Wishing Star Ltd v Jurong Town Corp (No 2)

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 22 November 2004
• Neutral Citation: [2004] SGHC 255
• Docket Number: Suit No 31 of 2003
• Date: 22 November 2004
• Published date: 24 November 2004
• Year: 2004
• Plaintiff Counsel: Christopher Chuah Chee Kian, Tan Liam Beng and Eugene Tan (Drew and Napier LLC)
• Citation: [2004] SGHC 255
• Defendant Counsel: K Shanmugam SC, Ho Chien Mien, Ng Lip Chih, Karen Teoh and J Sathiaseelan (Allen and Gledhill)
• Court: High Court (Singapore)
• Subject Matter: Misrepresentations contained in tender documents subsequently incorporated as terms of contract,Whether defendant losing right to rescind sub-contract by electing to affirm sub-contract after discovering plaintiff's misrepresentations,Plaintiff making various misrepresentations in tender documents,Defendant counter-claiming damages for plaintiff's misrepresentations,Recission,Whether more appropriate to sue for breach of contract,Contract,Whether defendant induced by misrepresentations to enter into sub-contract with plaintiff,Inducement,Damages,Misrepresentation

22 November 2004

Choo Han Teck J:

Introduction

1 The plaintiff is a Hong Kong registered company carrying on the business generally of a façade cladding contractor. The defendant is a statutory body established under the Jurong Town Corporation Act (Cap 150, 1998 Rev Ed). The plaintiff was engaged by the defendant as a contractor for the façade works in a large building project referred to as “The Biopolis”. The plaintiff sued the defendant in this action for wrongful termination and the defendant counterclaimed for damages for misrepresentation and breach of contract. Mr Shanmugam SC appeared as counsel for the defendant, and Mr Christopher Chuah appeared for the plaintiff. Throughout the trial the defendant had emphasised the massiveness of the Biopolis project, not only in terms of its physical size, but also the international prestige it was expected to gain. The Biopolis is an 185,000m² research complex for biomedical research. The Biopolis project itself consisted of seven tower blocks and three basement levels. The defendant asserted that the façade works “would not only serve an aesthetic purpose in terms of forming the exterior appearance of the building but also, inter alia, ensure the water tightness of the buildings”. Samsung Corporation (“Samsung”) was the main contractor of the building project. The defendant had also appointed Jurong Town Corporation Pte Ltd (“JCPL”) as its managing agent. JCPL played an important role in the history leading to the present litigation. Ordinarily, a contractor such as the plaintiff would be engaged by the main contractor and thus be known as a nominated sub-contractor (“NSC”). In this case, the plaintiff did not impress the main contractor, Samsung. The plaintiff, whose tender was the lowest among the competitors, managed to impress JCPL. Hence, in spite of strong objection from Samsung, the defendant, on the advice and recommendation of JCPL (which was submitted formally to the defendant on 23 May 2002), appointed the plaintiff as the sub-contractor for the façade works (“the Façade Works”) directly and not as an NSC of the main contractor. On 9 September 2002, the defendant terminated that appointment on the ground of misrepresentation and breach of contract by the plaintiff. According to the plaintiff, the sub-contract sum was $54m, but the defendant averred that this figure comprised the base offer made by the plaintiff in its tender document. This disagreement is not material for the time being.

Scope of works and the representations

2 The defendant alleged that the plaintiff made a number of representations (all of which were contained in the tender documents) that were false and which had induced the defendant into contracting with the plaintiff. The alleged representations are set out in the following order for convenience:

(a) The plaintiff had, in the past five years preceding the tender, completed a curtain walling system of $10m and above in a single project;

(b) The plaintiff had at least two project managers with 20 years’ experience each for the unitised curtain wall project;

(c) The plaintiff had a chief design manager with at least 20 years’ experience;

(d) The plaintiff had an in-house production capacity of 10,000m² per month for curtain production;

(e) The plaintiff’s in-house facilities included a 1,000m² polyester powder coating plant;

(f) The plaintiff’s in-house facilities included a fluorocarbon coating workshop;

(g) The plaintiff’s in-house facilities included a window and curtain wall plant;

(h) The plaintiff’s in-house facilities included a functioning laboratory for testing cladding systems and were also suitable for testing curtain wall materials for the Façade Works;

(i) The plaintiff’s in-house facilities included a 2,000m² stone fabrication plant;

(j) The plaintiff’s in-house facilities included a metal panel fabrication plant.

Six of these representations were made in response to the evaluation criteria imposed by the defendant for the purpose of shortlisting and selecting its contractors. The criteria itself comprised two sub-sets named “Critical Criteria” and “Other Criteria” respectively. The former, according to Mr Ong Tiong Beng (“Mr Ong”), a vice-president of JCPL, “sets the basic minimum criteria that tenderers needed to meet in order to be eligible to be awarded the Façade Works”. Only the first representation related to the “Critical Criteria”. “Other Criteria”, Mr Ong said, set out “certain specific requirements and conditions” and were as important as the items in “Critical Criteria”. Only items (b) to (f) above came from “Other Criteria”. It was the defendant’s case that the above representations were “point by point confirmations of the plaintiff’s compliance with the Evaluation Criteria”. It was by this argument that it sought to cluster all the representations as being equally important.

The defendant’s case and important dates

3 It will be more convenient to begin with the defendant’s case rather than the plaintiff’s because of the positive assertions made by it, whereas the plaintiff’s case will depend, in essence, on a successful defence of the defendant’s assertions in the defence and counterclaim. The narrative of the eventful story will be better appreciated if some important dates are identified. The plaintiff submitted its tender document on 23 April 2002. This was followed by a number of other documents and letters, culminating in the defendant’s letter of award dated 14 June 2002, issued through JCPL. The contract stipulated that the plaintiff had to commence work by 23 May 2002. On 9 September 2002, the defendant wrote to the plaintiff alleging that the plaintiff had repudiated the contract by its misrepresentations and breaches, and the defendant had accepted the repudiation and treated the contract as terminated. Counsel for the defendant emphasised repeatedly that the Biopolis was a prestigious and important national project, and was put on a “fast-track” development programme, that is to say, it was intended that the project be completed within 19 months instead of the 30 months that such a project would normally require.

The role of JCPL and its officers

4 References to the parties so far were of the plaintiff and the defendant, but in fact, throughout much of the crucial period between the tender of contract and its subsequent termination, JCPL and its officers were dealing directly with the plaintiff (as well as with Samsung). JCPL was a wholly-owned subsidiary of the defendant. It performed the dual role of consultant to, and agent of, the defendant. The most senior officer from JCPL to testify in this trial was Miss Mao Whey Ying (“Miss Mao”), the Executive Vice-President of JCPL’s Public Business Division. She was also designated the Superintending Officer of the Biopolis project. The Superintending Officer was in charge of administering the main contract between the defendant and Samsung on the defendant’s behalf. In reality, the day-to-day work was left to her assistant, Mr Nick Chang Koon Chean (“Mr Nick Chang”), who was the Principal Architect of JCPL’s Specialised Parks Department. Mr Nick Chang was appointed the Superintending Officer’s Representative, referred to in the documentary evidence as the “SO’s rep”. As Miss Mao testified, her role was more a “supervisory one” and she did not deal with the contractors and sub-contractors. That job was performed mainly by Mr Nick Chang, and Mr Ong, the Project Manager for the Biopolis project. Three other relevant officers from JCPL were Mr Seah Chee Kien, the Chief Architect, Mr Chew Son Wah, the Senior Contracts Manager, and Mr Lim Lye Huat, a manager.

How the tocsin was sounded

5 Almost from the moment the tender exercise closed, Samsung was already indicating its uneasiness with contractors unfamiliar to it. Mr Ong deposed that two letters from Mr Harrison Park of Samsung in April and May 2002 respectively gave him the impression that Samsung was “posturing”; hoping to influence the defendant in awarding the tender to Permasteelisa, which he said, would also been beneficial to Samsung financially, but he did not elaborate. In the face of continued objections by Samsung, Mr Ong, Mr Nick Chang, and Mr Chew Son Wah appeared to scrutinise the plaintiff carefully before clearing with Mr Cheong Kum Yin, JCPL’s Senior Vice-President, and Miss Mao prior to submitting JCPL’s recommendation to the defendant. When asked by Mr Spencer Lim, a director of the defendant, whether he was convinced that the plaintiff would be able to “deliver a good job, in time, and within budget”, Mr Ong told Mr Spencer Lim that he would ideally “have preferred to recommend bigger players such as Permasteelisa but that was not possible due to [the defendant’s] budget constraints”. In response to a letter from Mr Harrison Park, the plaintiff wrote on 1 May 2002 giving a detailed affirmation that it was able to meet the criteria and terms set out in the “Evaluation Criteria” in the tender documents. Ten days later, the plaintiff wrote again, this time to affirm that its project manager would be a person with 20 years’ experience. The ever-sceptical Samsung continued to raise questions. Mr Ong eventually reacted to the constant warnings from Samsung and asked to check the plaintiff’s programme. By June 2002 senior officers at JCPL appeared nervous and concerned. It was about this time that Mr Nick Chang visited the plaintiff’s office where he saw 15 members of the plaintiff’s design team at work. It transpired that almost all of them were models hired by the plaintiff. The only real dispute was whether the fake employees were employed with or without the plaintiff’s knowledge. It was a small point because the most probable conclusion that the evidence leads to is that it was done with the plaintiff’s knowledge and consent, by a Mr Jack Koh, a senior member of its management team (which was not very large in any case, comprising of Miss Carol...