Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd

JudgeLai Siu Chiu SJ
Judgment Date09 December 2019
Neutral Citation[2019] SGHC 286
Citation[2019] SGHC 286
CourtHigh Court (Singapore)
Published date21 January 2020
Docket NumberSuit No 662 of 2012
Plaintiff CounselWong Wendell, Ang Xin Yi Felicia and Teo Ying Ying Denise (Drew & Napier LLC)
Defendant CounselAndrew Ang Chee Kwang, Tan Jin Jia Andrea and David Marc Lee (PK Wong & Associates LLC)
Subject MatterCommercial Transactions,Sale of goods,Contract,Remedies,Damages
Hearing Date04 June 2019,08 August 2019,06 June 2019,03 June 2019
Lai Siu Chiu SJ: Introduction

This case concerned a dispute between the parties over the supply of pipes, valves and other plumbing fittings (“the Products”) to OSK Engineering Pte Ltd (“OSK”) from Sintalow Hardware Pte Ltd (“Sintalow”) for installation in the Marina Bay Sands hotel project (“the MBS Project”) in 2007. The dispute as to liability has been dealt with by the High Court in Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd [2016] SGHC 104 (“the HC Judgment”) and by the Court of Appeal in Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd [2017] 2 SLR 372 (“the CA Judgment”). This judgment deals with the dispute as to quantum.

Sintalow sued OSK for breach of contract. Sintalow’s case was that the parties’ relationship was governed by what it called a Total Package Agreement (“TPA”) under which Sintalow agreed to give OSK special discounts on the Products in consideration of OSK’s commitment to purchase at least S$5m worth of the Products. The TPA was partly oral and partly written.

OSK’s case on the other hand was that the parties’ contractual obligations were governed by OSK’s letter dated 21 November 2007 (termed the “Master Contract” by the trial judge).

After a lengthy trial, the trial judge found in favour of Sintalow and held that the Master Contract governed the parties’ relationship. The court also found that OSK had not accepted three separate quotations for the Products based on various bills of quantities for the stated quantities, prices, terms and conditions (“the Products Agreements”). It was further held that OSK did not make representations to Sintalow as to the minimum value of the Products that it would purchase from Sintalow.

Judgment was awarded to Sintalow on 25 May 2016 in the following terms (see the HC Judgment at [133]): OSK was to pay Sintalow for all CV couplings that Sintalow delivered to OSK with the customised rubber collars. Damages would be assessed in respect of: The order placed by OSK for the additional Duker Hubless products by way of OSK’s letter dated 7 March 2008 and sent by facsimile on 10 March 2008 (“the additional Duker Hubless products”). The additional Duker Hubless products were those underlined in Sintalow’s quotation dated 3 March 2008 and the price and quantities of those underlined products were to be applied in the assessment of damages. The order placed for Duker Hubless cross tees by way of OSK’s letter dated 23 May 2008 (“the Cross Tees Agreement”). The order placed for customised rubber collars on 8 May 2008 by way of OSK’s letter dated 8 May 2008.

With regards to the three matters referred to at [5(b)] above, OSK’s three letters dated 7 March 2008, 23 May 2008 and 8 May 2008 and Sintalow’s quotation dated 3 March 2008, were presented in court in volume 1 of the Agreed Bundle of Documents.

Sintalow appealed against the HC Judgment in Civil Appeal No 83 of 2016 (“the Appeal”) against the following findings made by the trial judge: that the general contractual terms between the parties were contained in the Master Contract and not in the TPA; that OSK did not make any representations as to the estimated sales amount or that the quantity of products to be purchased from Sintalow would be equivalent to the estimated sales amount; that Sintalow and OSK did not conclude the three Products Agreements; that OSK is not liable to Sintalow for the undelivered quantity of Fusiotherm products because Sintalow refused to deliver the same to third parties to whom OSK had sold them; insofar as damages are to be assessed for the excess supply of Duker Hubless products (“Excess Duker Hubless products”) as described in [120] of the HC Judgment, that the quantities of Duker Hubless pipes that Sintalow had difficulty supplying to OSK must be deducted from the assessment of damages; insofar as damages are to be assessed for OSK’s order for cross tees under the Cross Tees Agreement, that those damages are to be assessed on the basis that Sintalow was obliged to give OSK the same discount for the cross tees as it had promised for the other Duker products and that it was not reasonable for Sintalow to place a further order for cross tees when OSK had already indicated it no longer wanted them; and insofar as Sintalow was entitled to payment for the CV couplings under an 8 May 2008 letter from OSK to Sintalow (“Rubber Sealing Agreement”), that Sintalow was entitled to payment at the quoted price less the 40% discount agreed to in the Master Contract.

On 27 April 2017, the Appeal was allowed in part by the Court of Appeal (see the CA Judgment). The appellate court held, inter alia, that: The Master Contract was not a contract of sale and purchase for the Products. OSK was not obliged to buy nor was Sintalow obliged to sell any of the Products under the Master Contract. The Products Agreements were binding contracts upon OSK’s acceptance of Sintalow’s quotations for the Products with respect to the bills of quantities issued by OSK. In so far as the terms and conditions specified therein were inconsistent with the general conditions in the Master Contract, they would have the effect of varying and/or superseding the general conditions. OSK was in breach of its obligations to take delivery of the excess valves as described at [66] of the CA Judgment (“Excess Valves”) and the Excess Duker Hubless products and accordingly is liable for damages to Sintalow. Although OSK was under an obligation to take delivery of excess Fusiotherm PPR products as described at [91] of the CA Judgment (“Excess Fusiotherm PPR products”), it was not in breach of this obligation as Sintalow had wrongfully refused to deliver the same to nominated third parties to whom OSK had on-sold. OSK did not represent to Sintalow that it would place orders for the Products to the total value of not less than S$5m. OSK was not entitled to the special discount of 23% for the cross tees as that term was superseded by the higher discount of 41.43% in the Cross Tees Agreement. OSK was entitled to the 40% discount as provided in the Master Contract for the CV couplings delivered pursuant to the Rubber Sealing Agreement.

The task of this court was to assess the damages awarded to Sintalow under the HC Judgment as varied by the CA Judgment.

The assessment hearing

For the assessment of damages, there were three witnesses called by the parties. Sintalow’s only witness was its managing director, Chew Kong Huat (also known as Johnny Chew) (“Chew”). In the trial on liability, Chew had also testified for Sintalow. OSK’s witnesses were its general manager, Madam Oh Swee Kit (“Mdm Oh”), who is the wife of its managing director, Tan Yeo Kee, as well as its deputy general manager, Chay Ann Ling (“Chay”).

Sintalow’s case

In his affidavit of evidence-in-chief (“AEIC”), Chew claimed the following sums from OSK:

No Description Amount (S$)
1 Products ordered by OSK but undelivered 1,937,592.21
2 Refund of discount for new Duker Hubless orders that were delivered 6,195.32
3 Costs of CV couplings that were delivered 35,387.76
4 Less: overcharged amount (10,595.04)
Total claim: 1,968,580.25

As an alternative to the $1,937,592.21 specified in item 1 above, Sintalow claimed loss of profits amounting to $926,298.06. Added to items 2 and 3 above and less item 4, Sintalow’s alternative claim amounted to a total of $957,286.10.1

Chew’s AEIC referred to [132] of the Judgment where the court found that OSK took delivery of 5,142 pieces of 150mm CV couplings with 5mm rubber collars and 674 pieces of 200mm CV couplings with 5mm rubber collars leaving a balance of 758 pieces undelivered. At $7.80 per piece, the cost of the 758 pieces amounted to $5,912.40.2

Chew, in his AEIC, noted that the Court of Appeal had allowed Sintalow’s claim for the Excess Valves (see [8(c)] above).3 He elaborated on this claim at paras 74 to 87 of his AEIC, giving the history behind OSK’s orders under various valve agreements (which Chew compiled in a spreadsheet referred to as the “Material List for Valve Orders”) with a breakdown thereof as to the types of valves supplied, as well as the various prices. Based on the Material List for Valve Orders, Chew asserted that OSK was liable to Sintalow for $788,230.30.4

Chew explained that Sintalow considered any orders above $500,000 in value a “large scale order”. For such large scale orders (as was the case for OSK’s orders for the MBS project), Sintalow adopted the following course of conduct with its purchaser:5 Sintalow would provide its standard price lists for the products that the purchaser intended to purchase. The purchaser would usually negotiate for a discount after which the purchaser would issue bill of quantities for its order(s). Sintalow would use the purchaser’s bill of quantities to negotiate prices with its suppliers for the products ordered. Sintalow would then issue a quotation to its purchaser setting out the prices for each of the products listed in the bill of quantities as well as any discounts Sintalow offered. An agreement would be formed by the purchaser signing Sintalow’s quotation. Due to the dynamic nature of large scale projects the purchaser would typically be allowed to vary the quantities it ordered from Sintalow by +/– 10%. Any variation in excess of the +/– 10% buffer required Sintalow’s consent. The purchaser was required to provide Sintalow with a delivery schedule setting out the approximate dates by which the purchaser would require delivery. This was to enable Sintalow to plan its stock for the project as the existing stock in Sintalow’s warehouse would likely be insufficient to meet the orders. Sintalow would in turn inform its supplier of the purchaser’s orders as well as the delivery dates. The purchaser’s requests for deliveries were to be made by fax or...

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    • 6 Julio 2020
    ...Chai Charles and another [1998] 1 SLR(R) 880 at [38], which was recently cited in Sintalow Hardware Pte Ltd v OSK Engineering Pte Ltd [2019] SGHC 286 at [82]. Indeed, as the Court of Appeal observed in China Resources Purchasing Co Ltd v Yue Xiu Enterprises (S) Pte Ltd and another [1996] 1 ......

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