Emjay Enterprises v Skylift Consolidator: Exception Clauses & Pleading Requirements

In Emjay Enterprises Pte Ltd v Skylift Consolidator (Pte) Ltd, the Singapore High Court addressed the issue of whether a defendant could rely on an exception clause, specifically a limitation of liability clause, at the stage of assessment of damages, despite not pleading it in their defense. The plaintiff, Emjay Enterprises Pte Ltd, had obtained interlocutory judgment against the defendant, Skylift Consolidator (Pte) Ltd, for breach of contract, with damages to be assessed. The defendant sought to introduce an exception clause to limit their liability, arguing it related to the quantum of damages and therefore did not need to be pleaded. Andrew Phang Boon Leong J held that the exception clause pertained to liability, not merely the quantum of damages, and dismissed the defendant's appeal.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Defendant's appeal dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court addressed whether a defendant could rely on an unpleaded exception clause to limit liability during damages assessment. The court held that exception clauses relate to liability, not just damage quantum.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Emjay Enterprises Pte LtdPlaintiffCorporationJudgment for PlaintiffWon
Skylift Consolidator (Pte) LtdDefendant, AppellantCorporationAppeal DismissedLost
Direct Services (HK) LtdThird PartyCorporation

3. Judges

Judge NameTitleDelivered Judgment
Andrew Phang Boon LeongJudgeYes

4. Counsels

Counsel NameOrganization
Vanessa YeoKhattarWong
Yeow Joo YunKhattarWong
Michael Moey Chin WoonMoey and Yuen

4. Facts

  1. Plaintiff obtained interlocutory judgment against the defendant for breach of contract.
  2. Damages were to be assessed following the interlocutory judgment.
  3. Defendant sought to introduce an exception clause at the stage of assessment of damages.
  4. The exception clause was a limitation of liability clause.
  5. The exception clause had not been pleaded by the defendant in its defense.
  6. The defendant argued the exception clause related to the quantum of damages and therefore need not be pleaded.
  7. The plaintiff resisted the introduction of the clause, arguing it concerned liability and should have been pleaded earlier.

5. Formal Citations

  1. Emjay Enterprises Pte Ltd v Skylift Consolidator (Pte) Ltd, MC Suit 16197/2003, RAS 25/2005, [2006] SGHC 28

6. Timeline

DateEvent
MC Suit 16197/2003 filed
RAS 25/2005 filed
Judgment delivered

7. Legal Issues

  1. Whether a defendant can rely on an exception clause without pleading it, arguing it relates to the quantum of damages.
    • Outcome: The court held that the exception clause concerned went to liability as opposed to the assessment of damages and that, in any event, O 18 r 13(4) of the Rules of Court was not applicable to the facts of the present case.
    • Category: Procedural
    • Sub-Issues:
      • Applicability of Order 18 r 13(4) of the Rules of Court
      • Interaction between rules of pleading and exception clauses
  2. Nature and function of exception clauses
    • Outcome: The court determined that exception clauses, whether total exclusion or limitation of liability, primarily relate to liability rather than the assessment of damages.
    • Category: Substantive
    • Sub-Issues:
      • Distinction between limitation of liability clauses and total exclusion of liability clauses
      • Relevance of primary and secondary obligations to exception clauses

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co LtdHouse of LordsYes[1983] 1 WLR 964England and WalesCited for the principle that limitation of liability clauses are interpreted less stringently than total exclusion of liability clauses.
Rapiscan Asia Pte Ltd v Global Container Freight Pte LtdSingapore High CourtYes[2002] 2 SLR 325SingaporeApplied the principle from Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd in the local context regarding the interpretation of limitation of liability clauses.
Photo Production Ltd v Securicor Transport LtdHouse of LordsYes[1980] AC 827England and WalesCited for the distinction between primary and secondary obligations in the context of exception clauses and the legal effect of allowing courts the flexibility to give effect to exception clauses at common law even where a fundamental breach of contract has occurred.
Sze Hai Tong Bank Ltd v Rambler Cycle Co LtdPrivy CouncilNo[1959] AC 576SingaporeCited as an apparent authority contrary to the position established in Photo Production case regarding exception clauses and fundamental breach of contract.
Metro (Pte) Ltd v Wormald Security (SEA) Pte LtdSingapore High CourtYes[1980–1981] SLR 539SingaporeCited as a Singapore High Court decision that established the position in the Singapore context as that established in the Photo Production case.
AA Valibhoy & Sons (1907) Pte Ltd v Banque Nationale de ParisSingapore High CourtYes[1994] 2 SLR 772SingaporeCited as a Singapore High Court decision that established the position in the Singapore context as that established in the Photo Production case.
Parker Distributors (Singapore) Pte Ltd v A/S D/S SvenborgSingapore Court of AppealYes[1982–1983] SLR 153SingaporeCited as a Singapore Court of Appeal decision that established the position in the Singapore context as that established in the Photo Production case.
Moschi v Lep Air Services LtdHouse of LordsYes[1973] AC 331England and WalesCited for Lord Diplock's reference to the fact that both primary and secondary obligations are obligations.
Dunlop Pneumatic Tyre Company, Limited v New Garage and Motor Company, LimitedHouse of LordsNo[1915] AC 79England and WalesCited by the defendant to argue that a liquidated damages clause is similar to a limitation of liability clause, but the argument was rejected by the court.
Cellulose Acetate Silk Company, Limited v Widnes Foundry (1925), LimitedHouse of LordsYes[1933] AC 20England and WalesCited in relation to the argument that limitation of liability clauses are not to be classed as agreements for liquidated damages, since they are not a genuine pre-estimate of damages; and the House of Lords has held that they are not penalty clauses.
Plato Films Ltd v SpeidelEnglish Court of AppealYes[1961] AC 1090England and WalesCited for the holding that notwithstanding the then English equivalent of our O 18 r 13(4), the then English equivalent of our O 18 r 8 (relating to any pleading subsequent to a Statement of Claim) ought to prevail.
Weait v Jayanbee Joinery LtdEnglish Court of AppealNo[1963] 1 QB 239England and WalesCited as a case where the point was not (in the final analysis) decided definitively.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Order 18 r 13(4) Rules of CourtSingapore
Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)Singapore
Order 18 r 8Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Exception clause
  • Limitation of liability clause
  • Total exclusion of liability clause
  • Pleadings
  • Assessment of damages
  • Primary obligations
  • Secondary obligations
  • Order 18 r 13(4)
  • Rules of Court
  • Mitigation of damages

15.2 Keywords

  • contract law
  • civil procedure
  • pleadings
  • exception clauses
  • limitation of liability
  • assessment of damages

17. Areas of Law

Area NameRelevance Score
Contracts85
Civil Practice75
Contract Law70
Law of Pleadings60

16. Subjects

  • Contract Law
  • Civil Procedure
  • Pleadings
  • Exception Clauses