Smith & Associates v Britestone: Breach of Contract & Damages for Counterfeit Goods
In Smith & Associates Far East Ltd v Britestone Pte Ltd, the High Court of Singapore heard an appeal by Britestone Pte Ltd against an order to pay damages to Smith & Associates Far East, Ltd for supplying counterfeit capacitors. Smith had purchased the capacitors from Britestone and resold them to Celestica Thailand Ltd, which then installed them in products for EMC Corporation. After the counterfeit nature of the capacitors was discovered, EMC claimed damages from Celestica, who in turn sought damages from Smith. Smith settled with Celestica and then sued Britestone to recover the settlement amount. The court dismissed Britestone's appeal, finding that Britestone was liable for the damages Smith paid to Celestica due to the breach of contract.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Smith sued Britestone for breach of contract after supplying counterfeit capacitors. The court upheld damages awarded to Smith for settling a claim with a third party.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Smith & Associates Far East Ltd | Respondent, Plaintiff | Corporation | Judgment for Plaintiff | Won | Terence Tay, Jeffrey Lim |
| Britestone Pte Ltd | Appellant, Defendant | Corporation | Appeal Dismissed | Lost | Sham Chee Keat |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Lee Meng | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Sham Chee Keat | Ramdas & Wong |
| Terence Tay | Wong & Leow LLC |
| Jeffrey Lim | Wong & Leow LLC |
4. Facts
- Smith purchased capacitors from Britestone.
- Smith resold the capacitors to CTL.
- CTL installed the capacitors onto printed circuit boards for EMC.
- The capacitors were discovered to be counterfeit.
- EMC claimed damages from CTL.
- Smith settled with CTL for US$300,000.00.
- Smith sued Britestone to recover the settlement sum.
5. Formal Citations
- Smith & Associates Far East Ltd v Britestone Pte Ltd, Suit 108/2005, RA 304/2006, [2006] SGHC 238
6. Timeline
| Date | Event |
|---|---|
| Smith purchased capacitors from Britestone. | |
| Counterfeit capacitors discovered. | |
| Smith and CTL agreed to settlement. | |
| Smith commenced proceedings against Britestone. | |
| Consent judgment entered; Britestone accepted liability for breach of contract. | |
| Appeal dismissed. |
7. Legal Issues
- Breach of Implied Condition
- Outcome: The court found that Britestone breached the implied condition of the contract.
- Category: Substantive
- Damages for Breach of Contract
- Outcome: The court upheld the award of damages to Smith for the settlement sum paid to CTL.
- Category: Substantive
- Related Cases:
- (1854) 9 Exch 341
- [1949] AC 196
- [1926] 1 KB 348
- [1951] 1 KB 422
- [1997] 3 WLR 205
- Reasonableness of Settlement
- Outcome: The court found that the settlement between Smith and CTL was reasonable.
- Category: Substantive
- Related Cases:
- [1951] 2 KB 314
- [1998] 192 CLR 603
- [1999] 1 Qd R 210
- [1997] 1 SLR 1
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Electronics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Hadley v Baxendale | N/A | Yes | (1854) 9 Exch 341 | N/A | Cited for the rule on remoteness of damages in contract law. |
| Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker | N/A | Yes | [1949] AC 196 | N/A | Cited regarding the understanding of ordinary business practices between reasonable businessmen. |
| Dexters Ltd v Hill Crest Oil Co (Bradford) Ltd | N/A | Yes | [1926] 1 KB 348 | N/A | Cited regarding the view that all contracts in a chain must be the same for recoverable damages to be passed along the chain. |
| Biggin & Co Ltd v Permanite Ltd & Ors | N/A | Yes | [1951] 1 KB 422 | N/A | Cited regarding the materiality of variations in a string of contracts and the assessment of damages. |
| Bence Graphics International Ltd v Fasson UK Ltd | N/A | Yes | [1997] 3 WLR 205 | N/A | Cited regarding the contemplation of damages in a chain of contracts and the integration of goods into a final product. |
| Biggin | N/A | Yes | [1951] 2 KB 314 | N/A | Cited regarding the encouragement of reasonable settlements and the evidence necessary to establish reasonableness. |
| Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd | N/A | Yes | [1998] 192 CLR 603 | Australia | Cited as an Australian case that expressed doubts about the decision in Biggin. |
| White Industries Brokers Qld Pty Ltd v Hennessey Glass & Aluminium Systems Pty Ltd | N/A | Yes | [1999] 1 Qd R 210 | Australia | Cited as an Australian case that expressed doubts about the decision in Biggin. |
| Brown Noel Trading Pte v Donald & McArthy Pte Ltd | Court of Appeal | Yes | [1997] 1 SLR 1 | Singapore | Cited for adopting the views of Somerwell and Singleton LJJ in Biggin. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Sale of Goods Act (Cap 393, 1999 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Counterfeit capacitors
- Settlement sum
- Breach of implied condition
- Sub-sale
- Remoteness of damage
- Printed circuit boards
- Purging process
15.2 Keywords
- breach of contract
- counterfeit goods
- damages
- sale of goods
- settlement
- capacitors
16. Subjects
- Contract Law
- Commercial Law
- Sale of Goods
17. Areas of Law
- Commercial Transactions
- Sale of Goods
- Contract Law
- Breach of Contract
- Damages