Romar Positioning Equipment Pte Ltd v Merriwa Nominees Pty Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 21 September 2004
• Neutral Citation: [2004] SGCA 44
• Docket Number: Civil Appeal No 8 of 2004
• Date: 21 September 2004
• Published date: 22 September 2004
• Year: 2004
• Plaintiff Counsel: Jimmy Yim SC (Drew and Napier LLC), Josephine Chong and Victor Leong Wai Ming (Chan Kam Foo and Associates)
• Citation: [2004] SGCA 44
• Defendant Counsel: B Mohan Singh (K K Yap and Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Condition precedent,Contract,Pleadings,Whether late amendment to Reply introducing inconsistent plea not found in Statement of Claim should have been allowed,Deed signed in counterparts,Contractual terms,Amendment,Whether signing and forwarding of Deed condition precedent to obligation to pay under Deed,Whether necessary to imply term requiring forwarding of signed Deed to other party,Implied terms,Civil Procedure

21 September 2004

Lai Siu Chiu J (delivering the judgment of the court):

1 This was an appeal against the decision of the judge awarding judgment to Merriwa Nominees Pty Ltd (“the respondent”) on 8 January 2004 and ordering Romar Positioning Equipment Pte Ltd (“the appellant”) to render an account, inter alia, of moneys owed to the respondent. We heard the appeal and allowed it on 26 August 2004. We now give our reasons.

The facts

2 The appellant is a Singapore company. It is in the business of manufacturing, supplying and acting as consultants in automated welding equipment and metal work machinery. The respondent is a company incorporated in Western Australia with a place of business at Perth. It is in the business of providing specialised drilling technology and services.

3 In early 2000, the appellant approached the respondent to inquire whether the latter was interested to enter into a joint venture to provide specialised drilling services to an Indian company, Reliance Engineering Associates Private Limited (“Reliance”), with whom the appellant had established contact. After several discussions between the appellant’s managing director, Jonathan Lim (“Lim”), and the respondent’s managing director, James Johnson (“Johnson”), it was agreed that the two parties would jointly undertake the venture.

4 On or about 13 November 2000, the appellant entered into an agreement with Reliance (“the Reliance Agreement”) to provide technical assistance, direction and supervision for the installation of a network of optic fibre cables throughout India (“the project”). Although the appellant alone contracted with Reliance, it was agreed that the contracted works would be provided by both parties.

5 On 1 December 2000, the appellant and the respondent entered into two written agreements, one being a Service Agreement and the other a Partnership Agreement. Under the Service Agreement, the respondent was to train and provide sufficient personnel to be employed by the appellant to enable the company to fulfil its obligations under the Reliance Agreement. In consideration of this, the appellant would, within three business days after it had received payment from Reliance for the services rendered, provide to the respondent the details of the payment received and all reasonable expenses incurred under the Reliance Agreement, as well as a cheque for an amount equal to half of the payment received by the appellant (less reasonable expenses incurred).

6 In the period between December 2000 and September 2001, the respondent recruited and trained personnel for the appellant. By September 2001, the appellant had paid the respondent US$165,000 for the latter’s share of the services provided to Reliance. This sum was in addition to amounts paid to Johnson for his work as one of the specialists employed in the project.

7 Reliance’s delay in paying invoices issued by the appellant caused unhappiness to the respondent. The respondent accused the appellant of withholding payments from and of not accounting fully to it. The respondent would not accept the appellant’s explanation that Reliance was responsible for the delay.

8 After an exchange of telephone calls and e-mails between Lim and Johnson on the accounts issue, a meeting took place on 7 February 2002 in Australia, at the office of the respondent’s Perth solicitors, attended by the respondent’s solicitor Chris Stokes (“Stokes”). The parties reached an agreement at the meeting to settle their differences. It was agreed that the appellant would pay the respondent a sum of US$325,000 (“the settlement sum”) in full and final settlement of all claims between them in connection with the Service Agreement. The settlement sum would be paid in three instalments, viz US$250,000 upon the signing of the settlement agreement, US$50,000 on or before 31 May 2002 and US$25,000 on or before 31 July 2002.

9 As Lim had to return to Singapore on the same day, it was agreed that Stokes would draw up the settlement agreement and fax a copy to Lim’s Singapore office for his signature. A deed of settlement and release (“the Deed”) was subsequently prepared by Stokes. Clause 1 of the Deed reflected the agreement to pay the settlement sum by three fixed instalments in accordance with the time frame stated above. Clause 7 provided that the Deed would not be effective until the full settlement sum had been received by the respondent.

10 Also on the same day (7 February 2002), Stokes faxed a copy of the Deed to Lim for his signature, under cover of a letter. Lim duly executed the Deed and forwarded it to Stokes’ office.

11 On 8 February 2002, the appellant’s solicitors received a letter from the respondent’s Singapore solicitors confirming the settlement agreement and stating that a copy of the Deed was signed by the appellant and another copy was signed by the respondent. The letter also gave details of the bank account into which the settlement sum was to be paid. However, no copy of the signed Deed was attached to the letter.

12 On the same day, the appellant’s solicitors hand-delivered a draft of US$250,000 to the respondent’s Singapore solicitors together with a request for a copy of the signed Deed. There being no response, the appellant’s solicitors wrote again on 16 May 2002 to the respondent’s Singapore solicitors for a copy of the Deed; this was before the second payment was due.

13 On 31 May 2002, the appellant’s solicitors forwarded to the respondent’s Singapore solicitors the second instalment of US$50,000 due that day, even though they had still not received a copy of the signed Deed. The appellant’s solicitors made a third request for a copy of the Deed by their letter dated 28 June 2002, giving notice therein that the final payment (when due) would only be set aside, unless a copy of the Deed duly executed by the respondent was received by them.

14 By a letter dated 29 July 2002 from Stokes’ law firm to the appellant, the respondent gave notice that it no longer considered itself bound by the Deed because of alleged misrepresentations on the part of Lim. (The appellant said it only received the letter on 2 August 2002). Two days earlier, the appellant had obtained a draft for US$25,000 in payment of the final instalment due that day. However, the draft was never tendered to the respondent. Instead, on 1 August 2002, the appellant’s solicitors wrote to the respondent’s solicitors giving notice that a draft for US$25,000 had been issued and would only be released in exchange for the Deed. The solicitors followed up with another letter dated 26 August 2002 to the respondent’s solicitors, rejecting the respondent’s allegations of misrepresentations and electing to treat the Deed as valid and subsisting.

The proceedings below

15 On 2 April 2003, the respondent commenced action against the appellant for breach of contract in failing to render accounts and to make payment in accordance with cl 2.3 of the Service Agreement. The statement of claim also pleaded that the Deed was vitiated because the respondent (Johnson) had been induced to enter into the Deed by alleged misrepresentations on the part of the appellant (Lim). The appellant’s defence was that there had been satisfaction and discharge of the respondent’s cause of action by reason of the Deed.

16 On the first day of trial, the respondent sought and obtained leave from the court to amend its reply to include a new basis for vitiating the Deed in addition to the plea of misrepresentation. The respondent pleaded in para 4 of the Amended Reply that cl 7 of the Deed stated that the Deed was not effective until the respondent had received all three instalments. Since the last instalment of US$25,000 was not received by it, the respondent averred that the Deed was not effective.

17 The trial judge ruled in favour of the respondent on the ground that the appellant’s defence of accord and satisfaction was not made out. There was no finding that any misrepresentation vitiated the Deed. Instead, the respondent’s new plea in the Amended Reply was accepted and the Deed was held to be ineffective because the third payment was not made on time. The trial judge took the view that the appellant’s act of purchasing the bank draft of US$25,000 did not suffice as the payment was not actually tendered. He rejected the appellant’s argument that the final payment was not tendered because it was conditional upon receipt from the respondent of a copy of the executed Deed.

The issues

18 Two issues arose for determination in this appeal:

(a) Could the appellant rely on the Deed as a valid defence to the respondent’s claim notwithstanding that the third and final instalment of US$25,000 was not paid on the due date of 31 July 2002?

(b) Should the last-minute amendment to the Reply have been allowed?

Did the Deed constitute a valid defence notwithstanding the non-payment of the final instalment?

19 As stated earlier at [17], the trial judge made no finding on the respondent’s allegation of misrepresentation which purportedly induced it to enter into the Deed. Consequently, the only issue to be determined on appeal was whether non-payment of the final instalment rendered the Deed unenforceable.

20 The crux of the appellant’s case was that payment of the instalments was conditional upon its receipt of a copy of the executed Deed. Therefore, it was entitled to withhold payment of the last instalment of US$25,000 until it received a copy of the Deed, which never came. The trial judge had rejected this argument of counsel for the appellant on the basis that it was not a pleaded defence (see [2004] SGHC 78 at [14]). His finding overlooked the fact that it was the respondent who first raised this issue by its eleventh hour amendment of para 4 of the Reply.

21 It was our view that the appellant had succeeded on the first limb of its appeal. We accepted its counsel’s submission that it was a condition precedent to the appellant’s obligation to pay under the...