Projection Pte Ltd v The Tai Ping Insurance Co Ltd: Settlement Agreement & Insurance Claim Dispute

Projection Pte Ltd (PPL) appealed against the High Court's decision to dismiss their claim against The Tai Ping Insurance Co Ltd (Tai Ping) for $553,560.98, based on an alleged compromise agreement. PPL, the main contractor for a Singapore Sports Council project, claimed under a Contractors' All Risks Policy with Tai Ping after a retaining wall collapsed. The Court of Appeal allowed the appeal, holding that a compromise agreement was reached on 31 March 1999, obligating Tai Ping to pay PPL $553,560.98. The court also addressed the issue of consideration and the role of the Sports Council.

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 a claim by Projection Pte Ltd against The Tai Ping Insurance Co Ltd. The court held that a compromise agreement was reached.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Projection Pte LtdAppellantCorporationAppeal allowedWon
The Tai Ping Insurance Co LtdRespondentCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealNo
L P TheanJustice of AppealNo
Yong Pung HowChief JusticeYes

4. Counsels

Counsel NameOrganization
Tan Liam BengDrew & Napier
Yap Pett ChinDrew & Napier
Low Tiang HockChor Pee & Partners
Jack Lee Tsen-TaChor Pee & Partners

4. Facts

  1. PPL was contracted by the Singapore Sports Council for a construction project.
  2. PPL took out a Contractors` All Risks Policy with Tai Ping.
  3. A retaining wall collapsed during construction, causing damage.
  4. PPL claimed under the Policy for the loss.
  5. Cunningham International Pte Ltd was appointed to investigate the damage.
  6. Tai Ping offered to pay PPL $523,912.68.
  7. PPL requested an increase in the settlement sum.
  8. Tai Ping agreed to adjust the proportion of loss and pay $553,560.98.

5. Formal Citations

  1. Projection Pte Ltd v The Tai Ping Insurance Co Ltd, CA 110/2000, [2001] SGCA 28

6. Timeline

DateEvent
Contractors` All Risks Policy was valid from this date.
Retaining wall of the Project collapsed.
Cunningham International Pte Ltd appointed by Tai Ping to investigate the damage.
Sports Council requested Tai Ping to expedite payment of the claim to PPL.
Cunningham International Pte Ltd assessed PPL`s claim in the sum of $679,065.95.
Cunningham adjusted the claim to $679,066.09 in Interim Report No 2.
PPL wrote to OCW Insurance (Brokers) Pte Ltd requesting assistance in expediting payment.
PPL wrote to Tai Ping asking for payment of the assessed amount or the reasons for the non-payment.
PPL wrote to Tai Ping, recording what Douglas had said and stating that they expected to receive the payment within the next few days.
Cunningham adjusted the claim to $523,912.68.
Cunningham issued final report to Tai Ping.
Tai Ping wrote to OCW, stating that they would pay PPL $523,912,68 on the claim.
PPL wrote to Tai Ping, enquiring the reasons for paying a sum which was less than the assessed amount.
Representatives of the parties met for a discussion.
Tai Ping wrote to OCW stating that they agreed to adjust the proportion of the Section II loss from 30% to 20% and that the final sum payable was $535,560.98.
PPL signed and returned the discharge voucher to Tai Ping.
PPL`s solicitors wrote to Tai Ping demanding payment of $553,560.98.
Tai Ping wrote to PPL rejecting the claim.
Tai Ping`s solicitors wrote to PPL`s solicitors withdrawing any offer of settlement that their clients had made.
Decision Date

7. Legal Issues

  1. Formation of Contract
    • Outcome: The court held that a compromise agreement was reached between the parties.
    • Category: Substantive
    • Sub-Issues:
      • Application of objective test
      • Continuing negotiations
      • Agreement on material terms
    • Related Cases:
      • [1999] 3 SLR 1
      • [2000] 3 SLR 405
      • [1977] 2 Lloyd`s Rep 5
      • [1979] 1 All ER 965
      • [1974] 1 All ER 1015
  2. Consideration
    • Outcome: The court held that PPL had provided consideration for the compromise agreement.
    • Category: Substantive
    • Related Cases:
      • [1969] 2 QB 507
      • [1918] AC 869

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Insurance Claims

11. Industries

  • Construction
  • Insurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Aircharter World v Kontena NasionalCourt of AppealYes[1999] 3 SLR 1SingaporeCited for the objective test in determining whether parties have reached an agreement.
Tribune Investment Trust Inc v Soosan Trading CoN/AYes[2000] 3 SLR 405SingaporeCited for the principle that the test of agreement is objective.
Port Sudan Cotton Co v Govindaswamy Chettiar & SonsN/AYes[1977] 2 Lloyd`s Rep 5N/ACited for the principle that in continuing negotiations, it is better to examine all documents to determine if agreement was reached.
Butler Machine Tool Co v Ex-Cell-O Corporation (England)N/AYes[1979] 1 All ER 965N/ACited for the principle that in continuing negotiations, it is better to examine all documents to determine if agreement was reached.
New Zealand Shipping Co Ltd v AM SatterthwaiteN/AYes[1974] 1 All ER 1015N/ACited for the principle that in continuing negotiations, it is better to examine all documents to determine if agreement was reached.
Magee v Pennine Insurance CoN/ANo[1969] 2 QB 507N/ACited to distinguish from a case where a compromise agreement was set aside due to a common fundamental mistake.
Jayawickreme v Amarasuriya (since deceased)N/AYes[1918] AC 869Sri LankaCited for the principle that the validity of a compromise agreement is not dependent on the success of the original claim.

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

  • Compromise agreement
  • Contractors` All Risks Policy
  • Settlement agreement
  • Discharge voucher
  • Loss payee
  • Objective test
  • Consideration

15.2 Keywords

  • settlement
  • insurance
  • contract
  • appeal
  • construction
  • compromise agreement

17. Areas of Law

Area NameRelevance Score
Contract Law90
Insurance85
Breach of Contract75
Insurance Bad Faith60
Commercial Law50

16. Subjects

  • Contract Law
  • Insurance Law
  • Civil Litigation