Stahltec Metallhandels GmbH v Chuan Ann Metals Pte Ltd and Others

CourtHigh Court (Singapore)
JudgeChoo Han Teck JC
Judgment Date02 March 2005
Neutral Citation[2005] SGHC 46
Citation[2005] SGHC 46
Publication Date03 March 2005
Plaintiff CounselLim Tong Chuan (Loo and Partners)
Defendant CounselLee Eng Beng and Meah Tze Hua (Rajah and Tann)
SubjectCompanies,Receiver and manager,Duty of receiver and manager,Contract,Contractual terms,German law governing contract,Whether retention of title clause validly incorporated -Whether retention of title clause transparent, clear and comprehensible,Whether English translation of retention of title clause constituted valid notice,Tort,Conversion,Plaintiff's contract with first defendant containing retention of title clause,First defendant not paying bills,First defendant put into receivership,Whether receivers and managers committing conversion by selling goods in custody to third party,Whether receivers and managers liable for storage costs of goods in plaintiff's possession pending outcome of trial

2 March 2005

Choo Han Teck J:

1 The plaintiff is a company incorporated and having its registered office in Germany. It was at all material times the manufacturers of rolled steel which it sold and supplied to its customers, one of whom was the first defendant. The first defendant was subsequently placed under receivership by one of its creditors, the Oversea-Chinese Banking Corporation (“OCBC Bank”). The second and third defendants were the receivers and managers appointed by OCBC Bank. The plaintiff obtained judgment against the first defendant for breach of contract on account of unpaid bills.

2 The claim against the second and third defendants (“the other defendants”) was for damages for the tort of conversion. The plaintiff’s claim was based on a retention of title clause in the contract between it and the first defendant. By 26 January 2003, the other defendants had sold all the goods in their custody to a third party, but prior to that had released a portion to the plaintiff. This portion represented the goods identified in a joint inspection by the plaintiff and the other defendants (“the disputed goods”). The plaintiff claimed that apart from the disputed goods, the total goods converted were valued at €255,000 as at 26 November 2003, but prices for steel had since risen and the value claimed was now €331,000. The plaintiff was also claiming storage costs of the disputed goods, on the ground that it was unable to sell the goods because of the other defendants’ objections. The storage charges claimed amounted to $200,287.62, being $22,254.18 a month for nine months. The plaintiff was also claiming a sum of $5,037.23 for some other steel sold by the other defendants in November 2003.

3 The other defendants denied that the retention of title clause was a valid clause in the contract. Their defence was two-fold. Firstly, they argued that the clause was not validly incorporated into the sale contracts. Secondly, they argued that even if the said clause had been incorporated, it was not applicable because the clause was not “transparent, clear and comprehensible”. In the first case, Mr Lee Eng Beng, counsel for the defendants, submitted that the contract was a standard-form contract, and had not been validly notified to the first defendant in a commonly understood language, as required under German law. He submitted that the English version that the plaintiff produced as proof of notification, was, in fact, lifted from another contract to which the first defendant was not a party. Moreover, it was plagiarised from another German supplier’s standard form.

4 The contract in question between the plaintiff and the first defendant was in the German language and signed on 16 August 1999. The relevant part of the retention of title clause in the English version purportedly given to the first defendant reads as follows:

1. All goods delivered shall remain our property (goods in which title is retained) until all accounts receivable from Purchaser are settled. This shall also apply to future and conditional claims, eg from acceptor’s bills of exchange.

2. Machining and processing of the goods in which title is retained shall take place on our behalf as our being the manufacturer in the meaning of Art 950 BGB (Civil Code), without any obligation on our part deriving therefrom. The machined and processed goods shall be deemed to be goods in which title is retained in the meaning of para 1.

3. If the goods in which title is retained are processed, combined and mixed with other goods by Purchaser, we shall have joint title to the resultant merchandise,...

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1 books & journal articles
  • Tort Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2005, December 2005
    • 1 December 2005
    ...21.1 In Stahltec Metallhandels GmbH v Chuan Ann Metals Pte Ltd[2005] SGHC 46, the plaintiff sold and supplied rolled steel to the first defendant. Before fulfilling its payment obligation to the plaintiff, the first defendant was placed under receivership by one of its creditors, the Overse......

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