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

• Judge: Lai Siu Chiu J
• Judgment Date: 29 June 2006
• Neutral Citation: [2006] SGCA 20
• Citation: [2006] SGCA 20
• Defendant Counsel: Gurbani Prem Kumar and Bernard Yee (Gurbani & Co),Alvin Yeo Khirn Hai SC, Chan Hock Keng and Jaclyn Neo (Wong Partnership)
• Published date: 03 July 2006
• Plaintiff Counsel: K Shanmugam SC (Allen & Gledhill), Randhir Ram Chandra and Nicole Tan (Haridass Ho & Partners)
• Date: 29 June 2006
• Docket Number: Civil Appeals Nos 96, 122,
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether contract subject to term implied in law that first defendant to take reasonable care in dealings with second defendant,Hearsay,Whether doctrine of contributory negligence applicable to defendants' concurrent breaches of contract,First defendant claiming indemnity from second defendant for breach of contract,Plaintiffs failing to produce originals of documents tendered in evidence,First defendant subcontracting refurbishment of vessel's slip joint to second defendant,Plaintiffs omitting to call makers of documents tendered in evidence,Whether parties agreeing that authenticity of documents not in issue,Sections 32, 35 Evidence Act (Cap 97, 1997 Rev Ed),Contractual terms,Admissibility of evidence,Damages,Necessity for best evidence,Whether exceptions to hearsay established,Principles,Evidence,Implied terms,Whether first defendant breaching any such term,Whether documents exhibited to affidavit automatically admitted into evidence,Sections 66, 67 Evidence Act (Cap 97, 1997 Rev Ed),Plaintiffs exhibiting documents in question in witness's affidavit,Contract,Whether first defendant's own breach of implied term in contract precluding first defendant from claiming damages for second defendant's breach,Remedies

29 June 2006 Judgment reserved.

Andrew Phang Boon Leong JA (delivering the judgment of the court):

Introduction

1 The present proceedings comprise a total of six related appeals. The number of appeals is due to the fact that there are three main parties as well as the fact that there are appeals against the trial judge’s orders as to costs. However, that having been said, the basic facts are common to all these appeals and are (more importantly) relatively straightforward as well. It would in fact be appropriate at this juncture to set out, in as succinct a manner as possible, the factual matrix, legal issues in the High Court, as well as the learned trial judge’s decision. We will then proceed to set out the issues that arise in the present appeals before, of course, dealing with them accordingly.

2 Indeed, it ought to be noted that counsel for the parties in the present appeal focused on only a few of the more significant issues. This is not surprising as the learned trial judge (“the Judge”) dealt with the various issues raised at first instance in an extremely comprehensive fashion (see, especially, Jet Holding Ltd v Cooper Cameron (Singapore) Pte Ltd [2005] 4 SLR 417, which is the main judgment, and Jet Holding Ltd v Cooper Cameron (Singapore) Pte Ltd [2006] SGHC 20, which deals solely with the issue of costs). In fact, and as we shall elaborate upon below, the comprehensiveness just mentioned is accompanied by ample clarity as well as legal justification with regard to virtually all the legal issues raised. To this end, therefore, we will focus, in the main, on those issues which counsel for the parties themselves focused upon during the present appeals. To be sure, we will also cover the remaining issues but will not seek to re-traverse ground already well-covered by the Judge.

3 The factual matrix is, as already mentioned, a relatively straightforward one, as follows.

4 The present proceedings arise out of the two decisions referred to at [2] above, and which we shall hereafter refer to as “the original action” (with the judgments at [2005] 4 SLR 417 and [2006] SGHC 20 being referred to as “GD” and “the costs judgment”, respectively). The original action involved three main interest groups: the four plaintiffs, the first defendant (“Cameron”) and the second defendant (“Stork”). Each group has appealed against both of the Judge’s decisions, leading to the total of six appeals mentioned at the outset of this judgment.

5 The dispute arose from the fracture of a slip joint (“the Failed Slip Joint”) on board an oil-rig, the Energy Searcher (“the Vessel”), on or about 16 March 2001. Slip joints (also known as telescoping joints) form part of a vessel’s drilling equipment, and are used to accommodate changes in distance between the drill ship and the seabed caused by tides or ship movement. The upper end of the slip joint is connected to the vessel in question by a riser box, which is a critical load-bearing component in the drilling unit. In the present case, the Failed Slip Joint had an RCK-type riser box (“the Riser Box”). On the relevant date, in the course of being installed on the Vessel, the Failed Slip Joint fractured at the end connector of the Riser Box, about 19 inches from the box face. As a result of this, the components of the drilling unit attached to the lower half of the Riser Box dropped to the bottom of the ocean. A large part of the equipment still remains unfound. Subsequent investigation revealed that the wall of the Riser Box had been over-machined, leading to excessive thinness and inability to support the weight of the drilling unit.

6 In response to these events, the plaintiffs commenced the original action against both defendants. The four plaintiffs were as follows: (a) Jet Holding Ltd (“JHL”), the owner of the Vessel on the relevant date; (b) Jet Shipping Ltd (“JSL”), the former owner of the Vessel and the bareboat charterer of the Vessel on the relevant date; (c) Jet Drilling (S) Pte Ltd (“JDL”), the manager of the Vessel; and (d) Maurel Et Prom (“MEP”), the alleged assignee of the respective rights, title and interest of the other three plaintiffs.

7 Prior to the events in question, there were originally two slip joints on the Vessel, which were respectively given the subsea numbers 501 and 502. Upon finding that both joints were unfit for use, JDL contracted with Cameron on behalf of JSL, the owner of the Vessel at that time, to refurbish and repair them. The works were then subcontracted to Van Der Horst Engineering Services Pte Ltd (“VDH”). Using selected components from both joints, VDH re-assembled a single operational joint. This refurbished joint was given the subsea number 502 and was used as the primary slip joint on board the Vessel (“the Primary Slip Joint”). Cameron then subcontracted the refurbishment of the unused parts of the two original joints to Stork (“the refurbishment contract”). Stork was told to create a new slip joint (“the Standby Slip Joint”). VDH then sent the discarded parts to Stork, which then used the parts to fabricate the Standby Slip Joint. This joint was allocated the subsea number 503.

8 In the original action, the plaintiffs alleged that the Failed Slip Joint was one and the same as the Standby Slip Joint and sought, inter alia, damages for breach of contract against Cameron and damages for negligent breach of duty against both Cameron and Stork. Cameron denied all liability, and additionally commenced third party proceedings against Stork for any damages it might be ordered to pay. The plaintiffs initially alleged that the Standby Slip Joint had remained on board the Vessel from 1998, the time it was refurbished by Stork, until it fractured on the relevant date in 2001. However, Cameron subsequently adduced documents indicating that the Standby Slip Joint had been onshore in Malaysia sometime in 1999. In the face of these documents, the plaintiffs conceded during their closing submissions that the Standby Slip Joint had indeed been in Malaysia, allegedly for storage purposes.

9 At the conclusion of the trial of the original action, the Judge found that the Failed Slip Joint was indeed the Standby Slip Joint that the defendants had refurbished: see GD at [42]. She held that Cameron was guilty of breaching its contract with JSL, and that both the defendants had breached their duty of care to JHL and JSL by failing to detect and remedy the defect in the Standby Slip Joint: see GD at [110] and [130]. As regards JDL and MEP, the Judge held that they had no locus standi to bring the claims in either tort or contract, and were therefore not entitled to any damages: see GD at [52] and [69].

10 One of Stork’s tasks as part of the refurbishment job was to dismantle and inspect the discarded parts received from VDH (“the pre-inspection”).[note: 1] The Judge held that Stork had acted negligently by failing to detect and remedy the non-conforming “step” in the Riser Box either during the pre-inspection, in the course of refurbishment or before the Riser Box left its premises: see GD at [131]. The evidence at trial showed that Rajamanickam Prabhuram (“Prabhuram”), Stork’s quality control inspector at the relevant time, had “chosen to act in a way in which a reasonable man would not act”: see GD at [130]. According to Prabhuram, although he knew that a dimensional inspection was required from Stork’s quotation No QT2279-GA.R1 dated 25 August 1998 (“the Quotation”)[note: 2] to Cameron, he did not think it a standard or common practice to conduct wall thickness tests on the Riser Box: see GD at [88].

11 During the trial, Stork placed great reliance upon the fact that Cameron failed to furnish Stork with the relevant dimensional drawings: see GD at [98]. According to Stork, this made it impossible for Stork to ascertain the existence of any dimensional defects in the Riser Box wall. The Judge held that these omissions on Cameron’s part did not detract from Stork’s liability for breaching its duty of care to JHL and JSL: see GD at [130]. In the absence of the dimensional drawings, Stork should not have gone ahead with the pre-inspection: see GD at [130].

12 On the issue of causation, the Judge rejected Cameron’s allegation that the failure by JHL and JSL to maintain and inspect the Standby Slip Joint amounted to a novus actus interveniens: see GD at [127]. She also found the defence of contributory negligence inapplicable. Due to the separate and independent nature of Cameron’s and Stork’s breach of duty, the Judge held that they were concurrent tortfeasors and therefore severally liable to JHL and JSL for the full extent of their loss: see GD at [164]. As the defendants were additionally found to be equally culpable, the Judge ordered Stork to indemnify Cameron for 50% of the total damages. We pause here to observe that the word “indemnify” is used in a broad sense. This is an important point to which we shall have occasion to return (see below at [119]–[123]).

13 Having found the defendants liable to JHL and JSL, a crucial factor that affected the award of damages was whether the documents proving loss were properly admitted into evidence. The bulk of these documents had been discovered via the plaintiffs’ second and third supplemental lists of documents; some were also contained in the (first) list of documents. These documents, which allegedly proved the quantum of the plaintiffs’ loss, were subsequently consolidated into 12 volumes (“the Damages Bundle”) for the purposes of the trial. The other documents which did not relate to the question of damages were compiled in the plaintiffs’ bundle of documents.

14 The documents in the supplemental lists were used as evidence of the plaintiffs’ loss arising from the defendants’ breach of duty, and were adduced at trial via the Damages Bundle. In addition, almost all these documents relating to quantum of damages were also referred to in Helmut van Roijen’s affidavit.[note: 3] Helmut van...