PPG Industries (Singapore) Pte Ltd v Compact Metal Industries Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 14 March 2013
• Neutral Citation: [2013] SGCA 23
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 125 of 2011
• Published date: 18 March 2013
• Year: 2013
• Hearing Date: 23 October 2012,15 October 2012,27 February 2013
• Plaintiff Counsel: Nicholas Narayanan (Nicholas & Tan Partnership LLP)
• Defendant Counsel: Michael Por Hock Sing and Er Jing Xian Cindy (Michael Por Law Corporation)
• Subject Matter: Contract,Remedies,Remoteness of Damage,Damages,Assessment
• Citation: [2013] SGCA 23

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

This is the defendant’s appeal against the decision of the High Court judge (“the Judge”) in Compact Metal Industries Ltd v PPG Industries (Singapore) Pte Ltd [2012] SGHC 91 (“the GD”).

Having carefully considered the arguments of both parties, we are of the view that the Judge’s decision and reasoning ought to be affirmed – with the exception of two particular issues (viz, that relating to the award of damages for additional site preliminaries incurred by the plaintiff as part of the delay costs incurred for late installation of the panels in question, and that relating to the defendant’s counterclaim). For the reasons set out below, we allow in part the defendant’s appeal with regard to the first issue, viz, the award of damages to the plaintiff for additional site preliminaries. In so far as the second issue regarding the defendant’s counterclaim is concerned, we remit it back to the Judge below for her decision because (as both parties correctly conceded) the GD does not disclose the Judge’s decision and reasoning in relation to the defendant’s counterclaim. However, we respectfully differ from the reasoning (albeit not the decision) given in the GD with regard to one other issue (viz, whether the plaintiff was entitled to claim from the defendant the liquidated damages that it had to pay to the main contractor as a result of the defendant’s breach of contract). We will elaborate on both the point about the additional site preliminaries and the point about the liquidated damages below. Before proceeding to do so, we note that the facts have been comprehensively set out by the Judge in the GD and we will therefore not rehearse any of the facts, save to the extent that they impact on the points just mentioned.

The award of damages to the plaintiff for additional site preliminaries

The damages awarded by the Judge for the additional site preliminaries represented the costs incurred by the plaintiff’s subsidiary, Façade Master Pte Ltd (“Façade”), for the additional days of delay in the completion of the project that were caused by the defendant’s failure to provide paint of a satisfactory quality. These costs include staff salaries, transportation costs, equipment costs and utilities bills. The Judge awarded the plaintiff damages totalling $1,040,662.35 for 273 days’ worth of costs expended on additional site preliminaries. The Judge accepted, inter alia, the view of the plaintiff’s expert, Keith Pickavance (“Pickavance”), that the defendant’s breach of contract caused 273 days of delay in the completion of the project.

Before us, the defendant argues that it is inequitable for the Judge to allow damages for 273 days of delay when the project’s architects, RSP Architects Planners & Engineers (Pte) Ltd (“RSP”), had granted extensions of time totalling 168 days to the project’s main contractor, Taisei Corporation (“Taisei”), and, as such, the project would have been delayed in any event even if there were no problems with the paint. In support of its position that the Judge’s decision to award 273 days’ worth of additional site preliminaries should be upheld by this court, the plaintiff essentially relies on Pickavance’s view that the paint tonality issue caused a critical delay of 273 days in the completion of the project with no concurrent causes of delay. The plaintiff also points out that the Judge accepted Pickavance’s view and that the defendant had made no arguments that challenged the analysis advanced by Pickavance in his expert evidence.

In our view, the sole issue that arises here is that of causation. The but-for test is used to determine factual causation for the purposes of contract law: see the decisions of this court in Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric [2007] 3 SLR(R) 782 at [63] and Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd and another appeal [2012] 1 SLR 427 at [39]. Thus, the crucial question is whether the 273 days’ worth of additional site preliminaries (or part thereof) would not have been incurred by the plaintiff but for the defendant’s breach of contract. To recast this question: Whether the 273 days of delay in the completion of the project (or part thereof) were caused by the defendant’s breach of contract, or by some other delaying event.

In this regard, both parties’ expert witnesses on the issue of delay, namely Pickavance and Thomas Anthony Harker (“Harker”), proffered diametrically opposed views as to the cause of the 273 days of delay in the completion of the project. Pickavance opined that the defendant’s failure to provide paint of satisfactory quality solely caused the entire 273 days of delay and there were no concurrent causes of delay. On the other hand, Harker opined that not a single day of delay was caused by the defendant’s breach of contract.

In our view, both experts’ positions are unreasonable and cannot, by any measure of logic and common sense, be accepted in their entirety (if at all). It cannot reasonably be said that the defendant’s breach of contract caused absolutely no delay to the completion of the project, particularly since the parties had spent several months to achieve a satisfactory quality of the paint. Harker’s position is, with respect, untenable and unrealistic.

On the other hand, it seemed (at least at first blush) that the defendant could not have been solely liable for the full 273 days of delay, because there were other delaying events which in all likelihood contributed in some measure to the 273 days of delay in the completion of the project. The numerous delaying events for which Taisei sought to obtain extensions of time from RSP are represented in the breakdown of delaying events appended to an affidavit filed on behalf of RSP. Out of these delaying events, RSP granted Taisei extensions of time totalling 168 days for four specific delaying events. Counsel for the defendant conceded during oral submissions (correctly, in our view) that two of these delaying events could not be relied upon by the defendant in the present appeal, viz, “Reinstatement Works to Podium Granite Cladding at GL 1/F & 5/F” and “Removal of concrete encasements to Elevation 4 shafts steel structures”, for which a total of 81 days of extensions of time were granted by RSP to Taisei.

We are left with two specific delaying events which are relevant to the present appeal; they are “No Noisy Work/Stop Work Orders” and “Exceptionally adverse weather conditions”, for which 78 days and 9 days of extensions of time, respectively, were granted by RSP. Both delaying events were not attributable to the defendant’s fault, but in all likelihood did contribute to the ultimate delay in the completion of the project. If work at the project site was ordered to stop or weather conditions were so adverse that works could not proceed, it stands to reason and common sense that these two delaying events would have consequently caused some measure of delay in the completion of the project, and it must follow that the defendant should not have been held liable for the delay in the completion of the project which was caused by...