Speedo Motoring Pte Ltd v Ong Gek Sing

• Jurisdiction: Singapore
• Judge: George Wei JC
• Judgment Date: 14 April 2014
• Neutral Citation: [2014] SGHC 71
• Court: High Court (Singapore)
• Docket Number: Small Claims Tribunal Appeal No 1 of 2013
• Year: 2014
• Published date: 21 April 2014
• Hearing Date: 06 December 2013
• Plaintiff Counsel: Lee Chay Pin (Chambers Law LLP)
• Defendant Counsel: Respondent/Claimant, in person.
• Subject Matter: Commercial Transactions,Sale of Goods,Consumer Protection,Courts and Jurisdiction,Jurisdiction
• Citation: [2014] SGHC 71

George Wei JC: Introduction

When the buyer of a second-hand hybrid vehicle finds out a few months down the road that he has to fork out a few thousand dollars to replace the hybrid battery on the ground that the battery is defective, should he be allowed to avail himself of the newly enacted “lemon law” provisions in Part III of the Consumer Protection (Fair Trading) Act (Cap 52A, 2009 Rev Ed) (“CPFTA”)? In the event that the CPFTA is applicable, has there been a breach of any of the provisions and, if so, what would be an appropriate remedy? These are the core issues that have arisen in the present appeal from the decision of the learned referee, Mr Awyong Leong Hwee, of the Small Claims Tribunal. After hearing the submissions of both parties, I am dismissing the appeal. I now give the reasons for my decision.

The facts

The respondent (“the Buyer”) in this appeal entered into a “Purchase/Sales Agreement” (“the Sales Agreement”) with the appellant (“the Seller”) for the sale of a second-hand Lexus GS 450 Hybrid Super Lux (“the Vehicle”) on 3 September 2012. According to the Sales Agreement, the Vehicle was a 2008 model and was registered in Singapore on 30 April 2009. As at the date of purchase, the Vehicle was about three years old and had two previous owners. According to the STA Evaluation Report dated 5 September 2012, the mileage of the Vehicle at that time was 53,842 km.

The purchase price of the Vehicle was $138,000. The Sales Agreement signed on 3 September 2012 indicated that a non-refundable deposit of $3,000 had been paid by the Buyer and that the Vehicle was to be handed over on or before 5 September 2012.

The Buyer paid a total sum of $80,511 (inclusive of the transfer and processing fees) after trading in his previous car for $58,000. At this juncture, it is useful to note that the Seller has emphasised that the purchase price of $138,000 was discounted from the original selling price of $139,800 as the Buyer had “opted-out” of the extended warranty offered by the Seller.

The Seller further asserts that on 3 September 2012, its sales manager had advised the Buyer to send the car for an evaluation test but the Buyer decided against it. Nevertheless, in order to provide the Buyer with the “peace of mind” and to avoid future disputes in relation to the condition of the Vehicle, the Seller decided to send the Vehicle for the STA evaluation test. The Vehicle eventually went through the STA evaluation test on 5 September 2012 and received an overall “B” grading. After the Vehicle had undergone the STA evaluation test, the Buyer took delivery of the Vehicle on the same day. The balance of the purchase price was paid by the Buyer and an official receipt (“the Official Receipt”) was issued. The Official Receipt, which was signed by the Buyer, stated that the Vehicle was sold on a “as is where is” condition and “without warranty from the seller”.

The Buyer, in his Statement of Sequence of Events (“the Buyer’s SSE”), asserts that in the course of the sale process, the Seller’s sales manager, one Javier Er, told him that the Vehicle was serviced regularly at the authorised dealer, Borneo Motors, in accordance with the maintenance schedule and that the Vehicle was in a “very good condition”. In relation to the alleged discount from the original sale price of $139,800, the Buyer asserts that he was only told that the purchase price was a “special price” and that it did not include any form of warranty by the Seller. The date when these statements were made by Mr Er is not entirely clear. Nonetheless, according to the Buyer’s SSE, the statements appear to have been made on 5 September 2012, although it has to be noted that the Sales Agreement was signed on 3 September 2012.

Subsequently, the Buyer asserts that on 11 October 2012, he sent the Vehicle for servicing at Borneo Motors for the first time after taking delivery of the Vehicle. He was then informed that the car had not been serviced by Borneo Motors since 7 March 2011. To this end, the Buyer has provided a copy of the “Service Maintenance Record Book” of the Vehicle as supporting evidence. The Buyer was also told that the tyres were worn out and that the Vehicle’s front disc brakes were not in good condition. As a result, the Buyer paid $305.82 to replace the front disc brakes.

Less than a month after the servicing, on 5 November 2012, the Buyer noticed a warning on the Vehicle’s instrument panel, indicating an error with the hybrid system. The Vehicle was brought back to Borneo Motors for the problem to be rectified. The Buyer complains that thereafter on 26 November 2012, the hybrid system warning appeared once again on the instrument panel. The Vehicle was sent back to Borneo Motors. The Buyer was then informed by Borneo Motors that the hybrid battery was no longer working and had to be replaced.

The Buyer asserts that he proceeded to contact the Seller on 12 December 2012. During the conversation with the General Manager of the Seller, the Buyer was asked to provide the name of his agent in Borneo Motors and he was thereafter told that they would contact him again. The Buyer further asserts that he did not receive any reply from the Seller and he proceeded to contact the Seller a week later on 19 December 2012. The Buyer states that he was told that they would contact him but similarly, the Seller failed to respond to his queries.

As a result, on 9 January 2013, the Buyer proceeded to replace the defective hybrid battery and the front rotor discs at Borneo Motors for $5,800 and $1009.18 respectively (excluding GST). On 17 January 2013, the Buyer replaced all four tyres at Soon Tyre & Battery for $1,280 (excluding GST). To this end, the Buyer has provided copies of all relevant tax invoices as supporting evidence of the amount of money that had been expended by him to rectify the defects in the Vehicle.

The Buyer further asserts that he made subsequent attempts to contact the Seller but the dispute remained unresolved. As a result, the Buyer approached the Consumers Association of Singapore (“CASE”) before subsequently commencing proceedings against the Seller at the Small Claims Tribunal (“SCT”).

The decision of the SCT

The learned referee identified three major issues in the Grounds of Decision (“GD”):¹ Is the Buyer able to bring a claim against the Seller under s 12B of the CPFTA? Has the Seller breached its obligations to the Buyer under s 12B of the CPFTA? What is the fair measure of damages due to the Buyer?

On the first issue, it was held that the Buyer was able to bring a claim against the Seller under s 12B of the CPFTA, despite the fact that the Buyer had turned down the extended warranty offered by the Seller at the time of purchase. This was in response to the Seller’s argument that the purchase should not be subject to Part III of the CPFTA as the Vehicle was sold without warranty.

With regard to the second issue, it was held that the Vehicle did not conform to the applicable contract under s 12B of the CPFTA at the point of delivery from the Seller to the Buyer. In arriving at this decision, the learned referee made a finding of fact that “the car was not a car in good condition” and was not “sent regularly for servicing at Borneo Motors”. It was further noted that the Seller was unable to demonstrate that the defects did not exist at the time of delivery, as the evidence showed that the STA evaluation test did not deal with the hybrid battery of the Vehicle. On this basis, it was held that the Seller was obligated to repair or replace the defective parts of the Vehicle pursuant to s 12C of the CPFTA. As the Seller had failed to do so, the learned referee acknowledged that it was reasonable for the Buyer to send the car for repairs and thereafter seek reimbursement from the Seller.

Finally, in relation to the third issue, the learned referee was of the view that the Buyer’s claim in relation to the tyres and brake discs should not be allowed as they were items subject to “wear and tear”. On that basis, 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.

Dissatisfied with the decision of the learned referee, the Seller applied for leave to appeal to the High Court on 1 July 2013. The application was granted by Senior District Judge Leslie Chew and the Seller proceeded to file its Notice of Appeal on 7 August 2013. The appeal was heard before this court on 6 December 2013.

Issues

Essentially, the present appeal raises the following core issues: Whether the SCT has exceeded its jurisdiction under s 5 of the Small Claims Tribunal Act (Cap 308, 1998 Rev Ed) (“SCTA”)? Whether the CPFTA is excluded from application on the basis that the Buyer had turned down the extended warranty offered by the Seller? Whether Part III of the CPFTA applies on the basis that the Vehicle did not conform to the applicable contract at the time of delivery under s 12B(1) of the CPFTA? On the facts of the present appeal, what would be an appropriate remedy under Part III of the CPFTA?

Issue 1: Whether the SCT has exceeded its jurisdiction

Before moving on to the substantive issues in this appeal, I note that the Seller has, in its written submissions, argued that the SCT had exceeded its jurisdiction in the present case.² Given that this threshold issue was not fully canvassed during the actual hearing of the appeal, I will only deal with this argument in passing.

The jurisdictional limit of the SCT is set out in s 5 of the SCTA. Given that the Seller’s objection was confined to the quantum of the claim, as opposed to the subject matter, the relevant provision would be s 5(3) of the SCTA, which states that:

Except where this Act expressly provides otherwise, the jurisdiction of a tribunal shall not extend to a claim —

(a) which exceeds the prescribed limit; or (b) ...