Singapore Salvage Engineers Pte Ltd v North Sea Drilling Singapore Pte Ltd

JurisdictionSingapore
JudgeEdmund Leow JC
Judgment Date12 January 2016
Neutral Citation[2016] SGHC 5
Citation[2016] SGHC 5
CourtHigh Court (Singapore)
Published date15 January 2016
Docket NumberSuit No 1071 of 2013
Plaintiff CounselCharmaine Fu and Wong Shi Yi (Ang & Partners)
Defendant CounselChong Yee Leong and Azmin Jailani (Allen & Gledhill LLP)
Subject MatterAgency,construction of agent's authority,evidence of agency
Hearing Date24 April 2015,21 April 2015,28 April 2015,22 April 2015,05 October 2015,23 April 2015
Edmund Leow JC: Introduction

The question to be answered in this case is whether the defendant has to pay the plaintiff for thruster lashing services that were carried out on an oil rig known as “Troll Solution” in Singapore. The answer to the question depends on the role played by two individuals, namely, Jason Choo (“Mr Choo”) and John McMullen (“Mr McMullen”), and whether they had the requisite authority, actual or apparent, to contract with the plaintiff on behalf of the defendant.

Upon consideration of the evidence at trial and the parties’ submissions, I gave judgment in favour of the plaintiff for the principal sum of S$414,600 against the defendant and awarded interest at 5.33% from the date of the writ. The defendant has since filed a notice of appeal against my decision. I now give the grounds for my decision.

The facts The parties

The plaintiff, Singapore Salvage Engineers Pte Ltd, is a company incorporated in Singapore. Its business is to carry out marine services including, inter alia, the salvaging of vessels, underwater welding and fabrication, and the repair of ships, tankers and other ocean-going vessels. Ignatius Francis Danakody (“Mr Ignatius”) and Ivan Francis Danakody (“Mr Ivan”) are the directors of the plaintiff.

The defendant, North Sea Drilling Singapore Pte Ltd, is a company incorporated in Singapore. Its business is to provide support services for operations to be carried out on an oil rig known as “Troll Solution” (“TS”) whilst it was in Singapore between January and May 2012, which included the procurement of upgrading and repair works. It is undisputed that the defendant’s operations were divided principally into two teams, namely, Team A (which dealt with upgrading works to be performed on TS) and Team B (which dealt with repair and operational works). Mr Choo was the only employee of the defendant and by his appointment as its procurement logistics manager, he had the authority to issue purchase orders on behalf of the defendant directly to third party vendors. Roger Simmenes (“Mr Simmenes”) was the director of the defendant at the material time.

The defendant is part of a group of companies incorporated to manage and support the requirements of TS. Given that TS’ requirements were dependent on where TS was located at the relevant period of time, specific entities would be incorporated at each location to provide the necessary support services to TS. The defendant was one such entity. TS was principally managed by North Sea Drilling Group AS (“NSDG”), a corporation incorporated in Norway, and NSDG and the defendant are “sister corporations” wholly owned by TrollDrilling & Services Ltd (“TDS”), a company incorporated in Cyprus. 99.36% of the shares in TDS are owned by Blue Capital Pte Ltd (“BCPL”), a company incorporated in Singapore. Brian Chang Holdings, a company incorporated in Singapore, also provides management services to BCPL. Brian Chang (“Mr Chang”) is the main shareholder of BCPL and the father-in-law of Mr Choo. Even though each of these entities within the group performed narrow and specific functions in support of TS and belonged to the group, they were completely separate and distinct entities.

For the period of time in which TS was located in Singapore, NSDG had also engaged Maritime Projects AS (“Maritime”) to manage the yard stay and execution of works on TS in respect of “Team A” works. Rune Tvedt (“Mr Tvedt”) was the managing director of Maritime, who in turn engaged Pascaline Pte Ltd (“Pascaline”) to assist in the management of Maritime’s responsibilities in Singapore. Mr McMullen is the director of Pascaline and took on the role of site manager to monitor the works performed on TS in Singapore. As Mr Tvedt was not based in Singapore, and Mr Choo lacked the experience in the offshore industry to be able to give advice on the technical aspects of works performed on TS, Mr McMullen was the only person involved in the day-to-day operations of TS in Singapore with the requisite technical knowledge and expertise.

The claim

The plaintiff’s claim has been quantified at S$414,600 (the “Principal Sum”), being the costs of services rendered by the plaintiff to the defendant including the postponement of services, or alternatively, reasonable compensation on a quantum meruit basis fixed at the Principal Sum. The breakdown of the Principal Sum is as follows: S$59,000 per day for work performed on 5 and 6 May 2012; S$59,000 for additional works performed on 7 May 2012; S$59,000 per day for “cancellations” on 30 April and 2-4 May 2012; and S$1,600 in total for fabrication of eight pad-eyes.

The plaintiff relies on the quotation sent from Mr Ivan to Mr McMullen by way of an email dated 3 April 2012 (the “Quotation”) as its basis for the abovementioned breakdown of the Principal Sum. The relevant portion of the Quotation is reproduced here:

With regards to the below [email], we are pleased to quote for the below marine services.

Fabrication of pad-eye

Rate: S$200 per pad-eye

Provide chain, shackles and turnbuckles Provide 01 unit barge, 02 unit tugboats, crew, riggers, cutters, fitter, welders, welding and cutting equipment, scaffolding equipment, scaffolding team and 01 unit scissor lift to lash 03 unit thruster for vessel at West Jurong Anchorage.

Rate: S$59,000

Remarks:

Client to arrange all necessary permits and approvals Client to arrange hot work permit for operation Subject to vessel availability upon confirmation Any cancellation within 24 hrs will be charged at full rate.

Upon receiving the Quotation, Mr McMullen forwarded it to Mr Choo requesting that Mr Choo issue a purchase order to the plaintiff. On 4 April 2012 at 6.20pm, Mr Choo issued Purchase Order No. 0136-2012 dated the same (the “PO”) directly to Ivan by way of an email attachment. The PO made reference to the Quotation as it stated “as per attached email quotation dated 03/04/12” under the list of items which were the subject of the purchase order. The text of the email accompanying the PO stated “[d]ear Ivan, [a]ttached PO for your kind attention. All technical issues to be addressed to John.” The signature block at the end of the email indicated that Mr Choo was employed by the defendant. The plaintiff subsequently carried out the thruster lashing services on TS on 5 May 2012 and completed demobilisation the following day. The plaintiff issued Tax Invoice No. SSE.IN.20120141 dated 30 July 2012 to the defendant for the cost of services rendered by the plaintiff to the defendant at the Principal Sum.

The defendant’s preliminary objection is that the PO could not constitute a valid and binding agreement given that there was no intention to contract at that stage. It submits that Mr Choo and Captain Geow (from Brian Chang Holdings) had sought to make preliminary enquiries about the PO from the plaintiff but these queries were not responded to. It was in light of the “inherent vagueness as to the terms of the Quotation” that Mr Choo prepared an unsigned purchase order to be issued to the plaintiff. To this end, Mr Choo states that by sending the PO, he was merely seeking to “facilitate” the process because he did not wish to cause undue delay, and had copied the email to the relevant personnel for them to seek proper authorisation for the PO concurrently. Mr Choo claimed that he “operated on the basis that Rune and/or Mr McMullen would do the necessary follow up procedures with NSDG” and that given that the PO was of nil value, “this would have initiated further correspondence from the plaintiff and/or Pascaline on this issue”.

But if Mr Choo was merely seeking to facilitate the process (and by “facilitate” I assume he meant that the email did not constitute a valid and binding agreement and he did not intend for the plaintiff to act on the PO issued), it would not have been unreasonable to expect Mr Choo to indicate such an intention (or lack thereof) in his email to the plaintiff. Mr Choo could have easily stated that the PO was merely sent to “facilitate” the process and the PO would only be confirmed when the appropriate approvals were obtained. The fact that Mr Choo sent the PO to the plaintiff directly in this case without any such qualifier or condition attached, albeit unsigned, must have some significance. Mr Choo himself said that he did not wish to cause the project undue delay, and it was clear that these services had to be performed in time for the dry-tow of TS from Singapore to Rotterdam. If he was not intending to contract with the plaintiff at the point in time of sending the PO, there would be no purpose at all in sending the PO to the plaintiff. Further, by Mr Choo’s own admission, he did not follow up with Mr Tvedt or Mr McMullen on the status of the approvals for this particular contract with the plaintiff and merely waited for them to take action to obtain the necessary approvals, assuming, if he did not hear from them, that NSDG was happy with services contracted for. Clearly, Mr Choo’s explanations are merely bare assertions unsupported by evidence. The logical inference from Mr Choo’s actions in the circumstances of the case is that by sending the PO to the plaintiff, he intended for the plaintiff to commence work in preparing to provide the services and even to carry them out, and thus intended to contract with the plaintiff at the time the PO was issued.

The issues

The issues that arise from the pleadings and submissions are: whether Mr Choo and Mr McMullen had actual authority to enter into a contract with the plaintiff on behalf of the defendant; whether the agreement fails for want of certainty; and whether the terms of such agreement entitles the plaintiff to be paid the Principal Sum.

Issue 1 – whether Mr Choo and Mr McMullen had actual authority to enter into a contract with the plaintiff on behalf of the defendant The...

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1 cases
  • Lew, Solomon v Kaikhushru Shiavax Nargolwala and others and another appeal
    • Singapore
    • Court of Appeal (Singapore)
    • 10 Febrero 2021
    ...perform the task for which the agent had been appointed”: Singapore Salvage Engineers Pte Ltd v North Sea Drilling Singapore Pte Ltd [2016] SGHC 5 at [14]. Thus, an agent with authority (actual or ostensible) to make general representations pertaining to a certain transaction (eg, about the......

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