Contract dispute over misrepresentations in tender

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JurongTownCorpvWishingStarLtd(No2)[2005]3SLR283[2005]SGCA25
JurongTownCorpvWishingStarLtd(No2)
[2005]3SLR283[2005]SGCA25
SuitNo:
CA111/2004
DecisionDate: 13May2005
Court:
CourtofAppeal
Coram:
ChaoHickTinJA,LaiKewChaiJ,WooBihLiJ
Counsel:
KShanmugamSC,HoChienMienandJSathiaseelan(AllenandGledhill)fortheappellant,
ChristopherChuah,LeeHwaiBinandTohChenHan(WongPartnership)andTanLiamBeng
andEugeneTan(DrewandNapierLLC)fortherespondent
SubjectArea/Catchwords
Contract
Judgment
13May2005
Judgmentreserved.
WooBihLiJ(deliveringthejudgmentofthecourt):
Introduction
1Theappellant,JurongTownCorporation(JTC),isastatutorybody.Therespondent,WishingStarLimited
(WSL),isacompanyregisteredinHongKongwhichcarriesonthebusinessofafaadecladdingcontractor.
2JTCwasdevelopingtheBiopoliswhichwastobea185,000mresearchcomplexhousingkeybiomedical
researchinstitutesandbiotechnologicalcompanies.TheBiopoliswastocompriseseventowerblocksandthree
basementlevels.ThevisionfortheBiopoliswasthatitwouldbeaworldclassbiomedicalsciencesresearchand
developmenthubinSingapore.Astherewaskeencompetitionataninternationallevelbyvariousgovernments
topromotetheircountriesassuchahub,theBiopoliswastobedevelopedonafasttrack.Accordingly,the
developmentoftheBiopoliswastobecompletedwithin19monthsinsteadofthe30monthsthataprojectof
suchasizewouldnormallyrequire.
3ThemaincontractwaseventuallyawardedtoSamsungCorporation(EngineeringandConstructionGroup)
(Samsung).Animportantpartoftheconstructionworkswasthefaadeworks.Thefaadeworksweretobe
awardedbyJTCtoanominatedsubcontractor(NSC).ThismeantthattheNSCwastobenominatedor
selectedbyJTCafterwhichthemaincontractorSamsungwasobligedtoenterintoacontractwiththeNSCand
beresponsiblefortheNSCsperformanceofthecontractforthefaadeworks,unlessSamsunghadvalid
objectionsagainstenteringintosuchacontract.
4JTCwasassistedbyitsconsultant,JurongConsultantsPteLtd(JCPL),whichwasawhollyowned
subsidiaryofJTC.JCPLinvitedtendersforthefaadeworks.WSLsubmitteditstenderinApril2002.Itwasone
ofeighttenderersforthefaadeworks.Itsbidof$54mwasthelowest.However,Samsungsoughttodissuade
JCPLfromawardingWSLthesubcontractforsuchworks.SamsungwasnotfamiliarwithWSLandWSLhadno
experienceindoingsuchworksinSingapore.Samsungpreferredanothersubcontractorwhosebidwasfora
muchhighersumof$90m.Thiswasthehighestbid.Thesecondlowestbidwas$54,071,488.Notwithstanding
Samsungsviews,thecontractforthefaadeworkswaseventuallyawardedtoWSLon14June2002.However,
SamsungresistedenteringintoanycontractwithWLS.
5ItwascommongroundbetweenWSLandJTCthatuntilSamsungenteredintoacontractwithWSL,WSLs
contractremainedwithJTC.Eventually,forreasonswhichweshallelaboratebelow,JTCterminateditscontract
withWSLfor,interalia,misrepresentationandbreachofcontract.
http://www.singaporelaw.sg/sglaw/lawsofsingapore/caselaw/freelaw/courtofappealjudgments/12620jurongtowncorpvwishingstarltdno2200
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6WSLthencommencedthepresentactionagainstJTCforvariousreliefs,includingdamagesforwrongful
termination.Beforethetrialjudge,JTCappliedfortheissueofmisrepresentationtobetriedfirstonthebasisthat
ifthisissuewasdecidedinJTCsfavour,itwouldbeunnecessarytogointothevariousallegationsofbreachof
contract.NotwithstandingWSLsoppositiontothisapplication,thetrialjudgeagreedtoJTCsapplication.After
hearingevidenceandsubmissionsontheissueofmisrepresentation,thetrialjudgedecidedthatalthoughWSL
wasguiltyofmisrepresentingsomefacts,JTChadnotreliedonthemisrepresentations.Furthermore,thetrial
judgedecidedthatJTChadaffirmedthecontractwithWSLafterithadknowledgeofthemisrepresentations:
seeWishingStarLtdvJurongTownCorp(No2)[2005]1SLR339.JTCthenappealedtotheCourtofAppeal
againstthisdecision.TherestofthetrialwasheldinabeyancependingtheoutcomeofJTCsappeal.
Issues
7Theissuesbeforeusare:
(a)WhethercertainrepresentationsmadebyWSLwerefalse.Ifso,thefollowingissueswouldbe
relevant.
(b)Whetherthemisrepresentationsweremadefraudulently.
(c)WhetherJTCwasinducedbyWSLsmisrepresentationstoawardthecontractforfaadeworksto
WSL.
(d)WhetherJTChadelectedtoaffirmthesaidcontractafterithadbecomeawareofthealleged
misrepresentations.
Mainplayers
8Asanumberofpeoplewereinvolved,wesetoutbelowthenamesofthemainplayersandtheir
appointments:
(a)JCPL:
(i)MaoWheyYingExecutiveVicePresident(EVP)inchargeofthePublicBusinessDivision
(PBD)ofJCPL.AsEVPofPBD,shewasalsoappointedastheSuperintendingOfficer(SO)forall
publicsectorprojectsundertakenbyJCPL(savefordemolitionworks).Atanyonetimeshemighthave
beenholdingtheappointmentofSOformorethan100projectsconcurrently.
(ii)NickChangKoongCheanPrincipalArchitect,SpecialisedParksDepartment,PBDofJCPL.
AppointedSOsRepresentativeoftheBiopolisproject.
(iii)OngTiongBengVicePresidentinJCPL.AppointedProjectManager(Building)oftheBiopolis
project.
(iv)LimLyeHuatManagerinJCPL.QualifiedInternalAuditorcertifiedbytheConstructionIndustry
DevelopmentBoard.HeisresponsibleforensuringthatallconstructionsitesmanagedbyJCPL
complywithISOstandards.
(b)JTC:
(i)DrStevenChooKianKoonBoardmemberofJTC.AlsoamemberofTenderBoardBofJTC
betweenOctober2001andDecember2002.TenderBoardBwastheultimateauthorityapprovingthe
awardofthecontracttoWSL.
(ii)BrigadierGeneral(BG)PhilipSuAssistantChiefExecutiveOfficerofJTC.
(iii)SpencerLimDeputyDirector(Development&Marketing)ofJTC.
(iv)BruceCharlesWymondIndependentexpertengagedbyJTC.
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(c)Samsung
(i)HarrisonKHParkSeniorProjectManagerinSamsungfortheBiopolisproject.
(d)WSL
(i)CarolWenDirectorofWSL.
(ii)TongCheHung(alsoreferredtoasCHTong)Architectbytraining.InitiallyassignedbyWSLas
ProjectDirectoroftheBiopolisprojectandthenreassignedasSeniorProjectDirector.
(iii)JackKohAssignedbyWSLasProjectDirectorfortheBiopolisprojectwhenCHTongwas
reassignedasSeniorProjectDirector.
(iv)JohnAndrewShillinglawIndependentexpertengagedbyWSL.
Therepresentations
9JTCallegedthatWSLhadmadetenrepresentationsknowingthatsuchrepresentationswerefalse.The
representationswere:
(a)WSLhadcompletedacurtainwallingsystemofS$10mandaboveinasingleprojectforthepastfive
years
(b)WSLhadatleasttwoprojectmanagerswith20yearsexperienceforunitisedcurtainwallprojects
(c)WSLhadachiefdesignmanagerwithatleast20yearsexperienceforunitisedcurtainwallprojects
(d)WSLsfacilitieshadaninhouseproductioncapacityof10,000mpermonthforcurtainwalls
(e)WSLsinhousefacilitiesincludedametalpanelfabricationplant
(f)WSLsinhousefacilitiesincludeda3,000mwindowandcurtainwallplant
(g)WSLsinhousefacilitiesincludeda2,000mstonefabricationplant
(h)WSLsinhousefacilitiesincludeda1,000mpolyesterpowdercoatingplant
(i)WSLsinhousefacilitiesincludedafluorocarboncoatingworkshopand
(j)WSLsinhousefacilitiesincludedatestlaboratoryforcladdingsystems.
Wewillrefertotheserepresentationsasrepresentations(a)to(j)forconvenience.Therepresentationswere
madeinanintroductionofWSLwhichwassubmittedwithitstenderand/orlettersfromWSLbeforetheawardof
thecontracttoWSL.WSLdidnotdenymakingtherepresentations.Wewouldaddthattherepresentationsabout
itsinhousefacilitieswereinrespectofitsfacilitieslocatedinWishingStarIndustrialPark(WSIP)atDongguan,
GuangdongProvince,inthePeoplesRepublicofChina(China).
10JTCscasewasthatJCPLdiscoveredthattherepresentationswerefalsewhenJCPLmadeavisittoChina
between10to14July2002.Wewillelaborateonthisvisitandothervisitswhenwecometotheissueofelection
andaffirmation.
11Tenderersforthefaadeworkshadtomeetvariousevaluationcriteria.Thecriteriaweregroupedunder
CriticalCriteriaandOtherCriteria.
12Itwascommongroundthatrepresentation(a)aboutWSLhavingcompletedacurtainwallingsystemof
$10mandaboveinasingleprojectwasinrespectofaprojectinChinaandthiswasinresponsetoacriterion
undertheCriticalCriteria.AlthoughJTChadclaimedthatthiswasamisrepresentationbeforethetrialjudge,it
eventuallydroppedthisallegationbeforeus.Accordingly,weneedsaynomoreaboutit.
WhethertheremainingrepresentationsbyWSLwerefalse
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Representation(b)WSLhadatleasttwoprojectmanagerswith20yearsexperienceforunitisedcurtainwall
projects
13Representation(b)wastomeetitem(i)oftheOtherCriteria.Thetrialjudgedidnotmakeanyfindingasto
whetherthisrepresentationwastrueornot.
14WSLspositionwasthatatthetimeoftender,itdidhavetwoprojectmanagerswith20yearsexperience
forunitisedcurtainwallprojects.TheseprojectmanagerswereMrCheungTakMingandMrTonyTangChiFai.
However,atthetrial,WSLdidnotproduceeitherofthesepersonsaswitnesses.
15AsregardsMrCheung,WSLallegedthathehadpassedawaybutdidnotproducehisdeathcertificate.
WSLsoughttoestablishthathehadbeenemployedbyWSLbyrelyingonlettersofofferofemploymentdated
16October1982and16February1983fromWSLtoMrCheung.WSLalsoreliedonpaymentvouchersfor
MrCheungsmonthlybasicsalarybetweenMarchtoSeptember2002andarsum.
16Weareoftheviewthatevenifthelettersofemploymentweregenuine,theydonothelpWSLverymuch
especiallysincetheyweredatedmanyyearsbefore2002andtheoffersofemploymentwereforthepostofchief
designerandnotprojectmanager.ThepaymentvouchersreferredtoMrCheungsdepartmentasTechnicaland
couldeasilyhavebeenfabricated.Inanyevent,theydidnotshowthathehadhad20yearsexperienceas
projectmanagerforunitisedcurtainwallprojects.TherewasahandwrittenrsumofMrCheungwithwordsin
ChineseandEnglish.Evenifthisrsumweregenuine,theEnglishwordsthereinmentionedthathehadbeena
designerandacontractengineerduringvariousperiodsbutdidnotmentionthathehadbeenaprojectmanager.
WeareoftheviewthatMrCheungwasnotaprojectmanagerwith20yearsexperienceforunitisedcurtainwall
projectsatthetimeofWSLstender.
17AsforMrTang,hehadsignedanaffidavitofevidenceinchiefforWSLbut,asmentionedabove,hewas
notproducedasawitnesseither.Nosatisfactoryexplanationwasgivenforthisomission.WSLsoughtto
establishthathewastheiremployeewiththerequisiteexperienceinthesamemannerasitdidforMrCheung.
TherewasaWSLletterofferingemploymenttoMrTangdated20November2001.Thislettermentionedthe
positionofprojectmanagerandwasapparentlysignedbyMrTangtosignifyhisacceptanceoftheoffer.There
werealsosimilarpaymentvouchersforMrTangsmonthlybasicsalarybetweenMarchandSeptember2002but
apparentlynorsum.Wefindthisevidenceinadequate.
18Inaddition,whenrepresentativesfromJTCwenttovisitWSIPon3September2002,CHTongwas
queriedonWSLsprojectmanagersandchiefdesignmanager.ThenamesMrTongprovidedthenweredifferent
fromthosewhichWSLraisedforthetrial.Wewillelaborateonthislater.
19Inthecircumstances,weareoftheviewthatMrTangwasalsonotaprojectmanagerwith20years
experienceforunitisedcurtainwallprojectsatthetimeofWSLstender.
20Accordingly,weareoftheviewthatrepresentation(b)wasfalse.
Representation(c)WSLhadachiefdesignerwithatleast20yearsexperienceforunitisedcurtainwallprojects
21Representation(c)wastomeetitem(l)(i)oftheOtherCriteria.Thetrialjudgedidnotmakeanyfindingasto
whetherthisrepresentationwastrueornot.
22WSLspositionwasthatitdidhavesuchachiefdesignerbythenameofAndyChanChungShingatthe
timeoftender.However,again,WSLdidnotproduceMrChanasitswitnessalthoughMrChanhadfiledan
affidavitofevidenceinchiefasdidMrTang.
23WSLalsoreliedonsimilarevidencetoprovethatMrChanwasachiefdesignerwiththerequisite
experience.Therewasaletterdated22January1985fromWSLtoMrChanofferinghimemploymentasa
designengineertraineeandaletterdated22April1985fromWSLtoMrChanstatingthathehadcompletedhis
probation.TherewerepaymentvouchersforMrChansmonthlybasicsalarybetweenMarchandSeptember
2002andhisrsum.Accordingtothersum,MrChanhadworkingexperienceasasummertraineewithFong
ShingCottonMillbetweenJulyandAugust1980.HewasalsoasummertraineewithCharlesHaswell&Partners
ConsultingEngineersbetweenJuly1982toAugust1982.Thersumdidnotsaythatthesummertrainingwas
fordesignwork.NeitherdiditshowwhatworkexperiencehehadacquiredbetweenSeptember1980andJune 4/25
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fordesignwork.NeitherdiditshowwhatworkexperiencehehadacquiredbetweenSeptember1980andJune
1982andbetweenSeptember1982toJanuary1985whenhewaspurportedlyemployedbyWSLasadesign
engineertrainee.Furthermore,asmentionedabove,CHTonghadmentionedapersonwithadifferentnameas
WSLschiefdesignerduringJTCsvisittoChina.
24Inthecircumstances,weareoftheviewthatMrChanwasnotachiefdesignerwiththerequisite
experienceatthetimeofWSLstender.Accordinglyrepresentation(c)wasfalse.
25Thereisoneotherpointwewouldmention.WSLsubmittedthatNickChanghadadmittedincross
examinationthatWSLprobablyhadtherelevantpersonnelatthetimeoftender.Thissubmissionisnotaccurate.
NickChangsevidencewasasfollows:
Q:WishingStarneverhadthesepeoplementionedintheiremployment?
A:Iftheyareabletocalloutthenamesspecificallyandwiththedegreenexttoit,Imean,I
wouldbelievethatthesepeopleprobablyhadbeenhiredbeforeorstillarethere,Iamnotsure.
26Inanyevent,NickChanghadnopersonalknowledgewhetherWSLhadtheprojectmanagersandchief
designerasclaimedbyWSL.Atmost,hewasmerelyventuringhispersonalopinion.
Representation(d)WSLsfacilitieshadaninhouseproductioncapacityof10,000mforcurtainwallsand
representation(f)WSLsfacilitiesincludeda3,000mwindowandcurtainwallplant
27Representation(d)wastomeetitem(n)oftheOtherCriteria.Inaddition,WSLalsomaderepresentation(f).
Itseemsthatrepresentation(f)wasconnectedwithrepresentation(d)because(f)dealtwiththefloorareaof
WSLscurtainwallplantwhile(d)dealtwithitsproductioncapacity.
28WSLassertedthatrepresentation(d)appliedonlytothemullionsandtransomsbutnottothecladding
itself.Amullionisaverticalbarbetweenthepanesofglassinawindow,whileatransomisastrengthening
crossbarsetaboveawindow.Claddingreferstothecoveringofthewall.WSLspositionwasthatitsplantcould
produce10,000mofmullionsandtransomspermonth.ItreliedontheevidenceofitsexpertDrShillinglawthat
thedefinitionofcurtainwallincludedonlythemullionsandtransoms.
29ThetrialjudgewasoftheviewthatwhileDrShillinglawsexplanationwasplausible,theevidenceonthe
wholesuggestedthatwhenthepartiesreferredtothecurtainwall,thereferencewastotheentirecurtainwall,
claddingandall.WSLassertedthatthetrialjudgehaderredinhisconclusion.BesidesrelyingonDrShillinglaws
evidence,WSLraisedthefollowingarguments.
30WSLsubmittedthatNickChanghadexplainedthatthe10,000mcapacitywasbasedonanestimateofthe
areaofthetotalfaadeforPhase1whichinvolvedBlocks1,3and4thatwere30,000minsizeand
approximatelythreemonthswouldberequiredtoproducethecurtainwallcomponents.Thisworkedoutto
10,000mpermonth.WSLsubmittedthathenceitsrepresentationofthe10,000mrequirementwasmeanttobe
generallyindicativeofitsapproximatecurtainwallproductioncapacity.
31WSLfurthersubmittedthatthe10,000mcriterionhadtobeevaluatedagainsttheprojectscurtainwall
requirementsastheystoodatthetimeoftender.Itallegedthat,atthattime,therewasnorequirementfor
aluminiumcladdingforBlocks1,3and4instead,onlygranitepanelswererequiredforBlocks1and4.The
projectsquantitysummaryshowedthatatthetimeoftendertherewasnorequirementforanyaluminium
claddingforBlocks1,3and4.Asthe10,000mcriterionwasbasedontheareaofthefaadeforPhases1,3
and4,thepartiescouldnothavecontemplatedtheinclusionofaluminiumcladdingaspartofthiscriterion.
32WSLalsoreliedonaletterdated12July2002fromCHTongtoJCPL.Inthatletter,thefocuswason
mullionsandtransoms.Also,JCPLdidnotdisagreewithWSLspositionthatthe10,000mwasareferenceonly
tothemullionsandtransomsinitsletterofawarddated14June2002.
33WSLthenreferredtovariousspecificationstosupportitsargumentthattherewasacleardistinction
betweenthetermscurtainwallandexternalwallcladding.
34Lastly,WSLreliedonthecontraproferentemruletoarguethatanydiscrepancyorambiguityshouldbe
resolvedinitsfavour.
35ItseemstousthatthekeytotheissueraisedbyWSLiswhetherJCPLwasinvitingbidsforacurtainwall
only,ie,withoutthecladdingorasystemcomprisingbothcurtainwallandcladding,andwhetherWLSwas
makingabidfortheformerorthelatter.ThespecificationswhichWSLreliedondidnotassistitssubmissions
becauseJCPLcouldhaveinvitedbidsforthecurtainwallonlyorforbothcurtainwallandcladding.
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36FromthevarioustenderdocumentsandWSLsowntendersubmission,itiscleartousthatJCPLwas
invitingbidsforbothcurtainwallandcladdingandWSLwasmakingabidforsuchasystem.Theawardwasfor
suchasystem.
37Secondly,ifWSLwasnotintendingtomakeanyrepresentationastothecladding,howwasitthatitsother
representationslikerepresentations(e)and(g)wereinrespectofa2,000mmetalpanelfabricationplantanda
2,000mstonefabricationplant?
38Thirdly,ifJCPLwasnotinvitingbidsforthecladdingfromthisexercise,thentherewouldhavebeen
anothertenderexerciseforthecladdingandtheawardofanothercontractforsuchwork.Yettherewasno
suggestionatallthatanadditionaltenderexercisehadbeenundertakenbyJCPLorthatanothercontractwas
awardedseparatelyforthecladding.
39Asfortheletterdated12July2002fromCHTongtoJCPL,itistruethatitfocusedonmullionsand
transoms.However,itdidnotsaycladdingwasexcluded.
40AsregardsWSLssubmissionthataluminiumcladdingwasinitiallynotrequiredforPhase1,itisourview
thatthatisbesidethepoint.Thespecificationsmentionedbothaluminiumandstonecladding.WhattheOther
Criteriacalledforwasaninhouseproductioncapacityof10,000mforcurtainwallswhich,wefind,included
cladding.Whethersuchacapacitywaseventuallyreallynecessaryisaseparatematter.Thiswasnotacase
whereWSLhadsaidtoJCPL,whensubmittingitstender,thatsuchacapacitywasunnecessarybecauseofthe
specificationsforthescopeoftheworkforPhase1.WSLknewthatsuchacapacitywasoneoftheOther
Criteriaandrepresentedithadsuchacapacitywhenitdidnothaveit.
41Accordingly,inourview,theapplicationofthecontraproferentemruledoesnotarise.Forthereasons
statedabove,weseenoreasontodisturbthetrialjudgesfindingonthisissue.
42Asforrepresentation(f),wemakenofindingonitbecausetherewasadearthofsubmissionsonit.
Representation(e)WSLsinhousefacilitiesincludeda2,000mmetalfabricationplant
43JTCsubmittedthatrepresentation(e)wastomeetitems(n)and(o)oftheOtherCriteria.Item(n)states
thattenderersmusthaveaninhouseproductioncapacityof10,000mpermonth.Item(o)statesthattenderers
musthaveaninhouseproductionfloorareaofatleast2,500m.Itseemsthatrepresentation(e)wasmeantto
meetitem(o)oftheOtherCriteriaalthoughrepresentation(e)hadashortfallinthefloorarearequired.Item(n)of
theOtherCriteriawasalreadyaddressedbyrepresentation(d).
44ThetrialjudgefoundthatWSLsfacilitiescomprisedatwostoreybuildingwithjustover1,000moneach
floor.Hewasalsooftheviewthatthephotographsproducedofthisbuildingputanendtothedebatebecause
theyshowedtheemptyinteriorofthebuildingwithtwomachinesinside.Itwascleartothetrialjudgethata
buildingwhichmightpotentiallybeametalfabricationplantisnotsuchaplant.
45WSLsubmittedthattheinitialamountofmetalpanelsrequiredwassmallandthiswassignificantly
increasedonlyaftertheawardofthesubcontracttoit.Italsosaidthatithadintendedtofarmoutthemetal
fabricationworkinviewofthesmallquantityrequiredinitially.Itfurthersubmittedthatitwouldnottakemorethan
fourweekstosetupaworkshopthatcouldundertaketheincreasedmetalpanelfabrication.Itsaidthatthereal
issuewaswhetheritcouldequipitsplanttoaccommodatetheincreaseinmetalpanelsintimetomeetits
obligations.
46Weareoftheviewthatthesearenotvalidarguments.AtthetimeofWSLstender,WSLdidnotsaythatit
couldcomeupwiththenecessarymetalpanelfabricationfacilityifmorealuminiumpanelswererequired.Neither
diditsaythatitintendedtofarmoutsuchworkbasedontheinitialquantityofaluminiumpanelsrequired.It
representedthatitsinhousefacilitiesincludeda2,000mmetalpanelfabricationplant.
47WecomenowtoWSLsothersubmissionsonthisrepresentation.WSLsubmittedthatpartofthemetal
panelfabricationwaslocatedatitsPlant4whichJCPLsinspectionteamhaddeclinedtovisitduringJCPLsfirst
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visittoWSIPbetween10to14July2002.ItalsosubmittedthatJCPLsteamhadnotphysicallyenteredthe
metalfabricationplanttoverifytheequipmentcontainedtherein.
48Wefindtheseothersubmissionsdisingenuous.TheevidenceofOngTiongBengwasthatheandLimLye
HuatdidgotoPlant4buttheyfounditempty.Furthermore,whileitistruethattheydidnotactuallygoin,they
wereatthedoorandcouldseeinside.DuringasubsequentvisitbyJTCon3September2002,twomachines
werefoundinside.Asthetrialjudgesaid,whetherthepresenceoftwomachinesmadethebuildingnotvirtually
bareisaquarrelthatneednotbedwelton.
49Wewouldaddthatwhetherthesetwomachineswereinfactessentialpiecesofequipmentcomprisingthe
breakpressandpressfold,asallegedbyWSL,isirrelevant.WSLhadrepresentedthattheyhada2,000mmetal
panelfabricationplantandnottwoessentialpiecesofpartofaplant.
50Accordingly,weseenoreasontodisturbthetrialjudgesfindingthatrepresentation(e)wasuntrue.
Representation(g)WSLsinhousefacilitiesincludeda2,000mstonefabricationplant
51Representation(g)wasnotinresponsetoanyparticularitemoftheOtherCriteriaalthoughstonecladding
wasmentionedinthespecifications.Thetrialjudgedidnotmakeanyfindinginrespectofrepresentation(g).
52WSLsubmittedthatitdidhavethestonefabricationplantalthoughthisplantwasnotlocatedatWSIP.
AccordingtoCHTong,WSLhadsuchaplantwithinsixandahalfhoursfromWSIP.WSLsubmittedthat
thereforeitsrepresentationtoJCPLwassubstantiallyaccurate.
53ItiscleartousfromthephotographicevidenceproducedforJTCandfromWSLsownevidencethatWSL
didnothavetheinhousestonefabricationplantithadrepresented.AsfortheclaimthatWSLhadsuchaplant
sixandahalfhoursaway,thiswasabareassertionwhichwedonotaccept.Accordingly,wearealsoofthe
viewthatrepresentation(g)wasuntrue.
Representation(h)WSLsinhousefacilitiesincludeda1,000mpolyesterpowdercoatingplantand
representation(i)WSLsinhousefacilitiesincludedafluorocarboncoatingworkshop
54Item(p)oftheOtherCriteriastatesthattenderersmusthavedirectcontroloverapaintingplant(preferably
inhouse).Clause2.3.9.3(b)(vi)ofthesupplementaryspecificationsreferstoafluorocarboncoatingsystem.It
appearsthatbothrepresentations(h)and(i)overlapaswewillelaboratebelowandthattheyweremeanttomeet
item(p)oftheOtherCriteriareadwithspecificationssuchascl2.3.9.3(b)(vi).
55ThetrialjudgenotedthatJTChadadducedevidencetorebuttherepresentationsaboutapowdercoating
plantandafluorocarboncoatingplantandhefoundthatWSLdidnothavethesefacilities.
56WSLsubmittedthatatthetimeoftender,itdidhaveapowdercoatingfacilitywhichcouldbeusedfor
fluorocarboncoatingpurposes.Thiscouldbeusedforcarryingouttwocoatfluorocarboncoatingbutnotthe
threecoatfluorocarboncoatingrequiredforthefaadeworks.WSLaddedthatthiswasdrawntoJCPLsattention
atameetingon20May2002,ie,beforetheawardofthecontracttoWSLon14June2002.WSLallegedthatit
wasonlybyaletterdated21May2002thatJCPLclarifiedthatthecoatingspecificationwasforathreecoat
fluorocarbonpaintwithacertainminimumthickness.
57WSLspositionwasthatwhenitlearnedabouttherequirementofthreecoats,itdismantleditsexisting
powdercoatingfacilitytomakewayforanewfluorocarboncoatingfacility.Thedismantlingwasdoneafterthe
letterofaward.
58However,thephotographswhichJTCreliedonshowadifferentpicture.Therewasalargeshedwhichwas
enclosedonthreesides.Thebeamsoftheshedappearednew.Partsofthegroundinsidetheshedwerecovered
withgrass.WSLadmitteditdidnothaveanyevidenceofthedismantlingofthepowdercoatingplant.
59Inourview,thephotographsshowanewfacilitywhichwasbeingputup.Theallegedpowdercoatingplant
didnotexistatthetimeofWSLstender.Accordingly,weseenoreasontodisturbthetrialjudgesfindingonthis
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issue.Whethertherewasagenuinemisunderstandingornotabouttheneedtohaveafacilityforathreecoat
fluorocarbonpaint,thefactisthatWSLmisrepresentedeventheexistenceofapowdercoatingplantinWSIP.
Accordingly,itsrepresentationthatithadaninhousefluorocarboncoatingworkshopwasalsountrue.
Representation(j)WSLsinhousefacilitiesincludedatestlaboratoryforcladdingsystems
60Therequirementforteststobecarriedoutisfoundincll4.15.1to4.15.8ofthesupplementary
specificationsandnotintheevaluationcriteria.Representation(j)wasmeanttomeetthesespecifications.
61ThetrialjudgenotedthatJTChadadducedevidencetorebuttherepresentationofaninhousetest
laboratoryandhefoundthatWSLdidnothavethisfacility.
62WSLsubmittedthatitdidhaveafullycomputerisedtestlaboratoryforcladdingsystemsatthetimeof
tender.
63First,itreliedonpurchaserecords.Thepurchaserecordscomprisedinvoices,someinEnglishandsome
inChinese.TheonesinEnglishwereissuedbyM/sJAShillinglaw&Associatesandrelatedtovariousitemsof
equipment,astartupfeeandthesubmissionofdrawingsforatestchamberandequipmentatDongguan.They
wereissuedin1998.Inourview,thesedocumentsfallshortofdemonstratingthattherewasafullycomputerised
testlaboratoryatWSIPatthetimeoftender.
64Indeed,CHTongsaidinhisAffidavitofEvidenceinChiefthattherewasatestchamberandabooth.He
saidhehadexplainedatameetingafteraninspectionduringathirdvisittoChinathatthetestlaboratorywas
locatedinanopenareawithinWSIP.Forsecurityreasons,thetestequipmentsuchastransducers,connection
cordsandcomputerswouldnotbestoredinthetestchamber.Theaircompressorswerestoredinastoreroom
atthebackoftheobservationbooth.Hesaidhehadshowntheinspectionteamallthehardwarefixedtothetest
chamber.
65WSLalsoreliedontheviewsofitsexpertDrJohnAndrewShillinglawwhostatedinpara6ofhisthird
AffidavitofEvidenceinChiefdated10November2003that[t]heWSLtestfacilityisandwasfullyoperational.
66ItisourviewthatthissentencewastakenoutofcontextbyWSL.Paragraph6oftheaffidavitstates:
Irefertoparagraph2.1.12[ofBruceCharlesWymondsreport]PerformanceTestingand
paragraph6.10InadequateMockUpTestFacilities.Theparagraph2.1.12isadescriptionofthetesting
requiredtobeexecutedonvarioussamplesofthecurtainwallingforthisproject.Inoteallthetests
weretobecarriedoutatatestfacilityinSingapore.Inparagraph6.10MrWymondimpliesthatthe
WSLtestfacilityinChinawasnotabletobeusedfortestingthecurtainwall.Iwouldopinethatitwas
neverintendedtobeusedfortheBiopolisProjecttestings.TheWSLtestfacilityisandwasfully
operational.Alltheequipmentiskeptinthefactoryforsecurityreasons.Thefacilitywasusedto
conductatestforaPalmerTurner(Architects)projectinNovember2002.WSLdonothaveanaero
engineattheirtestfacility.InotethistestwasnotrequiredfortheBiopolisProjecttestregime.
[emphasisadded]
67Paragraph6doesnotmakeitclearwhenDrShillinglawmadehisinspection.Inanyevent,hisviewthat
WSLstestfacilityinChinawasfullyoperationalwasgiveninthecontextofusingthatfacilityforadifferent
projectinNovember2002.Indeed,hestressedthatitwasneverintendedtobeusedfortheBiopolisProject
testings.HealsonotedthatsuchtestsweretobecarriedoutinSingapore.However,para11ofaletterdated
25April2002fromWSLtoJCPLstatedthat[a]llnecessarymockuptestingswillbecarriedoutinWSLs
computerizedcontrolcurtainwall/claddingtestlaboratoryinWSLsindustrialpark.
68Inthecircumstances,wedonotacceptCHTongsexplanationabouthavingtokeepequipmentelsewhere
forsecurityreasons.ItiscleartousthatWSLdidnothavethetestfacilityinWSIPfortheBiopolisprojectwhich
itrepresenteditdid.Representation(j)wasuntrueandweseenoreasontodisagreewiththetrialjudgesfinding
onit.
Whetherthemisrepresentationsweremadefraudulently
69ThetrialjudgewasoftheviewthatWSLhadbeenoverlyoptimisticaboutitsfacilities.Hedidnotmakea
findingthatWSLwasguiltyoffraudulentmisrepresentations.However,itshouldberememberedthatthetrial
judgefoundonlythatrepresentations(d),(e),(h),(i)and(j)wereuntrue.Hedidnotmakeanyfindingon
representations(b),(c),(f)and(g).
70Outoftheremainingninerepresentationswhicharestillinissuebeforeus,ie,afterexcluding
representation(a),wehavefoundthateightoftherepresentationswereuntrue.Asmentionedabove,wemakeno
findingasregardsrepresentation(f).Evenifweweretoconfineourselvestotherepresentationswhichthetrial 8/25
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findingasregardsrepresentation(f).Evenifweweretoconfineourselvestotherepresentationswhichthetrial
judgefoundtobeuntrue,itseemstous,withrespect,thatthetrialjudgewasbeingeuphemistic.Itiscleartous
thatWSLmadetheserepresentationsknowingthattheywereuntrue.Theyweremadefraudulently.Wearealso
oftheviewthatWSLmadetheotheruntruerepresentations,ie,representations(b),(c)and(g),fraudulently.
WhetherJTCwasinducedbyWSLsmisrepresentationstoawardthecontractforfaadeworkstoWSL
71ThenextissueiswhetherJTCwasinducedbyWSLsmisrepresentationstoawardthecontractforfaade
workstoWSL.Asmentionedabove,JTCwasatallmaterialtimesassistedbyJCPL.
72JTCreliedonPanatronPteLtdvLeeCheowLee[2001]3SLR405(Panatron).Inthatcase,
LPTheanJAfoundthecaseofJEBFastenersvMarks,Bloom&Co[1983]1AllER583instructive.Hethen
said,at[23]:
Revertingtothecaseathand,asfoundbythejudge,themisrepresentationshadbeenmadebyPhua,
andLeeandYinrespectivelyhadbeeninducedbythemisrepresentationstoinvestinPanatron.The
misrepresentationsneednotbethesoleinducementtothem,solongastheyhadplayedarealand
substantialpartandoperatedintheirminds,nomatterhowstrongorhowmanyweretheothermatters
whichplayedtheirpartininducingthemtoactandinvestinPanatron.Ifinducementsinthissenseare
provedandtheotheressentialelementsofthetortarealsomadeout,asisthecasehere,thenliability
willfollow.[emphasisadded]
TheaboveprinciplewasnotdisputedbyWSL.
73ThetrialjudgenotedthattherewasadistinctionbetweentheitemsundertheCriticalCriteriaandthose
undertheOtherCriteria.HeagreedwithWSLssubmissionthatnoncompliancewithanitemundertheformer
wouldhaveendedtheprospectoffurtherevaluationwhereasnoncompliancewithanitemunderthelatterwould
notruleoutatendererschancesentirely.Healsonotedthattherecouldhavebeenminornoncomplianceunder
theOtherCriteria,forexample,ifWSLhadsaidthatithadaprojectmanagerwithexperienceof19yearsandsix
monthsinsteadofthe20yearsexperiencerequired.
74Thetrialjudgewasoftheviewthatinacaselikethepresent,generallyproposalsandcounterproposals
wouldbeexchangedandbecometermsofthecontract.Thesemustbesubjecttothelawrelatingtobreachof
contractandnotmisrepresentation.Otherwise,everybreachofsuchacontractinitselfwouldbeanactionable
misrepresentation.He,therefore,tookastricterviewastowhethertherewasmisrepresentationinlawina
constructioncontract.
75ThetrialjudgealsoconcludedthattherewasnoevidencebeforehimwhichinclinedhimtofindthatJTC
wasinducedintoawardingthecontracttoWSLbecauseofoneormoreofWSLsmisrepresentations.Hesaidin
hisgroundsofdecision([6]above)at[12]:
Inacontractofthissizeandnature,thereareveryfewconsiderationsthatstandouttobetheone
articlethatclinchesthedeal.Allconditionsandfactorshadtobeweighedandconsideredintotality.
Butiftherewereasinglemostimportantiteminthepresentcase,itwouldbethefactthatthe
plaintiffswasthelowesttenderat$60,000,000[sic].Thenextclosest,butbyalongway,wouldhave
beentherepresentationthattheplaintiffhadexperienceinaprojectofatleast$10,000,000.
76Itisourviewthatthetrialjudgeerredinconcludingthatasthemisrepresentationswouldhavebecomepart
ofthetermsofthecontract,JTCscauseofactionwasforbreachofcontract.Section1oftheMisrepresentation
Act(Cap390,1994RevEd)states:
Whereapersonhasenteredintoacontractafteramisrepresentationhasbeenmadetohim,and
(a)themisrepresentationhasbecomeatermofthecontractor
(b)thecontracthasbeenperformed,
orboth,then,ifotherwisehewouldbeentitledtorescindthecontractwithoutallegingfraud,heshallbe
soentitled,subjecttotheprovisionsofthisAct,notwithstandingthemattersmentionedin
paragraphs(a)and(b).
77Itisalsoourviewthatthetrialjudgeerredinconcludingthatbecausetherepresentationswouldhave
becometermsofthecontract,astricterviewshouldbetakenbeforesuchrepresentationsbecomeactionable.
78Further,itisimmaterialinlawwhetheraconstructioncontractorsomeothercontractisinvolved.A
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78Further,itisimmaterialinlawwhetheraconstructioncontractorsomeothercontractisinvolved.A
constructioncontractmay,generallyspeaking,makefindingsofmisrepresentationmoredifficultthan,say,a
simplecontracttopurchaseacar.However,thatisadifferentpointfromimposingsomesortofhigherthreshold
forconstructioncontracts.
79WecomenowtothetrialjudgesviewoftherelativeimportanceoftherequirementsundertheCritical
CriteriaandtheOtherCriteria.Whilewedonotquarrelwiththedistinctionbetweentheimportanceof
requirementsundertheCriticalCriteriaandthoseundertheOtherCriteria,itisourviewthattherequirementsof
theOtherCriteriawerestillimportantalthoughrelativelylessimportantthanthoseoftheCriticalCriteria.
80Toelaborate,whileitistruethatfailuretomeetarequirementoftheOtherCriteriawouldnotnecessarily
havedoomedatender,thiswoulddependonthenatureandtheextentofthefailure.Thetrialjudgegavean
illustrationregardingtherequirementtohavetwoprojectmanagerswithrequisiteexperienceof20years.He
consideredexperienceof19yearsandsixmonthstobeanunimportantfailure.Howeverthatisnotwhat
transpiredhereand,hence,withrespect,theillustrationisnotapt.SurelyatendererlikeWSLknewthatifithad
saiditdidnothaveanyprojectmanagerof20yearsorcloseto20yearsrequisiteexperience,itschancesof
successwouldbejeopardised.
81Then,letussupposethatWSLhadalsosaiditdidnothavethefollowinginrespectofsomeother
requirementsundertheOtherCriteria:
(a)adesignmanagerwith20yearsrequisiteexperience
(b)aninhouseproductioncapacityof10,000mpermonthforcurtainwalls(andcladding)
(c)aninhouse3,000mwindowandcurtainwallplant
(d)aninhouse2,500mmetalpanelfabricationplant
(e)apaintingplant(preferablyinhouse).
WhatwouldWSLschanceshavebeen?WeaccepttheevidenceandsubmissionforJTCthatitwouldbea
distortionofthetenderprocessiftendererswerenotcompetingonalevelplayingfieldandatendererwasableto
submitapricelowerthanothertenderersduetoitsnoncomplianttenderwithoutrevealingthenoncompliance.
Therefore,itseemstousthatwiththeaboveadditionalomissions,WSLwouldnothaveevengotitsfootinthe
doornotwithstandingitspriceunlesstheevidencedemonstratesthatJCPLdidnotinfactconsiderallthese
requirementsimportantorhadwaivedthem.
82Wenowcomebacktothetrialjudgesfindingaboutthedominanceofthepricefactor.WSLsoughtto
supportthisfindingbyrelyingonotherevidencefromJCPL.However,itseemstousthatsuchevidencedidnot
goasfarasWSLwasadvocating.WeneedreferonlytosomeoftheevidencewhichWSLreliedon.
83Forexample,WSLreliedonanemaildated28May2002fromNickChangtoSpencerLimwhichsaid:
Spencer,
Myanalysisofourrecommendedcontractorsisverymuchinlinewithtiongbengemailtoyou.Thisis
becausewehavespentsomanyhoursdebatingoverprosandconsofeachtenderers.Theunderlying
factisthatwehave$54M[to]workon,thechoiceisapparentwhenwehavenostronggroundtoreject
WS.Perhaps,theonlythingwecouldlearnfromthissagaistohaveaclose/invitedtenderatfirst.
WorkingwithWSmeanswehavetodevotemorehoursandmanpowertomakesuretheyhavenotslip
offtheirprogram.WSteamisnew,theirlearningcurvetimeislonger,theymayfacedifficultydealing
withSC.thisarerealandpracticalproblemthatwillerodetheessenceoftime.
Thewaytomakesurethattheydeliverwhattheypromisedistodeployadditionalsitestafftowatch
overtheirteamconsistently.Weliketodiscussfurtherwhetherwecanhaveacontingencysum(say
5%ontopofthe$4.5M)todeploymoreofoursitestafftomediatethetensionbetweenSCandWS.
Inconclusion,wecannotguaranteeWSperformance,wealsocannotjustjudgetheirperformance
merelyduringtenderevaluation.WhatJCPLcancommitisthatwewillputforwardthebestteamto
completethisprojectintime.
Thanks
NickChang
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[emphasisadded]
84Inourview,thisemaildoesnotsupportWSLscontention.Onthecontrary,itisagainstsuchacontention.
ItshowsthatNickChangconsideredWSLspricetobeimportantbecausehedidnotthinktherewasanystrong
reasontorejectWSLstender.
85AnotherexampleistheevidenceofMaoWheyYing.WSLswrittencasereliedonthefollowingtranscript:
Q:NotaneasypaperasODGmembershavedifferingopinions.Whatarethedifferentopinions
referredtohere?
A:ItisadifficultpaperinthesensethatthereisreservationaboutWishingStar.Samsungalthough
didnotstateclearly,exactly,whatiswrongwithWishingStar,hadmanyletterswhichwere
alreadysenttoJTC.Butwhenwecheckedthroughallthetendercriteria,WishingStars
submissionappearedtosatisfyallthetenderevaluationcriteriaandtheyarethelowesttender
price.Thatiswhywementionitisnotaneasypaper.Ifwearegoingtoknockouteitherway,if
wenominateWishingStar,wehavealittlebitofreservationourselves,basedonthisletter.Butif
wedonotrecommendWishingStarandrecommendanybodyelse,especiallyDiethelm,whichis
muchhigherprice,wedonothaveenoughevidencetoinformthetenderboardorJTCwhy
WishingStarshouldnotbeselected.
Q:Letmebeveryclearaboutthis.Thepricewasaveryimportantfactorcorrect?
A:Yes,asinallgovernmenttenders,thepriceisalwaysoneofthecriteria,aftersatisfyingallthe
tendercriteriasetoutinthedocument.IfmayIadd?
Q:Yes.
A:Yousee,whenthetenderersatisfiesallthecriteriaassetoutinthetenderdocument,weconsider
themasbonafidetendersubmission,andifthatisthecase,thennormally,pricewouldbethe
mostimportantcriteria.
Q:Infact,Iwouldsuggesttoyouherethatpricewastheoverridingcriteria,becausetherewas
alreadyabudgetof60millionsetasidebyJTCforthefacadework.Anythingabove60was
practicallyruledoutcorrect?
A:Notnecessarily,becauseatthattime,ifpriceistheonlycriteria,wewouldthen,ifwecannotfind
anycontractortosatisfythosewithinthepricerange,wewouldhavetotalktoJTCtoseewhether
therearewaystoincreasethebudget.Ifnot,thenwehavetolookatvaryingthedesigntoreduce
thecost.
Q:Ultimately,yourteam,JCPLputupatenderrecommendationonthe23rd,ifIrecallcorrectly.
A:Yes.
Q:Iwillshowittoyoufirst.Thatisfoundinthesamebundleatpages218to223,ifIamnot
mistaken.Maybeyoucouldjusttakealookatittorefreshyourmemory.Thecoverpageisat
218,fromMrCheongtoMrMarkKoh,ODG.
A:Yes.
Q:CouldIassumethatthiswasthefinaldraft?Weretheredraftsproducedinbetweenthe18thand
thisdate?
A:Thiswouldbethisshouldbethefinaldraft,sinceitisalreadysigned.
Q:Weretheredraftsproducedinbetweenthatyouhaveseen?
A:Icannotrecall.
Q:Youcannotrecall?
A:Icannotrecall.
Q:BecauseifIlookatMrOng'semail,theapproachthenwastoputuptheprosandcons,soto
speak,ofengagingWishingStar,settingoutreservationsabouttheirabilitytoperformandsoon
andthenleaveittoJTCtothendecide?
AIfIrecallthatparticularemailthatIsawjustnow,itwasreferringtothefactthatifwewereto
recommendanybodyotherthanWishingStar,thenwewouldhavetoputthatintoshowwhywe
werenotrecommendingthelowesttenderer.
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werenotrecommendingthelowesttenderer.
Q:CouldIaskyounowtolookatthetenderrecommendationreportatparagraph3.1.Itisat
page220,yourHonour.Couldyoulookatparagraph3.1.Itsays:
TenderinterviewswereconductedbyJCPLandrepresentativesfromODGforthelowestfive
tendererstoassesstheirunderstandingofthedesignintentwhethertheyhavethecapabilities
andresourcestomeetthetightscheduleofthiscontracttheirperformancesincurrentandpast
projectsandiftheycanmeetthefollowingcriticalcriteria.
[emphasisadded]
86Thereferenceinthelastquestiontopara3.1ofJCPLsrecommendationdoesnotgiveacompletepicture.
Paragraph4.1thereofstatesthatWSLsubmittedthelowestbasetenderand[its]submissionhasbeenvetted
byJCPLandwasfoundtocomplywiththetenderrequirements.
87ItseemstousthattheevidenceofMaoWheyYingalsodoesnotsupportWSLscontentionandisagainst
it.JCPLwasundertheimpressionthatWSLhadmetalltheevaluationcriteriaandhenceWSLstenderprice
becameveryimportant.
88Itseemstousthatthetrialjudgeomittedtoconsiderotherfactors.First,therewasanevaluationteam
whoserolewastoevaluatethetenders.Itwasnottheretoevaluatethedifferentpriceswhichspokefor
themselves.Itwastheretochecktoseeifthetendererscoulddothejob.Theevaluationteamhadfive
interviewswithWSL.Inthesecondinterview,whichHarrisonParkalsoattended,MrParknotonlyaskedWSL
whyitstenderpricewassolow,healsoaskedWSLtoreplypointbypointonitsabilitytomeettheevaluation
criteria.ThisWSLdidinitsletterdated1May2002.
89Secondly,aswehavementioned,althoughJCPLsrecommendationtoJTCtoawardthecontracttoWSL
didhighlightthatWSLsbidwasthelowest,therecommendationwasmadeonthepremisethatWSLhadmetall
thetenderrequirements.
90Accordingly,weareoftheviewthatthetrialjudgewasplainlywronginhisconclusionaboutthedominance
ofthepricefactor.
91Furthermore,inLimBioHiongRogervCityDevelopmentsLtd[1999]4SLR451,MPHRubinJsaidthat
inducementmaybeinferredfromthefactthatthepersontowhomtherepresentationwasmadeenteredintothe
contractunlesstheinducerprovesthatthatpersoneitherknewthattherepresentationwasfalseordidnotrely
onit.WSLdidnotquarrelwiththisprinciple.InsteaditsubmittedthatJCPLeitherknewofthemisrepresentations
ordidnotrelyonthem.
92Asregardsrepresentations(b)and(c)inrespectofthetwoprojectmanagersandachiefdesignmanager
whowereallegedtohavetherequisiteexperience,WSLsubmittedthatJCPLwasindifferenttothesecriteria.
WSLsaidthatithadsubmittedaprojectorganisationcharttotheevaluationteamandfromthisitshouldhave
beenclearthatWSLwasnotintendingtodeploytheexactnumberofpersonnelasrequiredundertheOther
Criteria.Italsoreliedonaletterdated10May2002fromWSLwhichitsaidshowedthatWSLwasproposingto
designateonlyoneprojectmanagerandnottwo.YettherewasnofollowupbyJCPLonthis.
93Uponconsiderationoftheletterdated10May2002,wenotethatitdoesnotspecificallysayoneora
projectmanager.True,itreferstoprojectmanagerinthesingularbutthiscouldhavebeenoverlookedbyJCPL
asNickChangwassuggesting.Inanyevent,areferencetoasingleprojectmanagerisquitedifferentfrom
sayingthattherewouldnotbeanyprojectmanager.Accordingly,wedonotseehowthisevidencedemonstrates
thatitwasacceptableforWSLnottohaveanyprojectmanagerwiththerequisiteexperience.
94Asregardsachiefdesignmanager,WSLsubmittedthatinitsletterdated17May2002ithadsaidthatthis
rolewouldbefilledbyMrTongandMrTongscurriculumvitaewasprovidedtoJCPLuponrequest.However,
WSLdidnotsaythatMrTongscurriculumvitaedisclosedthathehadlessthan20yearsrelevantexperience.
Inaddition,thissubmissionofWSLcontradicteditsothersubmission,mentionedabove,thatitschiefdesign
managerwasactuallyAndyChanChungShing.WeareoftheviewthatthesesubmissionsdemonstrateWSLs
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duplicity.Indeed,insteadofdemonstratingthatJCPLwaspreparedtoacceptthenonexistenceofachiefdesign
managerwiththerequisiteexperience,WSLssubmissionsonthisissuedemonstratethecontrary.
95Asregardsrepresentation(d)inrespectofaninhouseproductioncapacityof10,000mpermonthfor
curtainwalls(andcladding),WSLsaidthatJCPLhadaskedforfurtherinformationofsuchproductioncapacityin
ameetingon20May2002butdidnotfollowuponthispriortotheawardofthecontract.WSLsubmittedthatthe
reasonableinferencewasthatJCPLconsideredsuchaproductioncapacitytobeimmaterial.
96Wedonotacceptthissubmission.Thecontractwasnotasimpleone.Thereweremanyrequirementsand
therewassomeurgencyastheBiopolisprojectwasonafasttrack.Moreover,itseemstousthattheomission
tofollowupwasbecauseJCPLwasnotuptothemark.Aswewillelaboratebelow,JCPLwasalsodeficientin
otheraspects.However,itsomissiontofollowuptoobtainmoreinformationonrepresentation(d)didnotmean
thatitconsideredsuchinformationtobeimmaterial.Afterall,ifsuchinformationwereimmaterial,JCPLwould
nothaveevenhaverequestedforitinthefirstplace.
97WSL,however,submittedthatJCPLsinsistenceonWSLhavingcontingencyplansforthisrequirement
demonstratedthattherequirementwasnotmaterial.Wedonotagree.Theneedforcontingencyplanswasin
casetheoriginalplansfellthroughbutitdidnotrelieveWSLfromitsobligationtoensurethatithadsomebasis
foritsoriginalplans.
98Asregardsrepresentation(h)and(i)inrespectofaninhousepowdercoatingplantandaninhouse
fluorocarboncoatingworkshop,WSLsubmittedthattherewasnomandatoryrequirementforaninhousepainting
facilityinthefirstplace,althoughthiswasapreferredrequirement.ItwassufficientifWSLhadhaddirectcontrol
overthepaintingfacility.
99However,wenotethatWSLchosetorepresentthatithadtheseinhousefacilities.Havingdoneso,itdoes
notlieinthemouthofWSLtoarguethatthisrepresentationdidnotinduceJCPLtoawarditthecontract.Inour
view,therewasinducement.
100IfWSLhadshownthatatallmaterialtimesitdidinfacthavedirectcontroloverapaintingfacilitywhichwas
notitsown,thatmightwellhaveaffectedtherelieftobegrantedtoJTCforthismisrepresentation.However,that
isadifferentpoint.Inanyevent,WSLdidnotdemonstratethatithaddirectcontrolofsuchafacility.
101WSLalsohadanotherargument.Asmentionedabove,WSLsaidithadinformedJCPLoftheunsuitabilityof
itsinhousepaintingfacilityinameetingon20May2002.WSLsuggestedthatJCPLhadacceptedthis
clarificationbutitsowninternalmemorandumoftheminutesofthatmeetingshowedthatWSLwasrequiredto
submitanexplanationforthis,meaningawrittenexplanation.Inourview,thisdemonstratestheoppositeofwhat
WSLwasadvocating.JCPLhadnotsimplyacceptedWSLsoralexplanationandhadrequiredawritten
explanation.However,WSLsubmittedthatJCPLsomissiontofollowuponthispointbeforeawardingthe
contractdemonstratedthatthisrepresentationwasnotmaterialorhadnotinducedJCPLtoawardthecontractto
it.Forthesamereasonsasmentionedaboveinthecontextofrepresentation(d),wedonotacceptthis
submissionofWSL.Ifrepresentations(h)and(i)wereimmaterial,JCPLwouldnothaveaskedWSLtosubmitan
explanationinthefirstplace.
102WSLreliedonyetotherargumentstorefutetheclaimthattherewasinducement.Itsubmittedthatalthough
therewasarequirementintheevaluationcriteriathatthetenderersconstructionprogrammewastoconformwith
SamsungsmasterprogrammeandalthoughthiswasconsideredbyNickChangtobeasimportantasanyofthe
requirementsundertheCriticalCriteria,JCPLneverthelessawardedthecontracttoWSLeventhoughWSLs
constructionprogrammedidnotconformwithSamsungs.
103Secondly,WSLwastosubmitsamplesofspiders,framesandlouvresby3June2002andtofinaliseits
appointmentofitsProfessionalEngineer,DesignandFaadeConsultantby28May2002.Itdidnotdosoand
yetNickChangomittedtoreportthesebreaches.
104WSLsubmittedthatsuchconductwasreflectiveofJCPLsoverallattitudeandthatsuchconductalso
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supporteditsargumentaboutnoninducement.
105WeareoftheviewthatsuchconductdoesnotaddanythingmoretoWSLsothersubmissions.Atmost,
suchconductagainillustratesJCPLsdeficiencyincarryingoutitsresponsibilitiesbutthatisdifferentfromnon
inducement.
106WSLfurthersubmittedthatwhatJCPLhadreliedonwasWSLsgradingofL6undertheBuildingControl
Authorityssystemofregistration.L6wasthehighestcategoryoffaadecontractors.JCPLacceptedthatithad
placedrelianceonthisgradingforWSL.However,inourview,itdoesnotfollowthatJCPLdidnotplacereliance
onanyrepresentationfromWSL.
107Therewasonemoreargumentontheissueofinducement.WSLsubmittedthatbecauseJTChadJCPLto
evaluateWSLsrepresentations,JTChadnotreliedontherepresentationsbuthadinsteadreliedonJCPLs
evaluation.WSLreliedontheHouseofLordsdecisioninAttwoodvSmall[18351842]AllERRep258
(Attwood).
108InAttwood,certainrepresentationsweremadebyMrAttwoodabouttheproductivepowerandnatureofthe
propertyhewassellingtodirectorsoftheintendedpurchaser.Thepurchaserwasagreeabletopurchasingthe
propertyonthebasisthatMrAttwoodwouldaffordeveryfacilitytoitsagentstoascertainthecorrectnessofthe
representations.Aftertheagentshadmadeinquiries,thepurchasewascompletedandthepurchasertook
possessionoftheproperty.Aboutsixmonthsafterpossessionandafterworkingtheproperty,thepurchaser
soughttorescindthecontractonthegroundoffraud.TheHouseofLordsbyamajorityofthreetotwoconcluded
thatthepurchaserhadnotreliedontherepresentationssincethepurchaserhaddecidedtohavethe
representationsinvestigatedforitself.
109Weacceptthattherearepassagesinthejudgmentsofthemajority,ie,LordCottenhamLC,theEarlof
DevonandLordBrougham,whichseemtosupportthepropositionadvocatedbyWSL.However,inthe
subsequentcaseofRedgravevHurd(1881)20ChD1,theCourtofAppealexpresslydisavowedsucha
proposition.
110Inthatcase,MrRedgrave,asolicitor,hadpublishedanadvertisementabouthispracticetosolicitanoffer
topurchasehissuburbanresidence.MrHurdrespondedtotheadvertisementandhadaninterviewwith
MrRedgrave.Inthatinterview,MrRedgravesaidhispracticebroughtinacertainamountofrevenueayear.
Subsequently,MrHurdmadefurtherinquiryofMrRedgraveoftheamountofbusinessdoneforthelastthree
years.MrRedgraveproducedthreesummariesshowingrevenuewhichwaslessthanwhathehadrepresented.
MrHurdmadeafurtherinquiryandhereceivedsomepapersfromMrRedgraveinresponse.Itisunnecessaryto
gointodetailsofthat.Shortlyafterwards,MrHurdsignedanagreementtopurchasetheresidencebutthe
agreementmadenoreferencetothebusinessofthepractice.MrHurdtookpossessionoftheresidencebut
refusedtocompletethepurchasebecauseheallegedthatthebusinesswasworthless.MrRedgravesuedfor
specificperformance.Thetrialjudgeallowedtheclaim.However,hisdecisionwasreversedonappeal.
111ThemainjudgmentoftheCourtofAppealwasthatofJesselMR.Itisnecessarythatwequoteextensively
fromhisjudgment(at1317)asitdealswiththejudgmentsofthemajorityinAttwood:
ThereisanotherpropositionoflawofverygreatimportancewhichIthinkitisnecessaryformeto
state,because,withgreatdeferencetotheverylearnedJudgefromwhichthisappealcomes,Ithinkit
isnotquiteaccuratelystatedinhisjudgment.Ifamanisinducedtoenterintoacontractbyafalse
representationitisnotasufficientanswertohimtosay,Ifyouhadusedduediligenceyouwouldhave
foundoutthatthestatementwasuntrue.Youhadthemeansaffordedyouofdiscoveringitsfalsity,and
didnotchoosetoavailyourselfofthem.Itakeittobeasettleddoctrineofequity,notonlyasregards
specificperformancebutalsoasregardsrescission,thatthisisnotananswerunlessthereissuch
delayasconstitutesadefenceundertheStatuteofLimitations.Nothingcanbeplainer,Itakeit,on
theauthoritiesinequitythanthattheeffectoffalserepresentationisnotgotridofonthegroundthat
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thepersontowhomitwasmadehasbeenguiltyofnegligence.Oneofthemostfamiliarinstancesin
moderntimesiswheremenissueaprospectusinwhichtheymakefalsestatementsofthecontracts
madebeforetheformationofacompany,andthensaythatthecontractsthemselvesmaybe
inspectedattheofficesofthesolicitors.Ithasalwaysbeenheldthatthosewhoacceptedthosefalse
statementsastruewerenotdeprivedoftheirremedymerelybecausetheyneglectedtogoandlookat
thecontracts.Itisnotsufficient,therefore,tosaythatthepurchaserhadtheopportunityof
investigatingtherealstateofthecase,butdidnotavailhimselfofthatopportunity.Ithasbeen
apparentlysupposedbythelearnedJudgeintheCourtbelowthatthecaseofAttwoodv.
Smallconflictswiththatproposition.Hesaysthis:Heinquiredintoittoacertainextent,andifhedid
thatcarelesslyandinefficientlyitishisownfault.AsinAttwoodv.Small,thosedirectorsandagentsof
thecompanywhomadeineffectualinquiryintothebusinesswhichwastobesoldtothecompanywere
neverthelessheldbytheirinvestigationtohaveboundthecompany,sohere,Ithink,theDefendant
whomadeacursoryinvestigationintothepositionofthingsonthe17thofFebruarymustbetakento
haveacceptedthestatementswhichwereinthosepapers.Ithinkthatthoseremarksareinaccuratein
law,andarenotborneoutbythecasetowhichthelearnedJudgereferred.Ofcoursewhereyouhave
fiveLordsgivingindependentreasons,itisverydifficulttoascertainwithaccuracythegroundupon
whichtheHouseofLordsdecided,butIthinkthatinallsuchcasesyoumustonlylookatthe
judgmentsofthemajoritywhodecidedthecase,forthereasonstobefoundintheirjudgmentsmustbe
eitherwhollyortosomeextentthereasonswhichguidedtheHouseofLordsincomingtotheir
conclusion.IthereforeconfinemyselfforthispurposetotheopinionsofthethreeLordswhodecided
thecaseinfavouroftheAppellants.ThefirstopinionisthatofEarlDevon,HisLordshipsays:The
questionisnotastowaiveroracquiescenceinfraud,butwhetherthepartieshaveusedthatordinary
degreeofvigilanceandcircumspectioninordertoprotectthemselveswhichthelawhasarightto
expectfromthosewhoapplyforitsaid.InthatsentenceIthinkheisnotquitecorrectasregardsthe
law,butthegroundofhisjudgmentisthis:Thewholecourseoftheproceedingfromits
commencementtoitsclosetendstoshewthatthepurchasersdidnotrelyuponanystatementsmade
tothem,butresolvedtoexamineandjudgeforthemselves.Now,thatisagoodgroundifborneoutby
theevidence.ItisadifferentgroundfromthattakenbytheotherLords,butitcannotbeobjectedtoin
pointoflaw.
InowturntothejudgmentofLordChancellorCottenham,whosays,Wearenowtryingtwo
propositionsbythisevidence,first,whetherfraudwaspractisedand,secondly,whetherthatwhichis
allegedasfraud,orratherthefactsfromwhichfraudisinferred,werenotknowntothePlaintiffs,orto
thosebywhoseconductandbywhoseknowledgetheymustbeaffectedfromtheverycommencement
ofthistransaction.IhavesatisfiedmyselfthatboththesepropositionsareinfavouroftheDefendant
thatis,hefoundnotonlynofraud,buthealsofoundthatallthematerialfactswereknownbeforethey
enteredintothecontract.Idonotfindthefactoffraudmadeout,althoughundoubtedlyitmaybe
supposedthatthebargainwasaverygoodoneforMr.Attwood.Thatisnotthematterinquestion,but
thatthefraudalleged,whichalonecanberesortedtoforthepurposeofsupportingthePlaintiffscase,
isnotmadeoutinfact,andthatthecircumstancesfromwhichthatfraudisendeavouredtobeinferred
bythePlaintiffs,are,inmyopinion,provedtohavebeenknowntothemfromthebeginning.Thoseare
thetwogroundsofhisjudgment,andneitherofthemisanythinglikethepropositiontobefoundinthe
judgmentofMr.JusticeFry,thatifcursoryorineffectualattemptsaremadebytheagentsofthe
persondefraudedtodiscovertherealfactsheloseshisrighttocomplainofthefraud.Thereisa
sentenceinEarlDevonsjudgmenttothateffect,butnotinLordCottenhams.
Theonlyotherjudgmentwhichwasinfavouroftheappealwasaverylongjudgmentof
LordBrougham,whichIshallnotreadthrough,butatp.497wefindhisconclusion:MyLords,when
weapplytothiscasetheprincipleswhichIstatedattheoutset,wefindthefactsarewantingwefind
thereisnomisrepresentationwhichgaverisetothecontract(thatis,heconcurswith
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LordCottenhamthatthereisnofraudthatisthefirstground).Wefindthatthepurchasersdidnotrely
upontherepresentation,butsaid,Wewillinquireourselvesthatisthesecondgrounditisthesame
asLordDevonsground,andalsowouldbeagoodanswer,thoughitwasnottakenbyLordCottenham.
Thenhegoeson:Fromthe6thofJune,1825,downwards,theyconstantlyproceededupontheplanof
satisfyingthemselves,firstbysendingtheiragents,thenbygoingdownthemselves,thenbyinquiring
themselves,thenevenafterwardsbysendingotheragentstoinquire,andthoseagentsreportingthat
therepresentationwastrue,andthatthosepartiesfindingbytheirowninquiries(notas
Mr.JusticeFryputsit,theimperfectinquiriesofagents)thattheagentshadreportedaccurately,and
thattherepresentationwascorroboratedbytheresultoftheinquiry,andthatevenwhentheirown
interest,wheneverythinginthecommercialworldwasdown,whenshareswerefalling,whenmoney
wasnottobehad,whentheywereaskingtimeforaprolongationofthetermofpaymentto
Mr.Attwood,andwhenitwastheirinteresttodiscoveraflawinthecontract,theytheninquireagain
andsendanewagenttoinquire,Mr.Foster,anengineer,andtheystatetohimtheirownopiniontobe
infavourofMr.AttwoodsrepresentationsandMr.Foster,inansweraslateasthe26thofApril,less
thanamonthbeforethebillwasputuponthefile,reportsinfavourofMr.Attwoodsrepresentations.
Suchbeingthefacts,evenifnoobservationaroseastothedelay,astotheadoptionandaffirmanceof
thecontract,purgingitofallobjectionswhichmightbemade,andsupposingthattheyhadcomein
time,insteadofdelayingsomanymonthsthenIaskmyselfthisquestion,Inthesecircumstances
havethesepartiesarighttobereleasedfromtheircontractbytheinterpositionofaCourtofEquity,
accordingtothoseprincipleswhichIhavestated?WhenIaskmyselfthatquestionuponwhichalone
myjudgmentmustturn,IamboundtosayNo.SothatthetwogroundstakenbyLordBroughamare
thattherewasnomisrepresentation,andthatthepurchasersdidnotrelyontherepresentations.He
agreedinonewithLordCottenhamandintheotherwithLordDevon.Thethreegroundstakenbythe
threenobleLords,oneofwhichgroundswastakenbyoneonlyoftheLords,andeachoftheothersby
two,werethattherewasnofraudthattherewasactualknowledgeofthefactsbeforethecontract,
andthatnoreliancewasplacedupontherepresentation.Innoway,asitappearstome,doesthe
decision,oranyofthegroundsofdecision,inAttwoodv.Small,supportthepropositionthatitisa
gooddefencetoanactionforrescissionofacontractonthegroundoffraudthatthemanwhocomes
tosetasidethecontractinquiredtoacertainextent,butdiditcarelesslyandinefficiently,andwould,if
hehadusedreasonablediligence,havediscoveredthefraud.
112IfthepropositionadvocatedbyWSLwerecorrect,itmeansthatafraudstercanbeasdeceitfulashe
wishesinhisrepresentationsandyetescapetheconsequencesofhisdeceitiftheinnocentpartychoosesto
makehisowninquiryorduediligenceonhisrepresentations.However,iftheinnocentpartychoosesnottomake
hisowninquiryorduediligence,hecanrelyonthemisrepresentationstoavoidthecontract.
113Weseenologic,firstly,inpenalisingapartywhohaschosentoactcarefullybutfailed,whetherdueto
negligenceorotherwise,todiscoverthefraud.Putinanotherway,suchapropositionwouldencouragethe
indolent.Secondly,suchapropositionwouldalsoencouragefraud.
114Itisourviewthatsuchapropositioncannotbevalid.Apersonwhohasmadeafalserepresentationcannot
escapeitsconsequencesjustbecausetheinnocentpartyhasmadehisowninquiryorduediligence,unlessthe
innocentpartyhascometolearnofthemisrepresentationbeforeenteringintothecontractordoesnotrelyonthe
misrepresentationwhenenteringintothecontract.Thisisallthemoresowhentherepresentationismade
fraudulently.Wewouldaddthatitmattersnotwhethertheinquiryorduediligenceisconductedbytheinnocent
partyorhisagentsorboth.Theprincipleisthesame.
115AsforapointmadebythetrialjudgethatJTCandJCPLwerenotunschooledandinexperiencedpartiesin
thecontextoftheirbeingawareoftherighttoterminate,wewouldaddthattheexpertiseandexperienceofJTC
andJCPLdidnotmeanthattheywerenotinducedbytherepresentations.
116InPanatron([72]supra),LPTheanJAsaid,at[20]and[24]:
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Admittedly,bothLeeandYinareexperiencedbusinessmen,andundoubtedlytheymusthavemade
theirownevaluationoftheprospectsofinvestinginPanatron.Inthisrespect,byreasonofthe
exposureandexperiencetheyhadhad,theymusthaverelied,interalia,ontheirownexpertiseand
knowledgeindecidingwhetherornottoinvestinPanatron.However,itdoesnotfollowthattheycould
nothavebeeninducedbytherepresentationsmadebyPhua.Inthisregard,thejudgefoundasafact
thatPhuahadmadetherepresentationstothem,whichtheysaidweremade,andthatthese
representationswerefalse.Thesefindingswerenotseriouslychallengedorshowntobeplainlyinerror.
ThejudgealsofoundthatbothLeeandYinactedontheserepresentationsandtheymadesubstantial
investmentsinPanatron.Withthesefindings,themostthatcanbesaidonbehalfoftheappellants
wasthatbothLeeandYinreliedpartlyontheirownknowledgeandexpertiseandpartlyonthe
representationsmadebyPhuaindecidingtoinvestinPanatron.Inthisevent,theclaimsofLeeand
Yinwouldstillsucceed.
Thisisenoughtodisposeoftheappeal.However,somethingshouldbesaidabouttheappellants
argumentconcerningtheexercisebyLeeandYinofreasonablediligenceinmakingtheirrespective
investments.ItisarguedonbehalfoftheappellantsthatLeeandYinshouldneverthelessbedenied
success,becausetheyfailedtoexercisereasonablediligencetodiscoverthefalsityofthestatements,
somethingtheyshouldhavedone,beingknowledgeableandexperiencedbusinessmen.However,the
lawisclear.Allthatisrequiredisrelianceinthesensethatthevictimswereinducedbythe
representations.Oncethisisproved,itisnodefencethattheyactedincautiouslyandfailedtotake
thosestepstoverifythetruthoftherepresentationswhichaprudentmanwouldhavetaken:Central
RlyCoofVenezuelavKisch(1867)LR2HL99.
117Weareoftheviewthatthatiswhatoccurredinthecasebeforeus.JCPLhadreliedpartlyonitsown
expertiseandexperienceandpartlyontherepresentations,althoughJCPLwasalsocertainlyinfluencedbythe
price.Inturn,JTCreliedonJCPL.
118Inthecircumstances,weareoftheviewthatrepresentations(b),(c),(d),(e),(h)and(i)werecalculatedby
WSLtoinduceJTCtoawardthecontracttoit.WealsofindthatalthoughJCPLdidmakeitsownevaluation,it
wasalsoinducedbyrepresentations(b),(c),(d),(e),(h)and(i)torecommendtoJTCtoawardthecontractto
WSL.Inthecircumstances,itisunnecessaryforustoventureaviewastowhetherrepresentations(g)and(j),
regardingtheinhousestonefabricationplantandinhousetestlaboratoryrespectively,wereadditional
inducements.
119Fromwhatwehavesaid,weconsiderrepresentations(b),(c),(d),(e),(h)and(i)tobematerialinthatit
cannotbesaidthatnoreasonablepersonwouldhaveconsideredthemunimportant.Accordingly,itisalso
unnecessaryforustodecidewhethermaterialityisanessentialingredientinthetortofmisrepresentation,an
issueonwhichJTCandWSLdifferedandpresentedargumentsbasedondifferentcasesanddifferenttextbooks.
Electionandaffirmation
120ThetrialjudgefoundthatinanyeventJTChadaffirmedthecontractwithWSLafterithadcometoknowof
WSLsmisrepresentations.Itisthereforenecessarytoconsiderinsomedetailwhattranspiredaftertheawardof
thecontracttoWSLon14June2002.
121Aftertheaward,JCPLbecameincreasinglyconcernedoverWSLsoperationalplansastheprojectwas
movingaheadonatighttimeline.Accordingly,JCPLaskedtovisitWSLsfacilitiesatWSIP.Astime
progressed,JCPLwasalsoconcernedaboutWSLsdelaysintheproductionofshopdrawings.JCPLsfirstvisit
wascarriedoutbetween10and14July2002.WewillrefertothisasJCPLsfirstChinatrip.The
representativesfromJCPLwhowentonthistripwereOngTiongBeng,NickChang,RamChanderSrandLim
LyeHuat.JackKohfromWSLwentalong.CarolWenandCHTongwereapparentlyalreadyinChina.In
addition,JCPLrequestedHarrisonParktomakethevisitsothathewouldbeabletoseeforhimselfWSLs
facilities.
122JCPLsfirstChinatripbeganwithavisiton11July2002tooneofWSLsproposedsuppliersforaluminium
extrusions,FushanJinLanAluminiumCo(JinLan).ItwasdisappointedwithwhatitsawasJinLansplantwas
oldanddidnotmeetthestandardsexpectedfortheBiopolis.
123ThepartythenproceededtoWSIPatDongguan.Theyarrivedatabout5.00pm.JCPLobservedthatthe
industrialparkappearedmuchsmallerthanthe79acresthatwasrepresented.Theindustrialpartoftheparkwas
acollectionoffairlyoldandpoorlymaintainedbuildings.Afterashortbriefing,JCPLwasbroughttoaplantwhich
JCPLreferredtoasthecurtainwallandwindowplant.Themachinesthereinlookedoldandsmallinscale.The
onlyworkbeingcarriedouttherewaswindowframefabrication.
124JCPLwasthenbroughttoanotherplantwhichtheyreferredtoasthecurtainwallplant.Againthemachines
thereinlookedold.TherewasnolargecomputernumericallycontrolledmachinewhichJCPLexpectedtoseefor17/25
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thereinlookedold.TherewasnolargecomputernumericallycontrolledmachinewhichJCPLexpectedtoseefor
aplantwhichwascarryingoutfaadeworkworth$54mforaworldclassfacility.
125JCPLwasnextbroughttothepowdercoatingplant.Asmentionedearlier,thiswasahugeshed.Atthetime
ofthisvisit,ithadanopenroofandoneortwosideswereexposedtotheelements.
126Fourthly,JCPLwasbroughttothemetalpanelfabricationplant.JCPLsaidtherewasnomachineryinside.
LimLyeHuatsaidnothingcouldhavepreparedhimforwhathesawthere.OngTiongBengsaiditwasafarce.
127Fifthly,JCPLproceededtothetestlaboratoryforcladdingsystemsbutdidnotseeanyoftherequired
equipmentthere.
128Onthenextday,ie,12July2002,JCPLwasbroughttovisitathirdpartycalledPanAsia.PanAsiahada
metalpanelfabricationplant,acoatingplantandatestlaboratory.Itsfacilitiesweremuchmoreimpressivethan
JinLansalthoughJCPLconsideredtherewasroomforimprovementofcertainstandards.
129Subsequentlythatday,JCPLwasbroughttovisitaglassfactory.Thenextday,on13July2002,itwas
broughttoseetheShanghaiEastOceanCentre,whichwastheprojectinwhichWSLclaimedithadprevious
requisiteexperience.
130JCPLsaiditwasinadilemmaasitwasclearthatWSLsfacilitieswereinadequateforitsresponsibilities.
Afterthe11July2002visitsandbeforereturningtoSingapore,JCPLhaditsowndiscussions.Itknewitwasin
deeptroubleandwaspanicking.ThequestionofterminatingWSLscontractcameupbuttheconsequential
resultindelayingtheBiopolisprojectwasconsideredhumungous.ItconsideredaskingWSLtouse
subcontractorswhomJCPLhadmorefaithin.
131Atbreakfastinthemorningof14July2002,TiongBengmentionedtoCarolWenthatsheshouldconsider
havingthealuminiumcurtainwallcomponentssuppliedbyPanAsia.Sheagreedtoconsiderthisalthoughshe
saidshehadtoldTiongBengandLyeHuatthatWSLhadalreadysignedacontractwithJinLan.
132AfterJCPLsreturnfromChina,JCPLbriefedJTCataweeklymeetingon16July2002.ApparentlyJCPL
didnotgointodetailsofitsfirstChinatrip.TheimpressionJTCgotwasthatWSLsinhousefacilitieswerenot
uptomark.However,JTCwasinformedthatJCPLwastryingtogetWSLtotieupwiththirdpartysuppliersto
alleviatetheshortcomingsofWSL.
133MaoWheyYingwasbriefedon17July2002.HerevidencewasthatterminationofWSLscontractwas
consideredbuttheprioritywastoavoiddelay.JCPLstillconsideredthatthebestwayforwardwastofindother
supplierswhomWSLcouldtieupwith.
134On18July2002,atameeting(thefirstcoordinationmeeting),WSLwasrequestedbyJCPLtousea
thirdpartysupplierforextrusion,coatingandfabricationallrolledtogether.JCPLagreedtoconsideraparty
knownasNonfemetastheprimarythirdpartysupplierandPanAsiaasthecontingentthirdpartysupplier.
135Inthemeantime,on18July2002HarrisonParkwrotetoBGPhilipSu.Hedescribedthewholeepisodeof
JCPLsfirstChinatripasaruse.Inhisview,itwasobviousthatWSLdidnotcomplywithvariousrequirements
oftheOtherCriteria.HeurgedJTCtotakedrasticactiontoterminateWSLscontract.
136NotwithstandingthisletterandalthoughJCPLagreedthatWSLsfacilitieswereinadequate,JCPLs
preferencewasstilltogetWSLtousethirdpartysuppliersastheimplicationsofterminationwerehorrendousto
JCPL.MaoWheyYingalsothoughtthatSamsunghadavestedinterestinrecommendingterminationasthat
wouldgiveitagroundtorequestanextensionoftimeforcompletionofthemaincontract.
137JTChadameetingwithJCPLon20July2002regardingSamsungsletter.JTCsinhouselegalcounsel
alsoattendedthemeeting.Atthatmeeting,JCPLassuredJTCthattheyhadthingsundercontrolasitwastrying
toworkoutasolutionusingthirdpartysuppliers.JTCsviewthenwasthatterminationandtheneedtohave
anotheropentenderweretootimeconsumingandpreferredJCPLsapproachofusingthirdpartysuppliers.
138JTCrepliedtoSamsungsletteron27July2002statingthattheyhadbeenadvisedbyJCPLthatinorderto
replaceWSL,JTCwouldneedobjectiveandsupportingevidencethatWSLwouldnotbeabletoperformthe
work.JTCsaidtheyunderstoodthatWSLhad,todate,providedacceptableexplanations,plansandtimelines.
139Inthemeantime,JCPLmadeasecondtriptoChinabetween25and28July2002.Weshallrefertothistrip
asJCPLssecondChinatrip.TherepresentativesfromJCPLwereOngTiongBeng,NickChangandLimLye
Huat.WSLwasrepresentedbyCHTongandJackKoh.ThetripwasarrangedbyWSLforJCPLtoassessthe
facilitiesofvariouspotentialthirdpartysuppliers,otherthanthosealreadyvisitedduringJCPLsfirstChinatrip.
140AfterJCPLssecondChinatrip,therewasasecondcoordinationmeetingon29July2002inSingapore.
TheminutesshowthatWSLhadconfirmedthelineupofcertainthirdpartysuppliersproposedbyJCPLfor
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140AfterJCPLssecondChinatrip,therewasasecondcoordinationmeetingon29July2002inSingapore.
TheminutesshowthatWSLhadconfirmedthelineupofcertainthirdpartysuppliersproposedbyJCPLfor
variousworksunderWSLsscopeofworks.JCPLalsorequiredWSLtoacknowledgethatJCPLcould,attheir
discretion,interveneandengageathirdpartytocompleteanyoutstandingworksshouldWSLsperformancebe
belowpar.
141On30July2002,CHTongleftforChinatotieuparrangementswiththeproposedthirdpartysuppliers.
CHTongstartedtogetquotationsfromtheproposedthirdpartysuppliers.Hefoundthemhighandmentioned
thisinan
emailtoCarolWendated30July2002.
142On31July2002,JCPLsentanemailtoWSLtorefertothemeetingon29July2002tostressthatWSL
wastogiveanaddedassurancethattheirworkswouldproceedasscheduledandWSLhadagreedthatJTC
and/orJCPLand/orSamsungcouldtakeinterveningactionincluding,butnotlimitedto,engagingthirdpartiesto
preventfurtherdelay.AdraftofWSLsaddedassurancewasalsoforwardedtoWSL.
143Significantly,CHTongsaid,inpara137ofhisAffidavitofEvidenceinChief,thathethengotacallfrom
CarolWenandhetoldherthatifwedidnotconfirmthesubcontractorsquickly,JCPLwouldterminateus.He
andCarolWendecidedtoreporttoJCPLthatWSLwouldusethirdpartysuppliersinSingaporeknownas
CompactandRotol.CarolWenthenspoketoOngTiongBengbutdidnotobtainapprovalforCompactorRotol.
144Therewasathirdcoordinationmeetingon1August2002.TherepresentativesofWSLatthismeeting
includedCarolWenandJackKoh.Theminutesofthismeetingshowthat,notwithstandingtheproblemofhigh
pricesbeingquotedbytheproposedthirdpartysuppliersinChina,CarolWenwastellingJCPLthateitherWSL
hadtieduporwouldbeabletotieupwiththeproposedthirdpartysuppliersbycertaindeadlinesbetween7and
15August2002.WSLsubmittedthatsuchdatesweresubjecttoacceptableprogrammesandqualityassurance
plans.However,thefactisthatWSLdidnotmanagetotieupwiththesethirdpartysuppliersbythosedeadlines
oratall.
145Inthemeantime,on1and3August2002,CHTongsentfaxestoOngTiongBengtocomplainaboutthe
highpricesbeingquotedbytheproposedthirdpartysuppliersinChina.
146On5August2002,OngTiongBengsentCHTonganemailtosaythatJCPLsfirstChinatripwasamajor
disappointmentandJCPLssecondChinatripwastovisittheproposedthirdpartysuppliers.Theemailalsosaid
thatitwasforMrTongtostrikeadealwiththethirdpartysuppliers.
147OngTiongBengalsosentanemailtoMaoWheyYingthesamedaycomplainingaboutvariousissues,
suchastheinabilityofWSLtoprovideaprogrammethatwouldmeetwithSamsungsprogramme,WSLs
inabilitytostafftheprojectcomfortably,internalsquabblingamongitsstaff,andWSLsinabilitytolineupthe
proposedthirdpartysuppliers.Accordingly,TiongBengconcludedthatitisfutiletopursuefurtherwithWSL.He
saidJCPLwouldhavetosweepWSLasideandforinterveningactiontobetakenwithsuggestedoptions.
HoweverMaoWheyYingwasthennotinfavouroftheoptions.
148On6August2002,therewasameetingbetweenCarolWenandMaoWheyYing.CarolWensaidthat
WSLsfacilitieswereadequatebutMaoWheyYingdidnotagree.
149Inthemeantime,alsoon6August2002,JCPLhadinformedJTCaboutdisagreementoverWSLs
programmeandWSLsdelayintyingupwiththeproposedthirdpartysuppliers.
150On10August2002,CHTongwrotetoOngTiongBengtorespondtohisemailof5August2002.
CHTongsaidWSLwasneverawarethatJCPLsfirstChinatripwasadisappointment.Healsoassertedthat
JCPLssecondChinatripwastovisitaparticularthirdpartysuppliersuggestedbyOngTiongBeng(andnot
variousproposedthirdpartysuppliers).
151On12August2002,MaoWheyYingsentanemailtoJTCsSpencerLimtorecommendthateitherWSLbe
persuadedtonovateitscontracttoanacceptablecontractoror,failingthat,WSLscontractbeterminated.
152On20August2002,JTCinstructedJCPLtoprepareapapersettingoutthebasisforterminatingWSLs
contract.ThiswastoenableJTCtoassesswhetherthereweregoodgroundsforthetermination.
153On22August2002,OngTiongBengrepliedtoWSLs10August2002letterandsubsequent
correspondencefromWSL.HisletterreiteratedthatitwasforWSLtodealwiththeproposedthirdparty
suppliers.TheletteralsostressedthatafterJCPLsfirstChinatrip,itwasclearthatWSLsrepresentationsonits
technicalcapabilitiesandmanufacturingfacilitieswereuntrue.Thepossibilityofusingthirdpartysupplierswas
consideredbutthissolutioncouldnotbeprovidedwithinareasonabletimeoratall.Theletteralsomentioned
SamsungsobjectiontoWSLasWSLdidnothavethenecessarytechnicalcompetenceandthatJCPLhad
advisedJTCaccordingly.Inthecircumstances,JCPLdidnotthinkitappropriatetorespondtoWSLsrecent
correspondence.
154WSLssolicitors,M/sHeeThengFong&Co,thenrepliedon24August2002.Inthatletter,theydeniedany
misrepresentation.TheyalsosaidthatJCPLhadinsistedthatWSLengagetheproposedthirdpartysuppliersin
Chinaandbecauseofhighercosts,WSLhadrecommendedSingaporesuppliersinstead,suchasCompactand
Rotol.ThesolicitorsgaveJCPLadeadlineof4.00pmon26August2002tosaywhetheritwishedWSLto
proceedwithitscontractandwerenotifiedthattherewasnobasistoterminateWSLscontract.
155WSLthenwroteanotherletterdated26August2002directlytoJTCandalsotoJCPL.WSLdeniedany
misrepresentation.WSLalsoallegedthatastheinspectionscarriedoutbyJCPLduringthetwovisitsinJuly
2002weredoneaccordingtotightschedules,JCPLwasnotabletoinspectalltheplantsitshouldhave
inspected,thatis:
(a)ametalpanelfabricationplant
(b)acurtainwallplant
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(b)acurtainwallplant
(c)astonefabricationplant(jointventure)
(d)apolyesterpowdercoatingplantand
(e)atestlaboratory.
156Furthermore,WSLsletterallegedthattheearlierinspectionswereconductedafterworkinghoursandas
such,photographstakenbyJCPLwouldnothavedisplayedthetruecapabilitiesofWSLsstaffandfacilities.
WSLannexeditsownphotographstoitsletterandsaidithadofferedJCPLanindependentassessmenttobe
done.ThesamepointaboutthirdpartysuppliersinChinabeinguncooperativeandWSLsrecommendationof
CompactandRotolwasreiterated.
157InthelightofWSLsclaims,BGSudecidedthatJTCshouldsenditsownteamtoassessWSLsfacilities
andalsoobtainanobjectiveopinionfromafaadespecialist.TheteamwastobeledbyDrStevenChooKian
KoonandincludedSpencerLimandBruceWymond,theindependentfaadespecialist.Withthisinmind,a
meetingbetweenJTCandWSLwasorganisedfor2September2002inSingapore.WSLwasrepresentedby
CHTongwhomaintainedWSLspositioninthe26August2002letter.BGSutoldhimthatthebestwayto
resolvethedifferenceswasforJTCitselftoinspectWSIPthenextday,astimewasshort.Thevisitwason
3September2002.RepresentativesofJCPLandWSLalsowentalong.
158AsfarasJCPLwasconcerned,thisvisitreinforcedwhatithadseenonitsfirstChinatrip.Forexample,
althoughbythenthereweretwomachinesinsidethemetalfabricationplantinsteadofanemptyspace,thisdid
notmakeasignificantdifferenceaswehavealludedtoin[48]and[49]supra.Thepowdercoatingplantwasthe
sameincompleteshedlikestructureJCPLhadseenbuttherewassomeoldmachineryinitandthefully
computerisedtestlaboratorystilldidnothaveanycomputer.
159AsfarasJTCsownrepresentativeswereconcerned,theirobservationsweresimilartothoseofJCPL.
Therewasnostonefabricationplant,nopowdercoatingplantorfluorocarboncoatingplant,themachineryinthe
windowandcurtainwallplantintwobuildingswasoldandofthemanualtype,andthemetalfabricationplantwas
baresavefortwopiecesofequipment.Therewasnocomputerorelectronicequipmentinthetestlaboratory.
160SpencerLimsaidhequeriedCHTongontheprojectmanagersandchiefdesigner.CHTongrepliedhewas
oneoftheprojectmanagersandtheotherwasoneMicheleMarzottobutCHTongwasunsurewhetherthis
personhadtherequisite20yearsexperience.Asforthechiefdesigner,MrTongaskedwhetherthisroleandthe
roleofprojectmanagercouldbesharedbyoneperson,andthensaidthatMicheleMarzottowasthechief
designerandtheotherprojectmanagerwasNicholasWong.Aswehavementionedearlier,thesenameswere
nottheoneswhichWSLreliedonattrialasitsprojectmanagersandchiefdesigner.
161AfterSpencerLimbriefedBGSuaboutwhathehadlearned,BGSusaiditbecamecleartohimthatWSL
hadnotbeensincere.On6September2002,BGSureceivedBruceWymondsreportwhichBGSusaid
highlighteddisturbingaspectsofWSLsfacilities.Itisnotnecessaryforustogointothedetailsofthereport
whichwasalongthelinesofwhatJCPLandJTChadobserved.Inthelightofthesedevelopmentsandafter
seekingsolicitorsadvice,BGSuinstructedSpencerLimandtwootherson6September2002toprepareapaper
toseektheboardsapprovaltoterminateWSLscontract.Theapprovalwasobtainedon9September2002.
162On9September2002,BGSuconveyedtoWSLthedecisiontoterminate.JTCsdecisionwascontainedin
aletterofthatdatewhichstatedthatthecontractwasrescindedformisrepresentationandalsoforrepudiation
arisingoutofWSLsbreachoffundamentaltermswhichWSLsrepresentationsconstituted.Theletterof
terminationalsoreliedonthegroundthatSamsunghadobjectedtoWSLsappointmentastherelevantNSC.As
JTCscasebeforethetrialjudgeandusproceededfirstonthemisrepresentationissue,weneednotexpressa
viewontheothergroundsfortermination.
163Inthemeantime,from23August2002,JCPLwasinvitingbidsfromcertaincontractorstobesubmittedfor
thefaadeworksincaseWSLscontractwasterminated.SubsequenttoJTCsterminationofWSLscontracton
9September2002,anewcontractforthefaadeworkswasawardedtoanotherNSCforthehighersumof
$61,810,000.Thecontractwasnotawardedtothenextlowestbidsubmittedundertheinitialtenderexercisefor
reasonswhichweneednotgointohere.
164Thetrialjudgewasoftheviewthatbeforetherecouldbeanelection,JTCorJCPLmustfirsthavehad
knowledgenotonlyofthefactswhichgaverisetotherighttorescindbutalsooftherighttorescind.Hefound
thatJCPLhadbeenawareofboth.Weagreewiththetrialjudgeonthisfindingoffact.Itisobvioustousthat
afterJCPLsfirstChinatrip,JCPLwasawareofmanyfactswhichgaverisetotherighttorescindandalsoofthe
rightitself.ItmaybethatJCPLwasunderamisapprehensionastothemechanicsofexercisingtherightto
terminatebutthatisadifferentmatter.Knowledgeofthemechanicsisnotaprerequisitetoelection.Inthe
circumstances,itisacademicwhetherknowledgeoftherighttorescindisanessentialingredientofelection.
165ThetrialjudgealsofoundthatafterJCPLsfirstChinatrip,JCPLhaddecidedonatwoprongedapproach.
ThefirstwastogetWSLtoappointcertainthirdpartysuppliers.ThesecondwastotryandgetSamsungtotake
overWSLscontract.
166Thetrialjudgewasoftheviewthatatthemeetingof20July2002betweenJTCandJCPL,themeetingwas
contentwiththeassurancefromOngTiongBengthatthingswereundercontrol.TiongBengwasoftheviewthat
becausetheimplicationsofterminationwerehorrendous,thewayforwardwastosalvagethesituationbygetting
WSLtoengagethirdpartysuppliers.Also,JCPLdidnotwanttogiveSamsungareasontoclaimanextensionof
time.Inthesecircumstances,thetrialjudgeconcludedthatJTChadatthattimeweighedallitsoptionsand
decidedagainsttermination.Inhisview,thatwasanelection.
167Thetrialjudgealsonotedthefollowing.JTChaddecidedpositivelyinfavouroftheideaofusingthirdparty
suppliers.Inthemeantime,shopdrawingswerebeingsubmittedbyWSLtoJCPLforapprovalandcoordination
meetingsbetweenWSLandJCPLcontinued.Thetrialjudgereferredtoonemeetingon18July2002whereWSL
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meetingsbetweenWSLandJCPLcontinued.Thetrialjudgereferredtoonemeetingon18July2002whereWSL
wastoldthatJCPLwouldconsideranyinnovationsproposedbyWSLandthepartiesdiscussedmatters
concerningcoppercladding,glassworkandmanpower.Theminutesofthe18July2002meetingendedwitha
scheduleforthenextmeeting.Inanearlieremaildated17July2002fromMaoWheyYingtoSpencerLim,she
hadinformedhimthatJCPLhadidentifiedcrediblesupplierswhomJCPLwouldgetWSLtoworkwith.
168Accordingly,besideshisfindingofnoninducement,thetrialjudgeconcludedthatJTChadelectedtoaffirm
thecontractwithWSL.
169WSLalsoreliedonJTCswillingnesstohaveWSLusethirdpartysuppliersinChinatoconstitutean
election.WSLsubmittedthatthatwassomethingthatwentbeyondtheexploringofoptions.WSLalsosaidthatit
hadfacedproblemswithitsnegotiationswiththethirdpartysupplierssuggestedbyJCPLanditthentookthe
reasonablestepoflookingforothersuitablesuppliersinSingaporelikeCompactandRotol.WSLclaimedthat
JCPLdidnotrespondtothesetwopartiesnordidJCPLnotifyJTCoftheseparties.However,WSLdidmention
thesetwopartiestoJTCinitslettertoJTCdated26August2002.
170WSLalsoreliedonthefactthatsinceJCPLsfirstChinatrip,therewerevariouscoordinationmeetings
betweenJCPLandWSLatwhichothermattersinadditiontotheuseofthirdpartysupplierswerediscussed.
Secondly,inthemeantime,WSLhadsubmittedshopdrawingsanditsconstructionprogrammetoJCPLforits
approvalandtherewerediscussionsthereon.Thirdly,WSLhadsubmitteditsfirstprogressclaimon17August
2002.TherewerealsodiscussionswithJCPLaboutWSLmovingintoitssiteofficeassoonaspossible.Onthe
law,WSLreliedonMotorOilHellas(Corinth)RefineriesSAvShippingCorporationofIndia(TheKanchenjunga)
[1990]lLloydsRep391whereLordGoffofChieveleysaidat398and399:
If,withknowledgeofthefactsgivingrisetotherepudiation,theotherpartytothecontractacts(for
example)inamannerconsistentonlywithtreatingthatcontractasstillalive,heistakeninlawtohave
exercisedhiselectiontoaffirmthecontract.
171ThatpropositionwasnotdisputedbyJTCwhoreferredtothecaseofYukongLineLtdofKoreavRendsburg
InvestmentsCorporationofLiberia[1996]2LloydsRep604(YukongLine).Thefactstherearenotrelevantbut
MooreBickJcitedanumberofprinciplesontheissueofaffirmationafterreferringtoanarrayofauthorities.The
principlesrelevantforpresentpurposesare:
(a)Abindingelectionrequirestheinjuredpartytocommunicatehischoicetotheotherpartyinclearand
unequivocalterms.Inparticular,hewillnotbeboundbyaqualifiedorconditionaldecision.
(b)Electioncanbeexpressorimpliedandwillbeimpliedwheretheinjuredpartyactsinawaywhichis
consistentonlywithadecisiontokeepthecontractaliveorwhereheexercisesrightswhichwouldonlybe
availabletohimifthecontracthadbeenaffirmed.
172Inaddition,weconsideredthatMooreBickJsstrictureat608wasparticularlypertinent.Hesaid:
[T]heCourtshouldnotadoptanundulytechnicalapproachtodecidingwhethertheinjuredpartyhas
affirmedthecontractandshouldnotbewillingtoholdthatthecontracthasbeenaffirmedwithoutvery
clearevidencethattheinjuredpartyhasindeedchosentogoonwiththecontractnotwithstandingthe
otherpartysrepudiation.
Considerationsofthiskindareperhapsmostlikelytoarisewhentheinjuredpartysinitialresponseto
therenunciationofthecontracthasbeentocallontheothertochangehismind,accepthisobligations
andperformthecontract.Thatisoftenthemostnaturalresponseandonewhich,inmyview,theCourt
shoulddonothingtodiscourage.Itwouldbehighlyunsatisfactoryif,byrespondinginthatway,the
injuredpartyweretoputhimselfatriskofbeingheldtohaveirrevocablyaffirmedthecontractwhatever
theother'sreactionmightbe,andinmyjudgmenthedoesnotdoso.Thelawdoesnotrequirean
injuredpartytosnatchatarepudiationandhedoesnotautomaticallylosehisrighttotreatthecontract
asdischargedmerelybycallingontheothertoreconsiderhispositionandrecognizehisobligations.
[emphasisadded]
173JTCsubmittedthatbyallowingWSLtoseektheaidofcertainthirdpartysuppliers,JTCwasexploringits
options.Thiswasnotanelection,butifitwas,theelectionwasaconditionalone,ie,theelectionwaseffectiveif
WSLcouldanddidengagetheproposedthirdpartysuppliers.
174ItisourviewthatJTChad,throughJCPL,madeanelectionrequiringWSLtoengagecertainthirdparty
supplierstomakeupforWSLsinadequateornonexistentfacilities.Thecruxoftheissueonelectioniswhether
thiswasaconditionalelectionoranoutrightelection.Asthetrialjudgeconcludedthattherewasanoutright
electionbyJTC,hedidnotdealwiththeargumentonconditionalelection.
175TheKanchenjungawasnotacaseonconditionalelection,andYukongLinementionedthataqualifiedor
conditionaldecisiondidnotresultinabindingelectionwithoutelaboration.JTCreliedontwoothercasesto
furtherexplainitssubmissiononconditionalelection.
176ThefirstofthetwocaseswasTropicalTradersLimitedvGoonan(1964)111CLR41(TropicalTraders).In
thatcase,acontractforthesaleoflandprovidedforthepurchasepricetobepaidbyinstalments.Clause11of
thecontractprovidedthatifthepurchasersweretodefaultonpayinganymoneypayableunderthecontract,all
moneyspaidbythemwouldbeabsolutelyforfeitedtothevendoranditwouldbelawfulforthevendortorescind
thecontract.Clause12providedthattimewastobeoftheessenceofthecontractinallrespects.The
purchasersmadevariouspaymentslate.Theyalsopaidcontractualinterest.Thelatepaymentswereaccepted
bythevendor.However,thefinalpaymentwasalsonotmadeonitsduedate,ie,6January1963.Thenextday,
contractualinterestuptotheduedatewastenderedandacceptedbutnottheprincipalsum.Thepurchasers 21/25
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contractualinterestuptotheduedatewastenderedandacceptedbutnottheprincipalsum.Thepurchasers
representativerequestedanextensionoftimeofthreemonthstomakethelastpayment.On8January1963,the
purchasersrepresentativewastoldthatthevendorwasentitledtorescindthecontractbut,inordertogivethe
purchasersanopportunityofmakingpayment,thevendorwouldnotexercisethepowertorescinduntil
14January1963providedanadditionalsumwaspaidtocoveradditionalinterest,costsandexpenses.Thiswas
followedbyalettertothesameeffect.Thepurchasersdidnotpayby13January1963andthenextday,the
vendorssolicitorsgavenoticeofforfeitureofallmoneyspaidandrescissionofthecontract.Thevendorissued
awritclaimingadeclarationthatthecontractwasrescindedandclaimingpossessionofthelandwhichhadbeen
giventothepurchasers.Oneoftheissuesraisedbythepurchaserswasthatthevendorhadwaivedtheterm
thattimewasoftheessenceofthecontract.
177TheHighCourtofAustraliawasoftheviewthatthepreviousacceptanceoflatepaymentdidnotwaivethe
termthattimewasoftheessenceofthecontract.Itwasoftheviewthattherealquestionswere,first,whether
thegrantingofanextensionoftimeamountedtoabindingelectionnottorescindfornonpaymenton6January
1963and,ifitdid,whetheritwasineffectualtofix13January1963asadateinrespectofwhichtimewasofthe
essence.KittoJ,whodeliveredthemainjudgmentoftheHighCourt,referredtoKilmervBritishColumbia
OrchardLandsLtd[1913]AC319andBarclayvMessenger(1874)43LJCh449(Barclay).Hestatedthat
inFryonSpecificPerformance(Stevens&Sons,6thEd,1921)atpara1126onp523,Barclayisdescribedas
havingdecidedthattheletteragreeingtoanextensionoftimewasonlyaqualifiedandconditionalwaiverofthe
originalstipulation.KittoJwasoftheopinionthatthatwasanaccuratewayofdescribingtheextensionoftime
inthecasebeforehim.Itwasnotofsuchanatureastobejustifiedonlyonthefootingofanelectionmade:
seeTropicalTradersat5355.
178WSLdidnotquarrelwithTropicalTraders.InsteaditreliedonBreachofContractbyJWCarter(TheLaw
BookCoLtd,2ndEd,1991),whichstates,
atpara1141:
Apromiseewhograntsanindefiniteperiodoftimewillusuallylosetherighttoterminate,atleast
withoutfirstgivingafurthernotice.
179WSLalsoreliedonpara1089ofCarter.Therelevantportionstates:
Nowaiverclausesandwithoutprejudiceelections.
Promiseescannotavoidthelegalconsequencesofelectiontocontinueperformancebystatingthat
theyareactingwithoutprejudice.Thepurposeoftheelectiondoctrineistopreventapartyfrom
simultaneouslytakingupinconsistentpositionsandunequivocalwordsorconductdepriveapromisee
oftherighttoterminateperformanceeventhoughsaidtobewithoutprejudicetotheright.However,a
withoutprejudicestatementmaybeanindicationthatthepromiseeswordsorconductarenot
necessarilyafinalelection.Forexample,apromiseewhograntsfurthertimeforapromisortoperform
anessentialtimestipulationmaymakeitclearthatfailuretoperformbeforetheexpiryofthetime
allowedwillresultintermination.Insuchasituationtheelectioncanbedescribedasaconditional
election.
180WSLthensubmittedinparas467to469ofitswrittencaseasfollows:
Further,thepresentcaseisnotonewhereJTChadimposedconditionsortimelimitsalongtheclear
linescontemplatedinTropicalTraders,nordidtheAppellantsexpresslypreserveitsrighttorescind/
terminateifthoseconditionswerenotmet.
ThisofcourseisinstarkcontrastwiththesituationinTropicalTraders,anddefeatsalsothe
AppellantsrelianceontheYukongLinecasewhichrequiresaqualifiedorconditionaldecisionto
negativeaffirmation.Onthefacts,therewasplainlynoqualificationorconditionsattachedtothe
AppellantsaffirmationoftheContract.
Itisalsopertinenttonote,aspointedoutinCarter,thatifnotimelimitsarespecifiedforfulfilmentof
conditions,therighttoterminatewouldusuallybelost.
181WedonotagreewiththesesubmissionsofWSL.First,theabsenceofanexpressreservationoftherightto
rescinddoesnotnecessarilymeanthatelectionhastakenplace.Consequently,theconditionimposedbythe
promiseewhichthepromisorhastomeettoavoidrescissionneednotbestatedwithsuchanexpress
qualification.
182Secondly,Carterdoesnotsaythattheabsenceofatimelimittofulfiltheconditionmeansthattherightto
terminatewillusuallybelost.Hesaysitwillusuallybelostatleastwithoutfirstgivingafurthernotice.
Furthermore,itisalsoimportanttorememberthatCartersaysthatthepromiseewouldusually,notinvariably,
losetherighttoterminate.
183Inthecasebeforeus,itwascleartoWSLthatJCPLwasunhappywithWSLsinadequateornonexistent
facilities,hencethediscussionsonthirdpartysuppliers.True,notimelimitwasgivenforWSLtoengagethe
proposedthirdpartysuppliersfromChinabutthiswasnotasituationinwhichWSLwasstillinthemidstof
negotiatingtheirengagementwhenWSLscontractwasterminated.AccordingtoWSLsownposition,asitcould
notreachagreementwiththeproposedthirdpartysuppliersfromChina,ithadtoproposecertainsuppliersfrom
Singapore.Inthecircumstances,itwasunnecessaryforJCPLtogiveWSLadeadlinetoappointthethirdparty
suppliersfromChinawhenWSLitselfhadintimatedthatthiswasnotpossible.
184Next,WSLsubmittedthatevenifJTCselectionwasconditionaluponWSLsengagementofthirdparty
suppliers,WSLhadnotfailedtomeetthisconditionasitwasJCPLwhichhadfailedtoconsiderWSLsfurther
proposalsaboutthesuppliersinSingaporeandtohighlightthesametoJTC.Weareoftheviewthatthisisnota
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proposalsaboutthesuppliersinSingaporeandtohighlightthesametoJTC.Weareoftheviewthatthisisnota
validsubmission.TheconditionwasforWSLtoengagecertainthirdpartysuppliersinChinawhichwere
discussedandidentifiedasbetweenJCPLandWSL.ThatwasthepurposeandresultofJCPLssecondChina
trip.WSLagreedtoengagethesethirdpartysuppliersbutfailedtodoso.Havingfailed,itthenproposedthe
suppliersinSingaporebutthatwasnottheconditionwhichitandJCPLhadagreedon.WSLandJCPLdidnot
agreethatWSLcouldengageanysupplierasitmightwishsolongasthesupplierappearedtobereliableand
costeffective.Inthecircumstances,iftherewasaconditionalelection,WSLhadfailedtomeetthecondition.
185ThesecondcasewhichJTCreliedonwasEvansvArgusHealthcare[2001]SCLR117(Evans),adecision
oftheOuterHouseoftheScottishCourtofSession.WewilladoptthefactsfromthejudgmentofLord
Macfadyen.
186In1998thepursuerssolicitorsonherbehalfconcludedmissivesforthesaleofhernursinghomebusiness
tothedefenders.Aspartofthebargainthepursuerwastoconveytothedefenderstheheritablesubjectsin
whichthebusinesswascarriedout.Themissivescontainedprovisionsrelatingtothewaterrightstobe
conveyedtothedefendersinconnectionwiththeheritablesubjects.Thepipelineprovidingthewatersupplyto
thesubjectspassedthroughlandinotherownership.Thepursuerthereforeundertooktodelivertothedefenders
atsettlementadeedofservitudegrantedbytheownersofthelandthroughwhichthewaterpipepassed.It
provedimpracticabletoimplementthatobligationaccordingtoitstermsbecausepartofthepipelinelayundera
privateroadandtheownerofonehalfoftheroadwasunidentifiable.Inthesecircumstancesprolonged
discussionstookplacebetweenthepartiessolicitors.Thesolutionwhichwasproposedinvolvedthegrantofa
deedofservitudeforpartofthelengthofthepipeline,withthesectioninrespectofwhichnovaliddeedcouldbe
procuredcoveredbyananondominotitlefortifiedbytitleindemnityinsurance.Variousstepsweretakenwitha
viewtoputtingthatsolutionintoeffect.However,therewasconsiderabledelay,andthedefenderssoughtto
resilefromthebargain.Thepursuerdidnotacceptthattheywereentitledtodoso.Sheacceptedthatshewas
notabletofulfilherobligationtodeliveradeedofservitudeaccordingtoitsterms,butcontendedthatthe
defendershadwaivedtheirrighttoresileonthatground.Thedefendersontheotherhandcontendedthatthere
werenorelevantavermentsofwaiver.
187LordMacfadyensaidat[11],[25],[26]and[28]:
Itis,inmyview,sufficientforthepurposesofthepresentcasetotakefromthoseauthoritiesthe
propositions(1)thatwaiverisconstitutedbythegivinguporabandonmentofaright(2)thatsuch
abandonmentmaybeexpressormaybeamatterofinferencefromtheactingsofthepartyinwhom
therightinquestionwasvested(3)thatdeterminationofwhetherabandonmentistobeinferred
requiresobjectiveconsiderationofthefactsandcircumstancesofthecaseand(4)thatcircumstances
whicharealsoconsistentwithretentionoftherightinquestionwillnotsupportaninferencethatthe
righthasbeenabandoned....
Idonotseeanyobjectioninprincipletowaiverbeingconditional.Itisnodoubtsettledthatfor
waivertobeestablishedtheremustbecircumstancesyieldingtheinferenceofpermanent,ratherthan
meretemporary,abandonmentoftheright(JamesHowden&CoLtd[JamesHowden&CoLtdvTaylor
WoodrowPropertyCoLtd[1998]SCLR903]).Itdoesnotseemtome,however,thatthatstandsinthe
wayofacceptanceofaninferencethatapartyhaspermanently,butconditionally,givenupa
contractualright.Apartymaysay:Igiveupmyrightpermanentlyandabsolutely.Orhemaysay:I
giveupmyrightpermanently,providedIreceiveinsteadthefollowingsubstitutebenefit.Eitherofthese
thingsmaybesaidexpressly,ormaybeamatterofinferencefromtheactingsofthepersonvestedin
therightinquestion.
Iftherighttostrictcompliancewithclause2(2)hasbeengivenuponlyonthebasisthattherewill
beprovidedinstead(a)ananondominodisposition,and(b)asuitableandsufficienttitleindemnity
policy,thedefendersareleftinapositioninwhichfailureonthepursuersparttoprovideeitherorboth
ofthosesubstituteformsofprotectionwouldconstitutefailuretopurifytheconditiononwhichtheright
toresilehadbeengivenup,andthatrightwouldinthatevent,butinthateventonly,reemerge.
Itseemstomethatthedisputebetweenthepartiescomestothis.Thepursuersaysthatthe
defendershaveactedinawaythatshowsthattheyhavegivenuptherighttoinsistonstrict
compliancewithclause2(2)providedtheygetananondominodispositionandasuitableandsufficient
titleindemnitypolicytocoversectionCDofthepipe,andmusttherefore,iftheyaretoresile,dosoon
thegroundthatthepursuerisfailingtotenderoneorotherorbothofthesecomponentsofthe
alternativesolution.Thedefenderssaythattheyhavecooperatedwiththepursuerinhereffortsto
identifyanalternativemeansofgivinggoodtitletotheproblematiclengthofthepipe,butthatitcannot
reasonablybeinferredthattheyhavebydoingthatgivenuptheirstrictcontractualentitlementin
advanceofcompleteagreementonallthecomponentsofthealternativesolution.Theyhaveapproved
theformofcertainelementsofthatalternativesolution,butmustberegardedashavingreservedtheir
positiononwhetherornottoacceptthealternativepackageasawhole.Thatisadisputewhichinmy
viewcannotproperlyberesolvedwithoutaproof.Waiverisamatterofcircumstances,anditwould
onlybeifIwerepersuadedthatthepursuersavermentsareincapableofsupportingtheinference
whichthepursuerseekstodrawfromthemthatIwoulddismisstheactionasirrelevant.Itseemsto
methatthepursuersavermentsarecapable,ononeview,ofsupportingtheinferenceofwaiverofthe
conditionalsortdiscussedabove.
[emphasisadded]
188Inthecircumstances,thepursuersactioninEvanswasnotdismissedandwassubjecttoevidencebeing 23/25
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188Inthecircumstances,thepursuersactioninEvanswasnotdismissedandwassubjecttoevidencebeing
given.
189RelyingonEvans,JTCsubmittedthatitsagreementtohaveWSLengagethirdpartysuppliersinChinawas
aconditionalelectionbyitandwhenWSLfailedtomeetthecondition,JTCsrighttoterminatereemerged.
190WSL,however,soughttodistinguishEvansonthebasisthatthatcaseinvolvedwaiverasopposedtoan
electiontoaffirm.Itsubmittedthatwaiverwasseparateanddistinctfromaffirmationandthatthetestforthe
latterwasadifferentone.Yet,WSLdidnotsaywhatthedifferenttestwas,andwewerenotconvincedbyits
argument.TheeditorsofChittyonContracts(Sweet&Maxwell,29thEd,2004)observeatpara24007that
affirmationissometimesregardedasaspeciesofwaiver.Theydistinguishbetweentwotypesofwaiver:waiver
byelectionandwaiverbyestoppel.Theyexplainthattheformertermisusedtosignifytheabandonmentofa
rightwhicharisesbyvirtueofapartymakinganelection,andthataffirmationisanexampleofsuchawaiver,
sincetheinnocentpartyelectsorchoosestoexercisehisrighttotreatthecontractascontinuingandthereby
abandonshisinconsistentrighttotreatthecontractasrepudiated.WealsonotethatwhilstthecaseofTropical
Traders([176]supra)involvedwaiver,itiscitedbyCarter([178]supra)inhisdiscussiononconditionalelection.
191Likewise,althoughTheKanchenjunga([170]supra)didnotdealwithconditionalelection,LordGoffdid
expressaviewonwaiverinthecontextofanaffirmation.At397398hesaid:
Itisacommonplacethattheexpressionwaiverisonewhichmay,inlaw,beardifferentmeanings.In
particular,itmayrefertoaforbearancefromexercisingarightortoanabandonmentofaright.Herewe
areconcernedwithwaiverinthesenseofabandonmentofarightwhicharisesbyvirtueofaparty
makinganelection.
192At400,LordGoffsaidthattheownersofthevesselbeforehimmustbetakeninlawtohavethereby
electednottorejectthecharterersnomination,andsotohavewaivedtheirrighttodosoortocallforanother
nomination.
193WeareoftheopinionthattheviewsexpressedbyLordMacfadyeninEvansregardingaconditionalwaiver
wereinthecontextofwaiverbeinganabandonmentofaright,ie,affirmation.Thisisclearfrom
LordMacfaydensjudgmentat[11].Furthermore,ifthoseviewswereinthecontextoftemporaryforbearance
only,therewouldhavebeennoneedtorequireevidencetobegiven.Thepursuersactionwouldhavebeen
dismissedsinceitwasclearthatthedefendersnolongerwantedthealternativesolution.
194WhenJCPLlearnedofthemisrepresentationsduringJCPLsfirstChinatrip,itknewthesituationwas
desperate.ItwantedtoavoidtheterminationofWSLscontractwithitsconsequentialdelayifanalternative
solutioncouldbefound.Thatsolution,itthought,wasWSLsengagementofthirdpartysuppliersinChinawhich
WSLhadagreedtodo.HadWSLengagedthesesuppliers,thenitwouldnotbeopentoJTCtoreopentheissue
oftermination.HoweverWSLfailedtodoso.Inthesecircumstances,itseemstousclearthattherewasa
conditionalelectionbyJTCthroughJCPLnottoterminatethecontractifWSLweretoengagethesesuppliers.
195WereiterateCHTongsownevidencethatafterJCPLhadsenttheemailon31July2002toWSLtoseek
WSLsassurancethattheprojectwouldbecompletedwithoutdelay,failingwhichJTCwouldhavetherightto
engagethirdparties,CHTongthengotacallfromCarolWenandhetoldherthatifwedidnotconfirmthe
subcontractorsquickly,JCPLwouldterminateus.HeandCarolWenhadthoughtthattheycouldpersuadeJCPL
toacceptotherthirdpartysuppliersassubstitutestothosewhichJCPLhadproposed,buttheywerewrong.As
WSLfailedtomeetJCPLscondition,JTCsrighttoterminatereemergedanditwasentitledtoanddidterminate
WSLscontracton9September2002.
196Withrespect,wedonotthinkitrighttocategorisethedesperatediscussionsandagreementtoengage
certainthirdpartysuppliersasbusinessasusual.Ifitwerebusinessasusual,therewouldhavebeennoneed
forJCPLtomakeitssecondChinatriporforCHTongtotryandengagethesethirdpartysuppliersfromChina
andthereaftertosuggestthirdpartysuppliersfromSingaporeassubstitutes.Therewouldalsohavebeenno
needforJTCtosenditsownteamandanindependentexperttoWSIPon3September2002.
197AsfortheomissionbyJCPLtoinformJTCofWSLssuggestionofCompactandRotol,WSLhaditself
informedJTCofthesetwosuppliers.Inanyevent,weareoftheviewthatJCPLsomissiondoesnotaffect
JTCsrighttoterminate.Whethertheomissionwillaffecttheissueofdamagesisanothermatter.
198WenowcometoWSLsargumentsthat,inthemeantime,WSLhadsubmittedshopdrawingsand
constructionprogrammestoJCPLandhaddiscussionswithJCPLthereonaswellasonothermatters.WSLhad
alsotakenotherstepslikesubmittingaprogressclaimforpayment.Inourview,allofthesestepsmustbe
consideredinthecontextofabuildingcontractwhichwasonafasttrack.Abuildingcontractbynatureisalready
morecomplexthan,say,acontracttobuyacar.WhenthepartieswerediscussingWSLsengagementofthird
partysuppliersandfollowinguponWSLsagreementtodoso,therestoftheworkbyWSLhadtocontinueon
theassumptionthatWSLwouldcarryoutwhatithadagreedtodo.ItisnotrealistictoexpectJCPLtohave
suspendedtherestofWSLsworkpendingitsengagementofthethirdpartysuppliers.Thatwouldhaveresulted
infurtherdelaywhichJCPLwasanxioustoavoid.
199True,byearlyAugust2002,JCPLhadlearntthatWSLwashavingdifficultiesinengagingthethirdparty
suppliers.On5August2002,OngTiongBenghadsentanemailtoCHTongtoexpressJCPLsmajor
disappointmentafteritsfirstChinatripandthatitwasforWSLtostrikeadealwiththethirdpartysuppliers.
However,WSLknewitstillhadnotmettheconditionandhenceitcontinuedthereaftertotrytopersuadeJCPLto
acceptCompactandRotolassubstitutesbutwithoutsuccess.
200WSLwasalsohopingtopersuadeJTCthatJCPLsviewsontherepresentations(afterJCPLsfirstChina 24/25
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200WSLwasalsohopingtopersuadeJTCthatJCPLsviewsontherepresentations(afterJCPLsfirstChina
trip)werewrong.Inthesecircumstances,theothersteps,whetherrelatingtoshopdrawings,construction
programmeorotherwise,hadtocontinueinthemeantime.
201ThereisoneotherpointwhichWSLraisedinitswrittensubmissionsbutdidnotpursueorallybeforeus.
WSLpointedoutthatwhileJCPLwasallegingmisrepresentationinitscorrespondencewithWSL,JCPLandJTC
weretakingadifferenttackwithSamsung.Thiswasthesecondofthetwoprongedapproachmentionedbythe
trialjudge.
202Wehavementionedabovealetterdated18July2002fromSamsungtoJTCcomplainingaboutWSLsruse
andJTCsresponsedated27July2002statingthatinordertoreplaceWSL,JTCwouldneedobjectiveand
supportingevidencethatWSLwouldnotbeabletoperformthework.TherewerealsootherlettersbetweenJTC
andSamsung,whichweneednotsetout,inwhichJTCtriedtopersuadeSamsungtotakeoverWSLscontract
afterJCPLbecameawareofvariousmisrepresentationsbyWSL.
203WeareoftheviewthatwhilesuchconductsuggestedthatJTCwastryingtopassthebucktoSamsung,it
didnotconstituteaclearandunequivocalelectiontoaffirmWSLscontract.Afterall,althoughJCPLandJTC
wereawareofthemisrepresentations,theywereexpectingWSLtoengagecertainthirdpartysuppliers.Also,as
wementionedabove,SamsungwasalreadycontractuallyobligedtotakeoverWSLscontractasWSLwasan
NSC,unlessSamsunghadvalidobjectionsnottodoso.
204Accordingly,wemakethefollowingorders:
(a)JTCsappealisallowedandthedecisionofthetrialjudgeon15September2004issetaside.
(b)WedeclarethatWSLscontractforthefaadeworkswasvalidlyterminatedbyJTC.
(c)WSListopaydamagestoJTCtobeassessedbytheRegistrar.
(d)WSListopay90%ofthecostsofthisappealtoJTCtobeagreedortaxed.Wehavenotawardedthe
fullcostsoftheappealtoJTCbecauseitwasresponsibleforsomewastedcosts.Forexample,inits
writtensubmissions,JTChadreliedonO57r3oftheRulesofCourt(Cap322,R5,2004RevEd)and
submittedthatitwasnotopentoWSLtoarguethatthetrialjudgehaderredoncertainfindingsoffactwhen
WSLhadnotfiledanycrossappeal.ThatsubmissionofJTCwasanonstarterasWSLwasentitledtoraise
othergroundsinitsRespondentsCasetosupportthetrialjudgesultimateconclusion,pursuantto
O57r9A(5).Secondly,JTChaddroppedtheissueonrepresentation(a)withoutmakingthisclearinits
AppellantsCaseandWSLhadaddressedthisissueinitsCase.Inaddition,JTCfailedtopersuadeusthat
bothJCPLanditwereunawareoftherighttoterminateatthematerialtime.
205Thecostsofthetrialaretobedeterminedbythetrialjudge,subjecttoanyrightofappealthereon.
206Thereisonemorepoint.InNoticeofMotionNo121of2004,JTChadtoapplyforcertainreliefsinrespect
ofitsavenueofappealonwhichtherewasadisputebetweentheparties.WegrantedJTCtheprimary
declarationsoughtandorderedcostsofthatmotiontobeJTCscostsintheappeal.Inthecircumstances,JTC
isentitledtothefullcostsofthatmotionasithassucceededinitsappeal,eventhoughitisentitledtoonly90%
ofthecostsofitsappeal.
Appealallowed.
HeadnotedbyTammyWJLow.
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Contract dispute over misrepresentations in tender

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1/23/2016

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