Willas-Array Singapore (Pte) Ltd and Another v Hsin Semiconductor Pte Ltd
| Jurisdiction | Singapore |
| Judge | Leslie Chew |
| Judgment Date | 06 August 2007 |
| Neutral Citation | [2007] SGDC 217 |
| Court | District Court (Singapore) |
| Published date | 19 September 2007 |
| Year | 2007 |
| Plaintiff Counsel | Aw Wen Ni (Wong Partnership) |
| Defendant Counsel | Han Wah Teng (Keystone Law Corporation) |
| Citation | [2007] SGDC 217 |
| 6 August 2007 |
|
District Judge Leslie Chew:
Introduction
1. There are in reality two appeals arising out of DC Suit 2020/2006Z. They are cross-appeals. I heard the matter on 13 and 16 July 2007. At the end of the hearing I reserved my judgment. I now give my decision.
RA 119/2007N
2. Pursuant to the Plaintiffs’ application for summary judgment, the learned Deputy Registrar had granted the First Plaintiffs judgment for part of the claim namely the sum of US$59,333.70 and granted the Defendants unconditional leave to defend the balance of the first Plaintiffs’ claim amounting toUS$24,059.51 as well as unconditional leave to defend the second Plaintiffs’ claim for US$11,444.00. Plaintiffs appeal against this.
RA 121/2007/J
3. The Defendants on the other hand cross-appealed against the decision of the learned Deputy Registrar praying for the Order of the learned Deputy Registrar as above be set aside and the Plaintiffs’ application for summary judgment be dismissed.
4. Although I have set out the sequence of the appeals before me, strictly it did not matter in the sense that before me I am to hear the matter de novo – see Singapore Court Practice, Pinsler at paragraph 55B/1/6.
5. Essentially therefore the approach I have taken is simply a case of the Plaintiffs applying for summary judgment. In a case of an application for summary judgment it is trite that once the Plaintiffs have established a prima facie claim as they have done so on affidavit – see affidavit of Yang Jihong dated 15 August 2006 (‘the Plaintiffs’ First Affidavit’), - it is then for the Defendants to show cause why summary judgment should not be granted. The Defendants filed Pang Gek Hwa’s affidavit dated 19 January 2007 (‘Defendants’ First Affidavit’) – see Singapore Court Practice, Pinsler at paragraph 14/3/1.
The Factual Background
6. The basic facts, which I did not understand the Defendants to dispute, are conveniently summarized in the Written Submissions of the Plaintiffs dated 9 July 2007 (‘Plaintiffs’ Written Submissions’) as follows:
“4. The 1st and 2nd Plaintiffs are in the business of inter alia selling electronic components. The Defendants are in the business of manufacturing telecommunications apparatus.
5. By way of various purchase orders placed by the Defendants, the Defendants ordered various goods from the Plaintiffs. The goods ordered by the Defendants have been duly delivered by the Plaintiffs and invoices have also been rendered by the Plaintiffs in respect of these goods. However, there are sums due and owing under various invoices rendered to the Defendants for the goods sold and delivered by the Plaintiffs to the Defendants.
The monies owed to the 1st Plaintiff
6. The monies owing under the invoices rendered by the 1st Plaintiff to the Defendants amount to US$83,393.21.
The monies owed to the 2nd Plaintiff
10. The monies owing under the invoices rendered by the 2nd Plaintiff to the Defendants amount to US$11,444.00”
7. Arising from the basic facts, the first Plaintiffs claim against the Defendants the sum of US$83,393.21 while the second Plaintiffs claim against the Defendants the sum of US$ 11,444.00. As can be seen, the claims arise out of goods sold and delivered.
First Plaintiffs’ Claim of US$83,393.21
8. The claim arise out of goods sold by the first Plaintiffs to the Defendants and for which invoices had been raised in respect of the claimed sum – see paragraph 3 (a) of the Statement of Claim (Amendment No.1) and paragraph 9(a) of the Plaintiffs First Affidavit.
9. In respect of this claim, the first Plaintiffs asserted that in purported payment of the claimed sum, the Defendants had drawn and delivered to the first Plaintiffs 3 post-dated cheques drawn on the Singapore branch of the Korea Exchange Bank (KEB) payable to the 1st Plaintiffs for the total sum of US$59,333.70.
10. On presentment these cheques were dishonoured. The fact of dishonour of these cheques is not in dispute. What the Defendants say however, is that the cheques were delivered to the 1st Plaintiffs on the basis that they would be presented for payment only upon being advised by the Defendants. Specifically, the Defendants had some time on or before 21 March 2006 informed the 1st Plaintiffs not to present the cheques for payment. In breach of this understanding, the 1st Plaintiffs subsequently presented the cheques for payment and as a result these were not honoured on presentment – see paragraph 11 of the Defence & Counterclaim. On the other hand the Defendants pointed out that these cheques were countermanded. What is not in dispute is that the cheques were not honoured on presentment.
11. Before me the Defendants’ Counsel also argued that ‘there was a standing agreement between the parties not to bank in the cheques until confirmation by the Defendants’. He maintained this was the case since July 2005. Counsel referred to exhibits PG-5 of the Defendants First Affidavit.
12. In addition the Defendants also argued that they had a defence to the 1st Plaintiffs’ claim on the basis that the goods sold and delivered to them were defective and in any event delivered late in breach of the sale contract. The 1st Plaintiffs claim may be divided into two parts namely one that is based on the 3 post-dated cheques which were issued by the Defendants but dishonoured upon presentment and the other, the balance claimed being in relation to the remainder of the goods delivered. It would be convenient to deal with the1st Plaintiffs’ claim in that way.
The claim for the 59,333.70
13. This claim which the learned Deputy Registrar granted the Plaintiffs summary judgment, is strictly based on the 3 cheques which the Defendants had issued and delivered to the Plaintiffs in payment of goods delivered. In the event, these cheques were not honoured (the Defendants pointed out that they had countermanded payment rather than that the cheques were dishonoured) on presentment.
14. The Defendants’ defence is based on the following:
a. The goods were defective
b. The goods were delivered late in breach of the contract of the sale of the goods.
c. As a result, they had a counterclaim against the Plaintiffs in damages in diminution of the price
15. The Plaintiffs’ claim based on the dishonoured cheques is really a claim arising out of the Plaintiffs’ rights under the Bills of Exchange Act (Cap 23) specifically s 55 thereof. Where a claim arises out of the Bills of Exchange Act, in Order 14 proceedings the law is clear and well established. The law is clearly stated in Yeo Hiap Seng v. Australian Food Corp Pte Ltd
[I]n an application for summary judgment against a defendant on the proceeds of a dishonoured cheque, a defendant will not be allowed to set up by way of a set off a counterclaim for damages for breach of the underlying contract and the plaintiff is entitled to judgment for the amount of his claim without a stay of execution. A cross-claim relating to the transaction in which the action on a bill of exchange arose is not a defence to the action on the bill of exchange.”
16. In view of the above, unless as laid down in Marina Sports v. Alliance Richfield
17. I return now to the issues which the Defendants raise which they rely on to show that there are what is commonly referred to as ‘triable issues’. The burden is of course on the Defendants, in this sort of application to show that they have a fair or ‘reasonable probability of having a real or bona fide defence’ so as to deny the Plaintiffs from obtaining summary judgment – see Goh Chok Tong v. Chee Soon Juan
18. I should also add that in O14 proceedings although the Defendants are merely to raise ‘triable issues’ to prevent the grant of summary judgment and I am not to descend upon the merits as it were – see Marina Sports – nevertheless, I also ought not ‘to shy away from evaluating the rival contentions even where the facts are many and the arguments are vigorous’ – see Abdul Salam Asanaru Pillay v. Nomanbhoy & Sons Pte Ltd
19. Following the precedents I have cited above and evaluating the Defendants’ arguments, I find that the short answer to the ‘defective goods’ defence, if I may call it that, is that since it is not in dispute that the Defendants received the goods and indeed on-sold them to a third party – this is the import of the Defendants’ position as deposed to by Pang Gek Hwa in her Affidavit of 19 January 2007 at paragraph 11 - the defence cannot stand. The Defendants, had so far as the goods were concerned, acted in a manner inconsistent with the ownership of the goods – see s 35(1) of the Sale of Goods Act (Cap 393). Perhaps more significantly, the Plaintiffs rightly drew my attention to the Court of Appeal case of Sunny Daisy Ltd v. WBG Network (Singapore) Pte Ltd
20. There is another aspect to the Defendants’ defence. They also alleged that the delivery of the goods by the Plaintiffs were late, in breach of the delivery times required under the sale contract. The Plaintiffs countered that in fact the delivery dates provided for under the sale contract were only tentative – see paragraph 21 of YJH’s 1st Affidavit and paragraph 6 of YJH’s 4th affidavit of 19 April...
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