Huationg Contractor Pte Ltd v Choon Lai Kuen (trading as Yishun Trading Towing Service)

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin J
• Judgment Date: 24 June 2020
• Neutral Citation: [2020] SGHC 129
• Court: High Court (Singapore)
• Docket Number: Suit No 730 of 2018
• Year: 2020
• Published date: 30 June 2020
• Hearing Date: 26 March 2020,20 February 2020,19 February 2020,18 February 2020,26 February 2020,24 February 2020
• Plaintiff Counsel: Sham Chee Keat and Dawn Tan Si Jie (Ramdas & Wong)
• Defendant Counsel: Richard Tan Seng Chew and Michelle Peh Siqi (Tan Chin Hoe & Co)
• Subject Matter: Contract,Breach,Contractual terms,Exclusion clauses
• Citation: [2020] SGHC 129

Lee Seiu Kin J: Introduction

Most of the journey from Fort Road to Benoi Crescent is conducted on the Ayer Rajah Expressway (“the AYE”). The route is relatively flat, gradient-wise,¹ and has few traffic lights or bends to negotiate.² Most drivers can expect an uneventful journey, especially on a late Friday afternoon. This was exactly Mr. Ong Sen Lian’s (“Ong”) experience³ as he operated a concrete pump truck (“the Truck”) which was towed across the AYE from Fort Road to Benoi Crescent on 20 July 2012. As he neared Benoi Crescent, he found smoke emitting from the Truck.⁴ Before long, the Truck’s chassis and tyres had caught fire.⁵ The present action centred on the nature and cause of this fire.

The suit was brought by the owners of the Truck against the towing company which had been entrusted with transporting the Truck. The plaintiff-owner alleged breaches of a bailment contract. The defendant-company denied the breaches and sought, in the alternative, to rely on limitation and exemption clauses which had been purportedly incorporated into the contract. Following five days of trial, I granted judgment in favour of the defendant. My reasons were as follows.

Facts The parties

Huationg Contractor Pte Ltd (“Huationg”) is the plaintiff-owner of the Truck. Yishun Trading Towing Service (“Yishun Towing”) is the defendant-company that had been entrusted with transporting the Truck from Fort Road to Benoi Crescent on 20 July 2012.⁶

The contractual arrangement between the parties

The contract between the parties was not captured in any written document.⁷ However, parties broadly agreed that Huationg’s chief executive officer, Mr Patrick Ng (“Ng”)⁸ had spoken to Yishun Towing’s operations manager, Mr Koh Tian Siew (“Koh”)⁹ and had engaged Yishun Towing for towing services at a meeting sometime in 2007.¹⁰ The resulting contract (“the services agreement”) envisioned Yishun Towing providing towing services as and when Huationg requested for them. At the meeting, the main term discussed was the price to be charged per towing trip.¹¹ Notably, the parties did not discuss any exemption or limitation of liability clause.¹² A set of limitation and exemption clauses were printed on the reverse side of Yishun Towing’s work orders. These work orders however, were not shown or even referenced at the meeting.¹³

Work orders were operational documents that tracked and recorded the job assignments received by Yishun Towing. They followed a standard form¹⁴ and, as stated earlier, had a set of limitation and exemption clauses (“the liability clauses”) printed on the reverse side:¹⁵

TERMS AND CONDITIONS

1. The Customer and the owner shall defend and indemnify the Company against all claims and demands of whatsoever nature and by whomsoever made and howsoever arising (from Company’s fault, what of diligence, negligence or otherwise) in excess of SGD$20,000.00 or where the Company is excluded from liability under this Agreement without excess arising directly or indirectly from the collection carriage storage and/or delivery of the Goods. 2. The Company shall not be liable for the loss, misdelivery or damage to the goods if such loss, misdelivery or damage has arisen from: - a) Act of God; b) compliance with instructions given to the Company by the Customer or Owner or any other person entitled to give them; c) Act. default or omission of whatsoever nature by the Customer, or Owner, its servant or agents or any person having an interest in the Goods; d) handling, loading, storage or unloading of the Goods by the Customer or Owner.

…

5. The Company shall not in any [sic] be liable for any claim cost or damage to the Goods by whomsoever made and howsoever arising (from the Company’s fault, what of diligence, negligence wilful misconduct or otherwise) if the Company is not notified in writing of the loss or damage before the expiration of 30 days after transit ends or 7 days after delivery whichever is the later.

…

The standard practice¹⁶ was for Yishun Towing’s drivers to generate a work order upon receiving a towing assignment from Huationg. The work order would detail matters such as the arrival time, delivery time, the date of operation and route taken.¹⁷ This work order would be collated by Yishun Towing and, together with an invoice, submitted to Huationg every two weeks. Huationg would then verify the work orders and invoices, and make payments to Yishun Towing accordingly. Yishun Towing too, would use these work orders to keep track of the trips that its drivers had completed. ¹⁸ This was useful for computing its drivers’ salaries,¹⁹ as they (the drivers) were paid on a per-trip basis.²⁰

The events of 20 July 2012

Yishun Towing was instructed by Huationg to tow the Truck from Fort Road to 9 Benoi Crescent on 20 July 2012. Koh arranged for Ong and another driver to undertake the towing assignment.²¹ A typical towing operation involved one driver operating the towing vehicle and another operating the towed vehicle, in this case, the Truck. Although this is described as a towing operation, the “towed” vehicle – the Truck – is propelled by its own motor even as it is attached to the rear of the towing vehicle (the parties agreed that this is a safety requirement of the Land Transport Authority). With the engines of both vehicles operating to propel each vehicle during the towing process²², both drivers have to coordinate their driving through a series of hand signals and established practices²³ to ensure smooth acceleration and cruising deceleration.

Prior to commencing the towing operation, Ong and his partner visually inspected the Truck to check for deflated tyres and ensured that the brakes were functioning.²⁴ Nothing was amiss. Separately, Huationg had also serviced the Truck on 14 July 2012, finding no issues with the Truck.²⁵ In other words, there was nothing out of the ordinary when Ong and his partner commenced the towing operation.

Throughout the journey, Ong said that he kept an eye on the brake air pressure meter²⁶, checked his mirrors regularly²⁷ and was alert to any sluggishness, drag or resistance whilst operating the Truck.²⁸ He did not experience anything unusual and described the journey as “uneventful”.²⁹

However, as they neared Benoi Crescent, he noticed that “the tyre area at the right portion of the [Truck]” was emitting smoke.³⁰ He saw this in the “right side mirror of the [Truck]”. ³¹ Ong recounted that there had been “no squealing sound coming from the tyres, nor [had] there [been] skid marks on the road”.³² Ong and his partner pulled over their vehicles and before long, the Truck’s tyres and chasis had caught fire. The Singapore Civil Defence Force’s Report concluded that:³³

“The fire was localised to the tyre of [the Truck] which was on tow. We believed that the brake pads were somehow engaged and this resulted in frictional heating as the vehicle was towed. There were no other possible accidental fire causes and there were no indicators of incendiarism”.

Both Huationg’s and Yishun Towing’s experts agreed with this conclusion.³⁴ The only question was how the brake pads had been engaged.

Issues to be determined

The parties agreed that the services agreement was a bailment contract.³⁵ The onus was therefore on Yishun Towing to prove, on a balance of probabilities, that it had taken reasonable care of the concrete pump truck: Sun Technosystems Pte Ltd v Federal Express Services (M) Sdn Bhd [2007] 1 SLR(R) 411 at [12] (“Sun Technosystems”). Though not obliged to identify the precise cause of the damage complained of, a bailee (Yishun Towing, in this case) may nonetheless do so in a bid to absolve itself of allegations of negligence: Sun Technosystems at [16].

To that end, Yishun Towing sought to prove that the fire was not caused by negligence on its part. Therefore, the first issue involved identifying the cause of the fire (“the Causation Issue”). In the alternative, Yishun Towing sought to rely on the liability clauses in defending itself against Huationg’s claims. Therefore, the second issue was whether the liability clauses had been successfully incorporated into the services agreement (“the Incorporation Issue”).

The Causation Issue

At trial, three theories were proposed by the experts: Ong had accidentally engaged the parking brake sometime during the towing operation. The parking brake however, had only been partially engaged so the vehicle could still move. The friction and resultant heat from brake pads rubbing against the brake drum caused the fire. This was Huationg’s first theory (“the Accident Theory”). Ong, as a nervous and inexperienced driver, had periodically applied the service brakes while the Truck was in motion.³⁶ This is known as “riding”³⁷ the brakes. This caused frequent, regular application of the brake pads to a moving brake drum. The friction and resultant heat from brake pads rubbing against the brake drum caused the fire. This was Huationg’s second theory (“the Riding Theory”). Air pressure had slowly fallen in the parking brake’s pressure chamber. Under normal circumstances, the air pressure would have kept a large spring in the braking chamber compressed. This spring, which was connected to the braking rod, slowly decompressed as the air pressure decreased in the chamber. As the spring was gradually released, the parking brakes were partially engaged. The vehicle could still move but the friction and resultant heat from the brake pads rubbing against the brake drum caused the fire. This was Yishun Towing’s sole theory (“the Pressure Leak Theory”).

I rejected both of Huationg’s theories and accepted Yishun Towing’s theory. My reasons were as follows.

The Accident Theory

The Accident Theory relied on two key assumptions, the absence of either being fatal to the theory. First, it assumed that Ong had accidentally engaged the brakes. There was...