Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 25 May 2016
• Neutral Citation: [2016] SGHC 104
• Court: High Court (Singapore)
• Hearing Date: 09 July 2015,13 July 2015,20 July 2015,26 October 2015,14 July 2015,21 July 2015,10 July 2015,16 July 2015,08 July 2015,15 July 2015
• Docket Number: Suit No 662 of 2012
• Plaintiff Counsel: Wendell Wong, Denise Teo and Valerie Goh (Drew & Napier LLC)
• Defendant Counsel: Andrew Ang Chee Kwong and Andrea Tan (PK Wong & Associates LLC)
• Subject Matter: Contract,Formation,Acceptance,Misrepresentation
• Published date: 16 May 2017

Judith Prakash J: Background The parties

This case involves a dispute over the supply of pipes, valves and other plumbing fittings for installation in a hotel construction project. The plaintiff says that the defendant contracted to buy certain fixed quantities of such products from it and did not fulfil the contract. The defendant’s position is that the actual amounts which it contracted to purchase were very much lower than the plaintiff’s figures and no breach of contract has taken place. In the alternative, the plaintiff also has a claim for misrepresentation, asserting that it offered generous discounts to the defendant in reliance on representations that the defendant would order goods worth at least a certain value.

The plaintiff, Sintalow Hardware Pte Ltd, was incorporated in 1982 and is in the business of distributing and supplying mechanical and engineering products. It is the exclusive distributor in Singapore for several well-known manufacturers of pipes, pipe-fittings and valves. The managing director of the plaintiff is Mr Chew Kong Huat, also known as Johnny Chew (“Mr Chew”).

The defendant, OSK Engineering Pte Ltd, is a company which installs plumbing, sanitary and gas works in buildings. The defendant is run by a married couple, Mr Tan Yeo Kee (“Mr Tan”) and Mdm Oh Swee Kit (“Mdm Oh”). Mdm Oh is the general manager of the defendant and she is the main person who dealt with the plaintiff, represented by Mr Chew, in connection with the transactions which gave rise to this action.

Outline of events

Although the plaintiff and the defendant had had dealings with each other prior to June 2007, such dealings had been on a small scale basis and involved the ad hoc supply of various types of pipes, valves and expansion joints by the plaintiff in response to orders placed by the defendant for immediate or early delivery. In May 2007, the defendant informed the plaintiff that it was tendering for the installation of plumbing and sanitary works at the hotel forming part of the Marina Sands Integrated Resort Project (“the Project”) and asked the plaintiff to submit its price list for various pipes and fittings. The plaintiff sent the defendant its May 2007 price list and thereafter, from time to time at the defendant’s request, provided it with additional price lists.

Sometime in September 2007, the defendant was appointed as the subcontractor to undertake plumbing and sanitary works for the Project.

On 18 September 2007, Mr Chew met Mr Tan and Mdm Oh in the defendant’s office to discuss the supply of products for the Project. It is the plaintiff’s position that at that meeting the defendant represented that it would be able to and would purchase at least $5m worth of products from the plaintiff for the Project. The plaintiff called this $5m the “Estimated Sale Amount”. On 22 September 2007, the plaintiff wrote to the defendant confirming that certain “special discount rates” in respect of products to be supplied by the plaintiff had been discussed and agreed at the meeting. I will refer to this letter as “the plaintiff’s September letter”. The plaintiff also says that terms were agreed at this meeting which became the material terms of what the plaintiff calls the “Total Package Agreement”. The defendant denies that the representations were made or that any contract was concluded on 18 September 2007.

Further meetings took place in October and November 2007. At one of these meetings the defendant insisted on further discounts for some of the products and the plaintiff agreed to these.

Whilst the plaintiff’s position is that the parties entered into the Total Package Agreement as the contract which contained the standard terms and conditions on which the plaintiff subsequently supplied products to the defendant, the defendant’s position is that the standard terms and conditions were contained in a different contract evidenced by its letter dated 21 November 2007 (“the defendant’s November letter”). The defendant refers to this contract as the Master Contract. One of the issues in this case is whether the general contractual arrangements between the parties are contained in the Total Package Agreement or in the Master Contract.

The defendant’s November letter was signed by both the plaintiff and the defendant. The plaintiff says that this letter did not reflect the agreed terms and Mr Chew had only signed it under pressure from Mdm Oh. Therefore, immediately thereafter the plaintiff wrote to the defendant to correct the agreed terms. This letter, also dated 21 November 2007, is referred to as “the plaintiff’s November letter”. The defendant denies that the plaintiff’s November letter has any contractual effect.

As far as the defendant is concerned, its general contractual relationship with the plaintiff is in the Master Contract and the products that were subsequently supplied by the plaintiff to the defendant were supplied pursuant to either Material Order Forms or letters which the defendant sent to the plaintiff specifying the type of product needed, the quantity and the delivery dates. The plaintiff says, however, that there were specific Product Agreements for various types of products and that the defendant was obliged to take delivery of the quantities specified in those Product Agreements. A large part of the plaintiff’s claim relates to the defendant’s refusal to take delivery of the full quantities of products specified in the Product Agreements. The defendant says that the Product Agreements were merely quotations from the plaintiff and the actual orders were contained in the Material Order Forms/its order letters.

The disputes between the parties over the supply of products arose in 2008. This suit, however, was commenced only in August 2012 and it came on for hearing in August 2015. Thus, by the time the witnesses were before me, the events that they spoke of had occurred up to eight years earlier. That could account for some of the inconsistencies in testimony. It would not be surprising that after all that time memories had faded somewhat. There were also difficulties with the oral evidence due to the fact that Mdm Oh knows very little English and testified in Mandarin although all the correspondence was in English. Some significant difficulties were encountered in the course of interpretation. Further, Mr Chew’s use of the English language, while fluent, was rather idiosyncratic and he sometimes had difficulty understanding the questions asked. Thus, in assessing the strength of each party’s case, I have preferred to rely on the documentary evidence as far as possible.

The plaintiff’s claim and the issues

The plaintiff’s claim is that the defendant is liable to it for loss and damage arising from the following: The defendant’s breach and/or repudiation of the Total Package Agreement and of the Product Agreements which were governed by the Total Package Agreement in relation to discounts to be accorded to the defendant. A discount mistakenly accorded to the defendant in relation to what the plaintiff terms as the “New Duker Agreement”. The delivery of CV Couplings to the defendant for which, mistakenly, the defendant was not invoiced. Further, or alternatively, the defendant’s misrepresentations to the plaintiff.

The parties have formulated the issues slightly differently. I think that the main issues that arise are as follows: Whether the governing contract entered into between the parties in 2007 was the Total Package Agreement or the Master Contract. Whether the plaintiff and the defendant had entered into subsidiary sale and purchase agreements (ie, the Product Agreements) in respect of each type of product required for the Project. Whether the plaintiff is entitled to withdraw the discount accorded in the “New Duker Agreement” and claim payment in relation to the CV Couplings. Whether the defendant’s alleged representations to the plaintiff that it would be able to and would purchase at least $5m worth of products from the plaintiff amount to actionable misrepresentation for which the plaintiff has an alternative course of action. A number of sub-issues need to be considered to determine the main issues but I will identify these in the course of the discussion.

The governing contract The pleadings

The plaintiff’s Statement of Claim (“SOC”) went through several iterations. In the SOC (Amendment No 5), the plaintiff pleaded the following in relation to its allegation that the parties had entered into the Total Package Agreement: At the end of 2007, the plaintiff and the defendant entered into the Total Package Agreement that was reached partly orally and partly in writing as follows: In so far as it was made orally, Mr Chew and Mdm Oh entered into the Total Package Agreement during a meeting on 18 September 2007. In so far as it was made in writing, the Total Package Agreement was contained in or was to be inferred from: The plaintiff’s September letter; The defendant’s November letter; and The plaintiff’s November letter.

The plaintiff further pleaded that it was induced to enter into the Total Package Agreement by representations from the defendant that it would be able to and would purchase from the plaintiff the products described in para 6(b) of the SOC in quantities totalling at least $5m in value. Consequently, the express terms of the Total Package Agreement were as follows: The defendant would purchase from the plaintiff products amounting to the Estimated Sales Amount. The plaintiff would extend agreed discounts in respect of the products. The discounts would only be applicable to the products and only if they were to be used in the Project. The products would be subject to “consultant’s/owner’s/client’s approval” (“the Approval Clause”). The parties would enter into the Product Agreements being separate agreements for the price and quantities of the various products. The...