Seyou Products Corporation v Midfa Corporation Pte Ltd

• Jurisdiction: Singapore
• Judge: Zainol Abeedin B Hussin
• Judgment Date: 30 June 2003
• Neutral Citation: [2003] SGDC 141
• Court: District Court (Singapore)
• Published date: 01 October 2003
• Year: 2003
• Plaintiff Counsel: David Khong (Wendy Wong & Partners)
• Defendant Counsel: Ramesh Appo (Brij Rai & RA Anthony)
• Citation: [2003] SGDC 141

Pleadings

1. The Plaintiffs, a Korean Company claimed against the Defendants, a Singapore company “for the sum of US$85,244.80 being the price of the goods namely, aluminium levels sold to the Defendants at the Defendants’ request”. The goods were averred to be “sold and delivered pursuant to the Defendants’ Purchase Order No. 138/2000 dated November 2000 (paragraph 1 of the Statement of Claim). It was notable that the actual purchase order, in AB 77, gave different particulars than those set out in paragraph 1 of the Statement of Claim, averred as “short particulars”. It was further averred that, despite repeated demands, the Defendants “for reasons best known to themselves have failed, neglected and/or refused to settle the aforesaid amount owing to the Plaintiff”. It was significant that, apart from the purchase order, it was not averred by the Plaintiffs when the contract for sale was settled.

2. In their Defence, the Defendants averred that, for the whole transaction, they were “acting as the agents of M/s El Arabia Co of Cairo Egypt, as the Plaintiffs at all material times well know”. The Defendants averred that there was a contract negotiated and concluded by the Plaintiffs and El Arabia for the purchase of goods, namely steel tapes and aluminium levels, by El Arabia from the Plaintiffs. In August 1999, El Arabia placed their first order with the Plaintiffs for US$105,360 for which the “Plaintiffs insisted that payment be made by Letters of Credit” (paragraph 2 of Defence). The Defendants agreed to El Arabia’s request to open the LC in favour of the Plaintiffs for this first shipment and to arrange for the documentation or to ship the goods in accordance with El Arabia’s instructions. The Plaintiffs were aware of these arrangements. The Plaintiffs knew that the goods in the first and subsequent shipments were to be shipped from Korea to Singapore and transhipped from Singapore to Egypt for El Arabia. El Arabia subsequently placed 3 further orders with the Plaintiffs for goods in the same manner, under three separate invoices dated 22 Jan 2000 for USD84,424; 31 Jan 2000 for USD97,656; and 1 May 2000 USD24,878.

3. The Defendants denied paragraph 1 of the Statement of Claim and averred that the contract referred to, was actually negotiated and concluded by the Plaintiffs and El Arabia for the last shipment of aluminium levels, at the agreed sum of USD95,000, payable directly by El Arabia in two cheques. In concluding this contract, the Plaintiffs had offered El Arabia a 20% discount as compensation for defective goods which had been delivered in the previous shipments and the sum of USD 95,500 took into account the compensation agreed upon. After the conclusion of the contract between El Arabia and the Plaintiffs for the last shipment, the Defendants, on El Arabia’s instructions, issued Purchase Order No. 1386/2000 dated 15 Nov 2000, which was referred to in paragraph 1 of the Statement of Claims. Unlike the particulars set out paragraph 1 of the Statement of Claim, paragraph 9 of the Defence fully reproduced the contents of the Purchase Order in AB 77, reflecting the total quantity of 50,000 pieces, as described, at USD119,000 less, compensation of USD23,500 giving the balance of USD95,500. The Defendants averred that El Arabia did pay to the Plaintiffs 2 bank cheques for the said shipment, pursuant to the contract between them. The Defendants averred, in the alternative that if any contract “was made by the Defendants, it was not on their own account but expressly as agent for and on behalf of El Arabia as the Plaintiffs at all material times well knew” (parahraph 11 of Defence). The Defendants denied liability to pay the Plaintiffs USD 85,244.80 or any sum at all.

4. It was further denied that the Plaintiffs or their Solicitiors had repeatedly demanded and that the Defendants have failed to settle the aforesaid amount owing to the Plaintiffs, as set out in paragraph 2 of the Statement of Claim. The “aforesaid amount” allegedly demanded and not paid as averred, was USD85,244.80. The Defendants pleaded that the Plaintiffs’ Solicitors, by their letter dated 31 Aug 2001 to the Defendants actually demanded USD 95,000 from the Defendants and had claimed that 2 cheques dated 27 Feb 2001 and 30 Mar 2001 had been handed to the Plaintiffs by the Defendants in purported payment for the goods delivered under the contract, which cheques were dishonoured and returned to the Plaintiffs (paragraph 14 of Defence; Plaintiffs’ Solicitors’ letter at AB 93; cheques at AB 89 and bank advice at AB 88). It was undisputed that the 2 cheques were issued by the partners of El Arabia, not by the Defendants. It was further averred (in paragraph 15 of Defence) that the Defendants’ Solicitors had, on 6 Sep 2001 and 12 Sep 2001, replied to the Plaintiffs’ Solicitors’ letter informing that the contract was made by the Plaintiffs and El Arabia and that the two cheques were given by El Arabia to the Plaintiffs as payment for the goods, Despite this the Plaintiffs still commenced this action against the Defendants.

5. In the Reply the Plaintiffs denied knowledge that the Defendants were acting as El Arabia’s agent and averred that the Defendants had represented, in Mar 1999, that El Arabia and the Defendants were “business partners”. The Plaintiffs confirmed that in August 1999 they shipped aluminium levels for US$105,360, but this was to the Defendants under their purchase order dated 14 Aug 99. Subsequently the Plaintiffs shipped more aluminium levels for US$94,937 to the Defendants. The Defendant paid for this order by way of their letter of credit (LC) on 18 Aug 99. The shipments were evidenced by a Bill of Lading dated 25 Oct 99. The Plaintiffs further denied the defence that the contract for this shipment was negotiated with El Arabia or that El Arabia placed the order with the Plaintiffs. The Plaintiffs denied knowledge of the arrangements between the Defendants and El Arabia on the issue of the LC or shipping documents for the goods. The Plaintiffs denied that El Arabia had placed the 3 orders as averred in the defence or any other order. They maintained that payments were made by the Defendants and goods were shipped to the Defendants in Singapore.

6. Significantly, there was no specific denial of paragraph 6 of the Defence, which averred that the contract pertaining to the goods sold and delivered under Defendants’ purchase order no. 1386 dated 15 November 2000 (AB 77) referred to in paragraph 1 of the Statement of Claim. The Plaintiffs did, however, reply to paragraph 7 of the Defence, which averred that in concluding the contract (i.e between the Plaintiffs and El Arabia, relating to the shipment in AB 77), the Plaintiffs offered El Arabia 20% discount as compensation for defects in the previous shipments. The Plaintiffs replied that the contract was concluded with the Defendants, not El Arabia. The Plaintiffs averred that the Defendants informed them that El Arabia had complained to them about defective goods which Defendants had bought from Plaintiffs and had delivered to El Arabia. Although Plaintiffs denied responsibility, out of good will and to maintain business relations with the Defendants, it was averred that “the Plaintiff agreed to give a discount of US$23,500 plus 1500 free pieces of aluminium levels from the contract price” (paragraph 8 of Reply). The Plaintiffs agreed to accept El Arabia’s two cheques as payment on behalf of the Defendants because the Defendants informed them that they were unable to open a L.C for this particular contract “as they had extended too much credit from El Arabia. The Plaintiffs denied knowledge that the Defendants had issued the purchase order (AB 77) on El Arabia’s instructions.

7. The Plaintiffs denied the defence that El Arabia had made payment to them for the shipment in AB 77 by way of 2 bank cheques. They specifically averred that “the Plaintiffs say that El Arabia did not make any payments for the shipment referred to therein”. They also denied knowledge that the Defendants were El Arabia’s agent and were contracting with Plaintiffs on El Arabia’s account.

8. It was not clear, from the Statement of Claim and Reply, whether the Plaintiffs were solely relying on the Defendants’ purchase order as the contract document or sole evidence of the contract, relating to the last shipment, subject of the claim. At the trial, however, the Plaintiffs, themselves, adduced oral and documentary evidence relating to the series of transaction involving them, the Defendants and El Arabia. These facts and circumstances related to the discussions on the production of the moulds from March 1999 right up to the date of the agreement on the last shipment, in November 2000. The Defendants, in line with their pleaded case, revolving around the relationship of the parties and El Arabia, also adduced and relied on evidence of circumstances and transactions from March 1999 to November 2000, when the purchase order (AB 77), compensation and the 2 cheques were given to the Plaintiffs and the communication among the three parties thereafter. Although the two partners of El Arabia of Egypt had filed their affidavits of evidence-in-chief, they did not attend court on the date of hearing. Their affidavits were not, therefore, admitted in evidence.

9. At the end of the three day trial, I found for the Defendants and dismissed the Plaintiffs’ claim, with costs fixed at $12,000 and disbursements to be agreed upon and to be paid by the Plaintiffs to the defendants. The Plaintiffs are appealing against the whole of my decision in this case.

Issues:

i) Whether the Defendants were merely acting as agents for El Arabia and were treated as such by the Plaintiffs when the Defendants issued the said purchase order and handled the other documentation for the delivery of the goods from Korea to Singapore and from Singapore to Egypt and were, therefore, not liable to the Plaintiffs.

ii) Whether the...