Out of the Box Pte Ltd v Wanin Industries Pte Ltd: Breach of Contract & Remoteness of Damages in Beverage Distribution
In Out of the Box Pte Ltd v Wanin Industries Pte Ltd, the Court of Appeal of Singapore heard an appeal by Out of the Box Pte Ltd (“OOTB”) against the High Court's decision regarding the assessment of damages for breach of contract. OOTB sued Wanin Industries Pte Ltd (“WI”) for breach of contract after a shipment of their sports drink, “18 for Life”, was found to be contaminated. OOTB claimed reliance damages, primarily advertising costs, but the High Court awarded only nominal damages for certain expenses due to insufficient proof of loss. The Court of Appeal dismissed OOTB's appeal, finding that the claimed damages were too remote, as WI was not aware of the scale of OOTB's advertising ambitions.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Out of the Box sued Wanin Industries for breach of contract after a contaminated beverage shipment. The court addressed remoteness of damages, dismissing the appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Out of the Box Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | |
| Wanin Industries Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won |
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 | No |
| Sundaresh Menon | Chief Justice | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Kesavan Nair | Genesis Law Corporation |
| Aqbal Singh | Pinnacle Law LLC |
4. Facts
- Out of the Box Pte Ltd (OOTB) marketed and distributed beverages and conceptualized a sports drink called “18 for Life”.
- OOTB subcontracted the formulation, design, and manufacture of the beverage to Wanin Industries Pte Ltd (WI).
- OOTB and WI entered into a Contract Manufacturing Agreement on 11 June 2008.
- A shipment of 18 supplied by WI was found to be contaminated with insects.
- OOTB had to recall all stock of 18 from the market, damaging the brand beyond repair.
- OOTB claimed reliance damages amounting to $779,812.30, primarily advertising costs.
- WI was not aware of the scale of OOTB's advertising ambitions for 18.
5. Formal Citations
- Out of the Box Pte Ltd v Wanin Industries Pte Ltd, Civil Appeal No 61 of 2012, [2013] SGCA 15
- Out of the Box Pte Ltd v Wanin Industries Pte Ltd, , [2012] 3 SLR 428
6. Timeline
| Date | Event |
|---|---|
| Out of the Box Pte Ltd conceptualised and developed a new sports drink called “18 for Life”. | |
| Out of the Box Pte Ltd and Wanin Industries Pte Ltd entered into a Contract Manufacturing Agreement. | |
| A shipment of 18 supplied by Wanin Industries Pte Ltd changed colour and was found to be contaminated with insects. | |
| Out of the Box Pte Ltd commenced Suit No 317 of 2009 against Wanin Industries Pte Ltd for breach of the Contract. | |
| The High Court granted summary judgment in favour of Out of the Box Pte Ltd and ordered Wanin Industries Pte Ltd to pay damages to be assessed. | |
| The High Court judge allowed Wanin Industries Pte Ltd’s appeal in part and held that Out of the Box Pte Ltd had not adequately proven its loss in respect of the ActMedia expenses and the Clear Channel expenses. | |
| The Court of Appeal dismissed Out of the Box Pte Ltd’s appeal. |
7. Legal Issues
- Remoteness of Damages
- Outcome: The court held that the damages claimed by Out of the Box Pte Ltd were too remote because Wanin Industries Pte Ltd was not aware of the scale of OOTB's advertising ambitions.
- Category: Substantive
- Sub-Issues:
- Foreseeability of damages
- Knowledge of special circumstances
- Related Cases:
- [1854] 9 Exch 341
- [1949] 2 KB 528
- [1969] 1 AC 350
- [2009] 1 AC 61
- Breach of Contract
- Outcome: The court found that Wanin Industries Pte Ltd had breached the contract by supplying contaminated beverages.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Contract Disputes
11. Industries
- Beverage
- Manufacturing
- Distribution
- Marketing
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Photo Production Ltd v Securicor Transport Ltd | House of Lords | Yes | [1980] 1 AC 827 | England and Wales | Cited for the principle that breach of contract gives rise to a secondary obligation to pay damages. |
| Hadley v Baxendale | Court of Exchequer | Yes | (1854) 9 Exch 341 | England and Wales | Cited for the principles governing remoteness of damages in contract law. |
| Victoria Laundry (Windsor) Ld v Newman Industries Ld; Coulson & Co Ld (Third Parties) | English Court of Appeal | Yes | [1949] 2 KB 528 | England and Wales | Cited for restating the rule in Hadley v Baxendale and explaining the types of knowledge relevant to remoteness. |
| Koufos v C Czarnikow Ltd | House of Lords | Yes | [1969] 1 AC 350 | England and Wales | Cited for clarifying the degree of foreseeability required for damages to be recoverable under the second limb of Hadley v Baxendale. |
| Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas (CA)) | English Court of Appeal | Yes | [2007] 2 Lloyd’s Rep 555 | England and Wales | Cited for its discussion of the rule in Hadley v Baxendale and the knowledge necessary to establish liability. |
| Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) | High Court | Yes | [1981] 1 Lloyd’s Rep 175 | England and Wales | Cited for the principle that the application of Hadley v Baxendale depends on the defendant's knowledge at the time of the contract. |
| Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd and another | Court of Appeal | Yes | [2008] 2 SLR(R) 623 | Singapore | Cited for affirming the continued applicability of the rule in Hadley v Baxendale in Singapore. |
| Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric | Court of Appeal | Yes | [2007] 3 SLR(R) 782 | Singapore | Cited for the concept of remoteness as a necessary limitation to protect contract breakers from infinite damages. |
| Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas (HL)) | House of Lords | Yes | [2009] 1 AC 61 | England and Wales | Cited for Lord Hoffmann's proposed new test for remoteness of damage, focusing on assumption of risk. |
| MFM Restaurants Pte Ltd and another v Fish & Co Restaurants Pte Ltd and another appeal | Court of Appeal | Yes | [2011] 1 SLR 150 | Singapore | Cited for rejecting Lord Hoffmann's new approach towards remoteness of damage in contract. |
| ASM Shipping Ltd of India v TTMI Ltd of England (The Amer Energy) | High Court | Yes | [2009] 1 Lloyd’s Rep 293 | England and Wales | Cited as an example of a court rejecting the view that The Achilleas (HL) laid down a new test different from the rule in Hadley v Baxendale. |
| Classic Maritime Inc v Lion Diversified Holdings Berhad and Another | High Court | Yes | [2010] 1 Lloyd’s Rep 59 | England and Wales | Cited as an example of a court expressing surprise if The Achilleas (HL) had changed the law on remoteness of damage. |
| Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd (The Sylvia) | High Court | Yes | [2010] 2 Lloyd’s Rep 81 | England and Wales | Cited for holding that the rule in Hadley v Baxendale remains the general test of remoteness. |
| Out of the Box Pte Ltd v Wanin Industries Pte Ltd | High Court | Yes | [2012] 3 SLR 428 | Singapore | Cited as the decision from which the appeal arose. |
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
- Remoteness of Damages
- Contract Manufacturing Agreement
- Reliance Damages
- Foreseeability
- Advertising Expenses
- Contamination
- Beverage Distribution
15.2 Keywords
- breach of contract
- remoteness of damages
- beverage
- advertising
- singapore
- contract law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 90 |
| Contract Law | 85 |
| Commercial Disputes | 70 |
| Measure of Damages | 60 |
| Remoteness of damage | 50 |
16. Subjects
- Contract Law
- Commercial Dispute
- Remoteness of Damages