Jet Holding Ltd and Others v Cooper Cameron (Singapore) Pte Ltd and Another

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judgment Date: 22 August 2005
• Date: 22 August 2005
• Docket Number: Suit No 1523 of 2002

[2005] SGHC 149

High Court

Belinda Ang Saw Ean J

Suit No 1523 of 2002

Jet Holding Ltd and others

Plaintiff

and

Cooper Cameron (Singapore) Pte Ltd and another

Defendant

Randhir Ram Chandra and Nicole Tan (Haridass Ho & Partners) for the plaintiffs

Prem Gurbani and Bernard Yee (Gurbani & Co) for the first defendant

Tan Teng Muan and Wong Khai Leng (Mallal & Namazie) for the second defendant.

Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518 (refd)

Ali Reza-Delta Transport Co Ltd v United Arab Shipping Co [2003] 2 Lloyd's Rep 450 (folld)

Caparo Industries Plc v Dickman [1990] 2 AC 605 (folld)

Central Bank of India v Bansal Hemant Govindprasad [2002] 1 SLR (R) 22; [2002] 3 SLR 190 (folld)

Chong Khee Sang v Pang Ah Chee [1984] 1 MLJ 377 (folld)

Deutz Far East (Pte) Ltd v Pacific Navigation Co Pte Ltd [1989] 2 SLR (R) 392; [1989] SLR 926 (refd)

Donoghue v Stevenson [1932] AC 562 (refd)

Energy Shipping Co Ltd v UDL Shipping (Singapore) Pte Ltd [1995] 2 SLR (R) 609; [1995] 3 SLR 25 (folld)

Fong Maun Yee v Yoong Weng Ho Robert [1997] 1 SLR (R) 751; [1997] 2 SLR 297 (folld)

Forsikringsaktieselskapet Vesta v Butcher [1989] AC 852 (folld)

Governors of the Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd [1985] AC 210 (refd)

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (folld)

Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (folld)

Hogan v Bentinck West Hartley Collieries (Owners) Ltd [1949] 1 All ER 588 (folld)

Jian He, The [1999] 3 SLR (R) 432; [2000] 1 SLR 8 (folld)

KPM Khidmat Sdn Bhd v Tey Kim Suie [1994] 2 MLJ 627 (folld)

Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] AC 785 (folld)

Lim Mong Hong v PP [2003] 3 SLR (R) 88; [2003] 3 SLR 88 (folld)

Maersk Colombo, The [2001] 2 Lloyd's Rep 275 (folld)

Man B&W Diesel S E Asia Pte Ltd v PT Bumi International Tankers [2004] 2 SLR (R) 300; [2004] 2 SLR 300 (distd)

Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360 (refd)

Regina v Shepherd [1993] AC 380 (refd)

Sim & Associates v Tan Alfred [1994] 1 SLR (R) 146; [1994] 3 SLR 169 (folld)

Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601; [1973] 2 All ER 260 (folld)

Voaden v Champion [2002] 1 Lloyd's Rep 623 (refd)

Winkfield, The [1902] P 42 (folld)

Evidence Act (Cap 97, 1997 Rev Ed) ss 32, 67 (consd);ss 12, 35 (1), 35 (6), 35 (10) (b), 64, 66

Rules of Court (Cap 322, R 5, 2004 Rev Ed) O 24 r 9, O 27 r 4 (1), O 27 r 4 (2), O 92 r 1

Contract–Breach–Ship manager contracting with defendant on behalf of disclosed principal–Alleged breach of contract by defendant–Whether ship manager and shipowner having title to sue for breach of contract–Contract–Contractual terms–Implied terms–Defendant contracting to undertake refurbishment of slip joint on board drill ship–Refurbished slip joint fracturing due to defect–Whether implied term in contract that defendant to exercise reasonable care and skill in refurbishing of slip joint–Whether such implied term breached–Whether existence of such implied term negativing imposition of duty of care on defendant in tort–Evidence–Documentary evidence–Proof of contents–Whether photocopies of documents tendered as evidence without proving authenticity of documents and statements therein admissible in court–Sections 32, 67 Evidence Act (Cap 97, 1997 Rev Ed)–Tort–Negligence–Breach of duty–Defendant responsible for refurbishing slip joint used on drill ship–Slip joint fracturing due to defect–Whether defendant liable in negligence for loss sustained by plaintiffs–Whether defendant owing duty of care to each plaintiff

The first plaintiff (“JHL”) chartered the drill ship, Energy Searcher,to the second plaintiff (“JSL”) under a bareboat charter. Pursuant to a contract made in November 2000 by the third plaintiff (“JDL”), the manager of the Energy Searcher,acting as agent for JSL, the Energy Searcher was time chartered to an oil exploration company. Some years before that, the slip joints on board the Energy Searcher,having been found to be deficient after an inspection in 1997, were refurbished according to a contract between JDL, acting as agent for JSL, and the first defendant (“Cameron”).

Subsequently, while on site, a decision was made to replace the primary slip joint with the spare slip joint. In the course of installation, the spare slip joint fractured due to tensile overload, which resulted in the loss of other drilling equipment. It was later discovered that the wall thickness of the spare slip joint had been inadequate. The spare slip joint had been fabricated by the second defendant, Cameron's approved contractor (“Stork”).

The first three plaintiffs along with the fourth plaintiff (“MEP”), who claimed as assignee of the respective rights, titles and interest of the first three plaintiffs, sued the defendants for breach of contract by Cameron and a breach of the duty of care owed by each of the defendants to the plaintiffs. The issues to be decided included: (a) whether the slip joint that had fractured was indeed the spare slip joint refurbished by the defendants; (b) whether any of the plaintiffs had title to sue; (c) whether Cameron was liable for breach of contract, breach of duty of care in and about the refurbishment of the spare slip joint, breach of warranty or negligent misstatement; (d) whether Stork was liable for breach of duty for having failed to observe or detect the inadequate wall thickness of the spare slip joint; (e) whether Cameron was contractually exempted from liability for the plaintiffs' losses; (f) whether the defendants' liabilities were extinguished or reduced by the doctrine of novus actus interveniens or the contributory negligence of the plaintiffs; and (g) whether the plaintiffs had successfully proved the loss sustained by reason of the breach and the damages for the loss.

Held, allowing the claim and declaring that the first defendant was entitled to an indemnity from the second defendant:

(1) The evidence when viewed in its totality, on a balance of probabilities, identified the fractured slip joint as the spare slip joint that was refurbished by the defendants. As the contract to refurbish the slip joint was between Cameron and JDL as agent for its disclosed principal, JSL, it was JSL who was entitled to sue Cameron in contract: at [42], [47] and [52].

(2) The evidence was sufficient to establish JHL's ownership of the drill ship and the subsequent charter to JSL as demise charterer. Applying the established principles of bailment, JHL as owner and bailor could sue Cameron for essentially the same damages as JSL in its capacity as bailee. Furthermore, whilst the contract might be material to the incidence of liability as between the contracting parties, it did not have the effect of negativing a duty of care owed by Cameron to JSL or JHL. The same reasoning would apply to find JSL and JHL as the persons with title to sue Stork in negligence and for negligent misstatement: at [56] to [60], [67].

(3) As the assignments purportedly made by the first three plaintiffs to MEP were not proved, MEP had no locus standi to bring the present action: at [69].

(4) There was sufficient justification to imply into the contract between Cameron and JSL terms to the effect that Cameron would use reasonable care and skill in rendering the services which it had contracted to provide, whether by itself or by Stork. This did not negate the imposition of a duty of care in tort which would, however, be no more than co-extensive with the contractual obligation: at [74] to [76], [82].

(5) Cameron was negligent and in breach of the implied terms to exercise reasonable care and skill in that its employees, having been aware of the deficiency in the wall thickness of the spare slip joint, failed to provide dimensional drawings to Stork so that the extent of the deficiency in the location of the failure could be investigated: at [83], [101] and [102].

(6) A claim for breach of warranty is founded in contract. Whether the statements in the Certificate of Compliance (“the Certificate”) issued by Cameron amounted to a statement of existing fact that gave rise to a contractually enforceable promise that the fact was true depended on the representee performing his part of the bargain by, as in the present case, paying for the Certificate. As it appeared that the Certificate was issued gratuitously, it could not be treated as a warranty that was breached by Cameron: at [63] and [64].

(7) In respect of a claim based on negligent statements, the plaintiff would have no cause of action unless he could show damage and he could only have suffered damage if he had relied on the negligent statement. As there was no proven reliance on the Certificate, there was no duty of care imposed on Cameron in that respect: at [105] to [109].

(8) The exemption clauses Cameron sought to rely on were not incorporated into the contract between Cameron and JSL. Inadequate notice was given as the clauses had not been brought fairly and reasonably to the attention of JDL (acting as agent for JSL), nor were they printed on the reverse of the quotation addressed by Cameron to JDL. In any event, Cameron could not be construed as falling within the definition of “Seller” in the standard terms that it sought to rely upon: at [114] to [116].

(9) Cameron had not established that the level of or lack of maintenance of the spare slip joint, or JSL and JHL's failure to ensure that its employee was familiar with the requirements and procedures for the inspection of the spare slip joint, were intervening causes of so powerful a nature that its own conduct was not a cause of the failure of the spare slip joint at all but merely part of the surrounding circumstances. It could not therefore rely on the defence of novus actus interveniens: at [122] to [127].

(10) As Cameron's breach of the implied terms to...