Chai Cher Watt v SDL Technologies: Breach of Contract, Sale of Goods Act

Chai Cher Watt, trading as Chuang Aik Engineering Works, appealed the High Court's decision against SDL Technologies Pte Ltd regarding breaches of two contracts for a drilling machine and a lathe machine. The Court of Appeal allowed the appeal in part, finding SDL Technologies in breach of the Drill Contract due to discrepancies in the drilling machine's length, violating Section 13 of the Sale of Goods Act. The matter was remitted to the Judge to determine the precise sums to be awarded. The appeal failed in so far as the Appellant’s claim for breaches of the Lathe Machine Contract is concerned.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding breach of contract for a drilling machine. The court allowed the appeal, finding a breach of condition under the Sale of Goods Act.

1.7 Decision Date

16 October 2011

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Chai Cher Watt (trading as Chuang Aik Engineering Works)	Appellant	Individual	Appeal allowed in part	Partial	Hee Theng Fong of RHT Law LLP Leong Kai Yuan of RHT Law LLP
SDL Technologies Pte Ltd	Respondent	Corporation	Appeal partially lost	Partial	Kenny Chooi Yue Wai of Yeo-Leong & Peh LLC David Kong Tai Wai of Yeo-Leong & Peh LLC Kelvin Fong Kai Tong of Yeo-Leong & Peh LLC

3. Judges

Judge Name	Title	Delivered Judgment
Chao Hick Tin	Justice of the Court of Appeal	No
Andrew Phang Boon Leong	Justice of the Court of Appeal	Yes
V K Rajah	Justice of the Court of Appeal	No

4. Counsels

Counsel Name	Organization
Hee Theng Fong	RHT Law LLP
Leong Kai Yuan	RHT Law LLP
Kenny Chooi Yue Wai	Yeo-Leong & Peh LLC
David Kong Tai Wai	Yeo-Leong & Peh LLC
Kelvin Fong Kai Tong	Yeo-Leong & Peh LLC

4. Facts

Appellant contracted with Respondent to purchase a drilling machine with a specified length of 11 meters.
The delivered drilling machine was actually 13.5 meters in length.
The Drill Contract specified the Drilling Machine would be 11 metres in length.
Appellant rejected the drilling machine due to the length discrepancy and concerns about its condition.
The First Drawing revealed that the length of the Drilling Machine was 13.5m rather than 11 metres.
The Appellant paid 30% of the purchase price as a deposit on 22 August 2007.
The Appellant alleged that it was either an express or implied term of the Drill Contract that the Drilling Machine was to be “newly manufactured”.

5. Formal Citations

Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd, Civil Appeals Nos 233 of 2010 and 10 of 2011, [2011] SGCA 54
Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd, , [2010] SGHC 348

6. Timeline

Date	Event
2007-08-01	Appellant approached Respondent's sales representative.
2007-08-21	Parties entered into the Drill Contract.
2007-08-22	Appellant paid 30% deposit.
2008-03-01	Respondent provided Appellant with the First Drawing.
2008-07-14	Square oil tank installed.
2008-08-19	Drilling Machine delivered to Appellant.
2008-08-20	Appellant acknowledged receipt of Drilling Machine.
2008-08-23	Appellant inspected the Drilling Machine.
2008-08-29	Respondent forwarded letter from manufacturer.
2008-09-01	SGS inspection of Drilling Machine.
2008-09-09	SGS issued report.
2008-10-09	Appellant rejected the Drilling Machine.
2010-01-01	High Court decision issued.
2011-10-17	Judgment reserved.
2011-10-17	Court of Appeal decision issued.

7. Legal Issues

Breach of Contract
- Outcome: The court found that the Respondent breached the contract by failing to deliver a drilling machine that corresponded with the description in the Drill Contract.
- Category: Substantive
- Sub-Issues:
  - Failure to deliver goods as described
  - Breach of implied condition
- Related Cases:
  - [2010] SGHC 348
  - [1995] 1 SLR(R) 122
  - [1933] AC 470
  - [1934] 1 KB 17
  - [1900] 1 QB 513
  - [2007] 4 SLR(R) 413
  - [1962] 2 QB 26
  - [1990] 1 Lloyd’s Rep 391
  - [1974] 131 CLR 634
  - [2010] 3 SLR 179
  - [1985] 2 WLR 154
Waiver
- Outcome: The court held that the Respondent had not been able to discharge its burden of proof with respect to this particular aspect of its case and therefore hold that the Appellant had not waived its rights in respect of the Respondent’s breach of the condition in the Drill Contract with regard to the length of the Drilling Machine.
- Category: Substantive
- Sub-Issues:
  - Election
  - Knowledge of facts giving rise to rights
- Related Cases:
  - [1990] 1 Lloyd’s Rep 391
  - [1974] 131 CLR 634
  - [2010] 3 SLR 179
  - [1985] 2 WLR 154

8. Remedies Sought

Return of deposits paid
Damages for losses suffered
Interest on the aforesaid

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Engineering

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd	High Court	Yes	[2010] SGHC 348	Singapore	The judgment being appealed from.
Chuan Hiap Seng (1979) Pte Ltd v Progress Manufacturing Pte Ltd	N/A	Yes	[1995] 1 SLR(R) 122	Singapore	Cited to support the proposition that contracts containing specifications are contracts of sale by description within the meaning of Section 13 of the Sale of Goods Act.
Arcos Ltd v E A Ronaasen & Son	House of Lords	Yes	[1933] AC 470	England and Wales	Cited for the principle that minor discrepancies between delivered goods and their description may entitle the purchaser to reject the goods.
Andrew Bros Ltd v Singer & Co Ltd	King's Bench Division	Yes	[1934] 1 KB 17	England and Wales	Cited as an example of a case where a contract for a new item was not satisfied by the delivery of a second-hand model.
Varley v Whipp	Queen's Bench Division	Yes	[1900] 1 QB 513	England and Wales	Cited as an example of a case where a contract for a one-year-old second-hand machine was not performed by delivery of a very old machine.
RDC Concrete v Sato Kogyo (S) Pte Ltd	Court of Appeal	Yes	[2007] 4 SLR(R) 413	Singapore	Cited for the condition-warranty approach to contractual terms.
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd	Court of Appeal	Yes	[1962] 2 QB 26	England and Wales	Cited to contrast the condition-warranty approach with the Hongkong Fir approach.
Re Moore & Co and Landauer & Co	N/A	Yes	Re Moore & Co and Landauer & Co	N/A	Cited as an example of how the packing of goods may also form part of their description.
Reardon Smith Line Ltd v Yngvar Hansen-Tangen	N/A	Yes	Reardon Smith Line Ltd v Yngvar Hansen-Tangen	N/A	Cited to show that some of the older cases were excessively technical.
Bowes v Shand	N/A	Yes	Bowes v Shand	N/A	Cited to show that goods can be rejected because shipment was not completed within the specified period.
Bunge Corp v Tradax Export SA	House of Lords	Yes	Bunge Corp v Tradax Export SA	N/A	Cited to reaffirm the decision in Bowes v Shand.
The Kanchenjunga	House of Lords	Yes	[1990] 1 Lloyd’s Rep 391	England and Wales	Cited for a useful summary of the law on waiver.
Sargent v ASL Developments Limited	High Court of Australia	Yes	[1974] 131 CLR 634	Australia	Cited for the concept of waiver.
Ang Sin Hock v Khoo Eng Lim	High Court	Yes	[2010] 3 SLR 179	Singapore	Cited Sargent v ASL Developments Limited for the concept of waiver.
Peyman v Lanjani	N/A	Yes	[1985] 2 WLR 154	N/A	Cited for the view that there must be knowledge of the existence of contractual rights themselves.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Sale of Goods Act (Cap 393, 1999 Rev Ed) s 13	Singapore
Sale of Goods Act (Cap 393, 1999 Rev Ed) s 11(1)	Singapore
Sale of Goods Act (Cap 393, 1999 Rev Ed) s 15A	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Drilling Machine
Drill Contract
Lathe Machine
Lathe Machine Contract
Sale by description
Condition
Waiver
First Drawing
SGS Inspection
De minimis principle

15.2 Keywords

breach of contract
sale of goods
drilling machine
waiver
description
condition

17. Areas of Law

Area Name	Relevance Score
Breach of Contract	90
Contract Law	90
Sale of Goods	80
Performance of Contract	60
Warranties	50
Damages	40

16. Subjects

Contract Law
Sale of Goods