Pearlson Enterprises Ltd v Hong Leong Co Ltd

• Jurisdiction: Singapore
• Judge: M Buttrose J
• Judgment Date: 07 August 1967
• Neutral Citation: [1967] SGFC 18
• Docket Number: Civil Appeal No Y38 of 1966
• Date: 07 August 1967
• Published date: 19 September 2003
• Year: 1967
• Plaintiff Counsel: KA O'Connor (Drew & Napier)
• Citation: [1967] SGFC 18
• Defendant Counsel: KS Chung (Chung & Co)
• Court: Federal Court (Singapore)
• Subject Matter: Breach,Whether repudiatory breach of contract,Increase in price of bricks supplied,Demand for immediate payment upon delivery and variation in price of bricks,Sale of bricks at agreed price,Contract

This is an appeal by the appellants, Pearlson Enterprises Ltd, against a judgment of Winslow J in the High Court in favour of the respondents, Hong Leong Co Ltd for $11,575.45 and costs and dismissing the counterclaim of the appellants with costs. The facts which I shall attempt to set out as briefly as possible are these.

The respondents who are the sole selling agents of a company manufacturing, inter alia, bricks sold to the appellants who are a developing company building flats for sale or rental 600,000 pieces of bricks under a written contract in the following terms:

Singapore, 18 June 1964

Messrs Pearlson Enterprises Ltd of 18-L, Battery Road, Singapore (hereinafter called `the buyers`) hereby confirm having purchased this day from M/s Hong Leong Co Ltd of Singapore, (hereinafter called `the sellers`) the undermentioned goods at the prices and on the terms and conditions hereinafter appearing and subject to the general conditions printed on the back hereof, except where inconsistent with the following special conditions.

Quantity Description of Goods Price

(600) ,000 Alexandra Bricks

pieces No 3 Commercial

Quality @ $79.00 per 1,000 pcs.

Delivery as from June to December 1964.

Delivery

Payment as usual.

The material provisions of the printed general conditions are as follows:

Deliveries 2 Dates given for delivery are approximate only. The delivery of one instalment delivered of one instalment delivered under this contract shall be considered as a separate contract. Default in delivery of any instalment shall not enable the buyers to treat the contract as repudiated. ...

All payments for goods to be delivered in instalments to be made on due date otherwise the sellers may at their discretion refuse to deliver further instalments until such payments be made ...

Increase in prices 4(a) Should the cost of goods be increased by any circumstances of any kind whatsoever beyond the control of the sellers including (but not by way of limitation) variations in rates of exchange, devaluation of any relevant currency or increase in relevant rates of freight or insurance, such increase shall be borne by the buyers.

Sellers 8(a) This contract is subject to confirmation and acceptance

Agents and not by manufacturers or suppliers and is also subject to

themselves liable. any conditions contained in the manufacturers contract (Delete if sellers with the sellers if they vary or are inconsistent with the

contract as principals) general conditions herein contained and particularly the right of cancellation and restriction of liability contained in any manufacturers contract.

(b) The sellers contract as agents and are not to be bound under these conditions but notwithstanding this condition or the other conditions here appearing the sellers reserve to themselves the right to institute any action against the buyers under the contract of which these conditions form a part as though the sellers were principals should the sellers deem it necessary or expedient so to do.

(c) The buyers shall be entitled to the benefits of but subject to the conditions of sal of the actual manufacturer or supplier of the goods including all manufacturers and guarantees so far as the latter conditions are not inconsistent with the above conditions.

The material terms of the agreement between the respondents and the manufacturers under which the former became the selling agents of the latter provided as follows:

(1) You will be selling agents for Alexandra Brickworks Ltd from 1 February 1964.

(2) All bricks and tiles sold as from this date will be billed to you on our ex factory price less 6% commission to you.

(3) The price of the bricks are as follows:

No 3 quality ... $75 per thousand.

(4) Transport charges will be added and are as follows:

$6 per thousand within five miles limit and $7 per thousand beyond five miles. As stated previously where large quantities are involved, reconsideration may be given to the amount of transport charged.

(6) Terms of payment ... 60 days ... We trust with the above arrangements you will now endeavour to push the sales to the best of your ability ...

The appellants were not aware of the terms of the above-mentioned agreement until after the commencement of the action against them.

On 18 October 1964 the manufacturers wrote to the respondents that as they have to pay increased labour they have no alternative but to increase your supplies to the appellants by $3 per thousand bricks with immediate effect. The trial judge found that this increase of $3 per thousand bricks was communicated orally by the respondents to the appellants and that the appellants orally agreed to pay for future bricks delivered at the increased price. Subsequently a letter dated 7 November 1964 was sent by the respondents to the appellants in the following terms:

Dear Sirs,

Re: No 3 quality Bricks for Cavanagh Road.

Due to our increase in transport charges by the Alexandra Bricks Works Ltd, as from 15 October 1964 we are not able to supply you bricks at the previous price of $79 per 1,000 pieces delivered.

Our sales representative, Mr Low has been to see and informed you that the new price will be $82 per 1,000 pieces delivered to which you agreed.

Kindly let us have your confirmation in writing.

The appellants did not reply to this letter until 2 December 1964 when their solicitors wrote to the respondents in the following terms:

Dear Sirs,

We act for Messrs Pearlson Enterprises Ltd, who have handed us your letter of the 26 ultimo for attention.

Our clients instruct us that they have not agreed to any variation in the contract price. We understand that your representative spoke to our clients` representative and was told that if you wanted anything you should write a letter of request.

Our clients have considered your request and have decided that they are not prepared to agree to an increase in the contract price. We are instructed to point out that the contract provides for delivery by December at the latest. So far less than 200,000 out of the 600,000 bricks have been delivered and our clients require you to start delivering the balance in large quantities immediately.

Our clients have already suffered loss and damage by your delay. This is increasing daily and our clients intend to hold you fully liable for all such loss and damage that has and may occur due to your default.

In the meanwhile the respondents had on 27 November 1964 written another letter to the appellants pressing for payment of three outstanding accounts.

The trial judge found that the denial of the agreement to pay the increased price in the letter of 2 December was an afterthought on the part of the appellants occasioned by the respondents pressing for payment of overdue accounts and because it was...