Nambu PVD Pte Ltd v UBTS Pte Ltd

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JCA,Judith Prakash JCA,Tay Yong Kwang JCA
• Judgment Date: 20 October 2021
• Year: 2021
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 2 and 16 of 2021

Nambu PVD Pte Ltd

and

UBTS Pte Ltd and another appeal

[2021] SGCA 98

Andrew Phang Boon Leong JCA, Judith Prakash JCA and Tay Yong Kwang JCA

Civil Appeals Nos 2 and 16 of 2021

Court of Appeal

Contract — Contractual terms — Exclusion clauses — Plaintiff and defendant entering into oral contracts for transportation services — Defendant issuing invoices and delivery orders after work was done — Invoices and delivery orders making references to standard terms — Invoices and delivery orders not being intended to have contractual effect — Whether course of dealing could arise from invoices and delivery orders

Held, dismissing both CA 2 and CA 16:

(1) In relation to CA 2, Nambu's arguments were intensely factual, and had already been considered by the High Court at first instance. The high threshold for appellate intervention with findings of fact had not been satisfied, meaning that CA 2 had to be dismissed: at [8], [9] and [21].

(2) In relation to CA 16, UBTS argued that the SLA T&Cs were incorporated into the Contract by virtue of a course of dealing, since the SLA T&Cs were referenced in delivery orders and invoices issued by UBTS for work done prior and unrelated to the Contract. However, the delivery orders and invoices were not meant to have contractual effect. This was fatal to UBTS's argument, because non-contractual documents could not give rise to a course of dealing from which contractual terms could be incorporated. The court would be prepared to incorporate a term in the contract concerned (thus conferring upon that term contractual effect) despite the fact that it was not otherwise incorporated (for example, by way of signature or reasonable notice) precisely because the contracting parties had consistently contracted with reference to that term on previous occasions in the past. Put differently, permitting non-contractual documents to give rise to a course of dealing would amount to allowing terms which had been consistently treated by parties as non-binding to take on contractual effect. No reasonable parties would countenance such a drastic shift in their legal relationship. If anything, the fact that certain terms had been consistently non-binding would engender the expectation that such terms would remain non-binding for the contract in question: at [26] and [42].

(3) On the facts, if the delivery orders and invoices were not binding for the very contracts for which they were issued, there was no reason for Nambu to expect these delivery orders and invoices to be binding for the Contract: at [55].

[Observation: Whilst the doctrine of reasonable notice might overlap (especially from a factual perspective) with the doctrine of a course of dealing, these two doctrines were conceptually distinct: at [22] and [27].

The English Court of Appeal decision of British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd[1975] 1 QB 303 could be interpreted as one dealing with “trade custom or usage”. However, this “trade custom or usage” could be approached from either the perspective of implication of terms, or the perspective of incorporation of terms: at [64].]

Case(s) referred to

Brambles Holdings Ltd v WMC Engineering Services Pty Ltd [1999] WASCA 1010 (refd)

British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd [1975] QB 303 (refd)

Chapelton v Barry Urban District Council [1940] 1 KB 532 (refd)

Circle Freight International Ltd v Medeast Gulf Exports Ltd [1988] 2 Lloyd's Rep 427 (distd)

DJ Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749 (refd)

Hamad M Aldrees v Rotex Europe Ltd [2019] EWHC 574 (TCC) (refd)

Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31 (refd)

Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71 (refd)

Huationg Contractor Pte Ltd v Choon Lai Kuen [2020] SGHC 129 (refd)

La Rosa v Nudrill Pty Ltd [2013] WASCA 18 (not folld)

Olley v Marlborough Court Ltd [1949] 1 KB 532 (refd)

Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd [1994] FCA 1206 (refd)

R1 International Pte Ltd v Lonstroff AG [2015] 1 SLR 521 (distd)

Remath Investments No 6 Pty Ltd v Chanel (Australia) Pty Ltd [1992] NSWCA 208 (refd)

Rinaldi & Patroni Pty Ltd v Precision Mouldings Pty Ltd [1986] WAR 131 (refd)

Tan Mui Teck v PP [2003] 3 SLR(R) 139; [2003] 3 SLR 139 (refd)

Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd [2009] 4 SLR(R) 1101; [2009] 4 SLR 1101 (folld)

Transformers & Rectifiers Ltd v Needs Ltd [2015] EWHC 269 (TCC) (refd)

Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] 2 SLR 1271 (refd)

Wartsila Singapore Pte Ltd v Lau Yew Choong [2017] 5 SLR 268 (refd)

Facts

Nambu PVD Pte Ltd (“Nambu”) and UBTS Pte Ltd (“UBTS”) entered into a contract (“the Contract”) for UBTS to transport a machine (“the Machine”). The vehicle from UBTS which carried the Machine caught fire. Nambu then sued UBTS for fire damage to the Machine.

The High Court found, amongst other things, that the fire was due to negligence on UBTS's part. The High Court held further that UBTS could not rely on its own standard terms and conditions (“UBTS T&Cs”) or the Singapore Logistics Association's standard terms and conditions (“SLA T&Cs”) to limit its liability, since neither set of terms was incorporated into the Contract. Further, out of Nambu's claims totalling $1,226,807.20 on the basis of replacing the Machine (alternatively, $1,279,537.20 on the basis of repairing it), the High Court only awarded Nambu $248,240.00, together with interest and costs of $160,000.00 (excluding disbursements).

CA/CA 2/2021 (“CA 2”) was Nambu's appeal in respect of the quantum of damages and costs awarded to it. CA 16/2021 (“CA 16”) was UBTS's appeal in respect of the finding that the SLA T&Cs were not incorporated into the Contract (there was no appeal, however, against the finding that the UBTS T&Cs were not incorporated into the Contract).

S Magintharan and Liew Boon Kwee James (Essex LLC) for the appellant in CA/CA 2/2021 and respondent in CA/CA 16/2021;

Yee Mun Howe Gerald and Jonathan Lim Shi Cao (Premier Law LLC) for the respondent in CA/CA 2/2021 and appellant in CA/CA 16/2021.

20 October 2021

Judgment reserved.

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

Introduction

1 Nambu PVD Pte Ltd (“Nambu”) and UBTS Pte Ltd (“UBTS”) entered into a contract (“the Contract”) for UBTS to transport a “Prefabricated Vertical Drain” machine (“the Machine”). The vehicle from UBTS which carried the Machine caught fire during the course of the carriage, and the Machine was damaged.

2 Nambu then sued UBTS for fire damage to the Machine. The High Court judge (“the Judge”) found, inter alia, that the fire was due to negligence on UBTS's part (see Nambu PVD Pte Ltd v UBTS Pte Ltd[2021] SGHC 20 (“the GD”)). He held further that UBTS could not rely on its own standard terms and conditions (“UBTS T&Cs”) or the Singapore Logistics Association's standard terms and conditions (“SLA T&Cs”) to limit its liability, since neither set of terms was, in his view, incorporated into the Contract. Further, while Nambu had made claims totalling $1,226,807.20 on the basis of replacing the Machine and alternatively, $1,279,537.20 on the basis of repairing it, the Judge only awarded Nambu $248,240.00, together with interest and costs of $160,000.00 (excluding disbursements).

3 CA/CA 2/2021 (“CA 2”) is Nambu's appeal in respect of the quantum of damages and costs awarded to it. CA 16/2021 (“CA 16”) is UBTS's appeal in respect of the Judge's finding that the SLA T&Cs were not incorporated into the Contract. There was no appeal, though, against the finding that the UBTS T&Cs were not incorporated into the Contract.

4 We heard both appeals on 6 September 2021. Having considered the parties' written as well as oral arguments, we dismiss both appeals. In summary, and beginning with Nambu's appeal in CA 2, Nambu's arguments constituted essentially a rehash of what had been argued before the Judge in the court below. They turned essentially on factual issues which the Judge dealt with in meticulous detail. We thus see nothing which warrants the intervention of this court. As we elaborate upon below, we agree wholly with the Judge's reasoning and findings in relation to quantum, and therefore dismiss Nambu's appeal.

5 Turning to UBTS's appeal in CA 16, UBTS makes the argument that the SLA T&Cs had been incorporated in the subject contract by virtue of a previous course of dealing, based on the invoices and delivery orders issued by UBTS for past contracts. The central, albeit simple, point is that a course of dealing generally assumes that the terms concerned have contractual effect. In this regard, the Judge's finding that the invoices and delivery orders were not intended to have contractual effect for the past contracts for which they were issued, suffices, in our view, to dispose of UBTS's appeal in CA 16. That being said, UBTS's arguments present an appropriate occasion to provide a few clarifications with regard to the law on the incorporation of terms.

6 We now turn to consider both appeals in more detail.

Nambu's appeal

7 We begin with Nambu's appeal in CA 2. To recap, in respect of Nambu's claims totalling $1,226,807.20 on the basis of replacement costs, and alternatively, $1,279,537.20 on the basis of repair costs, the Judge only awarded Nambu $248,240.00. The Judge decided that the Machine could have been repaired for less than its replacement cost, and that this ought to have been done within six months of the accident, ie, by March 2017. Accordingly, the Judge allowed Nambu's claims for loss of use, and for storage and relocation charges, for only that six-month period (between September 2016 and March 2017). The Judge also reduced the amount of repair costs claimed, relying on the opinion of UBTS's expert witness, Mr Melvin Lum (“Mr Lum”). The Judge further...