Speedo Motoring Pte Ltd v Ong Gek Sing

• Jurisdiction: Singapore
• Judgment Date: 14 April 2014
• Date: 14 April 2014
• Docket Number: Small Claims Tribunal Appeal No 1 of 2013
• Court: High Court (Singapore)

Speedo Motoring Pte Ltd

Plaintiff

and

Ong Gek Sing

Defendant

[2014] SGHC 71

George Wei JC

Small Claims Tribunal Appeal No 1 of 2013

High Court

Commercial Transactions—Sale of goods—Consumer protection—Buyer claiming compensation from seller for money expended in rectifying defects in vehicle—Whether vehicle conformed to applicable contract at time of delivery—Whether principles governing implied terms in Sale of Goods Act (Cap 393, 1999 Rev Ed) applicable to issue of non-conformity in Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed) —Whether second-hand goods should be subjected to different standard—Sale of Goods Act (Cap 393, 1999 Rev Ed) —Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed)

Commercial Transactions—Sale of goods—Consumer protection—Seller claiming that vehicle was sold without warranty—Whether buyer still allowed to bring claim under Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed) —Whether parties allowed to contract out of Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed) —Section 13 Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed)

Commercial Transactions—Sale of goods—Consumer protection—Whether buyer should be fully compensated—Applicable principles for determining appropriate remedy under Pt III of Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed) —Part III Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed)

Courts and Jurisdiction—Jurisdiction—Buyer claiming monetary compensation from seller in Small Claims Tribunal—Whether monetary limit of Small Claims Tribunal exceeded—Whether relevant sum should be value of contract or quantum of claim

The appellant (‘the seller’) entered into a contract for the sale of a second-hand Lexus GS 450 Hybrid Super Lux (‘the vehicle’) to the respondent (‘the buyer’). The vehicle was about three years old and had two previous owners. The buyer allegedly received a discount for opting out of the extended warranty offered by the seller.

According to the seller, it had advised the buyer to send the vehicle for an evaluation test but the buyer decided against it. Nevertheless, the seller sent the vehicle for the evaluation test and the vehicle received an overall ‘B’ grading. During the sale process, the buyer was allegedly told that the vehicle was in a ‘very good condition’ and that it had been serviced regularly at the authorised dealer in accordance with the maintenance schedule.

The buyer took possession of the vehicle on 5 September 2011 and about one month later, the vehicle was sent for servicing at the authorised dealer. The buyer was then informed that the vehicle was last serviced on 7 March 2011. The buyer was also told that the tyres were worn out and that the vehicle's front disc brakes were not in good condition.

Subsequently, about one month after the first servicing, the buyer was informed that the hybrid battery of the vehicle was no longer working and had to be replaced. The buyer contacted the seller on multiple occasions but the issue remained unresolved.

The buyer eventually commenced proceedings against the seller at the Small Claims Tribunal, claiming compensation for the money expended to rectify the defects in the vehicle.

The learned referee held that the buyer was able to bring a claim against the seller under s 12 B of the Consumer Protection (Fair Trading) Act (Cap 52 A, 2009 Rev Ed) (‘CPFTA’), despite having turned down the extended warranty offered by the seller. It was further held that the vehicle did not conform to the applicable contract under s 12 B of the CPFTA and that the seller was obligated to repair or replace the defective parts of the vehicle pursuant to s 12 C of the CPFTA. Nevertheless, the learned referee disallowed the buyer's claim in relation to the tyres and brake discs as they were found to be items subject to wear and tear. With regard to the defective hybrid battery, the learned referee awarded the buyer a sum of $4,500, which was approximately half of what the buyer had originally claimed against the seller.

The seller was dissatisfied with the decision of the learned referee and proceeded to obtain leave to appeal to the High Court.

Held, dismissing the appeal:

(1) In determining whether the monetary limit of the Small Claims Tribunal had been exceeded, the substance of the claim had to be looked at. The decision of Mohammed Akhtar v Schneider[1996] 1 SLR (R) 731 should not be taken as having laid down a blanket rule that in all cases involving contractual disputes, the relevant figure would be the value of the contract as opposed to the quantum of the claim: at [22] .

(2) The buyer was claiming compensation for the money expended in repairing the vehicle. Unlike the facts in Mohammed Akhtar v Schneider,the claim was not based on the rescission of the underlying contract. Therefore, the relevant sum was the quantum of the claim, as opposed to the value of the contract: at [22] and [24] .

(3) The CPFTA envisioned the consumer being in a weaker bargaining position as compared to the vendor or supplier. It served as a protective framework which consumers could rely on, over and above any rights that they might already have under general law. To this end, the provisions of the CPFTA could not be contracted out by either the consumer or the supplier. Arguments that the protective framework of the CPFTA might be wholly excluded on the basis that the goods were sold without warranty had to be treated with great circumspection: at [28] , [30] and [34] .

(4) In spite of having turned down the extended warranty offered by the seller, the buyer was still entitled to rely on Pt III of the CPFTA: at [34] .

(5) In accordance to s 12 B (1) (b) of the CPFTA, the reference point for non-conformity had to be at the time of delivery of the goods. To aid the consumer in discharging the burden of proving that the goods did not conform to the applicable contract at the time of delivery, the presumption in s 12 B (3) of the CPFTA treated any defects discovered within six months from the date of delivery as having been present at the time the goods were delivered: at [39] and [41] .

(6) The potentially harsh effect of the presumption in s 12 B (3) was mitigated by s 12 B (4) of the CPFTA. The burden of establishing that either limb of s 12 B (4) of the CPFTA was applicable rests with the seller. To this end, the seller might rebut the presumption by adducing evidence to establish that the item did in fact conform to the applicable contract at the time of delivery or that some other causal factor resulted in the defect. Alternatively, the seller might rebut the presumption by establishing that the application of the presumption was incompatible with the nature of the goods or the nature of the lack of conformity: at [42] , [43] , [45] to [47] and [50] .

(7) The principles governing the application of ss 13-15 of the Sale of Goods Act (Cap 393, 1999 Rev Ed) (‘SGA’) were similarly applicable to the issue of non-conformity under Pt III of the CPFTA. In this respect, the principles laid down in Compact Metal Industries Ltd v PPG Industries (Singapore) Ltd[2006] SGHC 242 were relevant to the issue of whether the implied condition of satisfactory quality had been breached: at [38] and [52] .

(8) The question as to whether the goods were of satisfactory quality was a fact-sensitive inquiry that had to be viewed through the eyes of the reasonable person who was placed in the position of the buyer and armed with his knowledge of the transaction and its background rather than one who was not so acquainted. To that end, any and all factors that might be relevant to the hypothetical reasonable person would have to be taken into account by the court: at [55] and [58] .

(9) Given that the standard of satisfactory quality would always be dependent on the individual facts of each case, it would not be helpful to lay down a blanket rule that applied to all second-hand goods in general. Nonetheless, it had to be recognised that certain factors set out in s 14 (2 B) of the SGA would not be appropriate in the context of second-hand goods. Minor defects and general wear and tear were almost bound to arise when the product was being used. To that end, it would be too exacting a standard if second-hand goods were to be free from minor defects in order to be of satisfactory quality: at [62] and [63] .

(10) Cases that were decided on its own facts were of limited assistance in determining whether the condition of satisfactory quality had been breached. The standard of roadworthiness as set out in Bartlett v Sidney Marcus Ltd[1965] 1 WLR 1013 should not be applied indiscriminately across all second-hand cars: at [66] and [69] .

(11) A reasonable purchaser of a second-hand car will find a certain degree of wear and tear in relation to its components to be acceptable. The second-hand car should not be held to a standard of being free from minor defects and its durability would also depend on the age and mileage of the car: at [70] .

(12) The seller should not be held responsible for the worn out tyres or the faulty brake discs. On the other hand, the hybrid battery was an integral component of any hybrid vehicle in so far as it played a crucial role in allowing the hybrid vehicle to fulfil its intended purpose. Taking into account the mileage and age of the vehicle, and the fact that there were no signs of any major defects with the vehicle, the defective hybrid battery would give rise to the finding that the vehicle was not of satisfactory quality at the time of delivery: at [64] and [70] .

(13) Section 12 F of the CPFTA grants a wide discretion to the courts in relation to the remedies that might be awarded under Pt III of the CPFTA: at [77] .

(14) On the facts, the argument that the buyer had failed to give the seller a reasonable opportunity to repair or replace the defective hybrid battery is...