Trans-World v Cornelder: Misrepresentation, Title to Goods & Storage

Trans-World (Aluminium) Ltd (“TWA”) sued Cornelder China (Singapore) Pte Ltd (“Cornelder China”) in the High Court of Singapore, alleging misrepresentation regarding a cargo of metallurgical grade calcined alumina. TWA claimed that Cornelder China, through its representative, Adam Slater, misrepresented the cargo's condition and title, leading TWA to purchase the cargo and incur losses when a third party, Run Sheng Xiang Trade Co (“RSX”), placed an injunction on the cargo. Belinda Ang Saw Ean J dismissed TWA's claim, finding no fraudulent intent or reliance on the alleged misrepresentations. The court also dismissed Cornelder China's counterclaim for management fees.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiffs’ action is dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Trans-World sues Cornelder for misrepresentation regarding cargo. Court dismisses claim, finding no fraudulent intent or reliance by Trans-World.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Trans-World (Aluminium) LtdPlaintiffCorporationClaim DismissedLost
Cornelder China (Singapore)DefendantCorporationCounterclaim DismissedNeutral

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
Yap Yin SoonAllen & Gledhill
Vivian AngAllen & Gledhill
Mark OrtegaAllen & Gledhill
Leona WongAllen & Gledhill
Lim TeanRajah & Tann
Chin Li YuenRajah & Tann

4. Facts

  1. TWA contracted with Marco for the purchase of 20,890.50mt of alumina at US$260 per mt.
  2. TWA paid US$5,431,530 to Marco for the cargo.
  3. Cornelder China informed TWA that RSX had placed an injunction on the cargo.
  4. RSX claimed ownership of the cargo due to claims against Grand Empire.
  5. TWA intervened in Chinese proceedings to set aside the injunction but was initially unsuccessful.
  6. Slater allegedly misrepresented the cargo's condition and title during a meeting with TWA representatives.
  7. TWA claimed the misrepresentations induced them to enter the contract and pay the purchase price.

5. Formal Citations

  1. Trans-World (Aluminium) Ltd v Cornelder China (Singapore), OS 1749/2000, [2003] SGHC 56

6. Timeline

DateEvent
Vessel "ADIMON" arrived in Qingdao
Cornelder China appointed by Standard Bank to receive cargo
Warehouse receipts issued by Cornelder China to Standard Bank
Standard Bank instructed Cornelder China to release alumina to Mees Pierson NV London
Warehouse receipts issued to Mees Pierson for the account of Marco
North and Kestenbaum discussed possible purchase of cargo
Meeting between North and Slater
RSX allegedly obtained an injunction
TWA contracted with Marco for the purchase of the cargo
TWA paid US$5,431,530 to Marco for the cargo
Mees Pierson instructed Cornelder China to release the cargo to KBC Bank NV
Cornelder China wrote to KBC Bank to confirm release of the cargo
TWA learned from Cornelder China about the injunction
KBC Bank informed Cornelder China that the warehouse receipts have been given to TWA
TWA intervened in the Chinese proceedings
Cornelder China wrote to the Plaintiffs setting out the terms of the management fees
Cargo bonded
TWA succeeded in lifting the injunction
North left TWA
Decision of the Supreme People’s Court was handed down
Decision Date

7. Legal Issues

  1. Misrepresentation
    • Outcome: The court found no fraudulent intent or reliance on the alleged misrepresentations, dismissing the claim.
    • Category: Substantive
    • Sub-Issues:
      • Fraudulent misrepresentation
      • Innocent misrepresentation
      • Negligent misrepresentation
      • Misrepresentation by silence
  2. Title to Goods
    • Outcome: The court found that Grand Empire could not and did not pass good title to Marco, and neither did Marco have the capacity to transfer good title to TWA.
    • Category: Substantive
  3. Admissibility of Evidence
    • Outcome: The court ruled that the judgment of the Supreme People’s Court is evidentially conclusive only of its existence, date and legal effect, and that finding of facts in that proceeding are equally inadmissible evidence in a later proceeding.
    • Category: Procedural
  4. Pleadings
    • Outcome: The court did not consider the claim in quantum meruit because the Defendants have not pleaded in the alternative a claim in quantum meruit.
    • Category: Procedural

8. Remedies Sought

  1. Damages for misrepresentation
  2. Damages for shortage of cargo
  3. Fees incurred in connection with bonding of the cargo

9. Cause of Actions

  • Misrepresentation
  • Breach of duty as bailees
  • Breach of storage contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Commodities Trading
  • Warehousing
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Kea Holdings Pte Ltd & Anor v Gan Boon HockCourt of AppealYes[2000] 3 SLR 129SingaporeCited for the elements of the tort of deceit.
Panatron Pte Ltd & Anor v Lee Cheow Lee & AnorUnknownYes[2001] 3 SLR 405SingaporeCited for the requirement of knowledge of falsity in fraudulent misrepresentation.
Yogambikai Nagarajag v Indian Overseas BankUnknownYes[1997] 1 SLR 258SingaporeCited for the standard of evidence required in civil cases alleging fraud.
Teo Geok Fong v Lim Eng HockUnknownYes[1996] 3 SLR 431SingaporeCited regarding the evaluation of a witness's credibility when their testimony has been impeached.
Annie Yeo v SenanayakeUnknownYes[1963] 29 MLJ 43MalaysiaCited for cautioning against readily finding reliance on representations by knowledgeable plaintiffs.
Peek v GurneyUnknownYes[1861-73] All ER Rep 116EnglandCited for the principle that misrepresentation requires active misstatement or partial statement amounting to falsehood.
Derry v PeekHouse of LordsYes(1889) LR 14 App. Cas 337EnglandCited for the principle that there is no liability for honestly interpreting facts or drawing conclusions in a way the court does not think legally warranted.
Akerhielm v De MarePrivy CouncilYes[1959] AC 789EnglandCited for the principle that there is no liability for honestly interpreting facts or drawing conclusions in a way the court does not think legally warranted.
Hedley Byrne & Co Ltd v Heller and PartnersHouse of LordsYes[1964] AC 465EnglandCited as the authority recognizing recovery for pure economic loss in tort due to negligent misstatements.
Caparo Plc v DickmanHouse of LordsYes[1990] 2 AC 605EnglandCited for setting out the limits of liability for negligent misstatement causing economic loss.
White v JonesHouse of LordsYes[1995] AC 207EnglandCited for explaining the reasoning in Hedley Byrne regarding assumption of responsibility.
Banque Keyser Ullmann SA v Skandia (UK) Insurance Co LtdUnknownYes(1988) 2 Lloyd’s Rep 514EnglandCited for the principle that mere failure to speak can give rise to liability in negligence under Hedley Byrne principles, subject to voluntary assumption of responsibility.
South Australia Asset Management Corporation v York Montague LtdHouse of LordsYes[1997] AC 191EnglandCited for imposing limits on liability for negligent misstatement by pointing out that the scope of duty has a bearing on damages recoverable.
Cremer v General Carriers SAUnknownYes[1974] 1 All ER 1EnglandCited and distinguished regarding bailment by attornment and the terms of the original contract.
Etablissements Soules Et Cie v Intertradex S.A.UnknownYes[1991] 1 Lloyd’s Law Rep 378EnglandCited for the meaning of the words “Free Out” in a CIF contract.
Maroti Laxman Koshti & Ors v Jagannathdas Lachhmandas Gadewall and AnorUnknownYes[1939]A.I.R 72IndiaCited for the principle that a judgment is not admissible to prove the truth of the fact which it states.
Chew Chin Aik Victor v Arul ChandranHigh CourtYesSuit No. 1896 of 1998SingaporeCited for the principle that finding of facts in that proceeding are equally inadmissible evidence in a later proceeding.
P E Bakers Pty Ltd and Others v Yehuda and AnotherUnknownYes(1988) 15 NSWLR 437AustraliaCited for the principle that the estoppel that arises in an in rem judgment does not extend to every issue decided or findings made in that proceeding.
Wall v R; Ex parte King Wong and Wah On [No 2]UnknownYes(1927) 39 CLR 266AustraliaCited for the principle that the estoppel that arises in an in rem judgment does not extend to every issue decided or findings made in that proceeding.
Ballantyne v MackinnonUnknownYes[1896] 2 QB 455EnglandCited for the principle that the estoppel that arises in an in rem judgment does not extend to every issue decided or findings made in that proceeding.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Misrepresentation Act (Cap. 390)Singapore
Evidence Act (Cap.97)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Metallurgical grade calcined alumina
  • Warehouse receipts
  • Injunction
  • Bonded warehouse
  • Liens
  • Adverse claims
  • Collateral management
  • CIF Vanino
  • Bailment
  • Attornment

15.2 Keywords

  • Misrepresentation
  • Alumina
  • Cargo
  • Warehouse
  • Injunction
  • Title
  • Storage
  • Singapore
  • Contract
  • Tort

17. Areas of Law

Area NameRelevance Score
Misrepresentation95
Fraud and Deceit90
Contract Law70
Evidence60
Bailment50
Pure Economic Loss40
Civil Procedure40
Agency Law30
Documentary evidence25
In Personam15
In Rem15

16. Subjects

  • Contract Law
  • Tort Law
  • Commercial Law
  • Bailment
  • Agency