Koh Wee Meng v Trans Eurokars Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 27 May 2014
• Date: 27 May 2014
• Docket Number: Suit No 873 of 2011
• Court: High Court (Singapore)

Koh Wee Meng

Plaintiff

and

Trans Eurokars Pte Ltd

Defendant

[2014] SGHC 104

Judith Prakash J

Suit No 873 of 2011

High Court

Commercial Transactions—Sale of goods—Breach of contract—Damages for breach of contract—Seller sold luxury car to buyer—Buyer complained of noise and vibration—Subsequent rectifications carried out by seller—Alleged defects persisted—Whether car sold was defective—Sections 14 (2), 14 (2 A), 14 (2 B) and 14 (3) Sale of Goods Act (Cap 393, 1999 Rev Ed)

Damages—Compensation and damages—Whether measure of loss was estimated loss directly and naturally resulting from breach of warranty—Section 53 (2) Sale of Goods Act (Cap 393, 1999 Rev Ed)

Damages—Mitigation—Seller offered to buy back car—Whether there was market for car—Whether buyer failed to mitigate by refusing seller's buy-back offer

Equity—Defences—Acquiescence—Buyer sent car for rectification works regularly—Buyer took no action for two years—Whether defence of acquiescence was established

In December 2008, the plaintiff bought a Rolls-Royce Phantom SWB automobile (‘the Rolls’) from the defendant for $1,407,150. A few days later, he sent the Rolls back to the defendant complaining of noise and vibration while it was making a three-point turn. The defendant carried out rectification works on the Rolls, but the plaintiff was still unhappy. In 2009, the plaintiff took the Rolls back to the defendant for rectification works, and the defendant consulted several technical experts in order to determine the cause of the complaint. Despite these measures, the plaintiff remained dissatisfied with the Roll's performance.

In October 2009, the defendant offered to send the Rolls to Rolls-Royce's United Kingdom (‘UK’) workshop for further investigation. The plaintiff rejected the offer. He considered that the defendant had failed to address his complaints and he wrote to the defendant seeking to reject the Rolls and obtain a refund. Alternatively, the defendant could replace the Rolls with a similar model that was defect-free. In reply, the defendant provided two options to the plaintiff: (a) it would buy back the Rolls at $1,055,000 (‘the buy-back offer’) or (b) it would accept a trade-in of the Rolls for a new car and the plaintiff would have to pay an extra $250,000. The plaintiff rejected both options.

In November 2011, the plaintiff commenced these proceedings. The plaintiff's experts Mr David John Bellamy and Mr Errol Tan examined the Rolls and found it to be defective. The defendant's experts Mr Kelvin Koay and Mr Robert Johann Matawa found that the Rolls was not defective.

At the trial, the issues addressed were: (a) whether the Rolls was defective under the Sale of Goods Act (Cap 393, 1999 Rev Ed) (‘the SOGA’); (b) if it was, whether the defendant could rely on the defence of acquiescence; (c) what were the damages to be awarded to the plaintiff, if any; and (d) whether the plaintiff had failed to mitigate his loss.

Held, dismissing the claim:

(1) The words ‘satisfactory quality’ were relatively new additions to s 14 (2) of the SOGA and replaced the previous requirement that the goods had to be of ‘merchantable’ quality. While the cases on merchantability were still relevant, the focus was now on the quality of the goods from the consumer's point of view. In particular, the inquiry was an objective one undertaken from the view of a reasonable person and such reasonable person was someone who was placed in the buyer's position with his knowledge and background. The inquiry was broad-based and would ask if the reasonable person would have regarded the quality of the goods as satisfactory. The court should consider any and all of the factors that might have been relevant to the hypothetical reasonable person and the burden was on the buyer to show that the goods were not of satisfactory quality: at [90] and [91] .

(2) The present defect complained of neither affected the safety and reliability of the Rolls nor had the potential to cause damage to any part of the engine or other component of the car. The word ‘waftability’ might have been used to describe the driving experience in the Rolls but looking at the objective evidence, it was usual for the Rolls to exhibit noise and vibration when three-point turns were executed because of the stick-slip effect between the tyres and the road. It fell within industry standards albeit at the lower end but that did not make the Rolls defective. Furthermore, the plaintiff had driven more than 45,000 km on the Rolls over three and a half years. From a reasonable driver's perspective, there was no real defect: at [101] , [103] , [104] , [108] and [111] .

(3) A defect that could be remedied and so placed a vehicle back into an as-new position could not render that vehicle of unsatisfactory quality unless there were exceptional circumstances. Since there was not even a minor breakdown here and the plaintiff accepted that the Rolls remained safe and reliable, performing up to expectations apart from three-point turns, the Rolls was of satisfactory quality: at [113] .

(4) The protection afforded by s 14 (3) of the SOGA was invoked when a buyer made known to the seller any particular purpose for which the goods were being bought and the goods turned out to be unfit for that purpose. There was no evidence here that the plaintiff had made known to the defendant any purpose for which the Rolls was being purchased or that noise and vibrations were of particular concern to him. Also, the advertisements marketing the Rolls could not be relied on because there was no promise of absolute silence. Therefore there was no breach of s 14 (3) of the SOGA: at [115] to [117] .

(5) There were two situations in which acquiescence could be established. The first situation would be when a person abstained from interfering while his legal rights were being violated. The second situation would be where a person initially had no knowledge of his rights being violated but later discovered the violation and still refrained from seeking redress. Here, the plaintiff had used the Rolls for two years before starting action because he saw no point in raising the issue after the defendant's alleged failure to resolve his complaints. During this period, he had sent the Rolls back for servicing on eight occasions but had indicated neither that he would not sue on the noise and vibration nor that he would not enforce his rights. Therefore, there was no acquiescence: at [121] and [122] .

(6) The measure of damages in s 53 (2) of the SOGA was the estimated loss directly and naturally resulting in the ordinary course of events from a breach of warranty. It was the starting point for the assessment of damages. According to this principle, the prima facie rule set out in s 53 (3) of the SOGA should not be applied if it would result in giving a buyer more than his true loss: at [124] and [129] .

(7) A court could find that a market existed not just by identifying a willing buyer at a specified price but also by inferring from any sufficient evidence relevant to the issue. Since the defendant had made the buy-back offer to the plaintiff, a market was present for the Rolls and if it had been found to be defective, the damages claimable would be $352,150, being the difference between the actual purchase price and the buy-back price. However, the plaintiff's claim for damages due to the loss of amenity was rejected as it was based on nothing more than a bare assertion. Furthermore, he had many other vehicles which he could have used in its place: at [132] to [135] .

(8) It was unreasonable to expect the plaintiff to mitigate his damages by either accepting the defendant's offer to send the Rolls to the Rolls-Royce workshop in the UK or the buy-back offer. The defendant's case was that the Rolls was normal. Therefore, there was no basis to send the Rolls to the UK since there was nothing to investigate or repair. Second, accepting the buy-back offer would mean that the plaintiff would have suffered a $352,150 loss, that being 25% of the purchase price. It was unreasonable to expect the plaintiff to suffer this loss for just one year of use: at [136] to [141] .

Bence Graphics International Ltd v Fasson UK Ltd [1998] QB 87 (refd)

Bulkhaul Ltd v Rhodia Organique Fine Ltd [2008] EWCA Civ 1452 (folld)

Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220 (folld)

Compact Metal Industries Ltd v PPG Industries (Singapore) Ltd [2006] SGHC 242 (folld)

Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 (refd)

Jackson v Chrysler Acceptances Ltd [1978] RTR 474 (refd)

National Foods Ltd v Pars Ram Brothers (Pte) Ltd [2007] 2 SLR (R) 1048; [2007] 2 SLR 1048 (folld)

Rogers v Parish (Scarborough) Ltd [1987] QB 933 (refd)

S Pathmanathan v Amaravathi [1979] 1 MLJ 38 (refd)

Sale of Goods Act (Cap 393, 1999 Rev Ed) ss 14 (2) , 14 (2 A) , 14 (2 B) , 14 (3) , 53 (2) , 53 (3) (consd) ;ss 11, 14, 53

Davinder Singh SC, Jaikanth Shankar, Lim Chingwen and Samantha Tan (Drew & Napier LLC) for the plaintiff

Tan Chee Meng SC, Josephine Choo and Quek Kian Teck (Wong Partnership LLP) for the defendant.

Judgment reserved.

Judith Prakash J

1 On 23 December 2008, the plaintiff, Dr Koh Wee Meng, took delivery of a ‘Christmas present’ - a Rolls-Royce Phantom SWB automobile (‘the Rolls’) - from the defendant, Trans Eurokars Pte Ltd. On Christmas Day itself, the plaintiff took his new car out for a spin. In the course of the drive, he made a three-point turn. As he moved forward out of the turn, and while he was turning the steering wheel, he heard ‘a loud moaning noise’ and also felt a significant vibration from the steering wheel. On 26 December 2008, the plaintiff took the car back to the defendant's premises and explained his problems with it to the defendant's staff. He asked them to make sure that the noise and vibration problem was fixed.

2 That was the start of a whole series of visits by...