PT Master Mandiri v Yamazaki Construction: Mitigation of Loss in Breach of Contract

In PT Master Mandiri v Yamazaki Construction (S) Pte Ltd, the Court of Appeal of Singapore heard an appeal regarding the issue of mitigation of loss in a breach of contract case. PT Master Mandiri (PTMM) sued Yamazaki Construction (S) Pte Ltd (Yamazaki) for breach of contract after Yamazaki cancelled an agreement to sell 24 machines. Yamazaki offered to deliver 18 of the machines, but PTMM refused. The lower court found that PTMM failed to mitigate their losses by refusing the offer. The Court of Appeal allowed PTMM's appeal, finding that PTMM acted reasonably in refusing Yamazaki's offer under the circumstances and reinstated the assistant registrar's original award of damages.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding mitigation of loss in a breach of contract case. The court found PT Master Mandiri acted reasonably in refusing part performance.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
PT Master MandiriAppellantCorporationAppeal allowedWon
Yamazaki Construction (S) Pte LtdRespondentCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealYes
Lai Kew ChaiJudgeNo
L P TheanJustice of AppealNo

4. Counsels

Counsel NameOrganization
Jeffrey BehLee Bon Leong & Co
Siow Hua LinLee Bon Leong & Co
Thomas LeiEngelin Teh & Partners

4. Facts

  1. Yamazaki agreed to sell 24 machines to PTMM for $438,000.
  2. PTMM paid 50% of the purchase price upfront.
  3. Yamazaki informed PTMM they wanted to cancel the contract shortly after the agreement.
  4. Yamazaki offered to deliver only 18 of the 24 machines.
  5. PTMM refused Yamazaki's offer of 18 machines, demanding additional compensation.
  6. PTKG, who owned the machines, were interested in purchasing some of the machines themselves.
  7. Yamazaki did not provide a clear price for the 18 machines.

5. Formal Citations

  1. PT Master Mandiri v Yamazaki Construction (S) Pte Ltd, CA 70/2000, [2000] SGCA 65

6. Timeline

DateEvent
Yamazaki agreed to sell 24 machines to PTMM via tax invoice.
PTKG made a counter offer to Yamazaki for two additional items of equipment.
PTMM concluded sub-sale contracts with five other parties.
PTMM concluded sub-sale contracts with five other parties.
PTMM concluded sub-sale contracts with five other parties.
Yamazaki informed PTMM they would like to cancel the contract.
PTMM accepted the repudiation and demanded damages.
Parties met to resolve the matter amicably.
Parties met again; Yamazaki confirmed they could only deliver 18 machines.
Yamazaki stated they could only get approval for 18 units for sale to PTMM.
Yamazaki provided the individual selling price of the six machines for the proposed sale to PTKG.
PTMM requested to inspect the 24 machines.
PTMM's solicitors sent a letter of demand to Yamazaki.
Yamazaki's solicitors denied liability and stated Yamazaki was prepared to deliver 18 machines.
PTMM commenced legal proceedings against Yamazaki.
Yamazaki sold nine machines to PTKG.
Judgment on the appeal regarding the re-assessment of damages for the six machines was given, dismissing the appeal.
Court of Appeal delivered its judgment, allowing the appeal.

7. Legal Issues

  1. Mitigation of Loss
    • Outcome: The court held that PTMM had acted reasonably in refusing Yamazaki's offer for the 18 machines and had not failed to mitigate their loss.
    • Category: Substantive
    • Sub-Issues:
      • Reasonableness of conduct
      • Duty to mitigate
    • Related Cases:
      • [1878] 9 Ch D 20
      • [1912] AC 673
      • [1919] 2 KB 581
      • [1967] 2 Lloyd`s Rep 509
      • [1932] AC 452
      • [1932] All ER Rep 181

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Dunkirk Colliery Co v LeverN/AYes[1878] 9 Ch D 20N/ACited for the principle that an innocent party is not obligated to do anything other than in the ordinary course of business to mitigate loss.
British Westinghouse Co v Underground Electric RysN/AYes[1912] AC 673N/ACited for the principle that an innocent party is not obligated to do anything other than in the ordinary course of business to mitigate loss.
Payzu, Limited v SaundersN/AYes[1919] 2 KB 581N/ACited for the principle that the reasonableness of a person's conduct in mitigation of damages is a question of fact in the circumstances of each particular case.
Harlow & Jones Ltd v Panex (International) LtdN/AYes[1967] 2 Lloyd`s Rep 509N/ACited for the principle that an innocent party is not bound to nurse the interests of the contract breaker and that the innocent party's conduct should be evaluated in light of the circumstances at the material time.
Banco de Portugal v Waterlow & Sons, LtdN/AYes[1932] AC 452N/ACited for the principle that measures taken by a party to extricate themselves from a breach of contract should not be weighed in nice scales at the instance of the party whose breach caused the difficulty.
Banco de Portugal v Waterlow & Sons, LtdN/AYes[1932] All ER Rep 181N/ACited for the principle that measures taken by a party to extricate themselves from a breach of contract should not be weighed in nice scales at the instance of the party whose breach caused the difficulty.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Mitigation of loss
  • Repudiation
  • Export permits
  • Sub-sale contracts
  • Reasonableness
  • Part performance

15.2 Keywords

  • breach of contract
  • mitigation of loss
  • singapore
  • contract law
  • commercial dispute

17. Areas of Law

Area NameRelevance Score
Breach of Contract90
Contract Law85
Damages80
Mitigation of damage75
Performance of Contract70

16. Subjects

  • Contract Law
  • Commercial Law
  • Civil Litigation