Tort Law

AuthorTERRY KAAN SHEUNG-HUNG LLB (NUS), LLM (Harv), Advocate & Solicitor (Singapore), Associate Professor, Faculty of Law, National University of Singapore KOH KOK WAH LLB (NUS), Advocate & Solicitor (Singapore)
Date01 December 2001
Published date01 December 2001
Citation(2001) 2 SAL Ann Rev 360

19.1 In De Souza Tay & Goh v Singapore Press Holdings[2001] 3 SLR 380, the plaintiffs, a law firm, claimed damages against Singapore Press Holdings (the owners of The Straits Times) and a Straits Times journalist, for libel in respect of the publication of two articles in the 26 and 27 September 2000 editions of The Straits Times. The subject of these articles was a Belgian company, Lernout & Hauspie (“L&H”). The reports stated that L&H was being investigated by the United States Securities and Exchange Commission for suspected illegal activity. They stated that L&H had dealings with 15 Singapore registered companies, all of which had their common address at the plaintiffs” business premises. The articles reported that the company secretary for the 15 Singapore companies, who was the plaintiffs” employee, declined to comment when contacted by telephone at the law firm. The partners of the firm were also unavailable for comment. The articles also bore quotes from other lawyers explaining that it was common practice for companies to use law firms or accountancy firms as their registered addresses for the purpose of official correspondence and public notices.

19.2 The plaintiffs asserted that the contents of these articles were defamatory both by their natural and ordinary meaning as well as their innuendo meaning, in that they suggested that the plaintiffs were somehow involved in the suspected illegal activities of L&H. The plaintiffs argued that the articles suggested that they were evasive since they declined to comment on the matter. They also argued that the use of the phrase “common address” to describe the registered addresses of the 15 Singapore companies suggested that there was a link between the plaintiffs and L&H”s suspected fraudulent activities.

19.3 In the High Court, Lee Seiu Kin JC, applying the general defamation principles, concluded that the articles were not defamatory. Lee JC held that it was not reasonable for a reader to infer that the plaintiffs were involved in L&H”s suspected fraud simply because of the reports that the plaintiffs” employee had declined to comment on the matter. Neither was it reasonable to infer that the plaintiffs were evasive simply because The Straits Times had been unsuccessful in contacting them. Moreover, the

“antidote” in these articles was the remarks from other lawyers explaining that it was a commonly accepted practice for a law firm to allow its address to be used as the registered office for other companies. Hence a reasonable person would not associate the law firm with the actual operations of the company, and would not think that the plaintiff”s involvement in this case was wrong or illegal. The plaintiffs have appealed to the Court of Appeal.

Economic torts
Inducement of breach of contract

19.4 In the case of Abani Trading Pte Ltd v PT Delta Karina Mandiri[2001] 4 SLR 475, the plaintiff claimed against the second defendant Poh Fang Pte Ltd (“Poh Fang”) for damages for inducement of breach of contract and conversion of goods (the plaintiff only proceeded against Poh Fang at the trial as the first defendant (“Delta”) was not served). The plaintiff had purchased a total of 13,000 metric tons of cement from Indo Energy Pte Ltd (“Indo Energy”) on f.o.b. terms, with Makassar, South Sulawesi as the loading port. The cement was produced in Indonesia by PT Semen Tonasa. The plaintiff had intended to resell the cement to a buyer in Madagascar. Prior to entering into the contract with Indo Energy, the plaintiff had tried to buy the cement from Poh Fang, but the deal fell through because the parties could not agree on a price. The plaintiff subsequently entered into a voyage charterparty agreement with Delta for a ship, the “Jordan II” to carry the cement from Makassar to Madagascar. It emerged from the evidence that Poh Fang and the plaintiff were “potential competitors in the Madagascar cement market, and Poh Fang was unhappy over [the plaintiff”s] intention to export cement there”. On 14 July 2000, Delta”s agents in Singapore issued a notice of readiness to the plaintiff under the charterparty that the “Jordan II” was ready to load its cargo. On the same day, the plaintiff paid US$126,825 upon Delta”s request for hire and ballast to the head owners, with the further agreement that the plaintiff would pay another US$110,000 on 20 July 2000, if 50% of the cargo was loaded by that day. Loading commenced, and by 19 July 2000, 2,543 metric tons had been loaded, with 10,457 metric tons to follow. On 21 July 2000, the US$126,825 that the plaintiff had paid on behalf of Delta was credited back into the plaintiff”s bank account. The credit notice gave details of the credit as “Refund of freight deposit and booking cancellation of m.v. Jordan II”. The court found that this refund was provided by Poh Fang, and did not come from Delta”s funds. Despite this, Delta requested the plaintiff to pay freight under the charterparty. But the very next day, it informed the plaintiff that the charterparty was cancelled for non-payment. On the same day, Poh Fang wrote to the master of the “Jordan II”, PT Semen Tonasa, Delta and the “receiver in Madagascar” that it was the charterer of the vessel. It also confirmed its acceptance of the cement already loaded on board the vessel. As a result, PT Semen Tonasa told the

plaintiff that it was not going to continue loading until the plaintiff found another vessel.

19.5 In assessing the evidence, the court came to the conclusion (at 481), that:

“There is clear evidence that Poh Fang and Delta were acting together when Delta terminated [the plaintiff”s] charterparty. Poh Fang was upset that Abani was purchasing the cement from Indo Energy directly and selling it to Madagascar. It provided the funds for Delta to refund the advance freight payment made by [the plaintiff], agreed to take over the vessel although no [notice of readiness] had been issued to it, and also accepted [the plaintiff”s] … cement on the Jordan II although it had not purchased [the cement] from PT Semen Tonasa before or after this occasion.”

19.6 In considering the elements of the tort of inducement of breach of contract, Kan Ting Chiu J applied the formulation of the Court of Appeal in Tribune Investment Trust Inc v Soosan Trading Co[2000] 3 SLR 405, in which it was held that to “knowingly procure or induce a third party to break his contract to the damage of the other contracting party without reasonable justification or excuse forms the basis of the tort of inducing a breach of contract”. Kan J noted (at 482) that the Court of Appeal had further held that:

“An act of inducement per se is not by itself actionable. The plaintiff must satisfy a two-fold requirement in order to found a sustainable cause of action: First, he must show that the procurer acted with the requisite knowledge of the existence of the contract (although knowledge of the precise terms is not necessary); and second, that the procurer intended to interfere with its performance …”

19.7 The judge held that inducement could be inferred from the facts as direct evidence may not be available, and need not be shown in every case. Although there was no direct evidence that Poh Fang had induced Delta to cancel the charterparty, the judge noted (at 482) that where “one party sets out to subvert another”s contract, it may not leave direct evidence of its actions … [and] the target should not be without remedy”. The judge accordingly found that Poh Fang”s inducement of Delta”s breach of the charterparty was established on a balance of probabilities. In addition, the court also allowed the plaintiff”s claim for conversion of the cement on board the vessel when it was taken over by Poh Fang.

19.8 However, the court ordered that damages on the inducement of breach of contract claim be assessed by the Registrar because the plaintiff was under an obligation to show that the loss it incurred was unavoidable. When the vessel became unavailable, the plaintiff could have continued with the sale by securing another vessel to carry the cement if that was possible, but there was no evidence before the court of efforts by the plaintiff after 23 July 2000 to carry on with the sale. There was also some uncertainty over the exact amount of cement to be sold to Madagascar.

Likewise, the damages for conversion was also referred to the Registrar because the plaintiff had not in its Statement of Claim specified the precise quantity of cement alleged to be converted by Poh Fang.

Fraudulent representation

19.9 In Panatron Pte Ltd v Lee Cheow Lee[2001] 3 SLR 405, the Court of Appeal had occasion to review the law in relation to fraudulent representation. The first appellant (“Panatron”) had sued the respondents claiming damages for conspiracy on their part to injure Panatron, and also claimed against the respondents for breach of contract and breach of fiduciary duties. The first respondent (“Lee”) had been employed as a senior vice-president of corporate affairs of Panatron for about eight months in 1997. The second respondent (“Yin”) had been in the employ of Panatron for about two years from May 1995. Lee had agreed to subscribe for 200,000 shares in Panatron at the price of $200,000, and had paid Panatron only $189,000 for the shares when he left the company. Lee had likewise agreed to subscribe for 300,000 shares of $1 each in Panatron, and had paid for them in full. Panatron”s claim had arisen out of some involvement which Lee and Yin (after they had left the employ of Panatron) had in a company which had been formed by one of Panatron”s former business partners in Australia. The respondents denied the claims of the appellants, and in the same action, both Lee and Yin in turn counterclaimed against Panatron and the second appellant for damages for fraudulent representations made to them inducing them to invest in Panatron, and also for the balance of the remuneration due to them.


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