archive-sg.com » SG » S » SINGAPORELAW.SG

Total: 820

Choose link from "Titles, links and description words view":

Or switch to "Titles and links view".
  • Alwie Handoyo v Tjong Very Sumito and another and another appeal
    the exclusive licensee in Singapore of the copyright in certain works as a result of some contractual arrangements It commenced proceedings against the defendants for alleged breach of copyright However the court found at 48 that the plaintiff was not an exclusive licensee within the meaning of s 7 of the Copyright Act Cap 63 2006 Rev Ed and thus the action under the Copyright Act could not be maintained Referring to Performing Right the plaintiff there argued that this defect would be remedied so long as original copyright owners are joined The court dismissed this argument at 63 The decisions in The Charlotte 1908 P 206 Performing Right Society Limited v London Theatre of Varieties 1924 AC 1 all deal with the owner in equity having to add the legal owner in order to perfect the title to sue or some variant of this This is unremarkable and accepted practice in that in order to obtain final judgment the equitable owner must either perfect his title b y taking an assignment from the legal owner or alternatively join t he legal owner because of the risk to the defendant that he will be exposed to a second claim by or under the legal owner in particular by a bona fide purchaser for value without notice claiming under the legal owner This type of case is clearly different from the one before me The plaintiff has not advanced its claim qua equitable assignee The only capacity which it has put forward is as an exclusive licensee pursuant to its contractual arrangements However if it is not an exclusive licensee within the meaning of the Act in my judgment it has no title to sue at all and the joinder of the owners of the copyright does nothing to remedy that emphasis added in italics and bold italics 92 It is incorrect to characterise the present dispute as one solely involving Herman s proprietary rights in PT Deefu In so far as CA 82 is concerned the OAFL Unjust Enrichment Claim and the OAFL Conversion Claim are not premised on the vindication of proprietary rights they arise out of the Respondents contractual rights under the first SPA There is no dispute or claim founded on the ownership of the PT Deefu shares in Suit 89 The thing demanded to borrow the phrase from Performing Right is not a proprietary right relating to Herman s 7 3 stake in PT Deefu 93 Furthermore the OAFL Unjust Enrichment Claim and the OAFL Conversion Claim are not made by the Respondents qua equitable owners of a chose in action which is legally owned by Herman On the contrary if anything the Amended Clause 4 02 2 provides that of the Plaintiffs only Tjong is entitled to receive any payment Any action to recover monies which are allegedly owed to Tjong is premised on rights which belong entirely to Tjong not Herman This is also not a case where the legal and equitable owners of a chose in action are different such that the equitable owner of the chose in action should join the legal owner if it wishes to enforce the chose in action see Roberts v Gill Co and another 2011 1 AC 240 at 64 Herman s discontinuation of the action therefore does not affect the Respondents right to prosecute the OAFL Unjust Enrichment and the OAFL Conversion Claim Piercing OAFL s corporate veil 94 Mr Murugaiyan argued that the Judge erred in piercing OAFL s corporate veil because first this was not pleaded by the Respondents and second there was no allegation or finding that OAFL was a mere device sham or façade 95 Mr Murugaiyan s first argument may be briefly dealt with It is indisputably clear from a reading of the Amended Statement of Claim that the Respondents did plead that OAFL s corporate veil should be pierced vis à vis Alwie note 12 Further or in the alternative based on the aforesaid the corporate veil of OAFL should be lifted and the Plaintiffs seeks sic the recovery of US 550 000 and 42 102 727 MEGL shares from Alwie Further or in the alternative the Plaintiffs claim is for US 550 000 being money payable by OAFL and or Alwie by virtue of lifting the corporate veil to the Plaintiffs as money had and received by OAFL and or Alwie to the use of the Plaintiffs emphasis added 96 As for the second argument that there was no allegation or finding that OAFL was a mere device sham or façade Mr Murugaiyan has misconstrued the Judge s ground for piercing OAFL s corporate veil The Judge lifted OAFL s corporate veil on the ground that Alwie was OAFL s alter ego not that OAFL was a mere device sham or façade see Judgment at 70 The ground of alter ego is distinct from that based on façade or sham and the key question that must be asked whenever an argument of alter ego is raised is whether the company is carrying on the business of its controller NEC Asia Pte Ltd now known as NEC Asia Pacific Pte Ltd v Picket Rail Asia Pacific Pte Ltd and others 2011 2 SLR 565 at 31 and Zim Integrated Shipping Services Ltd and others v Dafni Igal and others 2010 2 SLR 426 at 86 88 97 OAFL was incorporated in the British Virgin Islands on 28 October 2004 by Alwie for the sole purpose of receiving payment under the first SPA as admitted by Alwie himself under cross examination On 19 November 2004 Alwie appointed himself as the sole director and shareholder of OAFL Alwie also admitted in his affidavit that OAFL was controlled by him Alwie also similarly admitted in the Defence of the fifth and sixth Defendants Amendment No 2 fifth and sixth Defendants Amended Defence that he is the directing mind and will of OAFL 98 Tellingly Alwie declared under cross examination that he is entitled under the first SPA to personally receive the US 550 000 paid to OAFL note 13 Court So I want you to explain to me if you can do you know whether in your defence and Mr Murugaiyan I d be more than happy for you to assist because it s a matter of pleadings have you explained to this court why you were entitled to keep this money other than the sale and purchase agreement A Okay Basically in the sale and purchase agreement there s a definition of OAFL The definitions there states clearly that I am entitled to receive the money Court All right A Through OAFL emphasis added OAFL s Coutts Bank account which the US 550 000 was paid into was clearly controlled by Alwie Although OAFL was the named owner of that account Alwie was the beneficial owner of the account as Mr Murugaiyan confirmed and as corroborated by Chan who said that he knew that the monies paid into the Coutts Bank account were for Alwie Alwie too conceded under cross examination that he operated the Coutts Bank account as if it was his own personal bank account 99 Furthermore Alwie actively procured payments due to OAFL under the first SPA and the manner in which Alwie procured the payments suggests that Alwie made no distinction between himself and OAFL On 23 November 2004 Alwie on behalf of OAFL wrote to Antig via a letter addressed to Chan requesting Antig to arrange for the US 50 000 payable under the Amended Clause 4 02 2 a ii of the first SPA to OAFL to be converted into Singapore dollars and deposited via cheque into Alwie s bank account The letter was shown to Alwie during cross examination Crucially Alwie admitted that he asked Chan to pay him the US 50 000 even though he was aware that he was not a party to the first SPA and the US 50 000 was in fact supposed to be paid to OAFL under the first SPA 100 Later on 12 June 2006 Alwie on behalf of OAFL wrote to Chan requesting for the remaining payment due to OAFL under the first SPA to be paid to the Coutts Bank account On 13 June 2006 a cheque for S 334 429 20 was paid into the Coutts Bank account When asked in cross examination why it was paid into the Coutts Bank account Alwie responded as follows note 14 Mr Gabriel Now the second cheque to Coutts Bank dated 13 June 2006 you confirm that you have received this cheque for the sum of 334 429 20 A Yes Q Why was the cheque made out to Coutts Bank A Because if it is put under OAFL it will take longer to clear by the bank in Singapore That s why I was told by my banker earlier on that if there is a cheque just put in the name of Coutts Bank so that I can receive it in a few days time the most But if it is OAFL it will take around two weeks Q Now was this cheque deposited in OAFL s account with Coutts Bank A Yes it was emphasis added Once again it is evident that Alwie made no distinction between himself and OAFL Therefore we agree with the Judge s decision to pierce OAFL s corporate veil Restitution for unjust enrichment 101 The Judge held that the Plaintiffs were entitled to recover the OAFL Cash Payment from OAFL and Alwie as a consequence of piercing the corporate veil as money had and received because all the elements of an unjust enrichment claim were established on the facts The Judge identified the relevant unjust factor as that of a want of authority to retain money citing specifically Goff Jones The Law of Unjust Enrichment Sweet Maxwell 8th Ed 2011 Goff Jones 8th Ed at paras 8 01 8 02 see the Judgment at 120 It is clear based on the plain meaning of Clause 4 02 2 that OAFL has no authority to retain the payments made to it under the 1st SPA sic This constitutes the relevant unjust factor required to establish the money had and received claim As observed in Goff Jones at paras 8 01 8 02 the want of authority to retain money constitutes an unjust factor where A defendant D obtains an enrichment by immediate transfer from a claimant C in circumstances where C did not consent to the enrichment It is also common for a defendant D to obtain an enrichment from a claimant C more remotely as a result of the actions of a third party X which were neither authorised nor consented to by C Where X holds assets subject to duties and powers to deal with them for C s benefit and acts within his authority C will have no remedy But where X acts outside his authority his want of authority will itself constitute a sufficient ground for recovery by C emphasis in original in italics emphasis added in bold italics 102 In reaching his conclusion that this unjust factor was established on the facts of the case the Judge concluded that pursuant to the Amended Clause 4 02 2 Aventi and OAFL were not entitled to retain and benefit from payments received by them Since OAFL had no authority to retain the payments the unjust factor of want of authority was established Upholding the contractual allocation of risk 103 Given our interpretation of the Amended Clause 4 02 2 see 67 87 above the Respondents claim in unjust enrichment must necessarily fail The amount that was payable to Tjong as provided under the first SPA and supported by the factual matrix of the case has always been US 6m and not a cent more By virtue of the Amended Clause 4 02 2 Antig was contractually obliged to pay the OAFL Cash Payment to OAFL and not Tjong In accordance with the Amended Clause 4 02 2 Antig paid the OAFL Cash Payment to OAFL 104 Simply put under the first SPA the Plaintiffs contracted for the OAFL Cash Payment to be made by Antig to OAFL and this was precisely what they got It does not lie in the mouth of the Respondents to now say that they are entitled to recover the very same payment that they contracted for Antig to pay to OAFL Indeed to allow the Respondents to recover from OAFL the Cash Payment through an action in unjust enrichment would be to undermine the contractual bargain under the first SPA which the Plaintiffs and Antig agreed on That the law of unjust enrichment should avail a plaintiff no remedy against the defendant where the plaintiff and a third party entered into a contract under which the plaintiff was required to confer a benefit directly on the defendant is supported by a string of judicial decisions The courts are unwilling to permit a plaintiff s unjust enrichment claim in these cases as to do so would undermine the contract and the contractual allocation of risk between the plaintiff and the third party 105 In the influential House of Lords decision of Pan Ocean Shipping Co Ltd v Creditcorp Ltd 1994 1 WLR 161 Pan Ocean the appellant time chartered a vessel from Trident Shipping Co Ltd Trident on terms which provided for advance payments As part of arrangements for credit facilities from the respondent Trident assigned receivables due under the charter to the respondent The appellant paid an advance payment of hire to Trident while the vessel was off hire Subsequently the appellant terminated the charterparty contract between itself and Trident after Trident failed to pay for repair of the vessel However Trident s financial position meant that it was not worth suing Thus the appellant sued the respondent seeking to recover from the respondent the advance payment on the ground that it was paid for a consideration that had wholly failed The House of Lords dismissed the appellant s appeal holding that the respondent was under no obligation to repay the advance payment Lord Goff of Chieveley stated at 164 166 All this is important for present purposes because it means that as between shipowner and charterer there is a contractual regime which legislates for the recovery of overpaid hire It follows that as a general rule the law of restitution has no part to play in the matter the existence of the agreed regime renders the imposition by the law of a remedy in restitution both unnecessary and inappropriate Of course if the contract is proved never to have been binding or if the contract ceases to bind different considerations may arise as in the case of frustration as to which see French Marine v Compagnie Napolitaine d Eclairage et de Chauffage par le Gaz 1921 2 A C 494 and now the Law Reform Frustrated Contracts Act 1943 With such cases as these we are not here concerned Here it is true the contract was prematurely determined by the acceptance by Pan Ocean of Trident s repudiation of the contract But before the date of determination of the contract Trident s obligation under clause 18 to repay the hire instalment in question had already accrued due and accordingly that is the relevant obligation as between Pan Ocean and Trident for the purposes of the present case It follows that in the present circumstances and indeed in most other similar circumstances there is no basis for the charterer recovering overpaid hire from the shipowner in restitution on the ground of total failure of consideration It is true that sometimes we find in the cases reference to there having been in such circumstances a failure of consideration see e g C A Stewart Co v Phs Van Ommeren London Ltd 1918 2 K B 560 563 per Scrutton L J It is against this background that we have to consider Pan Ocean s claim now made against Creditcorp for repayment of the hire instalment paid to it as assignee of the charter hire First although the benefit of the contract debt had been assigned to Creditcorp with the effect that payment to Creditcorp by Pan Ocean constituted a good discharge of the debt nevertheless the burden of the contract remained upon Trident From this it follows that Trident remained contractually bound to repay to Pan Ocean any overpaid hire notwithstanding that such hire had been paid not to Trident but to Creditcorp as assignee Mr Hirst for Pan Ocean accepted in argument that this was so but he nevertheless maintained that Pan Ocean had alternative courses of action open to it either to proceed against Trident in contract or to proceed against Creditcorp in restitution His argument proceeded on the basis that in ordinary circumstances a charterer has alternative remedies against the shipowner for the recovery of overpaid hire either in contract or in restitution and that here since the hire had been paid to Creditcorp as assignee Pan Ocean s remedy in restitution lay against Creditcorp in place of Trident However for the reasons I have already given I am unable to accept this argument This is because in my opinion Pan Ocean never had any remedy against Trident in restitution on the ground of failure of consideration in the present case its only remedy against Trident lying under the contract I am of course well aware that writers on the law of restitution have been exploring the possibility that in exceptional circumstances a plaintiff may have a claim in restitution when he has conferred a benefit on the defendant in the course of performing an obligation to a third party see e g Goff and Jones on the Law of Restitution 4th ed 1993 pp 55 et seq and for a particular example Burrows on the Law of Restitution 1993 pp 271 272 But quite apart from the fact that the existence of a remedy in restitution in such circumstances must still be regarded as a matter of debate it is always recognised that serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract emphasis added in italics and bold italics 106 We agree with Lord Goff s observations above There was a valid and subsisting contract between the appellant and Trident under which Trident had assigned its right to the benefit of payment to the respondent By suing the respondent instead of Trident for the advance payment the appellant was effectively seeking to avoid the valid and subsisting contract between itself and Trident which provided for contractual recourse against Trident in the event of overpaid hire Lord Goff was rightly concerned that allowing a plaintiff to claim in such a situation would undermine the contract and the contractual allocation of risk between the relevant parties The appellant should have sued Trident on the contract between them and not the respondent for restitution 107 The gist of Lord Goff s observations was adopted by the majority in the important Australian High Court decision of Lumbers and another v W Cook Builders Pty Ltd in liquidation 2008 232 CLR 635 Lumbers In Lumbers the appellant owner of land the Lumbers entered into a contract with a building contracting company Sons for the construction of a house on the land Sons then subcontracted much of the work under the contract to the respondent company Builders Builders sued the Lumbers in unjust enrichment for amounts due to it under the subcontract between Builders and Sons The court held that Builders had no claim against the Lumbers because there was no contract between them Gummow Hayne Crennan and Kiefel JJ in their majority judgment said at 79 124 126 The doing of work or payment of money for and at the request of another are archetypal cases in which it may be said that a person receives a benefit at the expense of another which the recipient accepts and which it would be unconscionable for the recipient to retain without payment And as is well apparent from this Court s decision in Steele v Tardiani 1946 72 CLR 386 an essential step in considering a claim in quantum meruit or money paid is to ask whether and how that claim fits with any particular contract the parties have made It is essential to consider how the claim fits with contracts the parties have made because as Lord Goff of Chieveley rightly warned in Pan Ocean Shipping Co Ltd v Creditcorp Ltd 1994 1 WLR 161 at 166 serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract In a similar vein in the Comments upon 29 of the proposed Restatement 3d Restitution and Unjust Enrichment Tentative Draft No 3 22 March 2004 the reporter says Even if restitution is the claimant s only recourse a claim under this Section will be denied where the imposition of a liability in restitution would overturn an existing allocation of risk or limitation of liability previously established by contract When account is taken of the contractual relationship between the Lumbers and Sons several observations may then be made First the Lumbers accepted no benefit at the expense of Builders which it would be unconscionable to retain The Lumbers made a contract with Sons which either has been fully performed by both parties or has not Sons made an arrangement or agreement with Builders which again has either been fully performed or it has not If either the agreement between Sons and the Lumbers or the agreement or arrangement between Sons and Builders has not been fully performed because all that is owed by one party to the other has not been paid that is a matter between the parties to the relevant agreement A failure of performance of either agreement is no reason to conclude that Builders should then have some claim against the Lumbers parties with whom Builders has no contract Because Builders had no dealings with the Lumbers Builders has no claim against the Lumbers for the price of any work and labour Builders performed or for any money that Builders may have paid in relation to the construction Builders has no such claim because it can point to no request by the Lumbers directed to Builders that Builders do any work it did or pay any money it did Reference to whether the Lumbers accepted any work that Builders did or accepted the benefit of any money it paid is irrelevant It is irrelevant because it distracts attention from the legal relationships between the three parties the Lumbers Sons and Builders To now impose on the Lumbers an obligation to pay Builders would constitute a radical alteration of the bargains the parties struck and of the rights and obligations which each party thus assumed There is no warrant for doing that emphasis added in italics and bold italics 108 Pan Ocean has also been followed in the leading English Court of Appeal decision of MacDonald Dickens Macklin a firm v Costello and others 2012 QB 244 MacDonald There the claimant builder MacDonald Dickens Macklin MDM entered into a contract with Oakwood Residential Ltd Oakwood a company owned by the first and second defendants Mr and Mrs Costello its shareholders and directors for the construction of houses on land owned by Mr and Mrs Costello Mr and Mrs Costello had informed MDM that they were using Oakwood to enter into the contract for tax reasons MDM had previously done work for Oakwood and was content to proceed in this manner Subsequently Oakwood failed to make payments to MDM At first instance judgment was given against Oakwood on the outstanding payments A monetary restitutionary award for unjust enrichment was also made against Mr and Mrs Costello who then appealed against the decision The English Court of Appeal allowed the appeal even though it was of the view that Mr and Mrs Costello were enriched at the expense of MDM Etherton LJ delivering the unanimous judgment of the court explained at 23 I am clear on the other hand that the unjust enrichment claim against Mr and Mrs Costello must fail because it would undermine the contractual arrangements between the parties that is to say the contract between the claimants and Oakwood and the absence of any contract between the claimants and Mr and Mrs Costello The general rule should be to uphold contractual arrangements by which parties have defined and allocated and to that extent restricted their mutual obligations and in so doing have similarly allocated and circumscribed the consequences of non performance That general rule reflects a sound legal policy which acknowledges the parties autonomy to configure the legal relations between them and provides certainty and so limits disputes and litigation The following cases support its application to the present case emphasis added Etherton LJ referred to inter alia Brown Davis Ltd v Galbraith 1972 1 WLR 997 Pan Ocean and Lumbers and stated at 30 32 30 All those points are fairly made on behalf of the claimants Nevertheless the policy considerations articulated by Lord Goff in the Pan Ocean case 1994 1 WLR 161 and by the majority of the High Court of Australia in the Lumbers case 2008 4 LRC 683 as well as the outcome of all the cases cited above clearly support the general policy of refusing restitutionary relief for unjust enrichment against a defendant who has benefited from the plaintiff s services rendered pursuant to a contract to which the defendant was not a party For the reasons I have given that is a sound legal policy 31 Further as Mr Darton pointed out the existence of two remedies one in restitution and one in contract is capable of producing anomalous results Contractual damages are calculated by reference to the contract price and terms Compensation for unjust enrichment as a result of the plaintiff s services is calculated by reference to the value of the services generally at the date of their receipt which may or may not be the same as the contractual rate This raises the possibility of compensation in restitution at a higher rate than the contractual rate so enabling a claimant to improve on a bad bargain and with consequential implications for contribution by the defaulting contracting party 32 It was perfectly clear then that the claimants were fully aware and accepted that Oakwood was their contracting counter party and that Mr and Mrs Costello were insisting on that arrangement because of tax reasons which would be put at risk if there were direct contractual relations between themselves and the claimants There was a perfectly straightforward and standard way in which the claimants could have limited their exposure in the event of default including insolvency on the part of Oakwood namely by taking guarantees from Mr and Mrs Costello The claimants did not do so I can see no basis on those facts for saying that in principle the law does or should provide a remedy directly against Mr and Mrs Costello because of Oakwood s breach of contract emphasis added in italics and bold italics 109 Returning to the facts of the present case Antig performed its obligations entirely in accordance with the Amended Clause 4 02 2 and the Plaintiffs obtained the performance they contracted for under the first SPA in relation to the OAFL Cash Payment We agree with Dr Tang s submission that the Respondents appear to be taking the position that the OAFL Cash Payment was wrongfully paid by Antig to OAFL If that is indeed the Respondents case the proper recourse would be to sue Antig Allowing the Plaintiffs to succeed in its claim in unjust enrichment against OAFL here would undermine the contract between Antig and the Plaintiffs The same reasons that motivated the courts in Pan Ocean Lumbers and MacDonald to deny the claims in restitution advanced in those cases operate equally here 110 For completeness we do not see OAFL as being unjustly enriched As Professor Andrew Tettenborn has suggested where the defendant has lawfully received a benefit from a third party when the benefit was the unencumbered property of the third party the defendant cannot be considered to be unjustly enriched Andrew Tettenborn Lawful Receipt A Justifying Factor 1997 RLR 1 at 12 The present case is exactly on point Want of authority 111 We also respectfully disagree with the Judge s acceptance of want of authority as an unjust factor As far as we can tell want of authority as an unjust factor is presently a theory advocated solely by the authors of Goff Jones 8th Ed Crucially it attracts no support from judicial decisions or other leading commentators In fact although the authors of Goff Jones 8th Ed purport at paras 8 34 8 44 to derive want of authority as an accepted unjust factor from their interpretation of several English cases including the seminal decision of Lipkin Gorman a firm v Karpnale Ltd 1991 2 AC 548 Lipkin Gorman they acknowledged subsequently at para 8 44 that the decisions in these cases were not stated to be based on the recognition of an unjust factor of want of authority but on the basis that the respective plaintiffs had title to the asset 112 The suggestion that want of authority is an unjust factor also appears to be a marked departure from the views expressed in previous editions of the same treatise and incidentally coincides with the change of editorship of the treatise from Lord Goff and Prof Gareth Jones to the current editors The previous editions in fact took an opposing position to that advocated by the editors of the latest edition For example the immediately preceding edition of the same treatise interpreted the claim in Lipkin Gorman as one of retention of title Goff Jones on The Law of Restitution Gareth Jones ed Sweet Maxwell 7th Ed 2007 Goff Jones 7th Ed at ch 2 generally There was no suggestion of want of authority as an unjust factor The authors of other leading English textbooks have also not recognised this unjust factor see Andrew Burrows The Law of Restitution Oxford University Press 3rd Ed 2011 Burrows at p 410 and Graham Virgo The Principles of the Law of Restitution Oxford University Press 2nd Ed 2006 Virgo at pp 645 646 The leading Australian text on unjust enrichment also rejects the view propounded by Goff Jones 8th Ed see Keith Mason J W Carter and G J Tolhurst Mason and Carter s Restitution Law in Australia LexisNexis Butterworths 2nd Ed 2008 Mason Carter at para 306 113 In our view the seminal House of Lords decision in Lipkin Gorman does not in fact support the position taken in Goff Jones 8th Ed In that case Cass a partner in the plaintiff firm of solicitors took cash from the plaintiff s client account and gambled it away at the defendant casino The court held that the plaintiff was entitled to claim against the defendant for money had and received It recognised that as personal restitution was sought from an indirect recipient it was necessary to show that the money paid by the partner as a third party belonged to the plaintiff In our view the court based its decision on the fact that the money received by Cass was the property of the plaintiff solicitors Lord Goff said at 572 The first ground is concerned with the solicitors title to the money received by Cass through Chapman from the bank It is to be observed that the present action like the action in Clarke v Shee and Johnson is concerned with a common law claim to money where the money in question has not been paid by the appellant directly to the respondents as is usually the case where money is for example recoverable as having been paid under a mistake of fact or for a consideration which has failed On the contrary here the money had been paid to the respondents by a third party Cass and in such a case the appellant has to establish a basis on which he is entitled to the money This at least as a general rule he does by showing that the money is his legal property as appears from Lord Mansfield s judgment in Clarke v Shee and Johnson If he can do so he may be entitled to succeed in a claim against the third party for money had and received to his use though not if the third party has received the money in good faith and for a valuable consideration The cases in which such a claim has succeeded are I believe very rare see the cases including Clarke v Shee and Johnson collected in Goff and Jones The Law of Restitution 3rd ed 1986 p 64 note 29 This is probably because at common law property in money like other fungibles is lost as such when it is mixed with other money Furthermore it appears that in these cases the action for money had and received is not usually founded upon any wrong by the third party such as conversion nor is it said to be a case of waiver of tort It is founded simply on the fact that as Lord Mansfield said the third party cannot in conscience retain the money or as we say nowadays for the third party to retain the money would result in his unjust enrichment at the expense of the owner of the money So in the present case the solicitors seek to show that the money in question was their property at common law But their claim in the present case for money had and received is nevertheless a personal claim it is not a proprietary claim advanced on the basis that money remaining in the hands of the respondents is their property emphasis added in italics and bold italics Indeed Lord Goff went on to discuss at 574 how the plaintiff s right to its monies in the bank was a chose in action which was legal property belonging to the plaintiff that it could trace at common law into the cash drawn by Cass 114 The same can be said of Nelson and others v Larholt 1948 1 KB 339 Nelson another case which the editors of Goff Jones 8th Ed relied on to argue that the unjust factor of want of authority has some judicial support see Goff Jones 8th Ed at para 8 44 In Nelson Mr Potts an executor of an estate fraudulently drew cheques on the estate s account in favour of the Mr Larholt the defendant The beneficiaries brought an action against Mr Larholt to recover the money as money had and received They succeeded Denning J as he then was stated the following principles at 342 343 The relevant legal principles have been much developed in the last thirty five years A man s money is property which is protected by law It may exist in various forms such as coins treasury notes cash at bank or cheques or bills of exchange of which he is the holder but whatever its form it is protected according to one uniform principle If it is taken from the rightful owner or indeed from the beneficial owner without his authority he can recover the amount from any person into whose hands it can be traced unless and until it reaches one who receives it in good faith and for value and without notice of the want of authority Even if the one who received it acted in good faith nevertheless if he had notice that is if he knew of the want of authority or is to be

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/court-of-appeal-judgments/15319-alwie-handoyo-v-tjong-very-sumito-and-another-and-another-appeal-2013-sgca-44 (2016-01-30)
    Open archived version from archive

  • Parkway Properties Pte Ltd and Another v United Artists Singapore Theatres Pte Ltd and Another and Another Case[2003] 2 SLR 103; [2003] SGCA 7
    of the project to MCST was completed Parkway would return without deductions or interest the 346 900 paid on 14 January 1999 It was clear that upon the transfer Parkway wanted a clean break and that thereafter UAST were to have no further rights in the development As for UAST s desire to operate the cineplex that was a separate matter to be negotiated and agreed upon 17 However the repayment of 346 900 which Parkway undertook to make to UAST was in fact never effected because the parties were then negotiating on the revised plan and Pacific Media as the owner of UAST offered to make some good faith deposit So the sum of 346 900 was allowed to be retained by Parkway as part payment of the good faith deposit required by Parkway although ALP had on 16 July 1999 written to Parkway asking for the return of that sum to Pacific Media In the words of Gary Quick a witness for UAST the refund of that sum was then rolled into the new proposal 18 We should add that the requirement of a deposit as a good faith money was again mentioned by Parkway in its letter of 21 June 1999 marked without prejudice and subject to contract where it indicated that the revised plan of UAST was being reviewed by MCST which had also requested an undertaking from your organisation as a form of financial commitment during this period of finalisation of the proposed terms and conditions The form of financial commitment may be in a confirmation of your financial status to commit to the proposed project with a reference from your bank and with a performance guarantee We should add that in the subsequent correspondence between the parties Parkway had also marked their correspondence subject to contract 19 Apparently UAST were not willing or able to provide a banker s performance bond But they were prepared to provide 500 000 as good faith money which would be forfeited should UAST fail to complete the project They also stated that This offer is made without prejudice and subject to contract expressly on the understanding that it would be available to us to complete the contract and would not be held by you once the cineplex had commenced operations 20 On 13 July 1999 Pacific Media assured Parkway that they had the financial ability to operate the cineplex and re affirmed the offer to place 500 000 as good faith money in addition to the 346 000 which was to be refunded to UAST Pacific Media wrote I believe that you currently have a deposit from us of 345 000 sic towards the premium payable to the Land Office I would be happy to give you a further deposit of 500 000 upon signing a lease making a total of 845 000 This money would be used as a final payment of our portion of the premium I am sure you will agree this proposal is a significant gesture of good faith regarding our intention and our ability to complete the project I suggest we now ask our respective lawyers to prepare a new lease for signature in the very near future 21 A week later Pacific Media offered to increase the deposit sum of 500 000 to 600 000 A further three days later UAST proposed a corporate guarantee from Pacific Media to secure the performance of the lease by UAST Representatives of Pacific Media even appeared before a meeting of MCST to explain their position and that was followed by a letter where Pacific Media stated that upon the execution of a lease between Parkway MCST and UAST a sum of 600 000 would be paid over to Parkway We send you the sum of S 600 000 within five working days of execution for the lease The current agreement between us is for us to pay you six quarterly instalments of 450 000 towards our proportion of the premium due to the Land Office the first instalment becoming due on 9 September 1999 I suggest that this deposit is used to provide a part payment of 100 000 towards each of these six payments 22 On 28 July 1999 Parkway wrote to Pacific Media asking for the remittance of the 600 000 within the next 2 working days and seeking their confirmation that this sum shall remain as good faith deposit until we hand over the cinema to UAST for fitting out works We will consider the utilisation of this sum against your contribution towards UAST s contribution to the premium in our negotiation for the revised terms for the draft lease agreement for the proposed cineplex and that Pacific Media would furnish a corporate guarantee to ensure that UAST would fulfil their obligations under the proposed lease 23 Pacific Media replied on 28 July 1999 giving substantially the assurances requested The relevant portions of this reply were the following 1 We will instruct our bankers to send S 600 000 to you tomorrow Thursday 29th July this money to be sent to the same bank and account details as the previous deposit ie 346 900 2 We confirm that UAST will pay six quarterly instalments of S 450 000 towards its contribution of the premium due to the Land Office with the first instalment being paid on or before 9th September 1999 3 I appreciate your agreement to discuss the utilisation of the S 600 000 good faith payment towards UAST s contribution to the premium once you have handed over the cinema to us for fitting out My suggestion would be that we pay the quarterly instalments of S 450 000 due 9th September 1999 and 9th 1999 in full and that the four remaining payments are then reduced to S 300 000 per instalment with S 150 000 of the S 600 000 being applied to each of the four instalments emphasis added 24 Interestingly the day before on 27 July 1999 in anticipation of the sum of 600 000 from Pacific Media there was an internal note from Elizabeth of Parkway to Linda of MCST in these terms Please note that 600 000 shld be in our bank PPPL You will need to clarify with TKS on whether this is to be transferred to MCST since this is a holding deposit for landlord who is MCST Plse let me know on Monday am when the money is in 25 On 3 August 1999 Parkway transferred the 600 000 it received to the account of MCST It should be mentioned that this sum was transferred back to Parkway on 29 February 2000 after Parkway sold their interest in the Shopping Centre to Lend Lease 26 Thereafter the parties continued their negotiations on the appropriate rental package for the lease of the cineplex by UAST 27 On 9 September 1999 and as promised UAST remitted the sum of 450 000 as being their contribution toward Parkway s DP instalment payment to the Land Office The next payment of 450 000 to Parkway was effected on 15 December 1999 In the meantime on 10 September 1999 Parkway paid the remaining 80 of the DP in full to the Land Office Before doing so they sought the Land Office s concurrence to waiving interest payment due But this was not acceded to UAST were not informed of Parkway s intention to pay up the entire DP 28 While the parties were negotiating drafts of a lease were to ing and fro ing between them But none was executed 29 Towards the end of 1999 Parkway decided that they would sell their interest in the Shopping Centre The sale was effected in February 2000 UAST were only told of it the following month Thereafter the negotiations between Parkway and UAST simply ceased In July 2000 UAST notified the new owners Lend Lease that they did not wish to proceed with the proposal to lease the cineplex from MCST Decision below 30 In respect of the original plan the trial judge held that there was no concluded free standing agreement binding on UAST to contribute towards the DP As for the period post Parkway MCST taking over from UAST as developers of the cineplex the trial judge held that it was the understanding between Parkway and UAST that UAST s proposed contribution of 3 046m towards the DP was an integral part of the rental package It was because of this contribution that UAST s package was viewed as being more attractive than that of Cathay s This contribution was important to Parkway as it would reduce their up front costs and the funding needed for the project Parkway were also then concerned about the financial standing of UAST Pacific Media Thus Parkway s emphasis on the need for good faith money The payments were made in anticipation of the intended lease ie as security for the liabilities under the intended lease They were not intended to be outright payments They were to be kept aside and held against the conclusion of a lease The moneys deposited were to be used after the lease was signed As regards the sum of 346 900 which should have been refunded to UAST the court held that UAST subsequently permitted Parkway to retain it as part of the good faith deposit 31 While the trial judge noted that UAST knew that whatever sums paid as DP to the Land Office would not be refundable she held that that was not the question The relevant question was what was the basis upon which the payments were made by UAST The parties never addressed their mind to the question as to what would happen to the payments if no lease was eventually executed Relying on Sydney Harbour Casino Holdings v NMBE Pty Ltd 1999 9 BPR 16 679 she held that pre contract deposit which was the nature of the present payments made by UAST was recoverable The negotiations were held subject to contract She ruled that the payments should be returned on the ground of a total failure of consideration Issues 32 In the appellants case Parkway raised two arguments to contend that the respondents were not entitled to ask for the refund of 1 846 900 a the payments were made pursuant to an agreement between the parties under which the respondents would contribute in part towards the non refundable payment of the DP imposed by the Land Office to obtain permission to convert the use of the common areas of the shopping centre into a multi screen cineplex and b there was a change of position on the part of Parkway as the moneys received from UAST were paid over to the Land Office and were non refundable Change of position 33 Quite rightly before us counsel for Parkway concentrated his arguments on the second ground On the facts as we have enumerated there was no reasonable basis to argue that there was an agreement whereby UAST would make outright contributions towards the DP irrespective of whether or not they were given a lease of the cineplex by Parkway 34 The judge below noted the defence of change of position but did not think there was a need for her to go into a detailed examination of that issue All she said was Given my findings the facts in evidence fall short of satisfying the elements of the defence of change of position 35 Counsel submitted that the judge was wrong to rule that the defence of change of position must fail He said that the very premise upon which this defence could be raised was that the payment was made pursuant to a vitiated transaction and relied upon the following passage from Jaffey The Nature and Scope of Restitution at pp 225 to 226 2000 Ed A defendant may receive a vitiated transfer and on the assumption that he is to that extent wealthier spend money that he would not otherwise have spent If the defendant remains liable for the full value that he received he will be worse off than if he had never received the payment This would be unjustified unless as will be seen below one can say that the defendant ought to have known that he was liable to return the money received The restitutionary liability is based on the fact that the defendant has received a windfall that he is in surplus as it were and therefore that overall he will not be prejudiced by the restitutionary liability if it would prejudice him it should be reduced accordingly This is the change of position defence the plaintiff s claim diminishes to the extent that the defendant s position has changed in consequence of the receipt 36 This defence would appear to have its origin in Lipkin Gorman v Karpnale Ltd 1991 2 AC 548 where Lord Goff said at 580 At present I do not wish to state the principle any less broadly than this that the defence is available to a person whose position has so changed that it would be inequitable in all the circumstances to require him to make restitution or alternatively to make restitution in full 37 A little earlier in his judgment at 579 Lord Goff gave the following illustration as to how such a defence could be invoked If the plaintiff pays money to the defendant under a mistake of fact and the defendant then acting in good faith pays the money or part of it to charity it is unjust to require the defendant to make restitution to the extent that he has so changed his position Likewise on facts such as those in the present case if a thief steals my money and pays it to a third party who gives it away to charity that third party should have a good defence to an action for money had and received In other words bona fide change of position should of itself be a good defence in such cases as these 38 In Management Corporation Strata Title No 473 v De Beers Jewellery Pte Ltd 2002 2 SLR 1 this Court distilled the three elements in this defence which must be satisfied before it can be successfully raised a The payer has changed his position b The change is bona fide c It would be inequitable to require him to make restitution or to make restitution in full 39 For easy reference Parkway had in their case set out the following table showing the dates on which Parkway made the DP payments to the Land Office and UAST to Parkway Payments by Parkway to the Land Office Payments by UAST to Parkway a 25 Apr 1998 872 487 00 b 14 Jan 1999 346 900 c 5 Apr 1999 906 331 50 d 30 Jul 1999 600 000 e 9 Sep 1999 450 000 f 10 Sep 1999 6 978 456 00 g 5 Dec 1999 450 000 h 29 Dec 1999 532 483 38 Total 9 289 757 88 1 846 000 Note The figures in column 2 should add up to 1 846 900 The mistake is inherent in the source of the quote 40 Parkway contended that they made the DP payments to the Land Office only because of their belief that UAST were committed to contribute at least 3 046 900 in that regard and consistent with that UAST did in fact make payments to Parkway on that account UAST had intended that their payments be used towards paying the DP and knew that such payments when made were non refundable Parkway said that while in the light of the negotiations between the parties there might be a question mark whether there was an enforceable agreement that UAST would pay their share of the non refundable DP in any event there was a compelling case that Parkway honestly believed that such was the position Parkway had in good faith changed their position by paying the 1 846 900 to the Land Office as part of the DP in the honest belief that it was UAST s contribution towards their share of the DP which when paid to the Land Office would be non refundable Therefore Parkway had satisfied both the first and the second elements 41 As for the third element Parkway argued that they no longer held the 1 846 900 as it was paid over to the Land Office and no refund could be obtained It would be unjust to require them to refund the whole sum or any part of it to UAST While it was true that Parkway had sold their interest in the Shopping Centre no additional value was given by the purchasers on account of the fact that Parkway had made the DP payments In any event the development of the cineplex did not proceed and the URA s written permission to develop the cineplex had also lapsed Our views 42 We shall now consider the fact situation of the case to determine whether the three elements of the defence had been fulfilled 43 To satisfy the first element the appellants must show that they had in the light of the understanding with UAST paid the money remitted by UAST over to the Land Office From the table shown at 39 it would be seen that the appellants made the first 10 DP payment over to the Land Office while still negotiating with UAST on the original plan It was some eight and a half months later that UAST paid their share to Parkway So in respect of that first payment at best it could be said that UAST reimbursed Parkway their share of the contribution 44 The second instalment payment was made by Parkway to the Land Office after UAST had already indicated that they would not be able to be the developers for the cineplex project and had proposed the revised plan

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/restitution/1627-parkway-properties-pte-ltd-and-another-v-united-artists-singapore-theatres-pte-ltd-and-another-and-another-case-2003-2-slr-103-2003-sgca-7 (2016-01-30)
    Open archived version from archive

  • Ooi Ching Ching Shirley v Just Gems Ltd[2003] 1 SLR 14; [2002] SGCA 43
    in the present action concerns this further 2 000 shares 16 On the basis of the SPA Ooi made two points First that the SPA was the agreement between the parties Second that the vendors of the 22 of the PRT shares were all the shareholders of PRT and not Ooi alone and that Ooi signed the SPA in a representative capacity as did Jamilah on behalf of Just Gems 17 In early 1998 Jamilah realised that no share certificates had been issued to Just Gems in respect of the 22 PRT shares Reminders were sent In her reply of 17 February 1998 Ooi stated that a mistake was made in having the 124 001 shares of PRT registered in the name of Jamilah It should have been under Just Gems Ooi promised to make the correction By that letter Jamilah was also told that because of a capital restructure Just Gems s shareholding in PRT had become 900 007 shares In court Ooi tried to shift the blame for the mistake to Jamilah 18 Notwithstanding subsequent correspondence and meetings the correction was never effected Thus this action by Just Gems is to recover firstly the USD500 000 on the ground of a total failure of consideration and secondly the excess USD50 000 paid by mistake Decision below 19 The judge below found that Just Gems through Jamilah had entered into the agreement with Ooi to invest in 124 005 shares of PRT This agreement was concluded sometime in late August or early September 1996 before the SPA was executed between the parties This explained why the first instalment payment was made by Jamilah on 16 September 1996 Otherwise there would have been no reason for Jamilah to effect the payment She also accepted Amin s explanation that because of confusion on his part an excess payment of USD50 000 was made 20 Proceeding from there the trial judge found that it was the intention of the parties that the consideration for the payment of USD500 000 was the transfer and registration of 124 005 shares of PRT in the name of Just Gems As Ooi had failed to fulfil that obligation there was accordingly a total failure of consideration and the sum paid should be returned to Just Gems Issues 21 In this appeal Ooi raises three issues for the consideration of the court In the appellant s case she formulated the issues as follows i Has Just Gems shown Ooi to be personally liable in the agreement relating to Just Gems investment in PRT ii Has Just Gems shown that it overpaid USD50 000 or any moneys in excess of its investment of USD500 000 iii In any event has Just Gems shown that it suffered a total failure of consideration Is Ooi personally liable 22 On this issue the argument of Ooi rests wholly on the SPA where it is clearly stated that the agreement was between the shareholders of PRT and Just Gems with the former agreeing to sell to the latter 20 of the shares of PRT Even the signature block shows that Ooi signed in her representative capacity Shirley Ooi Pacific Rim Trading Ltd Accordingly Ooi was clearly the agent of all the shareholders of PRT in the proposed transaction As regards the number of the shares in PRT which Ooi had agreed to sell to Just Gems it was only 33 445 shares This was evidenced by the six instruments of transfer effected in July 1997 by the six shareholders of PRT in favour of Jamilah There was no agreement before the SPA was signed What took place before then were mere negotiations 23 Ooi also relies upon an affidavit filed by Jamilah in a BVI proceeding where she exhibited the SPA as evidence of the agreement by Just Gems to buy the shares of PRT 24 Ooi contends that the trial judge s finding that Ooi and Just Gems had already concluded the agreement in late August early September 1996 is against the weight of the evidence and it is erroneous for her to have found that the SPA was of no legal effect Ooi also highlights the fact that on the evidence of Just Gems the latter would be buying 22 of the shares of PRT however under the SPA it was only to be 20 Ooi submits that in all the circumstances the judge s suggestion that the 20 stated in the SPA was a variation without consideration is wholly unsustainable 25 The main obstacle which stands in the way of the contention of Ooi is the finding of the trial judge that the first instalment of USD200 000 was paid on 16 September 1996 This payment was substantiated by documentary evidence showing that the sum was remitted into Ooi s Citibank account This was the key evidence which led the judge to conclude that there was a concluded contract before this payment was made On the other hand the judge was not at all impressed by the fact that Ooi kept changing her stand on the receipt of this sum and the purpose thereof In her pleadings she denied having received this sum Her final position was that the sum was sent to her so that Amin could open an account in the Singapore Citibank branch The trial judge having carefully scrutinised the objective facts as well as the fact that Ooi failed to call the Citibank officer who handled Ooi s account Ms Saini to explain how the sum of USD200 000 was dealt with could not accept this contention 26 This finding is one of fact and unless it could be shown that the trial judge was plainly wrong there is really no basis for us to overturn it We are not persuaded that the finding is plainly wrong It might well be that on the evidence another judge could have come to a different conclusion But the trial judge here heard the evidence and she accepted the version and the explanation of Jamilah and Amin In contrast the judge found Ooi to be an unsatisfactory witness She also noted that at times Ooi was evasive in her testimony 27 We should add that there was another basis upon which the trial judge held that the SPA could not be the concluded contract The SPA did not identify the shareholders specifically nor the quantum of shares which each shareholder agreed to sell to Just Gems Indeed it did not even say that all the shareholders of PRT had agreed to sell It is plain that the SPA is vague and ambiguous There is really no basis to suggest that Ooi should only be bound to the extent of 33 445 shares when that was never specified The fact that subsequently in the transfer form Ooi executed the transfer of 33 445 shares in PRT to Jamilah cannot be used to construe the contract see Schuler AG v Wickman Machine Tool Sales Ltd 1974 AC 235 at 261 263 In all the circumstances even assuming that the SPA were valid and effective it was reasonable for the judge to hold that on a fair construction of the document it meant Ooi would ensure that for USD500 000 Just Gems would obtain 20 of the total issued shares of PRT This obligation was entirely Ooi s All the more so when the full consideration of USD500 000 plus the excess of USD50 000 had been paid over to her Just Gems did not make any payment to any of the other shareholders of PRT 28 In the premises we hold that the first issue raised is without merit Excess payment 29 The second issue of overpayment is again dependent wholly on the question whether the sum of USD200 000 was paid to Ooi on 16 September 1996 and the purpose of that payment Ooi s contention is that it would have been too early for Jamilah to make that payment in respect of this transaction The memorandum of 25 September 1996 which was for discussion was not even furnished to Jamilah Just Gems as yet The deal was only concluded on 1 November 1996 when the SPA was forwarded to Jamilah for execution 30 We would reiterate that the fact of the matter is that the trial judge heard the evidence She considered the purport of the memorandum as well as the terms of the SPA She also scrutinised the different positions taken by Ooi on the USD200 000 She noted the shifts made by Ooi It was only after weighing the evidence including that of Khoo and Soh who testified for Ooi that the trial judge came to the conclusion that the sum of USD200 000 was remitted into Ooi s account in part satisfaction of the transaction 31 The only evidence which posed some difficulties are two letters written by Amin on 26 November 1996 and 11 December 1996 where in the first letter he stated that USD150 000 was outstanding in respect of the transaction and in the second letter USD50 000 was outstanding The trial judge did consider this aspect of the matter but she accepted Amin s explanation with this comment at para 92 of her judgment Mr Amin s explanation was that he was confused when he wrote that letter since he had made many payments to Madam Ooi for various investments and she was always asking him for more money It was only when his wife went through the payments in 1998 that she discovered the overpayment I accept Mr Amin s explanation It is a reasonable one given the circumstances then existing 32 The trial judge also dealt with Ooi s allegation that the remaining USD150 000 was paid by Jamilah in two instalments USD100 000 on 30 November 1996 and USD50 000 on 11 December 1996 on both occasions in cash at para 93 of her judgment The last two payments were allegedly made in cash Mr Amin denied having made the payment of USD100 000 Since Madam Ooi alleged this payment had been made she had the onus of proof on this issue She was not able to discharge it The money was purportedly received by Ms Sim but Ms Sim was not called to testify on the matter Further Madam Ooi s bank statement did not show a deposit of USD100 000 on the day in question and as I have stated in para 51 above Madam Ooi s attempt to equate a deposit of USD99 500 with the USD100 000 purportedly received was not convincing Madam Ooi s inability to substantiate the USD100 000 payment put a substantial dent in the credibility of her version of how the purchase price was settled 33 There is really no basis for us to hold that the trial judge s finding is plainly wrong Total failure of consideration 34 We now turn to the third issue It is not in dispute that the purchaser of the 22 of PRT shares was Just Gems and the latter should have been registered as the owner thereof Ooi admitted it in her letter of March 1998 as well as in court that she made a mistake in instructing the company secretary of PRT to prepare the instruments of transfer in favour of Jamilah personally She promised to put things right 35 It is also not in dispute that to date the 22 of PRT shares are yet to be registered in the name of Just Gems 36 Ooi s contention is that the underlying purpose of the two offers she made to Jamilah was to enable Jamilah through her nominee Just Gems to invest in Agate by the direct holding of 750 000 shares in Agate and through the holding of 22 or 20 as stated in the SPA of the PRT shares Consequently Jamilah was appointed a director of Agate and also became the CEO of Agate s Malaysian subsidiary The error in having the shares of PRT transferred to Jamilah personally instead of to Just Gems did not cause any real loss or disadvantage to Jamilah or Just Gems 37 Ooi also alleges that it made no difference whether the PRT shares were registered under the name of Just Gems or Jamilah Ooi points out that Jamilah in fact wanted to invest in Agate and Pacific Rim in her own name It was only at her suggestion that Jamilah decided to use Just Gems as the vehicle for her investment 38 There was correspondence between the parties on the intended rectification The stumbling block would appear to be that Ooi and or her representative wanted Just Gems Jamilah and Amin to sign an indemnity agreement drafted by Ooi s agent one Mr Allardice wherein Just Gems Jamilah and Amin were to indemnify all officers of PRT past present and future and to see that such officers are indemnified against all claims demands etc arising out of PRT acting on their request to cancel the share certificate in the name of Jamilah and reissue it in the name of Just Gems She admitted in court that she sought the indemnity agreement to protect herself from the consequences of her mistake There were some negotiations to seek an acceptable draft indemnity but without success 39 Basically the trial judge held that as the error in registration was brought about by a mistake on the part of Ooi and or PRT there was no reason why Jamilah Just Gems or Amin should be required to give any indemnity particularly so with regard to Amin who was a third party to the transaction 40 It is true that in a concurrent proceeding instituted in BVI shortly after this action in Singapore was commenced Just Gems asked for reliefs as if it were a shareholder of PRT The claim was dismissed by the BVI court when Just Gems refused to proceed with it Just Gems sought without success to have the BVI proceeding adjourned until after the outcome of the Singapore proceeding was known 41 However Just Gems clarified that the BVI proceeding was instituted in order to enable it to inspect the share register and to determine its status in PRT Because under BVI law only registered shareholders could inspect the share register the pleadings were amended to include two prayers asking for a declaration that Just Gems was a shareholder of 900 007 shares in PRT and for an order that a share certificate for the same be issued to Just Gems Later Just Gems realized the conflict and instructed its BVI lawyers not to proceed with these two prayers 42 The trial judge held that Just Gems was entitled to a refund of the sum of USD500 000 paid on the ground that there was a total failure of consideration As for the USD50 000 Just Gems was also entitled to have the sum returned on the ground that it was an excess amount paid by mistake The law 43 It is settled law that where money is paid by a plaintiff to a defendant under a contract and the defendant fails completely to discharge his part of the bargain the plaintiff has the option of either claiming in contract for damages for breach or he may treat the contract as at an end on the ground that the defendant has repudiated it and sue for the refund of the money in quasi contract Failure of consideration occurs when one party has not enjoyed the benefit of any part of what it bargained for In the determination of this question one has to judge it from the perspective of the payor plaintiff see Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited 1943 AC 32 at 48 44 For a plaintiff to succeed in a claim for a refund there must be a total failure of consideration The test as stated by Kerr LJ in Rover International Ltd v Cannon Film Sales Ltd No 3 1989 1 WLR 912 is whether or not the party claiming total failure of consideration has in fact received any part of the benefit bargained for under the contract If the plaintiff gets something out of the contractual arrangement this remedy would not be available to him although he can claim in damages against the defendant for failing to fulfil all his obligations 45 This distinction is very aptly illustrated by the case Whincup v Hughes 1871 LR 6 CP 78 There the plaintiff placed his son as an apprentice to a watchmaker and jeweller for a period of six years A premium was paid by the plaintiff to the master for the arrangement Unfortunately one year after the son became an apprentice the master died The plaintiff sued the master s estate to recover the whole or some part of the premium paid on the ground of failure of consideration Brett J in dismissing the action on the ground that the consideration had not wholly failed said When a sum of money has been paid for an entire consideration and there is only a partial failure of consideration neither the whole nor any part of such sum can be recovered 46 In contrast in Kwei Tek Chao v British Traders and Shippers Ltd 1954 2 QB 459 a case concerned with a CIF contract for the sale of goods Devlin J said at 475 If goods had been properly rejected and the price has already been paid in advance the proper way of recovering the money back is by an action for money paid on a consideration which had totally failed ie money had and received 47 The problem in each case is to determine whether on the facts there is a total or only a partial failure of consideration In some situations the line can be rather fine 48 In Rowland v Divall 1923 2 KB 500 the plaintiff bought a motor car from the defendant

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/restitution/1623-ooi-ching-ching-shirley-v-just-gems-ltd-2003-1-slr-14-2002-sgca-43 (2016-01-30)
    Open archived version from archive

  • Grossner Jens v Raffles Holdings Ltd[2004] 1 SLR 202; [2003] SGHC 290
    in Asia and Europe and the procurement of airline food and related supplies At the end of the meeting SAir proposed that Raffles liaise directly with them with respect to the proposed areas of cooperation Raffles pointed out that as the question of a sale did not appear to be on SAir s agenda at that time there was no further role for JG to play in the matter 9 Mr Helfer testified that upon his return to Singapore he broached the subject of an acquisition of all or a portion of the Owner s interest in Swissotel when he sent a draft confidentiality agreement on 29 May 2000 to SAir s Mr Werle for his comments No reply was received by Raffles but both parties continued from time to time to discuss ways of collaborating in the hotel business 10 At the end of 2000 Raffles received information that SAir were considering the sale of Swissotel Around January 2001 Swissotel was officially put up for sale A private sale to Raffles was not on the cards as SAir appointed Credit Suisse First Boston CSFB to handle a competitive bidding exercise for prospective purchasers of Swissotel By a fax dated 22 February 2001 CSFB invited Raffles to submit a bid for the purchase of Swissotel In their fax CSFB explained that the bidding process was divided into two phases The first was the indicative offer stage and the second was the negotiation phase CSFB explained that on the basis of the indicative offers received by them a final decision will be made as to whether the sale of any or all of the business would be taken If a decision was taken to proceed with the sale certain prospective purchaser s will be invited to proceed further into the next phase of the sale 11 After being invited by CSFB to bid for Swissotel Raffles appointed their own merchant bankers Morgan Guarantee to study the bid documents and prepare a bid proposal for Swissotel Raffles proposal for the acquisition of Swissotel was submitted to CSFB on 28 February 2001 In due course Raffles were identified as the preferred bidder and were invited to enter into negotiations which culminated in the sale to them of Swissotel The acquisition of Swissotel by Raffles was completed in June 2001 12 After learning that Raffles had succeeded in acquiring Swissotel JG claimed credit for having brokered the sale and demanded from Raffles a commission for the sale Raffles contended that he was not entitled to any commission and offered him an ex gratia payment in the form of an introduction fee The amount offered to JG was DM80 000 to DM100 000 This offer was rejected by him 13 In November 2002 JG commenced the present proceedings to claim from Raffles a commission of 1 of the purchase price of Swissotel Raffles furnished two reasons why JG s claim ought to be dismissed First they contended that although they had discussed the question of brokerage services regarding the acquisition of Swissotel with JG the proposed brokerage contract was not finalised There was no binding contract because important terms namely the scope of brokerage services to be performed by JG and his remuneration had not been agreed upon Secondly it was asserted that even if there was a contract JG did not earn any commission because he did not succeed in brokering the sale of Swissotel to Raffles which had to bid for Swissotel in the competitive bidding exercise conducted by CSFB Whether there was a concluded contract 14 Raffles assertion that they had no binding contract with JG will first be considered Depending on circumstances negotiating parties may enter into a binding contract even though there are a few terms which have yet to be agreed upon This was recently reiterated by the Court of Appeal in The Rainbow Spring 2003 3 SLR 362 However the position is very different where important terms have not been agreed upon for as Maugham LJ put it in Foley v Classique Coaches Ltd 1934 2 KB 1 at 13 unless all the material terms of the contract are agreed there is no binding obligation In the present case the parties did not reach agreement on crucial terms such as the remuneration for JG if he succeeds in brokering the sale of Swissotel to Raffles and the scope of the services to be rendered by JG 15 When JG offered on 31 January 2000 to broker the sale of Swissotel to Raffles the latter made it clear in their reply of 14 February 2000 that they required him to state the scope of services which will be provided Despite being reminded to do so JG did not furnish the required information Without such information on the scope of his services it is difficult to know what were his obligations under the proposed contract 16 More importantly the parties did not reach agreement on the remuneration package for JG Raffles which had rejected JG s proposal for payment of a commission of 1 of the purchase price wanted the commission to be capped and for this purpose JG was requested to provide information to Raffles regarding the indicative price for Swissotel JG failed to provide the required information The reason for this could be that he did not know what the indicative price was As the commission payable to JG was never sorted out why JG claimed 1 of the sale price as his commission cannot be fathomed After all when cross examined he admitted as follows Q Y ou confirmed that you had to negotiate an amount with Raffles after he told you the purchase price A That s right Q Right So even though you knew that was the position you decided to make the demand for 1 A Yes 17 JG also admitted that although the remuneration had not been agreed upon he was claiming the said 1 only because he did not know the actual amount paid by Raffles to SAir for Swissotel 18 It cannot be seriously argued that JG s scope of duties and remuneration may be implied from the previous course of dealing between him and Raffles Admittedly in Hilas Co v Arcos Ltd 1932 147 LT Rep 503 the House of Lords held that in the light of the previous dealings between the parties in question some of the terms of the contract could be ascertained from previous transactions between the said parties and the custom of the trade However there are insufficient deals between JG and Raffles to warrant any such implication 19 I thus hold that there was no concluded brokerage contract between JG and Raffles JG has only himself to blame for this state of affairs for if he had given Raffles the requested information on the scope of his services and the indicative price for Swissotel so that the capped commission could be worked out the position would have been different Whether JG succeeded in the sale of Swissotel to Raffles 20 Even if there was a binding contract between JG and Raffles his claim would still have been rejected for the simple reason that it was not established that he succeeded in brokering the sale of Swissotel to Raffles It is common ground that JG is to be remunerated only if he is responsible for effecting the sale of Swissotel to Raffles In his letter of 31 January 2000 to Raffles he stated that only when a conclusion comes to pass as a result of our activities do you have to pay the broker s commission named hereunder In their reply on 14 February 2000 Raffles referred to the payment of a success based fee to JG 21 To begin with the basis of JG s offer to broker a deal for the sale of Swissotel to Raffles was that it was a private sale In his letter of 31 January 2000 he stated that Swissotel was officially not on the market and that the proposed sale had to be treated with strict confidence The situation changed totally after SAir instructed CSFB to conduct a competitive bidding exercise for the sale of Swissotel 22 Raffles asserted that after CSFB invited them to make a bid for Swissotel in February 2001 Mr Yip informed JG about the changed circumstances In April 2001 Mr Yip told JG that Raffles was about to conclude an agreement with SAir for the acquisition of Swissotel He added that as a matter of goodwill Raffles may be prepared to give him an ex gratia amount which was referred to as an introduction fee 23 JG s response to Mr Yip in his letter of 14 April 2001 is rather telling as he referred to the change in the conditions of the acquisition He wrote as follows We refer to your telephone conversation with the undersigned and would like to thank you for offering us an introduction fee which shall come to pass as a result of our activities so far instead of the previous to that agreed commission since the conditions of the acquisition have changed recently As agreed between us the introduction fee will be deserved and due only upon conclusion of the transaction and the amount of the said fee will be decided by mutual agreement emphasis added 24 After agreeing to negotiate the introduction fee JG altered his position nine days later when he wrote on 23 April 2001 as follows We have performed accordingly to our agreement with RAFFLES and nevertheless if our deserved and due remuneration will be called commission or introduction fee it has to be based on the agreed 1 of the transaction price 25 JG s volte face cannot be countenanced I reject his testimony that when he used the term changed circumstances in his letter of 14 April 2001 he was merely referring to the renaming of his commission as introduction fee After all he readily accepted during cross examination that if there had been a genuine competitive bidding process for the sale of Swissotel the position would have changed so dramatically that his alleged agreement with Raffles if binding would have to give way to new arrangements When questioned he said so in no uncertain terms as follows Q Let s say on the 14th of February you and Mr Yip and Ms Lim are in a room and then somebody says What happens if nothing comes out of this and there is a separate bidding process what would your answer be You would have to re negotiate the fee correct because that s a very different situation A I would not only have to re negotiate the fee I would have to re negotiate the whole thing emphasis added 26 When asked why he relied on his old arrangements with Raffles when the situation had drastically changed JG claimed that he was entitled to do so because the competitive bidding process undertaken by CSFB was not a genuine bidding exercise Although he was not altogether coherent he furnished two reasons for this First he insinuated that SAir and CSFB had wrongfully fixed the bidding exercise in favour of Raffles Secondly he asserted that the only purpose of the competitive bidding exercise for Swissotel was to ascertain whether or not Raffles offer for Swissotel was reasonable enough for SAir to accept 27 If the allegation that there was wrongdoing in the bidding exercise has substance it must follow that both SAir and CSFB were part of a conspiracy When questioned repeatedly on this matter JG finally conceded that this must be so He said as follows Q The logical consequence of what you are saying is that the Board of Directors of Swissair the national pride of Switzerland were in breach of their duties and that Credit Suisse Boston were part of the conspiracy and had also acted wrongly A Yes 28 In his letter of 28 December 2001 to Mr Helfer JG had also alleged that the bidding exercise conducted by CSFB had been fixed In the penultimate paragraph of his letter he stated as follows By the way just to bring up the point once more although not being relevant to our remuneration claim and without prejudice we refuse to believe that the so called bidding has been an official one or took place without restraint on trade We intend to ask the duly qualified authority in Switzerland to check on those proceedings just to prove that your argument is incorrect as well as insincere 29 JG s associate Mr Buhrer went one step further on 31 January 2002 when he wrote to Dr Mario Corti one of the most senior officials in SAir to complain about the competitive bidding process handled by CSFB The English translation of his letter is as follows This includes the bidding process issue We can effect this in a fundamental manner which is also usable for the courts competent for the impending proceedings as means of evidence by an official investigation This would be done by a criminal complaint against the parties involved and advising them An investigation resulting therefrom by the district public prosecutor regarding a crime whose investigation is mandatory would obtain clarity in respect of these rumours 30 The serious allegation of wrongdoing on the part of SAir or CSFB was not substantiated in any way As JG was unable to establish that the competitive bidding process was a sham this allegation need not be further considered 31 JG further undermined his credibility when he next suggested that SAir had adopted the competitive bidding process for the sale of Swissotel because they merely wanted to check whether Raffles offer was within the range they could reach He also made the absurd suggestion that his assertion must be true simply because Raffles managed to acquire Swissotel When cross examined he said as follows Q This evidence that you re giving as to why Swissair went into the bidding process and that they used the Raffles Hotel bid as a benchmark with these other bids all these are your guesswork correct A No it s a possibility Q W hich means you are guessing that it happened A It would be guessing if Raffles wouldn t have got it But they got it 32 Although JG was very evasive when cross examined he finally admitted that he had no basis for his allegation when he said as follows Q Now you have no knowledge yourself of what were the reasons why Swissair called for a competitive tender nor do you know whether they were benchmarking the Raffles Hotel bid against other bids right A No that I don t have 33 As JG did not substantiate his allegation that the competitive bidding process managed by CSFB was rigged it must follow that he in his own words would have to re negotiate the whole thing This is consistent with his statement in his letter of 14 April 2001 that the introduction fee will be decided by mutual agreement In view of the fundamental change of circumstances resulting from the competitive bidding exercise conducted by CSFB it is surprising that JG claimed that he was instrumental in closing the deal for Swissotel between Raffles and SAir In paras 102 and 103 of his Affidavit of Evidence in Chief he claimed as follows 102 I reiterate that it was my efforts that enabled the Defendants to close the Swissotel Transaction with SAirRelations 103 I had brought the Defendants to meet the right people at SAirRelations at the right time and advised them on the right approach to the matter I verily believe that was why they were invited by SAirRelations to make an offer for Swissotel and was finally selected as the ideal partner 34 JG admitted that he did not have much to do in relation to the Swissotel deal during cross examination when he said as follows Q Now let s try and understand what exactly you had done I think you had arranged for one meeting and you had sent Raffles Hotel twice some publicly available information Correct A Well they requested yes Q And your basis of claiming 1 commission is that work which you did which I just outlined Correct A Yes because they didn t ask for more 35 The only concrete thing that he did was to arrange a meeting on 22 May 2000 between representatives from SAir and Raffles The value of this meeting was disputed After having had the opportunity to evaluate the testimony and demeanour of the witnesses I prefer the evidence of Mr Helfer and Mr Yip that the sale of Swissotel was not discussed at the meeting In short JG s claim that he had organised a successful meeting on 22 May 2000 cannot be taken seriously One is thus left in the dark as to what else he did to further Raffles interest in the acquisition of Swissotel 36 When JG was invited to explain how his brokering activities had secured the Swissotel deal for Raffles he was unable to do so He said as follows Q Give me a concrete piece of evidence within your knowledge which links Swissair s decision to sell it to Raffles Hotel and your introduction If you cannot say you cannot A Well that I can t 37 When asked why SAir decided to sell Swissotel to Raffles he also could not shed any light on the matter He said as follows Q You don t know the reasons why Swissair chose Raffles Hotel correct A I don t know the reasons no 38 In truth JG found it difficult to explain how he clinched the Swissotel deal for Raffles because there was nothing for him to do in the fundamentally altered circumstances resulting from the introduction of the competitive bidding exercise for the sale of Swissotel In this regard reference ought to be made to

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-19?id=1629 (2016-01-30)
    Open archived version from archive

  • Cendekia Candranegara Tjiang v Yin Kum Choy and Others[2002] 4 SLR 48; [2002] SGHC 136
    him later on 11 September 1999 He said by the end of August 1999 the amount required for the voluntary arrangements of both KYC and KFC was in the region of 250 000 VA sum with further sums to be made available by KYC and KFC to their personal creditors from profits and remuneration to be earned by them from new operations At about this time he had also learnt from the company s secured creditors that they were not prepared to consider any offer less than 4m for the sale of the assets of the company 13 By noon of 9 November 1999 the first defendant had received two written bids in response to his invitation to bid for the assets of the company The plaintiff arrived at his office on 9 November 1999 accompanied by KYC and KFC at around 11 45am The first defendant then informed the plaintiff that if he were to consider the plaintiff s bid it would have to be one that maximised the return for the secured creditors of the Group as well as one which catered to the aspects of remuneration equity and the like relating to both KYC and KFC in the operations of the new company Newco to be established by the investor to absorb the assets and operations of the Group see para 60 of his affidavit of evidence inchief 14 As it transpired the first defendant found the bid of the plaintiff more favourable than the two bids he had received in terms of price as well as the interests of various interested parties He then advised that he would proceed to draw up the MOU for signing In the event on 10 November 1999 the MOU was signed by the plaintiff KYC KFC and himself at his office Copies of the signed MOU were then handed to KYC and KFC to procure the signatures of their respective spouses They were duly signed later and consequently he instructed his then solicitors David Lim and Partners to prepare all requisite contracts and agreements relating to the said MOU In relation to the agreements to be executed by the parties the first defendant averred in para 118 of his affidavit that on 19 April 2000 his manager Ramasamy handed to the plaintiff the draft of all the agreements that were to be entered into pursuant to the MOU This assertion was later retracted accompanied by a claim that only four draft agreements were in fact handed over to the plaintiff on 19 April 2000 the remaining four being only mirror images of those handed to the plaintiff were forwarded to the plaintiff s solicitors on 26 July 2000 15 The first defendant in outlining the developments since the signing of the MOU said that his manager Ramasamy and his senior assistant Yap Chee Leong assisted the plaintiff to prepare amongst other things a cash flow report in relation to the company financial information including forecast for the Newco the personal and business profile of the plaintiff and other details in order for the plaintiff to procure suitable banking facilities The first defendant added that sometime in mid November 1999 the plaintiff along with KYC and KFC instructed his associate company Yin Services Pte Ltd a corporate secretarial firm to proceed with the incorporation of the Newco called IS Glass Pte Ltd He added that the incorporation was promptly done bank accounts were opened in the name of Newco and as from 1 December 1999 the plaintiff even remitted monies for Newco The supporting documents produced at the trial revealed that the plaintiff was not the registered shareholder of Newco although he was one of the authorised signatories to the bank account together with the Kwan brothers the first defendant and his manager Ramasamy 16 The first defendant testified that although the MOU was signed on 10 December 1999 the 10 deposit earnest money was not paid until 29 December 1999 As regards developments which took place in the course of December 1999 and February 2000 including the unhappy differences between the plaintiff and the Kwan brothers what the first defendant averred in paras 95 to 113 of his affidavit of evidence in chief is as follows 95 Between 8 December 1999 and 24 January 2000 Cendekia had remitted and or advanced for the account of IS Glass Pte Ltd a sum of about S 300 000 A copy of the ledger account of IS Glass Pte Ltd relating to the account of Cendekia with IS Glass Pte Ltd is annexed herewith and exhibited as YKC 37 I also refer to the above paragraph 82 and my exhibit YKC 26 which are to be read together as to the amounts advanced by Cendekia for IS Glass Pte Ltd s operations 96 In the meantime on 5 January 2000 when Cendekia came to Singapore to attend to the secretarial matters of IS Glass Pte Ltd and to meet several bankers as regards the financing sought to fund the acquisition of the Group s assets and operations a meeting was arranged by me between him and Heller Asia Capital S Ltd This meeting was attended by my manager Mr Rama 97 During his visit to Singapore on 5 January 2000 Cendekia also requested me to assist him to apply for an employment pass for his own representative one Sandiawati Pangestu whom he informed me was meant to be the financial controller of IS Glass Pte Ltd and to be stationed in Singapore Accordingly I proceeded to assist him in this regard A copy of the completed application form is annexed herewith and exhibited as YKC 38 98 Sometime in mid January 2000 Cendekia organised a trip to Europe Germany in particular KFC went with Cendekia on this trip and I came to know from Cendekia that the main purpose of this trip was to procure export orders for IS Glass Pte Ltd as forecasted in the Cendekia s Profile which is exhibited at YKC 16 99 In the meantime since 1 January 2000 IS Glass Pte Ltd proceeded a to procure both local and export orders in the name of IS Glass Pte Ltd b to procure from Indonesian manufacturers float glass both for reprocessing as well as for trading orders see paragraphs 82 and 95 above c to organise transfers of personnel from the various companies in the Group to IS Glass Pte Ltd and d to establish new accounts in the name of IS Glass Pte Ltd with local vendors and suppliers including transfer of telephone accounts 100 In all my meetings with Cendekia KYC and KFC in December 1999 and early January 2000 I had cautioned Cendekia KYC and KFC to the fact that as from 1 January 2000 all costs and expenses of the Group s operations are to be borne by IS Glass Pte Ltd since this became the new operating entity And that as the judicial manager of the company I will seek to recover rent from IS Glass Pte Ltd for the use of the assets of the Group as from 1 January 2000 pursuant to the MOU and reimbursement of all expenses incurred by the Company and the other companies in the Group 101 On 1 3 and 4 February 2000 my manager Mr Rama spoke to Cendekia to obtain approvals from Cendekia before certain cheques of IS Glass Pte Ltd were signed by me or Mr Rama to meet payments for certain advances requested by KYC and KFC and for payments to be made in view of the Chinese New Year festivities Mr Rama also took the opportunity to advise Cendekia to make a visit to Singapore to resolve certain issues like advances and remunerations made to KYC and KFC under IS Glass Pte Ltd 102 By early February 2000 I had also decided on an amount that the company intended to charge IS Glass Pte Ltd for the use of the assets of the company In consultation with KYC and KFC I had also arrived at a sum proposed to be charged by QTSPL and QT for the lease of the assets of QTSPL and QT to IS Glass Pte Ltd 103 By mid February 2000 I had prepared a first draft of the preliminary accounts of IS Glass Pte Ltd which I forwarded to Heller Asia Capital S Ltd on 17 February 2000 in response to their request This is included at exhibited sic YKC 19 104 A copy of my letter dated 17 February 2000 to Heller Asia Capital S Ltd incorporating the preliminary accounts of IS Glass Pte Ltd was also faxed to Cendekia sometime in mid February 2000 105 The JM order was expiring in February 2000 and I had made an application to court to extend this order A copy of my affidavit and the order of court is annexed herewith and exhibited as YKC 39 106 On 21 February 2000 I instructed my manager Mr Rama to request Cendekia to pay a visit to Singapore to discuss certain issues Mr Rama had sent to Cendekia an e mail dated 21 February 2000 in that regard which is annexed herewith and exhibited as YKC 40 107 On 26 February 2000 I had a meeting with Cendekia at Singapore The meeting was held at a coffee house at Grand Plaza Hotel at Coleman Street 108 At this meeting among other issues discussed I informed Cendekia of the company s proposal to charge IS Glass about S 80 000 a month for rental of the company s assets I also advised him about the other amounts that QTSPL and QT intended to charge for rental of their assets to IS Glass Pte Ltd Cendekia did not take objection to the proposed amounts 109 At this meeting the amount of remuneration of KYC and KFC paid under IS Glass Pte Ltd and the advances if any made to KYC and KFC under IS Glass Pte Ltd and the manner in which these advances were to be repaid as well as treated in the accounts of IS Glass Pte Ltd were also discussed 110 The paramount issue mooted by Cendekia at this meeting was Cendekia s intention to pull out from the MOU This intention of Cendekia was indicated to me for the first time at this meeting Cendekia informed me after KYC and KFC had left the meeting that he was afraid that he might not be able to work with KYC and KFC I told him that this was not a valid reason for him to pull out from the MOU 111 I was surprised with Cendekia s intention to pull out from the MOU I told him at that meeting that if he had such intention he had to advise me in writing and if so I would proceed to forfeit the deposit and or look to him for an action in specific performance and or alternatively to look to him for further damages 112 I also informed him to consider carefully all his options and to see through to the completion of his obligations pursuant to the MOU since he had committed an amount not only as a deposit placed pursuant to the MOU but also made advances for account of IS Glass Pte Ltd and to manage the business operations of IS Glass Pte Ltd I also highlighted to him that he was responsible for the rental sums charged to IS Glass Pte Ltd by the companies in the Group 113 Cendekia also informed me that he had agreed with KYC and KFC for them to look for a period of one month for an alternate investor to stand in Cendekia s shoes to complete his obligations under the MOU failing which Cendekia would proceed to complete his obligations under the MOU 17 As regards the counterclaim what the first defendant averred in paras 205 to 219 his affidavit of evidence in chief is as follows 205 I will in this section set out the issues concerning the counterclaim which claim I made through my defence and counterclaim 206 I had on 15 September 2000 through my previous solicitors M s David Lim Partners made a demand for a sum of S 469 004 66 due to the company for the total rental sum owing by Cendekia to the company see exhibit YKC 60 This sum of S 469 004 66 was included in the sum of S 688 197 41 then demanded by my solicitors acting for the company QT and QTSPL for rental sums owed by Cendekia to these three companies 207 Since then the accounts of the company have been updated and the revised amount of the counterclaim against Cendekia as regards the total rental sums owed by Cendekia to the company under the MOU is S 565 153 68 A detailed listing and statement of account of the company as regards this sum of 565 153 68 is exhibited at YKC 64 208 Cendekia at paragraphs 2 and 23 of his reply and defence to counterclaim has stated that my counterclaim for the rental sums charged to IS Glass Pte Ltd if at all is to be claimed by the company through its liquidators since the company has been ordered by the court on 6 April 2001 to be wound up 209 Further at paragraph 3 of his reply and defence to counterclaim Cendekia states that the 10 paid by him pursuant to cl 4 a of the MOU be paid to Cendekia as the second and third defendants have decided not to make any claim for this S 60 000 210 I have signed the MOU in my then capacity as the Judicial Manager of the company as an agent of the company 211 I have no choice in how I am named in this suit action brought by the plaintiff Cendekia 212 If Cendekia through paragraph 23 of his reply and defence to counterclaim is suggesting that the rightful party to assert the counterclaim is the company accordingly it should also follow that the company should be named as the first defendant and not me 213 Nevertheless until such time as such applications if any are made by Cendekia or by the liquidators of the company I have to continue to defend this suit 214 Through paragraphs 2 and 23 of his reply and defence to counterclaim Cendekia has chosen to draw a distinction in that he has taken out this suit against me as the first defendant to recover the 10 deposit but put up a defence as to the counterclaim by stating that the rightful party to assert such a counterclaim is the company This position is not reconciliable since there is a privity of contract by virtue of the MOU as between Cendekia and me then acting for the company I therefore have a valid right to assert the counterclaim against Cendekia until directed otherwise by the court 215 Clause 7 of the MOU reads as The investor shall pay such rates and fees to the respective companies in the Group for the use of the assets with effect from 1 December 1999 until the day when title to all such assets is transferred to the Newco should transfer of title for such assets be delayed beyond 1 December 1999 216 Clause 7 is clear in its terms in that it reads that the Investor shall pay such rates and fees emphasis added It does not read as the Newco having to pay for such rates and fees 217 Clause 7 clearly contemplates an obligation responsibility on the part of the investor Cendekia to pay for such rates and fees for the use by the Newco of the assets 218 At paragraphs 21 and 22 of the reply and defence to counterclaim of Cendekia Cendekia admits to the transfer of machinery and factory space by way of lease to IS Glass Pte Ltd and the transfer of personnel to IS Glass Pte Ltd although he claims that such transfer was done without his approval and agreement I have shown under the section on the background facts and in the previous sections that he actively participated in the incorporation of the company in establishing the bank accounts of IS Glass Pte Ltd and in the commencement of the operations of IS Glass Pte Ltd by remitting advances to procure materials and to make business trips to procure export orders for the benefit of IS Glass Pte Ltd Cendekia was therefore not going to invest through IS Glass Pte Ltd as stated at paragraph 21 of his reply and defence to counterclaim Rather Cendekia consciously and voluntarily invested into IS Glass Pte Ltd 219 I therefore maintain that pursuant to cl 7 of the MOU I have a valid counterclaim for S 565 153 68 against Cendekia who is obligated to pay for such rates and fees as charged to the Newco IS Glass Pte Ltd and in addition pursuant to clause 17 of the MOU I am entitled to forfeit the 10 deposit sum placed with me by Cendekia because of his failure to sign the contracts 18 In essence the first defendant averred that the plaintiff s conduct in not signing the eight contracts forwarded to him constituted a repudiation of the MOU the plaintiff was not entitled to recover the deposit sum paid by him in pursuance of the MOU and that the plaintiff owed the first defendant an amount of 565 153 68 later amended to 596 817 81 see re re re amended defence and counterclaim of the first defendant being rentals and other outgoings in respect of the assets of the company 19 The evidence of Ramasamy the first defendant s manager was in support of his employer and they require no recapitulation at this point No minutes or memoranda were made available either by the first defendant or Ramasamy in relation to what took place at the meeting held on 26 February 2000 at the Grand Plaza Hotel where it was alleged by the first defendant and Ramasamy that the plaintiff did not raise any objection to the first defendant s communication that the first defendant would charge 80 000 a month for the rental of the company s assets Pleadings 20 In his statement of claim the plaintiff after making reference to the various clauses in the MOU signed between the parties contended that the MOU was void for uncertainty He further contended that the forfeiture of the sums paid by him constituted penalty under the law However the contention based on penalty was abandoned by the plaintiff s counsel during final arguments 21 The first defendant denied in his defence that the MOU was void for uncertainty He pleaded that the sum of 462 800 made up of two segments ie a sum of 402 800 being 10 earnest money payable under cl 3 a of the MOU and a sum of 60 000 paid to him as nominee of the second and third defendants under cl 4 a of the MOU was for the purposes of the second and third defendant s VA sum The first defendant contended in para 8 of his defence that the plaintiff terminated and repudiated the MOU through his solicitors letter dated 11 August 2000 The first defendant acting for and on behalf of the YGBM accepted the plaintiff s said repudiation and forfeited the said 10 earnest money In para 9 of his defence he averred that besides forfeiting the 10 earnest money he was entitled to and was holding the VA sum of 60 000 as he had a valid set off and counterclaim against the plaintiff in the amount of 596 817 81 Particulars provided disclosed that the counterclaim was in respect of rates and fees payable for use of the assets of the company from 1 December 1999 onwards by the plaintiff Arguments issues and conclusion 22 As mentioned by me at the outset there were two main issues to be decided in this case The first one was whether the MOU signed between the parties was a binding and final agreement in the light of the very terms of the document The second issue concerned the authority and legal standing of the first defendant to continue with this action 23 In the first place what was glaring in this dispute was the feature that the first defendant in addition to his role as the judicial manager needless to highlight the aspect that he was appointed to that position by an order of court was seen to be wearing many other hats in connection with the responsibilities undertaken by him ie a special accountant to the related companies of the company para 12 of his AEIC b personal adviser to the Kwan family para 15 of his AEIC c nominee for the Kwan brothers in connection with their problems with their creditors para 19 of his AEIC and finally d corporate service provider to Newco Could he have objectively managed all these in an even handed manner I will return to this question later in these grounds 24 Let me now deal with the MOU under scrutiny This was the handmaiden of the first defendant an experienced accountant admittedly well versed in corporate practice liquidation and judicial management The court was told that in the drafting of the MOU he had some input from his legal advisers A careful sweep of the MOU unmistakably showed that it was not meant to be a final document and that it required a great deal more to make it certain and final In this regard it was expressly and unequivocally stated in cl 2 of the MOU vide para 3 infra that the investor namely the plaintiff shall enter into the relevant agreements with the first defendant and others which terms and conditions will be agreed upon a later date Nothing could be clearer or more precise 25 In his arguments counsel for the first defendant attempted to downplay the import of cl 2 of the MOU He contended that too much significance should not be attributed to the terminology of the said clause and that the MOU could stand on its own without any further agreements since all the essential and fundamental terms were found in that document In my view the contention put forward did not make much sense and appeared to introduce linguistic and semantic uncertainties to an otherwise plain and uncomplicated provision Clause 2 of the MOU which by its very words was calling out for a number of relevant further agreements which terms and conditions had to be agreed upon at a later date 26 Counsel for the first defendant invited my attention to principles enunciated by the Singapore Court of Appeal in Klerk Elias Liza v KT Chan Clinic 1993 2 SLR 417 and a High Court decision in Climax Manufacturing Co v Colles Paragon Converters S 2000 1 SLR 245 and submitted that the MOU under reference was a contract that was certain in scope meaning and application as was held in the cases cited 27 In Klerk Elias Liza supra the facts as appear in the head notes of the report are as follows The respondents owned premises the premises which he had leased to a company called Perrodo Offshore S Pte Ltd Perrodo The appellant had two businesses a beauty salon and a jewellery retail shop which she ran from premises at a hotel The offices of these two businesses were at another building In early 1983 it became known that both the hotel and the building where the appellant had her offices were to be demolished Alternative premises were found for the beauty salon and in mid 1983 the appellant reached an agreement with Perrodo whereby Perrodo would sublet the premises to her for the remaining months of their lease for 8 100 per month provided the respondents agreed On 7 July 1983 the respondents wrote to the appellant on a letterhead which read KT Chan Clinic referring to earlier discussions with the appellant and confirming the terms of rental of the premises The material terms were as follows rent was fixed at 7 740 per month maintenance charges of 1 440 per month would be borne by the tenant the lease was to be for three years commencing 1 December 1983 subletting was permitted details of which will be in the lease and the lease was to be legally drawn up with the usual terms that apply in Singapore The letter called for the appellant to sign the attached copy of the letter and to return it to the respondents if she agreed to the terms following which the respondents would authorize Perrodo to sublet the premises to the appellant The letter was signed on the appellant s behalf and returned to the respondents accepting the terms In late July or early August the appellant moved into the premises On 13 September 1983 a formal lease naming KT Chan Clinic as landlord and the beauty salon as tenant as the appellant had requested was prepared by the respondent s solicitors and sent to the appellant Clause 3 17 of the lease provided for the prior written consent of the landlord to be obtained before any assignment sublease or parting or sharing of possession of the premises Clause 3 21 provided that the premises could only be used as an office for the tenant s business and cl 5 5 provided inter alia an option to renew the lease for a period of one year and the terms for such renewal The appellant refused to sign the lease on the ground that the terms therein were unacceptable On 14 December 1983 the respondents requested that the appellant vacate the premises in the course of the week however on 27 December he countermanded his request and sought instead specific performance of the agreement for the lease of the premises entered into on 7 July 1983 The appellant denied the existence of any agreement and vacated the premises on 31 January 1984 The respondents eventually leased the premises to Blitz Advertising Pte Ltd Blitz for 24 months commencing 9 November 1984 at 6 300 per month The respondents commenced proceedings for damages for breach of the tenancy agreement evidenced by or contained in the letter of 7 July 1983 The learned trial judge held that the appellant had breached the lease agreement contained in the letter of 7 July and gave judgment for the respondents for 167 378 and costs to be taxed The appellant appealed and the respondents cross appealed for interest on the judgment sum under s 9 of the Civil Law Act Cap 43 1988 Ed 28 On the foregoing facts the Court of Appeal by a majority of two to one dismissed the appeal and cross appeal and held that 1 On the evidence the appellant s discussions with the respondents were with a view to securing for herself a tenancy or lease of the premises for a fixed term of years with an option for renewal for another fixed term of years and the respondents only consented to the sublease by Perrodo to the appellant because an agreement had been concluded between him and the appellant for a lease of the premises as contained in the letter of 7 July 1983 3 An agreement had been reached on both the question of the option for renewal and that of subletting and although the details to be incorporated into the lease had not been agreed there was no uncertainty which would render those two provisions void for uncertainty resulting in there being no concluded contract 5 All the essential terms for a valid agreement for a lease being either clearly defined in the letter of 7 July or there being no mistaking what they were the letter of 7 July and the signed acceptance thereof constituted a valid and binding agreement for a lease of the premises 6 The evidence leading to the signing of the letter of 7 July indicated that it was the parties intention that the document was to constitute a binding agreement between them for the lease of the premises on those terms pending the finalization and execution of a formal lease An agreement to execute a formal agreement does not prevent there being a valid and concluded agreement in the meanwhile 29 In Climax Manufacturing supra the facts as they appear in the headnotes are as follows The defendants were manufacturers of repositional adhesive memo pads They developed a system for production of these pads at lower costs the heart of the system being the machine designed by the defendants The defendants were seeking a business partner to help them penetrate the Hong Kong and China markets They were keen on marketing the technical know how required to convert and print on special repositional adhesive paper This would involve selling the machine developed for this process and the know how to convert and market the product The plaintiffs found the defendants proposition interesting On 24 November 1995 their Chief Executive Officer one Mr Fung Kin Yuen Kenneth visited the defendants at their factory in Singapore The parties subsequently decided to go ahead with the project and they signed a memorandum of understanding expressing the intention of the parties to enter into a joint venture agreement On 30 November 1995 the defendants sent the plaintiffs an agreement which they had pre signed for execution by the plaintiffs The plaintiffs were not happy with the terms of the agreement and on 15 December 1995 they wrote to the defendants giving their detailed comments on its various clauses One of these comments was that they wished the defendants to amend the agreement by adding the name specification machine number and photo for the machine The machine in question was described in cl 2 2 as one 1 unit 2 colour Web Offset Printing Machine dedicated to the printing of Repositional Adhesive Memo Pads The defendants proceeded to redraft the agreement However they did not add all the particulars which the plaintiffs had requested in relation to the machine After the amendments cl 2 2 of the agreement read Supply of raw material plus one 1 unit 2 Colour Web Offset Printing Machine dedicated to the printing of Re positional Adhesive Memo Pads the machine The specifications of the machine is sic attached hereto The sentence the specifications of the machine is attached hereto was added after the defendants had received the plaintiffs comments as had been the schedule with the specifications On 8 January 1996 the defendants Chief Executive Officer brought the amended agreement to Hong Kong for execution and the agreement was signed that same day However this was only after Mr Fung made some further handwritten amendments The amendments included inter alia the addition of the words to be agreed by both parties behind cl 2 2 Under the agreement the plaintiffs were to pay the defendants 30 of the contract price of 500 000 upon signing of the agreement The remaining 70 was to be paid by letter of credit which the plaintiffs were to forthwith establish in favour of the defendants After the signing on 8 January there was a lot of correspondence between the parties wherein the plaintiffs sought details of the machine The defendants them sic replied with a certain amount of information but the plaintiffs considered the information supplied inadequate and asked for further specifications The correspondence thus continued On 6 February 1996 the plaintiffs paid the defendants 150 000 being the 30 down payment They did not then or thereafter despite various requests from the defendants establish the letter of credit for the remaining 70 of the purchase price The defendants considered this failure to be a repudiation of the agreement on the part of the plaintiffs and on 10 June 1996 they purported to accept the plaintiffs repudiatory breach of the agreement The plaintiffs commenced this action in January 1997 for the return of the 150 000 down payment The basis of their action was that the agreement was void for uncertainty because it provided for the specifications to be agreed by both parties Alternatively they claimed that there was breach of an implied term to supply certain information relating to the machine so that the plaintiffs could assess the suitability of the machine to their needs before deciding whether or not to agree to the machine s specifications On the application of the plaintiffs pursuant to O 14 r 12 the question of construction came before the court as to whether the agreement was a valid and legally binding document or as the plaintiffs termed it an illusory agreement The assistant registrar came to the conclusion that the agreement was not an illusory one The plaintiffs appealed 30 Upholding the assistant registrar s decision and dismissing the plaintiff s appeal the High Court held that 1 In construing a particular clause of an agreement one must not do so in isolation but must have regard to the contract as a whole and also to a more limited extent to the factual matrix in which the contract was negotiated or concluded This principle holds true also when one was trying to decide whether a contract had actually come into existence The words to be agreed in cl 2 2 had to be construed in their context and their mere presence in the agreement did not ipso facto mean that no concluded contract was formed see para 25 26 3 In the present case everything necessary to be concluded between the parties had been concluded The defendants were selling to the plaintiffs their system for the production of the pre printed repositional memo pads and not just a machine Reflecting that the agreement went far beyond an agreement for sale and purchase of a single piece of equipment When the terms of the agreement were looked at as a whole it could be seen that the parties had a more complex arrangement in mind involving the transfer of know how and the appointment of the plaintiffs as the distributor for the defendants product in a new market which the defendants wished to penetrate They had agreed on all the basic issues that were relevant to this relationship see para 27 28 31 In my evaluation the facts and circumstances of the case before me were vastly different from that of Klerk Elias Liza or Climax Manufacturing In those two cases the agreements referred to did not require the parties to enter into relevant agreements on terms and conditions to be agreed upon a later date 32 In Courtney and Fairbairn v Tolaini Bros Hotels 1975 1 All ER 716 1975 1 WLR 297 the Court of Appeal in England held that a contract to negotiate even though supported by consideration was not a contract known to the law since it was too uncertain to have any binding force and no court could estimate the damages for breach of such an agreement 33 Returning to the facts of the present case quite apart from the express terminology of cl 2 of the MOU which in no uncertain language demanded further agreements to be entered on terms to be agreed later the plethora of new terms incorporated in the draft agreements forwarded to the plaintiff for his consideration most certainly tended to diminish the first defendant s contention that the MOU by itself was all embracing conclusive certain in scope and that subsequent agreements were but a mere formality The plaintiff s counsel had extensively set out in his final submissions the glaring differences in content between the MOU and the drafts paras 68 to 141 of his written submission What became clear at the trial was that many a term in the draft

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/restitution/1625-cendekia-candranegara-tjiang-v-yin-kum-choy-and-others-2002-4-slr-48-2002-sghc-136 (2016-01-30)
    Open archived version from archive

  • Lee Siong Kee v Beng Tiong Trading, Import and Export (1988) Pte Ltd[2000] 4 SLR 559; [2000] SGCA 57
    its managing director as its agent or employee interacted with Mr Quresh and another beneficiary in breach of cl 2 2 of the agency agreement Repudiation 18 Before us Beng Tiong did not challenge these findings of the trial judge Lee on the other hand contended that by these breaches Beng Tiong had repudiated the agency agreement The trial judge did not make any finding or determination whether these breaches amounted to a repudiation of the agency agreement He proceeded on the assumption that they amounted to a repudiation and considered whether Lee had accepted the repudiation On the evidence before him he found that Lee had not accepted repudiation notwithstanding that he was aware of the breaches He said at para 19 22 19 It is established law that where a party has repudiated a contract by breach the aggrieved party has an election to accept the repudiation or to affirm the contract See The Santa Clara Vitol SA v Norelf Ltd 1996 AC 800 at p 810 The alleged breach by interacting with the beneficiaries took place in November 1993 and Mr Lee knew about it then If this was a repudiatory breach then he was entitled to put an end to the agency agreement and at once treat himself as discharged from further performance He must do so before the time for performance or further performance on his part expires 20 Mr Lee requested an advance in November 1993 and again in January 1994 He did this with the knowledge that Beng Tiong had as he alleged interacted with the beneficiaries in repudiatory breach of the agency agreement Far from accepting the alleged repudiation he was quite clearly affirming the agency agreement 21 It is also alleged that by cl 2 3 Beng Tiong would make advances of up to 150 000 within the period 1 November 1993 and 15 July 1994 The alleged repudiatory breach by not making the advance would have occurred at the latest when the period expired which is also the same time by which Mr Lee himself was to perform or complete performance of his part of the agency agreement In these circumstances he should have accepted the repudiation then 22 It is alleged in the particulars of the work carried out and services performed by Mr Lee pursuant to the agency agreement that he instituted legal proceedings against certain parties in Suit 1550 1994 This action was commenced by writ issued on 22 September 1994 and judgment in default of appearance was entered against all but one of the defendants on 28 January 1995 By carrying out the work and performing the services pursuant to the agency agreement as alleged Mr Lee could not have accepted the alleged repudiation 19 We agreed entirely with the trial judge s conclusion and reasoning on the issue of repudiation Assuming that the breaches of the agency agreement by Beng Tiong amounted to a repudiation of the agency agreement there was no acceptance of such repudiation by Lee Unless and until the repudiation was accepted the contract continued to be in existence for an unaccepted repudiation is a thing writ in water Chitty on Contracts Vol 1 General Principles 28th Ed 1999 at para 25 012 This position was adumbrated by this court in Brown Noel Trading Pte Ltd v Donald McArthy Pte Ltd 1997 1 SLR 1 at para 26 where the court said There was thus a wrongful repudiation of the contract by the defendants That however did not conclude the matter because the repudiatory breach by the defendants did not automatically terminate the contract The third party had a right to elect whether or not to accept the repudiation and treat the contract as at an end They did not exercise their right and accept the repudiation by the defendants and in consequence the contract was kept alive and remained in force for the benefit of both parties 20 Lee was aware of Beng Tiong s interaction with the beneficiaries as early as November 1993 This was a breach of contract but despite knowledge of this breach Lee treated the contract as continuing to have effect He requested for an advance of 40 000 under cl 2 3 of the agency agreement and repeated his request in January 1994 Beng Tiong s failure to comply with his requests for the advance of 40 000 constituted a further breach and this breach was clearly apparent to him Despite this Lee continued to attempt to perform services pursuant to the agency agreement and treated the agency agreement as subsisting Among other things he instituted an action in Suit 1550 1994 on 22 September 1994 for the benefit of Beng Tiong Of significance was a letter from Lee s solicitors to Beng Tiong s solicitors dated 16 September 1994 protesting the two breaches of material terms The letter conspicuously omitted any statement that Lee accepted Beng Tiong s repudiatory breaches By then Lee had had the benefit of legal advice and could not claim to be unaware of his right to accept the breaches as repudiation of the agreement There was no indication from him or his solicitors that he accepted the repudiation and terminated the agency agreement before the expiry on 31 December 1994 21 There was also no evidence that Lee had expressly or impliedly communicated his acceptance of the repudiation to Beng Tiong prior to 31 December 1994 This was conceded by Lee at the trial below when he admitted that before 31 December 1994 he had not informed Beng Tiong that the agency agreement was terminated Lee pleaded that he accepted the repudiation on 28 January 1995 however that came too late as the time for his performance had already expired on the extended deadline of 31 December 1994 In any case it appeared that the election was not communicated or otherwise made known to Beng Tiong On the contrary Lee kept the contract alive at all material times 22 Finally counsel for Lee argued that the term null and void in cl 3 8 did not mean that the agency agreement automatically terminated after 31 December 1994 The agency agreement was merely voidable and not void after the expiry of the deadline He submitted that the respondents were not entitled to rely on their own breaches In our opinion this argument was a non starter Clause 3 8 clearly provided that the appellant undertook to secure the sale and purchase agreement executed by the estate by the contractual deadline of 15 July 1994 which was subsequently extended to 31 December 1994 The time for Lee to perform his obligation expired on 31 December 1994 and after that date the agency agreement ceased to have effect The breaches committed by Beng Tiong could not prevent the contract from expiring on that day However they would entitle Lee to damages if he had suffered any loss occasioned by such breaches Damages 23 To succeed on the claim for damages Lee had to show that Beng Tiong s breaches caused him to fail in his efforts to secure the execution of the sale and purchase agreement by the personal representatives or trustees of the estate by the extended deadline of 31 December 1994 There was no evidence that Beng Tiong s breaches had in any way occasioned his failure to secure the sale and purchase agreement 24 Under the agency agreement Lee s primary obligation was to secure the execution by the estate of an agreement for the sale to Beng Tiong of the properties by 15 July 1994 which was subsequently extended to 31 December 1994 The agreement would have to be signed by persons in whom the properties were vested whether they be the personal representatives or the trustees of the estate At that time the properties were vested in the Public Trustee Prior to the date of the execution of the agency agreement it was contemplated by 12 of the 14 beneficiaries that two persons Syed Ali and Robert Ng would be appointed as the trustees of the estate in place of the Public Trustee They filed an application in OS 489 1993 on 26 May 1993 seeking an order that these two persons be appointed as the trustees of the estate in place of the Public Trustee 25 Under the agency agreement the sale agreement of the properties by the estate to Beng Tiong was to be signed upon the estate s successful application in OS 489 1993 Hence unless the application was allowed there would be no agreement for the sale of the properties to Beng Tiong as contemplated in the agency agreement Pursuant to the agency agreement Lee procured the twelve beneficiaries to sign the Beneficiaries Agreement with Beng Tiong However soon after the execution of this agreement eleven of the twelve beneficiaries became hostile to the sale and resiled from the proposal to have Syed Ali and Robert Ng appointed as the trustees of the estate in place of the Public Trustee Eventually the application was withdrawn and that was sometime between 3 November 1993 and 14 January 1994 26 At the time of Lee s request for the advance of 40 000 and Beng Tiong s interaction with the beneficiaries both of which occurred in November 1993 13 of the 14 beneficiaries were already against the proposed sale of the properties to Beng Tiong Two beneficiaries had been opposed to the sale from the start while 11 beneficiaries repudiated the beneficiaries agreement soon after the execution the latest by 14 August 1993 In November when some of the beneficiaries met Ms Chiang the managing director of Beng Tiong one of the beneficiaries Quresh expressly informed her that the majority of the beneficiaries were opposed to the sale of the properties to Beng Tiong The change of mind on the part of the majority of the beneficiaries was not in any way caused by or attributable to Beng Tiong These events fatally impinged on the proposed sale of the properties by the estate to Beng Tiong 27 The trial judge after considering the evidence said at para 43 I come back now to OS 489 1993 for the appointment of Syed Ali and Mr Ng in place of the Public Trustee By the time the agency agreement was signed the application was not going to be successful It was not only opposed by the two beneficiaries who had not signed the document dated 12 August 1993 Eleven of those who had signed the document had supported the application to appoint four of themselves as trustees in place of the Public Trustee in OS 745 1994 Later he said at para 47 The application in OS 489 1993 was opposed The Public Trustee would have raised the same concerns as were raised in a similar application filed later It was an application that was doomed to failure from the moment it was filed and certainly by 14 August 1993 It may or may not have been withdrawn only between 3 November 1994 and 14 January 1994 as Mr Lee said under cross examination but what is relevant is that the court has not appointed either Syed Ali or Mr Ng to be a trustee or trustees together with or without any other person and whether in OS 489 1993 or in any other application The failure occurred before the breaches of the agency agreement by Beng Tiong and not in consequence of any such breach emphasis is added On the evidence adduced there were ample grounds for the trial judge to come to this conclusion and we agreed with him entirely In any event even if the application was allowed the sale which required leave of the court as the deceased had died more than six years ago would not have been sanctioned by the court The trial judge assessed the position thus at para 49 The sale would have to be sanctioned by the court if the sellers are selling as legal personal representatives of Shaikh Ahmad who died more than six years ago If the sellers are selling as trustees upon trust for sale and one or more of the beneficiaries opposes the sale or is otherwise not competent to express his consent to it then an application to court would have to be made In either case evidence of the value of the properties at the date of the hearing would have to be adduced and I cannot see that an order can be obtained either to sanction the sale or to empower the trustees to sell the properties to Beng Tiong for 8 26m when Beng Tiong is willing to pay that price and another 4 64m to Mr Lee to buy these properties Again we were in full agreement with the trial judge In our judgment Lee had not suffered any damage or loss in consequence of the breaches of the agency agreement by Beng Tiong Damages for loss of chance 28 It was next argued on behalf of Lee that by reason of the breaches of the agency agreement on the part of Beng Tiong he had lost the chance of earning the remuneration of 4 64m This argument had absolutely no merit whatever and we rejected it Beng Tiong s breaches of the agency agreement had nothing to do with the change of mind on the part of the 11 beneficiaries and their revocation of the proposal to appoint Syed Ali and Robert Ng as trustees of the estate By reason of the events and matters which we have related above Lee would be in no position to discharge his primary obligation under the agency agreement ie to secure the execution by estate of the agreement for the sale of the properties to Beng Tiong for the sum of 8 260 000 and he would be in no position to earn the 4 64m or any part thereof Quantum meruit on an implied term 29 Lee made a claim for a quantum meruit for the work or services he alleged he had performed He founded his claim on two basis i an implied term and ii restitution His claim on both bases was rejected by the trial judge and in our judgment rightly 30 In rejecting the claim on the basis of an implied term the trial judge said at para 54 Mr Lee attempted to plead the claim as a contractual claim founded upon an implied term I see no ground for implying such a term The agency agreement is not unworkable without it There is nothing in the agency agreement pointing to any obligation to pay Mr Lee anything other than the agreed fee for securing the agreement for sale and purchase of the properties In my judgment there was no implied term as alleged and Beng Tiong was not in breach of any such term We agreed In this case implying a term for payment of a reasonable sum was not necessary to give business efficacy to the agency agreement In addition such an implied term would be inconsistent with or contradictory to the express terms of the agency agreement The critical provisions of the agency agreement governing the payment by Beng Tiong and the repayment by Lee were these Under cll 1 2 and 2 4 Beng Tiong were obliged to pay to Lee the sum of 4 640 000 on completion of the sale of the properties by the legal personal representatives of the estate to the Principal Beng Tiong or the assigns of the Principal Lee in turn was obliged under cl 3 8 to secure the execution by the legal personal representatives or the trustees of the estate of the sale and purchase agreement for the sale of the properties to Beng Tiong for the sum of 8 260 000 not later than 15 July 1994 which was subsequently extended to 31 December 1994 failing which agreement was to be null and void and Lee was obliged to refund to Beng Tiong all moneys paid to him under the agency agreement Thus these provisions of the agency agreement expressly provided for a remuneration to be paid to Lee and for the refund by him of all monies advanced upon the happening of certain events They reflected the parties intentions and the allocation of risk as agreed between them If Lee was successful he would gain a substantial remuneration amounting to more than 50 of the purchase price On the other hand if he was unsuccessful he would receive no payment and would be out of pocket for any expenses The parties respective obligations had been explicitly set out in the agency agreement and there was no room for implying a term as contended Chitty on Contracts Vol 2 28th Ed 1999 at para 32 143 states Remuneration under a quantum meruit may be awarded where there is a contract but it does not provide for remuneration or does not do so for the circumstances which have arisen But where the contract makes express provision for the agent to be remunerated only upon the happening of a certain event he will not normally be entitled to claim reasonable remuneration on such a basis Such a claim would depend upon an implied promise to pay a reasonable sum if the event does not occur and such an implication cannot normally be made because it would be inconsistent with the express terms of the contract Thus an estate agent was held not to be entitled to payment on a quantum meruit when the principal sold the property elsewhere A term may only be implied where it is necessary to give business efficacy to the contract or otherwise to effect the intentions of the parties The implication that a reasonable sum should be paid when the event upon which remuneration is due does not occur will therefore be rare emphasis is added 31 Counsel for Lee submitted

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/restitution/1620-lee-siong-kee-v-beng-tiong-trading-import-and-export-1988-pte-ltd-2000-4-slr-559-2000-sgca-57 (2016-01-30)
    Open archived version from archive

  • Ngee Ann Development Pte Ltd v Nova Leisure Pte Ltd[2003] SGHC 168
    case on the basis of cl 1 3 of Schedule 4 as he construed it Counsel s argument was that this clause ought to be read as In consideration of the defendants fulfilling the full term of this lease the defendants shall be granted the following rent free periods From this counsel then argued that since the defendants did not sit out the full term namely five years they were therefore not entitled to the rent free periods Hence the rent that should have been paid but were not must now be paid 6 In construing a contractual document the only immutable principle is that the court should extract such meaning from the words that the parties had chosen to reflect their intention at the time of the contract It is wrong to give to the words a meaning that counsel thinks the words ought to mean or even what the court thinks they ought to mean Semantic interpretation is very often a very difficult exercise What the words say and what the parties mean by the words they say may not be the same thing A simple example will illustrate the point If John upon seeing Henry eating cookies exclaims in Henry s presence I m hungry The words are clear But what did John mean He could mean a he is hungry b the sight of Henry eating makes him hungry or c please Henry share your cookies with me John could reasonably mean any one or all three of the above interpretations Now the more facts there are the greater the chance that different bystanders may differ in their view as to what John meant I refer to this illustration to emphasize the need to be faithful to fundamentals One great fundamental in the application of the law is consistency because consistency is the alloy of predictability In this regard the courts ought to consistently adopt the approach that the meaning to be given to written words must first be that as appears from the text The context becomes an aide in interpretation only if the words are vague or ambiguous and only to the extent that a reasonable application of the context would easily bring out the meaning intended by both sides 7 For the above reason the phrase it all depends on the facts of the case can so easily become the anthem of inconsistency The phrase has such a magical ring to it It seems that whenever this incantation is made the court is at liberty to do as it pleases because there is no case like the present That is the temptation we must all resist Can cl 1 3 of Schedule 5 give rise to the interpretation Mr Yeo says it does I do not think so There is nothing exceptional on the facts to warrant a departure from a plain reading of the lease And a plain reading of the lease does not say that the rent free periods are given

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/restitution/1628-ngee-ann-development-pte-ltd-v-nova-leisure-pte-ltd-2003-sghc-168 (2016-01-30)
    Open archived version from archive

  • Jumabhoy Rafiq v Scotts Investments (Singapore) Pte Ltd[2005] 1 SLR 45; [2004] SGCA 48
    advised by the company s solicitors emphasis added 30 June 1997 indemnity In consideration of your agreeing to reasonably assist at the cost and expense of the relevant company and or ourselves 1 in the recovery of the assets of SIS Lion City Holdings Pte Ltd LCH and or its subsidiaries and associated companies and including without limitation Scotts Weitnauer Retailing Pte Ltd Cost Plus Pte Ltd Connoisseurs Private Limited Landberg Holdings Pte Ltd and Richberg Holdings Pte Ltd LCH Group 2 the prosecution of any claim which any company of the LCH Group may have and or 3 any reasonable action in connection with the affairs of any company of the LCH Group as may be advised by the company s solicitors we agree to indemnify you and keep you indemnified at all times to the extent permitted by law out of our assets against all costs and expenses and liabilities incurred or suffered by you in connection with any of the foregoing until such time as this indemnity is revoked in writing emphasis added 9 October 1997 indemnity In consideration of having agreed to our request to undertake such duties as Nominee Director of Rosebury Holdings Limited a New Zealand incorporated Company we will indemnify you and keep you indemnified against all claims demands and payments for which you may in the course of or arising out of such service render yourself liable and against all actions suits proceedings claims demands costs expenses and all other liabilities whatsoever which may be taken or made against you in the course of arising out of such service emphasis added 7 We would add that the appellant also relied on some prior correspondence with YJ to show the setting in which the resolutions were adopted Apparently being concerned that he would have to spend some time on the affairs of SIS on 14 May 1996 while he was in South America RJ wrote to YJ and raised the question of his remuneration In this letter RJ offered his services to SIS and asked for a fixed monthly pay of 25 000 YJ did not reply RJ claimed that YJ agreed to the proposal contained in the letter RJ said that YJ had assured him that YJ would procure SIS board resolutions to ensure that RJ would obtain payment for his time spent and expenses incurred However this was refuted by YJ who told the court that the proposal in the letter was to quote him nonsense In this regard we should perhaps mention that a letter dated 18 May 1996 from RJ to YJ was also produced to court wherein RJ referred to a conversation he had with Mr Andrew Smith an investment consultant of SIS where he told Mr Smith that he RJ was still awaiting a reply to his letter of 14 May 1996 The decision below 8 It would be noted that the basis of RJ s claim was not for a fixed monthly sum as claimed in the letter of 14 May 1996 but on a time costs basis While the judge was clearly aware that the dictionary meaning of costs could cover time costs in a wide literary and even economic sense he found that the words costs and expenses in the first two resolutions meant that the directors would be covered for all out of pocket expenses but not a director s remuneration which had to be specifically approved by the board Neither was a director entitled to remuneration based on quantum meruit In this regard he relied on the case of In re Richmond Gate Property Co Ltd 1965 1 WLR 335 Re Richmond Gate 9 The trial judge accepted YJ s evidence that YJ did not agree to RJ s proposal in the letter of 14 May 1996 Neither did the judge accept RJ s arguments that the board had by virtue of the resolutions agreed to pay RJ a remuneration for his time spent in the affairs of SIS The judge also held that as the appellant had contended that the words costs and expenses were intended by members of the board to cover remuneration as well then the appellant should have adduced evidence from the directors who partook in the deliberations on the resolutions to substantiate the appellant s claim that those words were intended to have a wider sense No such evidence was forthcoming The arguments of the appellant 10 Before us the main argument advanced by RJ was the same as that canvassed in the court below namely that the company by its resolutions agreeing to indemnify Mr Yusuf Jumabhoy and Mr Rafiq Jumabhoy for all costs and expenses incurred by them or each of them personally in respect of their appointment had thereby agreed to pay RJ for his time costs The time costs were no less costs incurred by RJ and they should be reimbursed by the company 11 RJ maintained that the resolutions be viewed against the backdrop that on 14 May 1996 RJ had written to YJ asking for a fixed sum remuneration and there had been no response thereto He submitted that the resolutions were thus the collective response of the board to his request for remuneration in respect of the time which he would spend in relation to the affairs of the company 12 Counsel for RJ also pointed out that the judge was wrong to have thought that because SIS was in financial difficulties the company could not have agreed to pay a director for the time he had so spent Neither did it matter that the board of SIS did not discuss a great deal over the resolutions Our views 13 We agreed with the submission of RJ s counsel that the crucial question was whether one could say looking at the resolutions and the indemnities that there was an agreement to pay RJ for the time he spent in the affairs of the company ie his time costs We also agreed with the words of his counsel that if there is an agreement there is an agreement even though the company might be in financial difficulties or in passing the resolutions there did not appear to be a great deal of discussions on them 14 It is trite law that in construing the meaning or scope of a document the subjective intention of the individual party is irrelevant As the learned authors of Chitty on Contracts Sweet Maxwell 29th Ed 2004 state at para 12 043 The task of ascertaining the intention of the parties must be approached objectively the question is not what one or other of the parties meant or understood by the words used but the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract Investors Compensation Scheme Ltd v West Bromwich Building Society 1998 1 WLR 896 at 912 The cardinal presumption is that the parties have intended what they have in fact said so that their words must be construed as they stand That is to say the meaning of the document or of a particular part of it is to be sought in the document itself One must consider the meaning of the words used not what one may guess to be the intention of the parties Smith v Lucas 1881 18 Ch D 531 at 542 However this is not to say that the meaning of the words in a written document must be ascertained by reference to the words of the document alone In the modern law the courts will in principle look at all the circumstances surrounding the making of the contract which would assist in determining how the language of the document would have been understood by a reasonable man emphasis in original 15 The words that lay at the centre of this dispute were indemnify for costs and expenses It seemed to us clear and here we agreed with the judge that in the context of the resolutions costs and expenses could not cover the remuneration of the two directors whom the board had authorised to act on behalf of the company That expression should be limited to liabilities and expenses that would be incurred by the two directors in carrying out the tasks assigned to them whether already paid by them or yet to be paid 16 In several places in the Appellant s Case the point was made that the burden of disproving RJ s case lay on SIS This would be correct only if RJ had shown that he was prima facie on the basis of the resolutions entitled to remuneration for the time he spent on the affairs of the company This was where the appellant failed As the judge astutely observed 1 supra at 6 Dictionary meanings of common words are always helpful but when a document is being challenged in court as to what the words in it mean the general and wide ambit of dictionary meanings can be misleading instead of enlightening 17 Clearly it would not be good enough to point out that one of the meanings of a word is either this or that Very often a word will according to the dictionary have a spectrum of meanings It is the context which will determine what is the correct meaning to give to a word in a document Here we thought the following observations of P O Lawrence J in Mills v Cannon Brewery Co Ltd 1920 2 Ch 38 at 44 45 were directly on point One of the main objects of every dictionary of the English language is to give an adequate and comprehensive definition of every word contained in it which involves setting forth all the different meanings which can properly be given to the particular word The Court on the other hand in determining what is the true meaning of a particular word used in an instrument which it has to construe has to ascertain in what sense the parties to that instrument have used the word all the help the Court can derive from dictionaries in such a case is in case of doubt to ascertain that the meaning which it comes to the conclusion ought to be attributed to the word is one which may properly be given to it 18 Another equally poignant remark was made by Lord Hoffmann in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd 1997 AC 749 at 775 The meaning of words as they would appear in a dictionary and the effect of their syntactical arrangement as it would appear in a grammar is part of the material which we use to understand a speaker s utterance But it is only a part another part is our knowledge of the background against which the utterance was made It is that background which enables us not only to choose the intended meaning when a word has more than one dictionary meaning but also to understand a speaker s meaning often without ambiguity when he has used the wrong words 19 Thus the context or the background against which certain words are used are germane to determining their meaning It seemed to us that it was in this regard that the judge below referred to the financial position of the company as well as the lack of discussion to show that the members of the board could not have intended to adopt the broadest literal sense of the word costs and to give RJ a blank cheque to fix his own time rate Be that as it may we would emphasise here that the words all costs and expenses were preceded by the word indemnify Thus the word costs could only mean an item or items of debt which the two directors were liable to pay to others and which costs they had incurred in carrying out the tasks assigned to them To label a claim for remuneration by a director as a cost incurred by him was in our view contrived 20 Moreover we think we were fortified in this view that the word costs could not be construed to cover remuneration of a director as that construction would be inconsistent with the articles of association of the company For this purpose two articles were most germane Article 77 The Directors other than a Managing Director shall be paid out of the funds of the Company remuneration for their services at such rate as the Company in General Meeting may from time to time determine and such remuneration shall be divided among them in such proportions and manner as the Directors may determine and in default of such determination within the year equally emphasis added Article 80 Each Director shall be paid all his travelling hotel and other expenses properly incurred by him and if any Director being willing shall be called upon to perform extra services for any of the purposes of the Company the Company shall remunerate the Director so doing by a fixed sum of money to be determined by the Directors and such remuneration may be either in addition to or in substitution for his or their share in the remuneration above provided emphasis added 21 From Art 77 it will be noted that the rate of remuneration to be paid to a director other than a managing director required the approval of a general meeting As for Art 80 which seemed to complement Art 77 it provided that where a director was willing to perform extra services the board would fix the sum which the company would pay the directors for the extra services The claim of RJ satisfied neither of these requirements It was not for a fixed sum and neither was the time rate which he claimed approved by a general meeting In fact he did not aver that he had indicated any time rate to the board 22 For the above reasons the claim for remuneration on the basis of the resolutions and the indemnities must fail Quantum Meruit 23 We now turn to consider RJ s claim for remuneration based on quantum meruit In the light of the contents of the resolutions there could be no doubt that the board of SIS had requested RJ to undertake the tasks 24 In Re Richmond Gate 8 supra a case relied on by the judge Plowman J held that where there were express terms in the articles of association for the payment of remuneration to a managing director there was no room for a claim in quantum meruit 25 The ruling in Re Richmond Gate was upheld in the later case of Guinness Plc v Saunders 1990 2 AC 663 where the appellant had received money from the respondent company in return for work on a take over bid whilst he was a director of a company The House of Lords ordered the appellant to return the money because no resolution had been passed authorising the payment as required by the articles of association The House also rejected the appellant s claim in quantum meruit because such payment to directors had to be in accordance with the articles Lord Templeman explained the position at 689 and 692 T he short answer to a quantum meruit claim based on an implied contract by Guinness to pay reasonable remuneration for services rendered is that there can be no contract by Guinness to pay special remuneration for the services of a director unless that contract is entered into by the board pursuant to article 91 The short answer to the claim for an equitable allowance is theequitable principle which forbids a trustee to make a profit out of his trust unless the trust instrument in this case the articles of association of Guinness so provides The law cannot and equity will not amend the articles of Guinness The court is not entitled to usurp the functions conferred on the board by the articles Equity forbids a trustee to make a profit out of his trust The articles of association of Guinness relax the strict rule of equity to the extent of enabling a director to make a profit provided that the board of directors contracts on behalf of Guinness for the payment of special remuneration or decides to award special remuneration Mr Ward did not obtain a contract or a grant from the board of directors Equity has no power to relax its own strict rule further than and inconsistently with the express relaxation contained in the articles of association A shareholder is entitled to compliance with the articles A director accepts office subject to and with the benefit of the provisions of the articles relating to directors 26 However Lord Goff of Chieveley with whose views Lord Griffiths agreed seemed to envisage the possibility that a director could in appropriate circumstances be paid an equitable allowance for work done He rationalised as follows at 700 701 The leading authorities on the doctrine have been rehearsed in the opinion of my noble and learned friend Lord Templeman These indeed demonstrate that thedirectors of a company like other fiduciaries must not put themselves in a position where there is a conflict between their personal interestsand their duties as fiduciaries and are for that reason precluded from contracting with the company for their services except in circumstances authorised by the articles of association Similarly just as trustees are not entitled in the absence of an appropriate provision in the trust deed to remuneration for their services as trustees so directors are not entitled to remuneration for their services as directors except as provided by the articles of association Plainly it would be inconsistent with this long established principle to award remuneration in such circumstances as of right on the basis of a quantum meruit claim But

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/restitution/1630-jumabhoy-rafiq-v-scotts-investments-singapore-pte-ltd-2005-1-slr-45-2004-sgca-48 (2016-01-30)
    Open archived version from archive



  •