Koon Seng Construction Pte Ltd v Siem Seng Hing & Co (Pte) Ltd

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 13 January 2005
• Neutral Citation: [2005] SGHC 8
• Court: High Court (Singapore)
• Year: 2005
• Published date: 13 January 2005
• Plaintiff Counsel: N Sreenivasan (Straits Law Practice LLC)
• Defendant Counsel: Anthony Lee Hwee Khiam and Pua Lee Siang (Bih Li and Lee)
• Subject Matter: Contract,Formation,Exchange of letters between parties,Whether contract concluded,Whether defendant breached contract
• Citation: [2005] SGHC 8

13 January 2005

MPH Rubin J:

Introduction

1 In this case, the primary issue was whether there was a binding agreement between the plaintiff and the defendant for the supply of steel bars by the defendant to the plaintiff. After hearing the evidence, both documentary and oral, and arguments, I concluded that the plaintiff’s claim that there was indeed a binding agreement between the parties had not been established. My grounds now follow.

Facts

2 On 18 September 2003, the plaintiff, reportedly a large construction contractor, was awarded the main contract (“the main contract”) for the construction, completion and maintenance of the Singapore Management University City Campus – Victoria Project. After the award of the main contract, the plaintiff sent out various requests for quotations to a number of companies, including the defendant, for the supply of high tensile steel reinforcement bars (“rebars”). The request sent out by the plaintiff was somewhat brief and it merely mentioned that the contract period was “23 Months” and the quantity required was “Approximate 3600 ton [sic]”.

3 The defendant responded to the plaintiff’s request, by its letter dated 9 October 2003. In so far as is material, the said letter reads as follows:

Siem Seng Hing & Co (Pte) Ltd

Company: Koon Seng Construction Pte Ltd From: Desmond Han

Attention: Miss Tresa Sim/Mr Chong Wai Swee Date: 9.10.2003

Message: Quotation For Building Material To SMU Victoria Project Parcel D2 Main Contract (Contract 3000)

Further to our discussion, we are pleased to submit herewith our quotation for supply of building materials for your kind consideration.

Reinforcement Steel Bar

Product: Mild Steel Round Bars and High Tensile Deformed Bars

Technical Spec: BS444/1988 Grade 250 or SS2 Part 1/1999 Grade 3000 for Mild Steel Round Bars and BS4449/1988 Grade 460 or SS2 Part 2/1999 Grade 500

For High Tensile Deformed Bars

Size: T10 T13 T16 T20 T25 T32 T40 R6 R10 R13

Price: For 12M Straight bars

At S$570 per M/Ton for 10mm to 32mm and R10 to R13

At S$585 per M/Ton for 40mm

For off-site pre-fabricated steel bars

Addition charge of S$85.00 per M/Ton over the above price of Standard length rebars.

Price quoted inclusive of wastage but exclusive of preparation of BBS

Bar chairs at S$1.00 per pce

Quantity: 3600 ton

Contract Period: 23 month

Ordinary Portland Cement –

Sand

…

Brick

…

Note: Order are subject to our final confirmation

…

Term of payment: 30 days from the date of invoice

Please note that prices quoted above do not include GST and are subject to revision without prior notice.

We hope you will give our quotation your kind consideration and we look forward to your favourable reply.

Best Regards

(signed)

Desmond Han (Hp:96825004)

Assistant Sales Manager

[emphasis added]

4 Subsequently on 17 October 2003, the defendant, admittedly upon the request of the plaintiff, amended the quoted price for 12M straight bars from $570 to $560 per metric ton for 10mm to 32mm and R10 to R13 bars, and from $585 to $575 per metric ton for 40mm bars.

5 On 23 October 2003, the plaintiff sent the following letter to the defendant:

Koon Seng Construction Pte Ltd

…

Mr Desmond Han

Siem Seng Hing & Co (Pte) Ltd

…

Dear Mr Han

Singapore Management University City Campus – Victoria Project – Reinforcement Steel Bars

We refer to the earlier telephone conversation between yourself and our Ms Tresa Sim on the abovementioned subject.

We are pleased to confirm your supply of Mild Steel Round Bars and High Tensile Deformed Steel Bars, Straight Bars, to us at the following rate:

12m Straight Bars

$560.00 M/Ton for 10mm to 32mm and R10 to R13

$575.00 M/Ton for 40mm

The said prices are confirmed throughout the whole duration of this project. The steel bars supply shall conform to the applicable prevailing standards. The payment terms is fixed at 60 days from the date of invoice.

We shall follow up with a Letter of Award to you subsequently.

Thank you

Yours faithfully

WS Chong

Snr Constr Manager

[emphasis added]

6 Despite the declaration by the plaintiff in the final paragraph of its letter dated 23 October 2003 that it would follow up with a letter of award, no such letter of award was ever issued by it. In the meantime, on 30 October 2003, the defendant wrote to the plaintiff, this time, increasing the price to $575 per metric ton for 10mm to 32mm and R10 to R13 bars; and $595 per metric ton for 40mm bars.

7 Sequentially, the next written note from the plaintiff was on 6 January 2004. It reads:

Koon Seng Construction Pte Ltd

…

To: Siem Seng Hing & Co (Pte) Ltd

…

Date: 06.01.04

Attention: Mr Desmond Han

…

Subject: Ordering of Reinforcement Steel Bars

We refer to your quotation reference SSH/FX 923/03 dated 09.10.03 and our subsequent confirmation letter reference SMU(V)64-SSH/03 dated 23.10.03 for the supply contract of reinforcement steel bars for the above project.

We are pleased to place order for the following high tensile deformed bars:

1. 20 tons of T25 – 12m straight bars

2. 20 tons of T20 – 12m straight bars

3. 10 tons of T13 – 12m straight bars

4. 10 tons of T10 – 12m straight bars

Total Amount = 60 tons x $560/ton = $33,600.00

Kindly deliver to our site on 07.01.04 (Wednesday) before 12pm. Please contact Mr Desmond Low @ 9100 4094 at site should you need further clarification.

Thank you.

8 The defendant’s response to the foregoing letter, the next day on 7 January 2004, was as follows:

Siem Seng Hing & Co (Pte) Ltd

…

7^th January 2004

Koon Seng Construction Pte Ltd

…

Attention: Ms Kelly Toh

Dear Madam

Order For Reinforcement Steel Bars

Singapore Management University City Campus Project

We refer to your fax ref : F78/SMU(V) dated 6 January 2004.

Please be advised that we are unable to accept your order for the high tensile deformed bars. At the meeting held on or about 3 November 2003, our Mr Jimmy Lim had already informed your Mr Goh Koon Suan that as we are unable to obtain supplies of the steel bars from Natsteel, we are in no position to supply steel bars to you for use in the above project.

We have used our best efforts to persuade Natsteel to supply the steel bars to us but they have been unable to accede to our request.

In the circumstances, we regret that we cannot accept your order.

Yours faithfully

Siem Seng Hing & Co Pte Ltd

(signed)

Jimmy Lim

Managing Director

9 There followed an exchange of letters between the parties as to their respective positions and legal proceedings were threatened. In the end, on 1 April 2004, the plaintiff commenced proceedings against the defendant.

Pleadings

10 In its Statement of Claim (amended subsequently), the plaintiff averred that the agreement between the parties was contained by or was to be inferred from the documents referred to earlier, in addition to a few mill certificates forwarded by the defendant to the plaintiff on 23 October 2003. The plaintiff alleged that the defendant by its letter dated 7 January 2004 repudiated the agreement between the parties and the plaintiff accepted the said repudiation by its letter dated 28 January 2004[1] and claimed damages to be assessed.

11 The defendant’s defence simply was that there was no concluded agreement between the parties and that the documents referred to and the conduct relied on by the plaintiff did not give rise to any inference that there was any concluded agreement between the parties. The defendant further contended that there was no consideration to support the alleged agreement. In any event, the prices quoted were subject to revision, the agreement was subject to contract and the payment terms were not agreed upon.

Evidence

12 There were five witnesses for the plaintiff. Most of their evidence revolved around the background facts. One significant aspect in the testimony of Goh Koon Suan (“Goh”), the managing director of the plaintiff, was in relation to a meeting allegedly held during the first week of November 2003. In this respect, his evidence, as appears at paras to 7 to 9 of his affidavit of evidence-in-chief (“AEIC”), reads as follows:

7. Subsequent to the confirmation of the Defendants as the Plaintiffs’ steel supplier, I was informed by Tresa that the Defendants’ Jimmy Lim wanted to have a meeting with me. Accordingly, a meeting was fixed sometime on or about the first week of November 2003.

8. When the Defendants’ Jimmy Lim came to my office for the meeting, coincidentally, a friend of mine, one Peter Chan was also in my office at the same time. Peter Chan also knew the Defendants’ Jimmy Lim and stayed during the whole of the meeting between Jimmy Lim and I [sic].

9. The Defendants’ Jimmy Lim informed me that he wanted to meet up with me to discuss the source from which the Defendants’ supply of steel would come from. He informed me that the Defendants had several sources and wanted to know whether the Defendants could supply the steel from these various sources. On this point, I called in Tresa to confirm the point on the Defendants’ source of steel as I recalled seeing some Mill Certificates being provided by the Defendants. Tresa confirmed that the Mill Certificates were from Natsteel and Eastern Steel. I highlighted to Jimmy that the Project Consultants might not approve if the supply of steel came from many sources due to the difference in the quality of the steel. Therefore, I informed Jimmy that we only require steel from a single source of supply which must comply with the Main Contract Specification. I then informed the Defendants’ Jimmy Lim that the Plaintiffs’ contract for the supply of steel was for a period of 23 months and the 1^st purchase order would in all likelihood only be made only in January 2004, so the Defendants had time on their hands to ensure that they had the steel from the sources which they had contracted for. The Defendants’ Jimmy Lim agreed with this point and Tresa was dismissed from the meeting. I recall asking Jimmy whether he was having any problem in supplying the steel to the Plaintiffs for this contract. He...