Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 27 April 2017
• Neutral Citation: [2017] SGCA 33
• Plaintiff Counsel: Wendell Wong, Denise Teo and Valerie Goh (Drew & Napier LLC)
• Date: 27 April 2017
• Docket Number: Civil Appeal No 83 of 2016
• Hearing Date: 20 January 2017
• Subject Matter: Misrepresentation,Formation,Contract
• Published date: 05 May 2017
• Defendant Counsel: Andrew Ang, Andrea Tan and David Marc Lee (PK Wong & Associates LLC)
• Court: Court of Appeal (Singapore)
• Citation: [2017] SGCA 33
• Year: 2017

Chan Sek Keong SJ (delivering the judgment of the court): Introduction

This is an appeal by Sintalow Hardware Pte Ltd (“Sintalow”) against the decision of the High Court judge (“the Judge”) in Suit No 662 of 2012 (“S 662/2012”). The respondent is OSK Engineering Pte Ltd (“OSK”). The Judge’s judgment is reported as Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd [2016] SGHC 104 (“the Judgment”).

The disputes between the parties arose from a series of agreements for the supply of sanitary ware to a large building project by Sintalow to OSK. Essentially, the disputes are concerned with the parties' contractual rights and obligations under these agreements. The background to the disputes is described below.

Background to the disputes

Sintalow is the exclusive distributor in Singapore for several types of pipes, pipe-fittings and valves for sanitary and plumbing works (“Products”). Its managing director is Mr Chew Kong Huat, also known as Johnny Chew (“Chew”).¹ OSK is a plumbing, sanitary and gas works contractor. It is owned by Mr Tan Yeo Kee, the managing director, and his wife, Mdm Oh Swee Kit (“Mdm Oh” or “Mrs Tan”), the general manager.²

In May 2007, OSK informed Sintalow that it would be submitting a tender for a sanitary and plumbing contract in relation to the Marina Bay Sands Project (“MBS Project”). OSK requested Sintalow to provide details of its Products.³ Sintalow sent OSK its May 2007 price list for the Products in a letter dated 18 May 2007 which set out the following terms:⁴ The prices of the Products were quoted in Singapore Dollars and excluded Goods and Services Tax (“GST”). The prices of the Products were subject to a 30-day payment term. Delivery of the Products would be partially from existing stock subject to prior sales. The prices of the Products were valid for two months and subject to Sintalow’s final confirmation of order.

Sintalow claimed that in or around June 2007, it was given an overall bill of quantity (“June 2007 BQ”) showing the kinds and quantities of sanitary and plumbing wares which OSK would require for the MBS Project. Sintalow studied the June 2007 BQ and concluded that the total value of the Products required for the MBS Project would be between S$7m and S$8m (including products for which Sintalow was not a supplier).⁵ OSK denied it gave the June 2007 BQ to Sintalow.⁶

After further inquiries from OSK, Sintalow provided OSK with price quotations for some of the Products on 16 August 2007⁷ and 25 August 2007.⁸

In or about September 2007, OSK was appointed the subcontractor for the plumbing works for the MBS Project.⁹ On 18 September 2007, OSK and Sintalow met to discuss the terms on which Sintalow would supply the Products to OSK (“the 18 September 2007 meeting”).

Following the 18 September 2007 meeting, Sintalow faxed a letter dated 22 September 2007 to OSK (“Sintalow’s September letter”) to confirm the special discount rates on certain specified materials as follows:¹⁰

We refer to our meeting on Tuesday, 18 September 2007, at your office with regard to the piping material for the abovementioned project.

As we have discussed and agreed, the “special discount rates” are as follows:

1. Special discount of 23% for Fusiotherm Pipe/Fitting; 2. Special discount of 23% for Duker Pipe Fitting; and 3. Special discount of 35% for CV Coupling.

Further, we have also agreed that the special discount rates are only valid and existing subject to the inclusion of the following products as part of the entire package/order:

(i) KKK – Valves (Pilot Float Valve, Pressure Reducing Valve) (ii) AFA – Resilient Seated Gate / Sluice Valve, Check Valve, Y-Strainer, Flexible Joint (iii) FC – Valves (iv) WUS – Pipe Clamp with Rubber Lined (v) THERMOSEL – Stainless Steel Expansion Joint

Due to the worldwide raw materials increases and bigger quantities required for this project, we would appreciate if you would kindly let us have your letter of confirmation of the above order as soon as possible. Also, this is so that we are able to lock-in the best prices with our manufacturers.

[emphasis added in italics]

It is pertinent to note the following points in this letter: The letter was an offer to supply the Products on the terms and conditions stated therein, ie, on those general terms. The special discounts were only available for the first three Products, ie, Fusiotherm Pipe/Fittings, Duker Pipe Fittings and CV Couplings if the following five Products were included as part of OSK’s purchase orders as an “entire package/order”. The term “entire package/order” is not defined, but it would appear to mean that OSK must place orders for all the five Products in order for the special discounts to be given. In the last paragraph of the letter, Sintalow requested a firm order from OSK for the Products so that it could lock in the best prices with its manufacturers. No prices or quantities of the Products, or dates of delivery and other terms are mentioned in this letter.

Further meetings between the parties took place between September and November 2007. On 2 October 2007, OSK sent to Sintalow a handwritten bill of quantity for the valves it required for the MBS Project.¹¹ On 18 October 2007, OSK sent to Sintalow a bill of quantity for Fusiotherm PPR and Duker Hubless products. This was accompanied by what appeared to be a set of draft terms and conditions:¹² 1. Goods must be delivered by _______ 2. All unit rates shall remain valid throughout the project for any variation in quantity up to +/– 20% our purchase order. 3. Terms of payment must be _______ 4. Partial delivery shall be delivered by Sintalow upon instruction from [OSK].

On 15 November 2007, Sintalow sent to OSK a quotation with the reference “SH/JCJ/sy/Q1733R2/07” for the valves needed by OSK for the MBS Project (“the Valves Quotation”).¹³ OSK accepted this quotation which was subject to the following terms:¹⁴

TOTAL AMOUNT: S$645,615.25.

PRICE: PRICE QUOTED ARE NETT IN SINGAPORE DOLLARS EXCLUDE GST AND ARE SUBJECT TO TOTAL PACKAGE ORDER.

TERM OF PAYMENT: 30 DAYS.

DELIVERY: PARTIALLY EX-STOCK, BALANCE 2-3 MONTHSUPON ORDER CONFIRMATION.

VALIDITY: 14 DAYS.

REMARKS: SUBJECT TO OUR FINAL CONFIRMATION OF ORDER.

Both parties signed this quotation. Chew signed beneath the sentence:

WE LOOK FORWARD TO RECEIVE YOUR ORDER.

Mdm Oh (as Mrs Tan) signed and dated it 21 November 2007 beneath the sentence:

WE, OSK ENRGR PTE LTD CONFIRM THE ACCEPTANCE OF THE ABOVE MENTIONED ORDER.

On 21 November 2007, OSK and Sintalow signed a letter on OSK’s letterhead (“OSK’s November letter”) which contained the following: ¹⁵

Dear Sir/Madam

RE: CONTRACT AGREEMENT ON THE USE OF SINTALOW HARDWARE PTE LTD FOR PROJECT MARINA BAY SANDS 1. With reference to your quotation SH/JCJ/sy/Q1733R2/07 dated 15/11/07, and the additional discounts below, i. FVC valve – Less 15% ii. FC Valve – Less 5% iii. Duker Brand Hubless Pipe and Fittings – Less 23% iv. [Fusiotherm PPR] Pipe and Fittings – Less 23% v. CV Coupling - Less 40%, 2. On behalf of OSK Engineering Pte Ltd, we have the pleasure to award you the above mentioned agreement contract for supplying of Hardware for Integrated Resort Project. 3. The Terms & Conditions are as follows:- i. All prices stated in Sintalow Hardware Pte Ltd’s quotation attached shall remain the same should there be, a) Any [addition]/reduction in quantities throughout the entire project. b) Any fluctuation of exchange rate of the currencies. c) Any change in size of pipe & fittings indicated to purchase. ii. The supplier shall keep at least 10% extra ex-stock throughout the duration of this project. iii. Subject to consultant’s / Owner’s / Client’s approval. iv. Quantity given by OSK Engineering Pte Ltd is an estimated order. v. All Pipes & Fittings shall be stored at your warehouse. Partial delivery is allowed. Pipes & Fittings shall be delivered by Sintalow Hardware Pte Ltd to the project site not later than two days upon receiving our fax order from our Purchasing Department. vi. Project construction period from January 2008 to December 2010 and further extension as per Owner / Client request. vii. Goods are to be delivered to the project site no later than 2 days upon receiving the order from our purchasing department. viii. Any defects found on the pipes and fittings, the goods shall be replaced with a new equivalent by Sintalow Hardware Pte Ltd at no additional cost to OSK Engineering Pte Ltd. ix. Payment Terms: 60 Days. x. This letter is sent to you in duplicate. Please indicate your acknowledgment and agreement to the foregoing by returning the duplicate copy duly signed by us.

[emphases in original]

We note the following points about OSK’s November letter: “SH/JCJ/sy/Q1733R2/07 dated 15/11/07” in paragraph 1 of the letter referred to the Valves Quotation (see [11] above). In addition to the valves ordered under the accepted Valves Quotation, three other Products, viz, Duker Hubless products, Fusiotherm PPR products and CV Couplings and their Special Discounts are mentioned in this letter. Therefore, paragraph 2 which awarded “the above mentioned contract for supplying of Hardware for Integrated Resort Project” does not refer to the Valves Quotation (for which a supply contract had already been concluded) but to the heading of the letter, ie, CONTRACT AGREEMENT ON THE USE OF SINTALOW HARDWARE PTE LTD FOR PROJECT MARINA BAY SANDS. Paragraph 3(i) refers to Sintalow’s “quotation attached”. The attached quotation consisted of 20 pages of attachments that were faxed together with the letter to Sintalow at 9.35am on 21 November 2007. The attachments consisted of Sintalow’s Price Lists sent to OSK at various times. There were...