Toshiba Machine South East Asia Pte Ltd v Long Hui Machinery Moving Pte Ltd and Another

• Jurisdiction: Singapore
• Judge: Terence Chua Seng Leng
• Judgment Date: 24 March 2006
• Neutral Citation: [2006] SGDC 54
• Court: District Court (Singapore)
• Published date: 31 January 2007
• Year: 2006
• Plaintiff Counsel: Gerald Yee and Michelle Tan (Joseph Tan Jude Benny)
• Defendant Counsel: Brij Raj and Ramesh Appoo (Just Law LLC)
• Citation: [2006] SGDC 54

24 March 2006

District Judge Toh Han Li:

1 The plaintiffs, Toshiba Machine South East Asia Pte Ltd (Toshiba), are diversified manufacturer and marketer of, inter alia, advanced electronic and electrical products, information and communications equipment and systems, electronic components and materials and various household appliances. The first defendants, Long Hui Machinery Moving Pte Ltd (LHMM) are, inter alia, machine movers and erectors. The second defendants, Yang Kee Logistics Pte Ltd (YKL) are in the transport business.

2 Toshiba wished to move one set of table-type horizontal boring and milling machine model BTD-110.R16 (the machinery) from Jurong Port to the factory premises of end user FMC Southeast Asia Pte Ltd at 149 Gul Circle.

3 LHMM duly submitted a quotation dated 6 September 2001 (quotation number LH-117-9-2001 at HM-1). LHMM's quotation was "to collect and deliver...the machinery from Jurong Port to 149 Gul Circle and subsequently "to uncrate the…packages, lifting and shifting into the factory [at 149 Gul Circle], include positioning". Toshiba accepted the quotation, initialed at the bottom of it and dated it 10 September 2001.

4 As it turned out, LHMM subcontracted the job to YKL, as evidenced by invoice no 01100895 dated 31 October 2001 (KYK-1 at page 45).

5 On 1 October 2001, three cases containing the machinery were loaded onto a trailer belonging to YKL and driven by YKL's employee. During the inland transportation, one of the cases toppled off the trailer and was damaged. The survey report of Nippon Kaiji Kentai Kyokai (at HM-1) found that the accident was due to the negligence of the YKL's driver who did not lash the said case placed at the centre section of the trailer while in transit.

6 On 9 June 2005, Toshiba issued a generally indorsed writ against LHMM and YKL claiming "damages against LHMM and/or YKL's breach of contract and/or duty and/or negligence and/or as bailees with the regard to inter alia the handling of the cargo.

7 YKL failed to enter an appearance within the prescribed period and on 22 June 2005 interlocutory judgment was entered against YKL. LHMM has entered an appearance and are not concerned with the present appeal.

8 Some 2 months later, on 18 August 2005, YKL filed an application to set aside the default judgment. The matter was heard by the Deputy Registrar on 26 January 2006 who allowed YKL's application. Toshiba appealed.

9 On 20 February 2006, I allowed Toshiba's appeal and restored the interlocutory judgment of 22 June 2005. YKL has now appealed against my decision to the High Court.

The appeal

10 Before me, it was not in dispute that the judgment was regularly obtained. Counsel for Toshiba submitted that the Deputy Registrar had erred in setting aside the default judgment, as YKL had not surmounted the standard set out in Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co Inc [1986] 2 Lloyd's Rep 22 1 (the Saudi Eagle test) requiring an applicant in a setting aside application to demonstrate that he had a defence on the merits with a real prospect of success. The Saudi Eagle test has been adopted by our Court of Appeal in Abdul Gaffar v Chua Kwang Yong [I995] I SLR 484 which held that the discretion to set aside a judgment in default was exercised when the applicant had a defence with a real prospect of success and which carried some degree of conviction.

11 Counsel for Toshiba submitted that Toshiba's claim against YKL was in tort as the owner of the goods - see Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd; The 'Aliakmon [1986] 2 All ER 145. Makoto Ishibashi, in affirming an affdavit on behalf of Toshiba, maintained that at all material times Toshiba has contracted only with LHMM and were not aware that LHMM had entered into a subcontract with YKL. Counsel for Toshiba submitted that LHMM are not their servants or agents but an independent contractor with whom they entered into an agreement with to transport the machinery. As Toshiba were not any time a party to the contract between LHMM and YKL nor had they expressly or impliedly consented to LHMM contracting with YKL on the SLA terms, they cannot be bound by the SLA terms.

12 YKL had filed an affidavit through its Managing Director Koh Yang Kee (Koh). Koh explained that there was a delay in forwarding the writ to their underwriters which resulted in the interlocutory judgment being entered against them. Koh affirmed that he had dealt with LHMM on many occasions prior to the accident and that all the terms of their relationship were governed by the Singapore Logistics Association (SLA) terms. There was no mention in Koh's affidavit that YKL knew of Toshiba's existence or that they were the owner of the machinery.

13 Clause 30 of the SLA terms provides that any claim has to be brought within 9 months of the incident. YKL is relying on this clause to say that Toshiba's claim is time-barred. This is the main and as it turns out only plank of YKL's defence. YKL has not challenged the finding of negligence against their driver in the survey report.

14 Counsel for YKL also referred to on Clause 5 of the SLA terms which provides:

The customer warrants that...