Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd

Philip Pillai J:

[1] The plaintiff is a painting contractor and the defendant is a manufacturer and supplier of paint. The full account of the background to the dispute arising between the parties is set out in Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd and another appeal [2011] 1 SLR 427 (“the CA decision”).

[2] For the purpose of this judgment, which deals solely with the assessment of damages, it suffices to set out the following salient facts. The plaintiff was subcontracted to paint the surfaces of a building project at Bukit Batok Street 23 (‘the Bukit Batok project”) which included:

(a) a 9-storey ramp up building (“Building A”); and

(b) a 30-storey building (“Building B”).

It bought the defendant’s paint for that purpose. The plaintiff applied the paint to the surfaces of the building project based on the defendant’s proposed paint system. However, there was extensive discolouration. The plaintiff bought replacement paint from a third party, Haruna (S) Pte Ltd, and repainted both the discoloured and adjacent areas in the buildings. Although the original painting works took 7.5 month to complete, the repainting works took 16 months. Subsequently, the plaintiff brought the present action claiming damages for the expense of repainting. It claimed that the defendant had given a warranty for the paint so long as the use of the paint was based on the defendant’s proposed paint system. The defendant denied that the paint was defective and brought a counterclaim against the plaintiff for the contract price of the goods supplied. It also denied that it had given any enforceable warranty covering the paint supplied.

[3] In Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd [2010] SGHC 351, I found that the plaintiff had not proven its case (namely that the defects in the paint had caused the discolouration) on a balance of probabilities. I also observed obiter that if I had decided on the issue of the warranty, I would have found that the defendant had warranted all its products used in any of the plaintiff’s projects for a period of five years, provided that the use was based on a proposed paint system by the defendant. The plaintiff appealed. The defendant cross-appealed on the question of the warranty.

[4] The Court of Appeal dismissed the defendant’s cross-appeal on the warranty at [27]:

[5] The Court of Appeal allowed the plaintiff’s appeal and made the following findings:

[6] This assessment of damages follows the Court of Appeal’s findings.

[7] The plaintiff’s claim of $1,185,545.60 for special damages is as follows:

[8] The general rule is that special damages have to be strictly proven and are otherwise not recoverable (Wee Sia Tian v Long Thik Boon [1996] 2 SLR(R) 420 at [15]). Where oral evidence is inconsistent with documentary evidence, and no adequate explanation has been provided, the court may well be justified in relying solely on what can be proven through documentation and not the oral testimony, as was the case in Bocatra Construction Pte Ltd v Thorkildsen [1994] 2 SLR(R) 387 at [31]. I bear these principles in mind as I turn to consider each item claimed by the plaintiff.

[9] The plaintiff claims that the entire area that required repainting were as follows:

(a) 176,882 m² being the equivalent of about 6 out of 9 storeys of Building A; and

(b) 100,883 m² being the equivalent of about 19 out of 30 storeys of Building B.

This means that three storeys of Building A and 11 storeys of Building B did not require repainting by reason of discolouration or had not been originally painted with the Berger paint. The plaintiff had originally issued a letter of demand for repainting, of $443,243.20 (excluding the cost of paint). The plaintiff also claims the costs of a sub-contractor who repainted Building B.

[10] The plaintiff claims $52,242.75 for its purchase of 43,400 litres of replacement paint from Haruna (S) Pte Ltd.

[11] In its closing statement, the defendant acknowledged that:

[12] The defendant has since been found by the Court of Appeal to be liable for the discolouration and damages. Accordingly, the plaintiff is entitled to claim for $52,242.75 under this head.

[15] I note that the number of workers originally deployed in the paintworks was a monthly average of about 20 whilst it was claimed that a monthly average of 23 workers for the repainting. From the invoice submitted by the subcontractor, Building B was completed by the sub-contractor by March 2009. Taking into account that the repainting of Building B had been subcontracted out, and that the plaintiff only repainted 6 storeys of Building A, it would be safer to adopt a measure of the work done by reference to the 7.5 months taken to repaint both Building A and Building B which was 7.5 months and to take into account the respective paint surfaces.

[16] Based on the constant of the surface area, Building A comprised around 63.7% of the total surface area originally painted (ie, 176,882 ÷ 277,765 x 100%), all things else being equal, I would apportion the time taken to repaint Building A (subject to adjustments below) to be around 4.78 months (ie, 63.7% x 7.5= 4.78 months).

[18] As the plaintiff had already sub-contracted the repainting works of Building B to Swiss Plan, the plaintiff is only entitled to recover the workers’ salary for repainting 6 storeys of Building A.

[19] However, I was mindful that the plaintiff had submitted that extra time was required in repainting given the following:

(a) An extra 15% time to account for the difficulty of re-painting around windows and fixtures that had to be protected;

(b) An extra 50% to account for the 50% less manpower that the Plaintiffs deployed (due to the necessity of continuing with the on-going contract works);

(c) An extra 10% to account for the Plaintiffs not using scissors lifts when they had the use of them during the original painting works; and

(d) An extra 10% for the sanding off of the discoloured paint before re-painting works could start.

[21] With respect to item (b), I note the plaintiff’s expert witness’s evidence that the plaintiff had deployed an average of 19.89 workers per month during the original painting works, and 23 workers per month during the repainting works. Given that more workers were used on average during the repainting works than the original painting works, I had difficulty accepting that the time for repainting would have been extended at all due to shortage of labour, let alone by such a wide margin as 50%. This is especially since the repainting work for Building B had been outsourced to Swiss Plan which had completed all of its sub-contracted works by February 2009. The plaintiff’s workers only had to repaint 6 storeys of Building A. Based on the foregoing, I would reject the plaintiffs uplift based on item (b).

[22] As for Item (c), the plaintiff is claiming that it took extra time for repainting due to the lack of a scissors lift, which it used during the original works. However, the plaintiff additionally claims $81,579.95 for the “Rental of Portable Scaffolding, Scissors Lift and Boom Lift” for the entire period of repainting as evidenced by an invoice for the period June 2008 to September 2009 for “scaffolding, scissor lift and boomlift”. As I have allowed some claim for extra time on Item (a) and (d), I would make no double counting arising from the alleged non-use of the scissors lift in the repainting.

[23] As for Item (d), the plaintiff has led evidence to show that sanding off was an additional step required before repainting could take place given that no sealer coat was applied. Although the defendant challenged whether the plaintiff did or needed to sand off the entire painted surface, ie, specifically the internal surfaces to be repainted, no alternative reasonable figure was proposed and given that in cross-examination, the defendant’s witness Chin Cheong appeared to have accepted the sanding-off in principle, I find that the figure of 10% submitted by the plaintiff is not unreasonable.

[24] In the premises, I find that the plaintiff’s claim of 16 months for repainting was inflated. The claim should be reduced to a figure of approximately 6.05 months, arising from the following:

4.78 months x 115% x 110% = 6.05 months.

[26] The defendant challenges the sum claimed under this head (ie, $34,668.00) on largely the same basis as it challenges the amount claimed for worker’s salary. Given my adopting of a 6.05 months proxy for the completion of repainting the 6 storeys of Block A, and not the 16 months claimed, I accordingly reduce the sum claimed proportionately to $13,108.84 , ie, $34,668.00 x (6.05 ÷ 16) = $13,108.84.

[27] Like the other heads of claim, the sum of $63,115 should be reduced proportionately to $23,865.36 following the application of the 6.05 months proxy for completion of repainting of Building A, ie, $63,115 x (6.05 ÷ 16) = $23,865.36.

[30] As to the first objection, the plaintiff has produced receipts verifying that it has spent $11,613.78 on petrol, parking and servicing in relation to the Vehicle. Its factual witness testified that these sums were expended in relation to the repainting works. I accept that testimony. The defendant has not adduced any evidence to show that the Vehicle was used for other purposes. It has not adduced any evidence to show that the expenses were incurred in relation to a different vehicle. I see no basis for finding that the expenses or the Vehicle were used for purposes other than the repainting works.

[31] As for the second objection, the defendant is entitled to claim damages for expenses reasonably incurred. I do not think it unreasonable that it should use its existing company vehicle for the purpose of the repainting works. It was not obliged to obtain a new vehicle for the purpose. The defendant has also not quantified how the discount should be applied.

[32] What is relevant, however, is the fact that the sum claimed under this head was incurred over a period of 16 months which should be adjusted to 6.05 months proxy. As such, the plaintiff is awarded:

$11,613.78 x (6.05 ÷ 16) = $4,391.46

[33] The plaintiff claims $29,393.20 for accommodation of the workers utilised for repainting works who could not stay on the site of the building project after February 2009 when the Building A units were handed back to the main contractor. As such, the plaintiff claims that alternative accommodation had to be secured for them with AC Creative Pte Ltd and Cheer Keong Contractor & Construction for period March to September 2009.

[34] The defendant is not challenging the fact that the site was handed back in February 2009. However, it raises the same objections – first, that the plaintiff has premised its claim on more man days than actually expended, and second, that the plaintiff has not proven its case that all the workers living in the alternative accommodation were used solely for the purpose of the repainting works.

[36] The plaintiff claims $16,000 as administrative charges for the additional time spent by the managing director of the plaintiff and his clerical staff in the administration of the additional work incurred when repainting became necessary. The plaintiff submits that $1,000 per month is not unjustified as a measure of value of this work. It is clear that additional management time would have had to be deployed for the repainting works. I would accordingly award $6,050 (ie, 6.05 x 1,000) to the plaintiff.

[37] The plaintiff has adduced an invoice from Hup Seng Aluminium Construction Pte Ltd which shows that the Portable Scaffolding, Scissors Lift and Boom Lift were leased to the plaintiff from 1 June 2008 to 30 September 2009 (16 months) for $81,579.95.

[40] The plaintiff did not proceed with its claim under this head at trial. In its closing submissions, it confirmed that it was not making a claim for this item.

[41] The plaintiff claims 7% GST of all the Items 1-12 in the table above at [7]. The defendant has disputed the plaintiff’s entitlement to this. It is surprising, however, that the plaintiff’s closing submissions and reply submissions do not address this claim at all. That the plaintiff may have paid GST on some but not all of the items is clear.

[42] The plaintiff has failed to show that GST was paid or payable on several of the items, eg, workers’ salary and dinner, consumable tools, vehicle upkeep, administrative charge, foreign worker levies. Whilst other invoices like the paint and subcontractor invoice did include GST, the plaintiff in issuing its own invoices for this work to the owner/main contractor would be able to recover GST thereby, it bearing only the differential burden of value added. It has provided no evidence of this amount. Accordingly I would disallow this claim.

[43] Parties are agreed that the defendant is entitled to a set off for paint supplied in the sum of $72,676.62. I accordingly apply a deduction.

[44] In the light of my findings above, the plaintiff’s claim should be adjusted as follows:

[45] In the light of my findings above, I award damages of $532,113.48 payable by the defendant to the plaintiff.

[46] The plaintiff shall be entitled to interest on the above amount at the rate of 5.33% per annum from the date of writ (23 November 2009) until the date of payment.