Maidstone Pte Ltd v Takenaka Corp

JudgeYong Pung How CJ
Judgment Date10 April 1992
Neutral Citation[1992] SGHC 92
Docket NumberSuit No 249 of 1987
Date10 April 1992
Published date19 September 2003
Plaintiff CounselPhilip Jeyaretnam and Jennifer Chan (Robert WH Wang & Woo)
Citation[1992] SGHC 92
Defendant CounselKenneth Koh and Prema Subramaniam (Koh & Choo)
CourtHigh Court (Singapore)
Subject MatterMalice,Defamation,Whether defendants reckless in describing plaintiffs as being 'under receivership',Tort,What amounts to recklessness,Publication by sub-contractor to main contractor,Plaintiffs wrongly described as being 'under receivership',Whether contents of publication showed malice,Ordinary reasonable man standard,Whether publication made with dominant intention of injuring plaintiffs,Whether previous dealings evidenced spite or ill-will,Whether defendants reckless as to truth,Whether common interest existed between defendants and main contractor,Qualified privilege,Whether delay in apologizing evidenced malice

Cur Adv Vult

This is an action for damages for libel. The defendants do not dispute that the published statement is defamatory and untrue, but they allege that the publication took place on an occasion protected by qualified privilege and they deny that it was made with malice. I shall therefore move directly to consider the circumstances of the publication.

The facts

The background to this action is the construction of the Mass Rapid Transit (`MRT`) system in Singapore. The MRT Corp had awarded the City Hall Station and Operation Control Centre/PUB Building project (`the project`) to the Nishimatsu-Lum Chang Joint Venture (`NLC-JV`) as the main contractors. NLC-JV in turn had nominated the defendants, a Japanese engineering and construction company, as the sub-contractors for the architectural finishes works for the project.

The plaintiffs are a local company involved in the manufacture, fabrication, supply and installation of stone.
In October 1985, with a view to participation in the project, the plaintiffs sent an employee, one Peter Wong, to India with representatives from NLC-JV. The purpose of the trip was to inspect the quarries of a company known as Gem Granites, Madras (`Gem Granites`). Subsequently, by a letter dated 26 December 1985, Gem Granites appointed the plaintiffs as their sole distributor in Singapore of a type of natural granite known as `Holy Brown`, which was quarried in Adoni, India.

By a letter dated 23 July 1986, the defendants as sub-contractors for the project, invited tenders from four pre-selected companies, of which the plaintiffs were one, for the supply, delivery and installation of granite slabs for the project (`the sub-contract works`).
The letter stated that the tenders were to be based `on the attached tender document and drawings compliance strictly with the terms and conditions of our standard sub-contract agreement ...`. The letter further specified that:

The scope of work involved in this tender shall comprise of the supply, delivery and installation of `Holy Brown` and `Rosa Limbara` to the interior/exterior floors and walls. Our proposed sizes of granite slabs are 900 [times ] 600mm and 600 [times ] 600mm with thickness of 25mm and 30mm. However, we may consider your proposal if it is more economical to use other alternative sizes/types of granite slabs.

The letter also stated that it was tentatively estimated that the installation should commence by the end of January 1987 and be completed by the end of May 1987.
The letter further specified that the tenders were to be delivered by hand.

The material terms of the defendants` tender document were as follows:

7.53.5 Obtain granite from single sources for each type as follows:

Type Holy Brown

Supplier - Gem Granite

Type Rosa Limbara

Supplier Corsi & Nicolai

Fabricator: Cutting and finishing to be carried out by Corsi and Nicolai

Confirm compliance with the specification prior to placing orders


7.54.1 Stainless steel anchor bolts, nuts and washers - Type 316, sizes as required, manufacturer Alpha AS SRL

7.58.1 Employ only operatives with a minimum of five (5) years of experience in the laying of granite. Granite installation to be supervised by an experienced representative provided by the fabricator of cut and finished units.

The types and sources of the granite slabs and fittings had been specified by the MRT Corp and their consent was required if different types and sources were to be used.
The MRT Corp had also, in a document referred to as `Addm No 1.00 - proprietary index`, identified the plaintiffs as the local representatives of Gem Granites and of the manufacturer Alpha AS SRL. No local representative was listed in the document for the company known as Corsi & Nicolai of Italy.

For the purposes of this case, the material clause of the standard form sub-contract agreement was cl 34 which read:

The sub-contractor shall, subject to any agreement between the parties, from time to time make application to the contractor for payments of the amount which at the date thereof fairly represents the sub-contractor`s value of the sub-contract works and of any variation authorized under this sub-contract then executed and of the materials and goods delivered upon the site for use in the sub-contract works ...

In other words, the successful tenderer would be paid by progress payments.

Under the cover of a letter dated 15 August 1986, the plaintiffs submitted a tender to supply, deliver and install the specified granite slabs for the operation control centre/PUB Building only for the sum of $4,232,235.
The covering letter also stated that notwithstanding the terms of payment stated in the standard form subcontract agreement, the plaintiffs sought payment in the following manner: `On sight letters of credit equivalent to 75% of the tender sum shall be established by you in our favour upon acceptance of our tender. Balance of 25% shall be on monthly progress payment from date of installation.` The covering letter also stated that the estimated date of completion of the sub-contract works would be 22 June 1987, provided that the sub-contract be formed by 22 September 1986.

In their tender, the plaintiffs described their financial standing as having an authorized capital of $2m, half of which was paid up, and as having credit facilities of up to $4m.
They also stated that their bankers were The Royal Bank of Canada and Hong Leong Finance.

The covering letter and the various tender documents were delivered to the defendants` office on 15 August 1986 by several members of the plaintiffs` company viz Peter Wong (PW1), Chong Toh Hui (PW3) and Christine Foo (PW4).
These witnesses testified that they were met by one Hideichi Suyama (DW1), the person in charge of handling the tenders for the sub-contract works, and one Jacqueline Ng (DW2), his assistant. Peter Wong testified that he had a brief conversation with Suyama during which Suyama told him, in a raised voice, that the defendants were having problems with the plaintiffs over the construction of the UMNO Building in Kuala Lumpur. I digress now to consider the relevant aspects of that project.

In that project, the defendants, together with other companies, were the main contractors for the construction of the UMNO Building.
They had sub-contracted part of the construction to another company called Intraco Ltd (`Intraco`) which had in turn, in August 1984 sub-contracted with the plaintiffs for the supply of marble slabs for the building. Disputes, dating from May 1985 to the time of the conversation between Peter Wong and Suyama on 15 August 1986, had arisen between Intraco and the plaintiffs over the quality and the colour of marble slabs supplied and the main contractors had eventually become involved with the negotiations towards settling the disputes. Christine Foo who had been involved in the plaintiffs` participation in the UMNO Building project, testified that the defendants had made several unreasonable demands upon the plaintiffs and had required them to replace slabs which had been damaged through no fault of the plaintiffs. She further said that despite the plaintiffs` compliance with those demands, the plaintiffs were not paid the sums due under that contract until 26 August 1989, some four years after its completion. In cross-examination, Christine Foo indicated that although the plaintiffs were not in a contractual relationship with the defendants in the UMNO project, their representatives had met at meetings and it was during such meetings that she had formed the view that the defendants bore ill-will towards the plaintiffs. She did, however, admit that she had never dealt with Suyama directly.

I now return to the conversation at the defendants` office on 15 August 1986.
Peter Wong testified that Suyama had also asked if the plaintiffs were still in receivership. Peter Wong said that he denied the allegation about the receivership but said nothing in reply to Suyama`s complaints about the UMNO Building. In his view, the conversation lasted about ten minutes. In cross-examination, Peter Wong admitted that the plaintiffs and their holding company had been in some financial difficulties and that the financial troubles of the plaintiffs` holding company had been widely reported in the newspapers. Peter Wong`s account of the matter was supported by the evidence of Chong Toh Hui and Christine Foo.

Suyama`s evidence on the conversation was that he asked about the financial status of the plaintiffs as Singapore was going through a recession at the time.
He said that he had heard about the plaintiffs` involvement in the construction of the UMNO Building but he had no personal involvement in it as he had left Kuala Lumpur in August 1983. He also said that he had heard rumours of the plaintiffs` holding company being in financial difficulties and that he had seen newspaper reports to the same effect. However, he could not remember if he had asked if the plaintiffs were in `receivership` or if he had mentioned the UMNO Building project. He stressed that there was no reason for him to have mentioned the UMNO project as it was of no relevance to the sub-contract works. He also denied in cross-examination that it was operating on his mind when he spoke to Peter Wong. Jacqueline Ng`s evidence was that she could not recall what was said at the meeting as it was short and nothing unusual happened, but to the best of her recollection the financial standing and the work experience of the plaintiffs were discussed.

Later, in a letter dated 21 August 1986 to the defendants, written in reply to a letter dated 18 August 1986, the plaintiffs confirmed that they would be able to commence the sub-contract works by the end of January 1987 and complete the sub-contract works by the end of May the same year, provided that a letter of credit was established in their favour by 22

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