Out of the Box v Wanin Industries: Assessment of Reliance Loss for Defective Drinks Supply
In Out of the Box Pte Ltd v Wanin Industries Pte Ltd, the High Court of Singapore assessed damages for breach of contract after Wanin Industries supplied defective '18' sports drinks to Out of the Box Pte Ltd. Out of the Box sued for breach of contract and obtained summary judgment against Wanin Industries. Out of the Box claimed reliance loss, including advertising and promotional expenses, payments for drinks and bottle moulds, rental of warehouse and forklift, expenses incurred as a result of the recall of '18', and fridge and vending machine expenses. The court awarded Out of the Box $655,280.70 in damages.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for the Plaintiff; damages awarded in the amount of $655,280.70.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Assessment of reliance loss damages for Out of the Box after Wanin Industries supplied defective '18' sports drinks, leading to recall and discontinued sales.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Out of the Box Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Wanin Industries Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Leo Zhen Wei Lionel AR | Assistant Registrar | Yes |
4. Counsels
4. Facts
- Out of the Box designed and conceptualized a sports drink called '18'.
- Wanin Industries was engaged to manufacture '18'.
- Wanin Industries supplied defective '18' that changed color and contained foreign particles.
- The Agri-Food and Veterinary Authority of Singapore issued an advisory warning against consuming '18'.
- Out of the Box recalled all stocks of '18' and discontinued the brand.
- Out of the Box sued Wanin Industries for breach of contract.
- Out of the Box claimed for expenses incurred in reliance on the manufacturing contract.
5. Formal Citations
- Out of the Box Pte Ltd v Wanin Industries Pte Ltd, Suit No 317 of 2009 (Notice of Appointment for Assessment of Damages 43 of 2011), [2011] SGHC 226
6. Timeline
| Date | Event |
|---|---|
| Out of the Box Pte Ltd designed and conceptualised a sports drink known as “18”. | |
| Bus-stop advertisements placed by Clear Channel Singapore Pte Ltd. | |
| Plaintiff terminated the contract with the defendant. | |
| Breach of contract occurred from late October 2008 to early January 2009. | |
| Suit No 317 of 2009 filed. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the defendant breached the contract by supplying defective drinks.
- Category: Substantive
- Sub-Issues:
- Supply of defective goods
- Related Cases:
- [2011] SGHC 226
- Remoteness of Damage
- Outcome: The court considered whether the amount of advertising expenses claimed was within the reasonable contemplation of the parties.
- Category: Substantive
- Sub-Issues:
- Reasonable contemplation of parties
- Type of loss
- Related Cases:
- (1854) 9 Exch 341
- [2011] 1 SLR 150
- Reliance Loss
- Outcome: The court assessed the amount of reliance loss damages that the plaintiff was entitled to recover.
- Category: Substantive
- Sub-Issues:
- Wasted expenditure
- Mitigation of loss
- Related Cases:
- [1985] QB 16
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Food and Beverage
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd | High Court | Yes | [2008] 2 SLR(R) 623 | Singapore | Cited for the principle that a plaintiff must provide sufficient evidence of loss to recover damages. |
| Thode Gerd Walter v Mintwell Industry Pte Ltd | High Court | Yes | [2010] SGHC 33 | Singapore | Cited for the principle that there is no requirement in law that the makers of invoices must invariably be called to explain them. |
| Livingstone v Rawyards Coal Co | House of Lords | Yes | (1880) 5 App Cas 25 | United Kingdom | Cited for the fundamental principle of compensation that damages should put the injured party in the same position as if the wrong had not occurred. |
| Ruxley Electronics & Construction Ltd v Forsyth | House of Lords | Yes | [1996] AC 344 | United Kingdom | Cited for the principle that the court has no concern with the use to which a plaintiff puts an award of damages for a loss which has been established. |
| Golden Strait Corpn v Nippon Yusen Kubishika Kaisha | House of Lords | Yes | [2007] 2 AC 353 | United Kingdom | Cited for the Bwllfa principle, that where the court has knowledge of what actually happened, it should base itself on the known facts. |
| MFM Restaurants Pte Ltd v Fish & Co Restaurants Pte Ltd | Court of Appeal | Yes | [2011] 1 SLR 150 | Singapore | Cited for the principle that the two limbs set out in Hadley v Baxendale remain the governing principles in relation to the doctrine of remoteness of damage in contract law. |
| Hadley v Baxendale | Court of Exchequer | Yes | (1854) 9 Exch 341 | United Kingdom | Cited as setting out the governing principles in relation to the doctrine of remoteness of damage in contract law. |
| Victoria Laundry v Newman | Court of Appeal | Yes | [1949] 2 KB 528 | United Kingdom | Cited for the principle that what would be in the reasonable contemplation of parties depends on the knowledge then possessed by the parties. |
| Zicom Pte Ltd v Antara Koh Pte Ltd | High Court | Yes | [1997] SGHC 215 | Singapore | Cited for the principle that the party who had suffered damage does not have to show that the contract-breaker ought to have contemplated the precise detail of the damage or the precise manner of its happening. |
| Christopher Hill Ltd v Ashington Piggeries Ltd | House of Lords | Yes | [1969] 3 All ER 1496 | United Kingdom | Cited for the principle that the party who had suffered damage does not have to show that the contract-breaker ought to have contemplated the precise detail of the damage or the precise manner of its happening. |
| Wroth v Tyler | Chancery Division | Yes | [1974] 1 Ch 30 | United Kingdom | Cited for the principle that it is wrong to limit damages flowing from a contemplated state of affairs to the amount that the parties can be shown to have had in contemplation. |
| Brown v KMR Service | Court of Appeal | Yes | [1995] 4 All ER 598 | United Kingdom | Cited for the principle that it was immaterial to their liability that the degree of that loss was unforeseeable. |
| Transfield Shipping Inc v Mercator Shipping Inc | House of Lords | Yes | [2009] 1 AC 61 | United Kingdom | Discussed in relation to Lord Hoffmann's approach on assumption of responsibility, but the Court of Appeal expressly declined to follow this approach. |
| Walhane v Wendy’s Supa Sundaes | Supreme Court of South Australia | Yes | [2000] SADC 39 | Australia | Cited as an example of a case where the court allowed plaintiffs to recover advertising expenses which have been wasted as a result of the defendants’ breaches without requiring that the plaintiffs prove that the defendants had actual knowledge that advertising expenses would be incurred. |
| G W Sinclair & Company v Cocks | Supreme Court of Victoria | Yes | [2001] VSCA 47 | Australia | Cited as an example of a case where the court allowed plaintiffs to recover advertising expenses which have been wasted as a result of the defendants’ breaches without requiring that the plaintiffs prove that the defendants had actual knowledge that advertising expenses would be incurred. |
| CCC Films (London) v Impact Quadrant Films | Queen's Bench Division | Yes | [1985] QB 16 | United Kingdom | Cited for the principle that a plaintiff should only be entitled to recover its wasted expenditure to the extent that such expenses could have been recovered if the contract had been properly performed. |
| Commonwealth of Australia v Amann Aviation | High Court of Australia | Yes | (1991) 66 ALJR 123 | Australia | Cited for the principle that the prospect of securing a renewal of a contract can be properly taken into account in a determination of whether the plaintiff would have recouped its expenditure had the contract been properly performed. |
| Anglia TV v Reed | Queen's Bench Division | Yes | [1972] QB 60 | United Kingdom | Cited for the principle that if the plaintiff claims the wasted expenditure, he is not limited to the expenditure incurred after the contract was concluded. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Reliance Loss
- Defective Drinks
- Advertising Expenses
- Reasonable Contemplation
- Remoteness of Damage
- Advertising Credits
- Recall of Products
15.2 Keywords
- breach of contract
- reliance loss
- defective goods
- advertising expenses
- sports drink
- recall
- damages assessment
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Damages Assessment | 90 |
| Reliance Loss | 85 |
| Breach of Contract | 80 |
| Contract Law | 75 |
| Remoteness of damage | 70 |
| Wasted Expenditure | 65 |
| Commercial Disputes | 60 |
| Advertising Expenses | 55 |
| Commercial Law | 50 |
16. Subjects
- Contract Law
- Damages
- Commercial Law