Gema Metal Ceilings v Iwatani Techno Construction: Breach of Contract & Defective Ceiling System
Gema Metal Ceilings (Far East) Pte Ltd, the plaintiff, sued Iwatani Techno Construction (M) Sdn Bhd, the defendant, in the High Court of Singapore on 14 March 2000, claiming sums for security clips and metal strip ceilings sold and delivered. Iwatani counterclaimed for breach of contract, alleging the ceiling system was defective and not fit for purpose. The court found in favor of Iwatani on the counterclaim, determining that Gema breached the contract for design and/or Sale of Goods Act s 14(3), and partially allowed Gema's claim for unpaid invoices for materials supplied before the incidents.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Defendant on counterclaim for breach of contract and/or Sale of Goods Act s 14(3). Plaintiffs' claim partially allowed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Gema Metal Ceilings sued Iwatani Techno Construction for unpaid sums. Iwatani counterclaimed for breach of contract due to a defective metal ceiling system.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Gema Metal Ceilings (Far East) Pte Ltd | Plaintiff | Corporation | Claim Dismissed in Part, Claim Allowed in Part | Partial | William Da Silva, Lee Mong Jen |
| Iwatani Techno Construction (M) Sdn Bhd | Defendant | Corporation | Counterclaim Allowed | Won | Danny Chua, Mohd Goush Marikan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| William Da Silva | W P Da Silva & Co |
| Lee Mong Jen | Leong Chua & Wong |
| Danny Chua | Joseph Tan Jude Benny |
| Mohd Goush Marikan | Joseph Tan Jude Benny |
4. Facts
- Plaintiffs claimed sums for security clips and metal strip ceilings sold to defendants.
- Defendants counterclaimed for loss due to plaintiffs' breach of contract.
- Plaintiffs were manufacturers and suppliers of strip ceiling systems.
- Defendants were subcontractors for the construction of metal strip ceilings at Kuala Lumpur International Airport.
- The contract specified the installation should withstand a wind loading relative to a maximum wind velocity of 35.5 m/s.
- Metal ceiling strips dislodged from carrier rails after installation.
- Plaintiffs supplied security clips after the collapse of the strip ceilings.
5. Formal Citations
- Gema Metal Ceilings (Far East) Pte Ltd v Iwatani Techno Construction (M) Sdn Bhd, Suit 2151/1998, [2000] SGHC 37
6. Timeline
| Date | Event |
|---|---|
| Gema Metal Ceilings (Far East) Pte Ltd incorporated in Singapore. | |
| Meeting between PW1 and DW1 in Kuala Lumpur to discuss KLIA Project. | |
| Plaintiffs submitted a quotation in writing to the defendants for the supply of strip ceilings. | |
| Defendants issued a letter of intent to the plaintiffs confirming their intention to enter into a contract for the design and supply of metal ceiling materials for the KLIA Project. | |
| Date of the first purchase order issued by the plaintiffs. | |
| PW1 admitted in a fax to the defendants that there was a delay in the delivery of the capping profiles. | |
| Metal ceiling strips dislodged from the carrier rails and fell. | |
| First wind-pressure and wind-tunnel test was carried out on a mock-up of the KLIA ceiling system in Hong Kong. | |
| KLIA became fully operational and was officially opened. | |
| Action commenced. | |
| Judgment date. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the plaintiffs breached the contract for design and/or Sale of Goods Act s 14(3).
- Category: Substantive
- Sub-Issues:
- Failure to design a system fit for purpose
- Failure to supply goods of merchantable quality
- Implied Terms in Contract
- Outcome: The court found a breach of the implied condition of fitness for purpose under s 14(3) of the Sale of Goods Act.
- Category: Substantive
- Sub-Issues:
- Fitness for purpose
- Merchantable quality
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Breach of Implied Terms under Sale of Goods Act
10. Practice Areas
- Commercial Litigation
- Construction Law
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Smith v Hughes | Queen's Bench | Yes | (1871) LR 6 QB 597 | England and Wales | Cited for the objective test of agreement in contract law. |
| SAL Industrial Leasing Ltd v Teck Koon (Motor) Trading (a firm) | Court of Appeal | Yes | [1998] 2 SLR 325 | Singapore | Cited for the objective test of intention to enter into a legally binding contract. |
| R v Lord Chancellor`s Department, ex p Nangle | N/A | Yes | [1991] ICR 743 | England and Wales | Cited for the principle that the intention to create legal relations is ascertained objectively. |
| Harvey v Johnson | N/A | Yes | (1848) 6 CB 305 | England and Wales | Cited as an example where contemporaneous conduct of the parties can be taken into account to determine the existence of an agreement between the parties. |
| Brogden v Metropolitan Railway | House of Lords | Yes | (1877) 2 App Cas 666 | England and Wales | Cited as an example where contemporaneous conduct of the parties can be taken into account to determine the existence of an agreement between the parties. |
| Trollope and Colls v Atomic Power Constructions | N/A | Yes | [1963] 1 WLR 333 | England and Wales | Cited for the principle that a contract contains all the terms essential to allow it to be workable as a matter of commercial common sense. |
| MCST Plan No 1166 v Chubb Singapore Pte Ltd | High Court | Yes | [1999] 3 SLR 540 | Singapore | Cited for the requirements of merchantability and reasonable fitness for purpose under the Sale of Goods Act. |
| Cammell Laird and Co Ltd v Manganese Bronze and Brass Co Ltd | House of Lords | Yes | [1934] AC 402 | England and Wales | Cited for the purpose of determining if the goods in question were fit for the purpose or purposes for which goods of that kind are commonly bought. |
| Henry Kendall & Sons v William Lillico & Sons Ltd | House of Lords | Yes | [1969] 2 AC 31 | England and Wales | Cited for the principle that the requirement of 'merchantable quality' is satisfied so long as the goods were fit for some, albeit not all, the purposes for which goods of that description are commonly used. |
| Aswan Engineering Establishment Co v Lupdine Ltd | N/A | Yes | [1987] 1 WLR 1 | England and Wales | Cited for the principle that the definition of 'merchantable quality' is satisfied so long as the goods are fit for some of their usual purposes. |
| Ashington Piggeries Ltd & anor v Christopher Hill Ltd | House of Lords | Yes | [1972] AC 441 | England and Wales | Cited for the principle that although the goods may be quite satisfactory for a wide range of uses, the seller will be liable if the goods are in fact unsuitable for anyone of those uses to which the buyer puts the goods. |
| Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank | Privy Council | Yes | [1986] AC 8o | England and Wales | Cited for the principle that where the parties were clearly involved in a contractual and commercial relationship, there is nothing to the advantage of the law's development to search for liability in tort. |
| Hadley v Baxendale | N/A | Yes | (1894) 9 Exch 341 | England and Wales | Cited for the principles of remoteness of damage in contract law. |
| Sanders v Maclean | N/A | Yes | (1883) 11 QBD 327 | England and Wales | Cited for the obligations of a seller under a CIF contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Sale of Goods Act (Cap. 393) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Metal Ceiling System
- KLIA Project
- Design Contract
- Shop Drawings
- Wind Loading
- Security Clips
- Proprietary System
- CP100
- Merchantable Quality
- Fitness for Purpose
15.2 Keywords
- breach of contract
- defective ceiling
- sale of goods
- construction
- Singapore
- KLIA
16. Subjects
- Contract Law
- Construction Dispute
- Sale of Goods
17. Areas of Law
- Contract Law
- Sale of Goods
- Construction Law