WBG Network (S) Pte Ltd v Sunny Daisy Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 12 January 2007
• Neutral Citation: [2007] SGCA 1
• Citation: [2007] SGCA 1
• Date: 12 January 2007
• Published date: 24 January 2007
• Plaintiff Counsel: Gabriel Peter and Ismail bin Atan (Gabriel Law Corporation)
• Docket Number: Civil Appeal No 43 of 2006
• Defendant Counsel: L Kuppanchetti Nadimuthu and Christopher Buay Kee Seng (Alban Tay Mahtani & de Silva)
• Court: Court of Appeal (Singapore)
• Year: 2007

12 January 2007

Choo Han Teck J (delivering the grounds of decision of the court):

1 The appellant, having taken delivery of goods purchased from the respondent, a Taiwan company, failed to make full payment. The respondent sued for payment in the sum of US$1,057,164.03 being the amount outstanding. The appellant filed a defence and counterclaim and denied liability on three grounds. First, that the contract had been between the appellant and a company called Internation Chlorella Co, Ltd (“Internation”) and that the respondent had only acted as Internation’s agent through one Prof Wang Shun Te (“Prof Wang”) who was also the president of the respondent company; secondly, that the amount claimed was excessive if certain credit notes issued by the respondent were taken into account; and thirdly, that the goods were not of merchantable quality. The respondent applied for summary judgment against the appellant. At first instance, the assistant registrar granted the appellant unconditional leave to defend. The respondent appealed. Judith Prakash J allowed the appeal and granted judgment in the sum of US$611,764.03, being the amount claimed by the respondent in its application for summary judgment. The amount claimed by the respondent in its application for summary judgment was considerably lower than that of the sum initially claimed as the respondent had taken into account the appellant’s second defence of the possibility of a set-off by reason of the credit notes. The learned judge, however, stayed execution of the summary judgment pending the outcome of the appellant’s counterclaim for damages. The appellant appealed to this court against the order for summary judgment in the sum of US$611,764.03.

2 It was apparent to us that the second defence was utterly without merit since the respondent had not included the sum that the appellant claimed to be subject to a set-off (by reason of the credit notes issued) in its application for summary judgment. Similarly, the appellant’s third ground of defence, namely that the goods were not of merchantable quality, was bound to fail since it was not a defence in so far as the respondent was claiming payment of the purchase price for goods of which delivery had already been taken. A buyer is not obliged to accept delivery of non-merchantable goods, but if he does so, his claim would be limited to damages only. There seemed to be no dispute that the goods in question were delivered to the appellant between May 2003 and September 2004. Instead of rejecting them, the appellant had sold them on to its customers. As provided under s 35(1)(b) of the Sale of Goods Act (Cap 393, 1999 Rev Ed), a buyer is deemed to have accepted the goods if he does an act (in this case, the selling of the goods to its own customers) in relation to those goods which is inconsistent with the rights of ownership belonging to the seller (in this case, the respondent). Hence, on the facts, the court below was right to hold that the appellant had accepted delivery of the goods.

3 The appellant was thus left with the claim that the respondent was not the seller, and, therefore, had no right to sue, in order to succeed in establishing a triable issue. That was thus the main thrust of the appellant’s case before us. Counsel for the appellant, Mr Gabriel Peter, submitted that it was evident from an email dated 27 August 2004 from Professor Wang to the appellant, that the money owed by the appellant to the respondent was, in fact, money owing to Internation. The salient parts of that email read as follows:

We don’t want WBG to owe Internation Chlorella more and more outstanding. Do not just think with your own point of view. Think about us, our company, we have been trying hard to help your company, WBG., but now … Think about us with our standpoint! [emphasis added]

We are of the opinion that this passage did not convey what the appellant claimed it to mean. The meaning that the appellant wished the court to accept from this passage (ie that the debt must have been owed to Internation) was, in our view, so exegetically derived that any other equally exotic meaning could have been asserted in its place. In any event, if the appellant claimed that the respondent had only acted as an agent for Internation, then we would expect to see clear words to that effect. Furthermore, even if we were willing to accept, for the sake of argument, that the respondent was an agent for Internation, the appellant faced another difficulty. Not only was there no evidence that the respondent was not empowered to sue for non-payment, but the appellant appeared to have accepted that the respondent was entitled to bill, and, implicitly, in the absence of anything to the contrary, to sue on the bill on behalf of Internation. This was apparent from the affidavit of the president of the appellant, one Mr Lim Lip Khoon (“Mr Lim”), dated 11 November 2005, in which he noted, at para 16, as follows:

[A]ll Purchase Orders would be sent by the [appellant] to the [respondent] as agent for Internation, and that the [respondent] as agents for Internation would bill the [appellant].

The adoption of such a stance, in our view, precluded the appellant from now claiming that the respondent had no right to sue. Hence, we agree with the learned judge in the court below that the undisputed documentary evidence in connection with the sale and purchase of the goods in question showed that the respondent was the creditor.

4 The final issue before us concerned the refusal by the learned judge below to allow the appellant’s application to admit further evidence at the proceedings before her. That evidence consisted of a letter dated 18 January 2005 with three attachments, namely, a document entitled “Formal & Serious Warning Issued to WBG Network (Singapore) Pte Ltd Owing Exceeds One Million USD ($1,000,000)”, a document entitled, “Notice to Cease Usage of Registered Trade Name ‘Crytomonadales’”, and a document entitled, “Full Recourse Promissory Note” (“the pro-note”) (collectively, “the letter”). The letter had purportedly been sent by an overseas lawyer to the appellant’s previous solicitors in Singapore on the instructions of Prof Wang. The letter was not produced in the form of an affidavit and instead, was merely handed to the learned judge below by counsel for the appellant at the hearing.

5 We are of the opinion that, based on the improper manner the evidence was adduced, the court would have been entitled to reject the documents. Documents do not amount to evidence unless they have been properly adduced and admitted into evidence by the court. Accordingly, the person adducing the evidence must do so on oath or affirmation as well as be subject to cross-examination, if necessary, so as to ascertain the relevance or authenticity of the evidence that is sought to be admitted. The question of weight is a secondary issue in that it does not arise until the evidence has been admitted. In...