GIB Automation v Deluge Fire Protection: Sub-Contract Terms & Breach

GIB Automation Pte Ltd sued Deluge Fire Protection (SEA) Pte Ltd in the High Court of Singapore, alleging breach of contract related to a sub-contract for a fire protection system in the Marina Line MRT project. The court, Sundaresh Menon JC presiding, found that Deluge wrongfully terminated the sub-contract. The court dismissed GIB Automation's claims regarding the Changi Prison Cluster “A” Project and miscellaneous claims. Interlocutory judgment was entered in favor of GIB Automation, with damages to be assessed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Interlocutory judgment entered in favor of the plaintiff for wrongful termination, with damages to be assessed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

GIB Automation sues Deluge Fire Protection for breach of contract. The court found Deluge wrongfully terminated the sub-contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Deluge Fire Protection (S.E.A.) Pte LtdDefendantCorporationInterlocutory Judgment AgainstLost
GIB Automation Pte LtdPlaintiffCorporationInterlocutory judgment entered in favor of the plaintiff for wrongful termination, with damages to be assessed.Partial

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Tan Teng MuanMallal & Namazie
Wong Khai LengMallal & Namazie
Alia MattarMallal & Namazie
N KanagavijayanKana & Co
S RajanKana & Co

4. Facts

  1. The defendant was the main contractor for the supply, installation, testing, commissioning and maintenance of a fire protection system for the Stage 1 Marina Line MRT project.
  2. The defendant sub-contracted a substantial portion of the work to the plaintiff.
  3. The plaintiff was to design, supply, test, commission and maintain the fire alarm system for the project.
  4. A dispute arose as to whether the specifications had changed so as to result in the contract price having increased.
  5. The plaintiff refused to supply certain items towards the end of 2004 and in early 2005, alleging that its obligation to deliver was contingent upon the defendant issuing a letter of credit.
  6. The defendant denied that payment was to be made via letter of credit and terminated the agreement.
  7. The defendant was aware that a very substantial extension of time to complete the work had been granted by the Land Transport Authority but did not inform the plaintiff.

5. Formal Citations

  1. GIB Automation Pte Ltd v Deluge Fire Protection (SEA) Pte Ltd, Suit 360/2005, [2007] SGHC 48

6. Timeline

DateEvent
Letter of award for Changi Prison contract was dated.
Plaintiff submitted a letter of offer.
Meeting held between the representatives of the parties.
Plaintiff wrote to the defendant setting out certain matters.
Email regarding preliminary quote of increase in costs.
Email regarding preliminary quote of increase in costs.
Defendant wrote to the plaintiff a letter of award.
Issue raised again on 28 October 2002 at about the time the plaintiff was countersigning the letter of award.
Plaintiff wrote seeking to clarify or confirm an understanding as to the increase.
Defendant's project manager handed a copy of a draft delivery schedule to plaintiff's representative.
Plaintiff required a letter of credit for a sum of $118,793.29.
Defendant responded to say that the project “is based on a payment term of back-to-back basic (sic)”.
Defendant instructed plaintiff in writing that they are in ‘default of contract’.
Defendant instructed plaintiff in writing that they are in ‘default of contract’.
Plaintiff sent letter to defendant regarding terms of contract.
Defendant terminated the sub-contract.
Mr Cheo filed an affidavit in which he exhibited a letter from an entity related to EST.
Judgment reserved.

7. Legal Issues

  1. Incorporation of main contract terms into sub-contracts
    • Outcome: The court determined the extent to which the main contract terms were incorporated into the sub-contract, based on the factual matrix and the express terms of the sub-contract.
    • Category: Substantive
    • Sub-Issues:
      • Construction of back-to-back provision
    • Related Cases:
      • [2003] SGHC 316
      • [2003] SGHC 53
      • [2005] SGCA 59
  2. Breach of Contract
    • Outcome: The court found that the defendant wrongfully terminated the sub-contract.
    • Category: Substantive
    • Sub-Issues:
      • Repudiatory breach
      • Wrongful termination
    • Related Cases:
      • [1962] 2 QB 26
      • [2004] 3 SLR 288
      • [1980] 1 WLR 277
  3. Mitigation of Damage
    • Outcome: The court found that the plaintiff failed to mitigate its damages.
    • Category: Substantive
    • Sub-Issues:
      • Duty to mitigate losses
    • Related Cases:
      • [1912] AC 673
  4. Admissibility of Evidence
    • Outcome: The court addressed the issue of whether the truth of the contents of a document accepted as authentic still needed to be proved.
    • Category: Procedural
    • Sub-Issues:
      • Hearsay
      • Proof of contents of documents
    • Related Cases:
      • [2006] 3 SLR 769

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Construction Law
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Multi-Pak Singapore Pte Ltd (In Receivership) v Intraco Ltd and othersSingapore High CourtYes[1992] 2 SLR 793SingaporeCited for the principle that a court may not make findings on the basis of facts that are not pleaded.
Jet Holding Ltd and others v Cooper Cameron (Singapore) Pte Ltd and Another and other AppealsCourt of AppealYes[2006] 3 SLR 769SingaporeCited for the principle that even if a document is accepted as authentic, the truth of its contents may not be proved by the document itself because of the hearsay rule.
Hi-Amp Engineering Pte Ltd v Technicdelta Electrical Engineering Pte LtdSingapore High CourtYes[2003] SGHC 316SingaporeCited regarding the interpretation of back-to-back clauses and the relevance of whether the sub-contractor had sight of the main contract.
Lam Hong Leong Aluminium Pte Ltd v Lian Teck Huat Construction Pte Ltd and AnotherSingapore High CourtYes[2003] SGHC 53SingaporeCited regarding the interpretation of back-to-back clauses and the relevance of whether the sub-contractor had sight of the main contract.
Spandeck Engineering (S) Pte Ltd v China Construction (South Pacific) Development Co Pte LtdCourt of AppealYes[2005] SGCA 59SingaporeCited regarding the interpretation of back-to-back clauses in sub-contracts.
Choon Construction Pte Ltd v L&M Concrete Specialists Pte LtdSingapore High CourtYes[1999] SGHC 228SingaporeCited regarding the approach to back-to-back provisions in construction contracts.
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha LtdQueen's BenchYes[1962] 2 QB 26England and WalesCited for the principle that a breach of contract entitles the innocent party to terminate the contract if the consequence of the breach deprives the innocent party of substantially the whole benefit which it was intended he should obtain.
Jia Min Building Construction Pte Ltd v Ann Lee Pte LtdSingapore High CourtYes[2004] 3 SLR 288SingaporeCited for the principle that until a contract has been brought to an end, its terms continue to apply and to enure to the benefit of both parties.
Woodar Investment Development Ltd v Wimpey Construction UK LtdHouse of LordsYes[1980] 1 WLR 277United KingdomCited for the principle that where there is a genuine dispute as to the construction of a contract, the courts may be unwilling to hold that an expression of an intention by one party to carry out the contract only in accordance with his own erroneous interpretation of it amounts to a repudiation.
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railway Co of LondonHouse of LordsYes[1912] AC 673United KingdomCited for the principle that a party has a duty to mitigate its losses and prevents it from claiming such damages as may be avoided by reasonable steps.
The Karting Club of Singapore v David Mak and othersSingapore High CourtYes[1992] 2 SLR 483SingaporeCited for the principle that the power to award costs conferred on the High Court is completely unfettered.
Tullio v MaoroCourt of AppealYes[1994] 2 SLR 489SingaporeCited for the principles on which costs were to be awarded.
Re Elgindata Ltd (No 2)England and Wales Court of Appeal (Civil Division)Yes[1993] 1 All ER 232England and WalesCited for the principles on which costs were to be awarded.
Baylis Baxter v SabathEngland and Wales High Court (Chancery Division)Yes[1958] 1 WLR 529England and WalesCited for the principle that where a party acts unethically, for example by relying on false evidence, he may be penalised in costs.
Anex Electrical Co Ltd v Kingsland International LtdHong Kong Court of AppealYes[1998] 1 HKLRD 947Hong KongCited for the principle that the burden is upon the party seeking to be released from the implied undertaking not to use such documents for collateral purposes, to provide persuasive and cogent reasons to warrant the discharge of the implied undertaking.
Jaya Sarana Engineering Pte Ltd v GIB Automation Pte LtdSingapore High CourtYes[2007] SGHC 49SingaporeRelated case involving similar parties.

13. Applicable Rules

Rule Name
Rules of the Supreme Court

14. Applicable Statutes

Statute NameJurisdiction
Supreme Court of Judicature ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Sub-contract
  • Back-to-back provision
  • Letter of credit
  • Mitigation of damages
  • Wrongful termination
  • Main contract
  • Letter of award
  • Equipment delivery
  • Fixed lump sum
  • Variations

15.2 Keywords

  • Sub-contract
  • Breach of contract
  • Construction law
  • Wrongful termination
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Sub-contracts90
Construction Law90
Breach of Contract85
Incorporation of main contract terms85
Construction of back-to-back provision80
Contract Law80
Repudiatory breach70
Measure of Damages70
Mitigation of damage60
Evidence60
Hearsay50
Commercial Litigation50

16. Subjects

  • Construction Law
  • Contract Law
  • Civil Procedure