The plaintiffs blamed their supplier in Spain. In the event the defendants invoked a provision in the PWD contract and asked for an extension of the completion date. By a letter dated 19 May 1990 to the defendants the PWD extended the completion date of the project to 3 June 1990. In the letter the PWD stated that the extension of time was given for the supply and delivery of additional granite tiles.

On 4 June 1990 the defendants confirmed in writing to the PWD that the contract works had been completed on 3 June 1990. There is no question that the project was completed and handed over within the extended completion period.

The plaintiffs submitted invoices for the total amount of $657,290.97. The defendants paid $325,046.46 leaving a balance of $332,244.51 under six invoices. On 27 July 1990 the plaintiffs issued a writ claiming the balance amount and applied for summary judgment for that amount. The defendants did not deny that full deliveries were made as evidenced by the relevant delivery orders but resisted the application with cross-claims. On 12 November 1990 the registrar gave judgment for $126,234.99 and gave unconditional leave to defend for the balance amount of $206,009.52. The defendants thereafter filed a defence and counterclaim asserting various cross-claims. The plaintiffs appealed seeking judgment for the remaining $206,009.52. When the appeal came up for hearing before me on 12 March 1991, I allowed the appeal and gave judgment for the remaining amount with interest at 8%pa from 1 July 1990. I now give the grounds of my decision.

The defence of set-off

Order 18 r 17 of the Rules of the Supreme Court 1970 provides:

Defence of set-off

Where a claim by a defendant to a sum of money (whether of an ascertained amount or not) is relied on as a defence to the whole or part of a claim made by the plaintiff, it may be included in the defence and set-off against the plaintiff`s claim, whether or not it is also added as a counterclaim.

The rule does not afford any guidance on the circumstances in which a defendant may set up a cross-claim as a defence. The law recognizes the following forms of set-off: (i) legal set-off, (ii) abatement, and (iii) equitable set-off. Each of these expressions is a term of art. Morris LJ in Hanak v Green [1958] 2 QB 9[1958] 2 All ER 141 at p 23 summed up the categories of set-off as follows:

(a) a set-off of mutual debts;

(b) in certain cases a setting-up of matters of complaint which, if established, reduce or even extinguish the claim; and

(c) reliance upon equitable set-off and reliance as a matter of defence upon matters of equity which formerly might have called for injunction or prohibition.

Legal set-off

Before 1728 a defendant who had a cross-claim or was entitled to any relief or remedy against his adversary had to bring a separate action to enforce his right. He could not match it against the adversary`s claim. The practice was changed by statute in 1728 with the creation of the legal set-off. Though called a legal set-off, it was truly a statutory relief beginning with the English Set-Off Statutes of 1728-1734. Under these and subsequent statutes, a defendant became entitled to set off a debt against a debt. It was in substance a merger or combining of the two debts to obtain the net result. Under various set-off statutes a cross-claim for a liquidated monetary claim could be used to diminish an adversary`s claim. It did not matter that the cross-claim was completely unrelated to the...

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