Aircharter World Pte Ltd v Kontena Nasional Bhd

JurisdictionSingapore
JudgeKarthigesu JA
Judgment Date18 May 1999
Neutral Citation[1999] SGCA 36
Docket NumberCivil Appeal No 207 of 1998
Date18 May 1999
Year1999
Published date19 September 2003
Plaintiff CounselYap Teong Liang (Salem Ibrahim & Partners)
Citation[1999] SGCA 36
Defendant CounselRS Bajwa and CA Monteiro (Bajwa & Co)
CourtCourt of Appeal (Singapore)
Subject MatterCivil Procedure,Witnesses' credibility not in issue,Whether appellate court should interfere with such,Facsimile following telephone call,Contract,Formation,Acceptance,Oral agreement,Finding of facts arising from witnesses' testimonies,Whether facsimile conclusive of agreement,Whether court can determine existence or otherwise of proper inference drawn from facts,Appeals
Judgment:

KARTHIGESU JA

(delivering the grounds of judgment of the court): This is an appeal against the decision of the learned judge to disallow the appellants` claim for the sum of US$200,000 as a deposit payable pursuant to an alleged oral agreement between the appellants and the respondents made on 14 September 1995. The learned judge found the evidence adduced in support of the alleged oral agreement to be unsatisfactory and held that no agreement had been made accordingly. At the conclusion of the hearing we allowed the appeal and now give our reasons.

2. Background

The appellants are an exempt private limited company registered in Singapore principally engaged in aircraft lease and charter brokerage. The respondents are a public company registered in Malaysia providing haulage, depot, warehousing and freight forwarding services to, inter alia, the Government of Malaysia.

3.On 13 July 1995, the respondents were invited by the Ministry of Defence, Malaysia (`Mindef`) to collect and submit tender documents for the transportation of Malaysian peacekeeping troops from Malaysia to Bosnia and from Bosnia back to Malaysia. The closing date for the tender was 17 July 1995. The respondents duly collected the documents and in turn invited the appellants to submit a quotation. On 14 July 1995, the appellants replied setting out the terms and conditions of their quotation. Apart from the price (the appellants quoted two prices for two separate options - US$1,528,000 or US$1,465,000 respectively - both not inclusive of war risk insurance), one of these was that the sum of US$200,000 was payable as a `deposit due confirmation`. The appellants` offer was expressed to expire on 31 July 1995 at 1200 hours (Kuala Lumpur time). On 17 July 1995, the respondents submitted their tender documents to Mindef. The respondents quoted two prices for two separate options - US$1,615,000 or US$1,552,500 respectively.

4.On 7 September 1995, one Brandon Teo Keng Leng (`Teo`) of the appellants, one Abdul Hamid bin Abdul Momin (`Abdul Hamid`) and one Sulaiman Maamor of the respondents had a telephone conversation in which Teo was informed of the outcome of a meeting which the respondents had with Mindef. After the conversation, the respondents sent a facsimile to the appellants informing them, inter alia, that Mindef required only a DC-10 or a better aircraft and not the L1011-100 which the appellants had offered as an alternative in their letter of 14 July 1995. On 11 September 1995, Abdul Hamid sent another facsimile to Teo informing him of the outcome of further discussions the respondents had with Mindef.

5.On the same day, Mindef informed the respondents of its acceptance of the respondents` quotation at the adjusted `ceiling rate` of US$1,664,660. Mindef stated in para 2 of its letter that

[w]ith the acceptance of your [ie the respondents`] quotation by the Government, you are advised that there is a binding contract between the Government and yourselves. A formal contract ... will be executed later with the inception of all the quotation terms as amended. You will be informed later by the Government once the contract document is ready to be executed by yourselves.

Paragraph 3 of the letter spelt out additional terms: para 3.1 required the respondents to provide an irrevocable performance bond in the form of a banker`s guarantee for 5% of the total value of the tender; and para 3.2 subjected Mindef`s offer to the approval of the United Nations.

6.On 12 September 1995, the appellants sent a revised quotation to the respondents incorporating their previous discussions and exchange of correspondence. The appellants maintained as one of their terms and conditions that the respondents were to pay the sum of US$200,000 as a `deposit due confirmation`. The price quoted for the charter was US$1,528,000 with war risk insurance of US$165,000, resulting in a total charter price of US$1,693,000. Unlike the appellants` first offer of 14 July 1995, there was no expiry date for this offer.

7.According to Abdul Hamid, he spoke to his senior manager, one Nor Salam Sulan (`Nor Salam`) on the same day and brought the appellants` revised quotation to his attention. Nor Salam instructed Abdul Hamid to inform the appellants that they were to proceed to make all the arrangements for the execution of the charter.

8.On 14 September 1995, an oral agreement was allegedly made between the appellants and the respondents. According to Teo and Abdul Hamid, who gave evidence for the appellants, this was effected by way of a telephone conversation between both of them. The appellants alleged that the terms of the agreement were (a) that the charter price was US$1,693,000; (b) that the sum of US$200,000 was payable as a deposit upon confirmation of the charter by the respondents; and (c) that if the respondents terminated or cancelled the agreement, 25% of the charter price was payable. The alleged oral agreement was followed by a facsimile of the same date from the respondents to the appellants. It was alleged that the facsimile was a confirmation of the oral agreement and that the respondents were thus liable to the appellants for the deposit.

9.The next day, 15 September 1995, Abdul Hamid received a facsimile from the appellants enclosing a copy of a draft agreement for the respondents` perusal and eventual execution. The main terms of the agreement (viz price, deposit and cancellation charge) were identical to those of the oral agreement set out above. Abdul Hamid brought the agreement to Nor Salam and informed him that the original would arrive shortly. Nor Salam said that he would sign the agreement. However, it later transpired that Abdul Hamid had actually received two draft agreements: one prepared on 14 September and the other on 15 September. The same terms appeared in both drafts, but the second draft contained a provision which was not present in the first draft. This was cl 7, the cancellation clause, which provided, inter alia, for the payment as `agreed compensation` of 25% of the charter price if the charter was cancelled upon execution. (Both draft agreements will hereinafter be referred to as `the first draft agreement` and `the second draft agreement` respectively.) It was not in dispute that neither agreement was in the event executed by the respondents, nor did the parties at any time thereafter enter into any other written agreement.

10.Subsequently, Mindef postponed the flights for one month - from October to November 1995 - for political and security reasons. The respondents informed the appellants of this accordingly.

11.On 22 September 1995, Abdul Hamid on behalf of the respondents wrote to the appellants to enquire whether they were willing to reduce the price of war risk insurance (quoted at US$165,000 in both the appellants` revised quotation of 12 September 1995 and the agreement dated 15 September 1995) for the flights. The reason for this, as Abdul Hamid himself explained, was that if the price of war risk insurance was added to the charter price of $1,528,000, the respondents` quotation to Mindef (US$1,664,660) would be lower than what they would have to pay the appellants on the charter (US$1,693,000), resulting in the respondents incurring a loss on the transaction. The appellants replied on the same day, saying that they would try to reduce the amount quoted for war risk insurance to between US$15,000 and US$20,000, subject to confirmation 72 hours before the flights. The appellants also informed the respondents that they would be sending an invoice for the `initial fee` of US$200,000 (or the deposit) which had been paid by their principal in the United States, Aircharter World (USA) (`ACW (USA)`) to the carrier as a down payment for the aircraft. On 25 September 1995, the respondents received an invoice (No 02/09) for US$200,000 being the `advance contractual fee` payable by the appellants to their principal (`the invoice`).

12.On 17 October 1995, Mindef wrote to the respondents informing them that the United Nations was of the opinion that the respondents` quotation of US$1,664,660 was `high`. Accordingly, Mindef requested the respondents to reduce their original quotation, the new quotation not to exceed US$1,295,000. On 20 October 1995, the respondents responded with a new price of US$1,620,000. On 25 October 1995, Mindef informed the respondents that the United Nations was not agreeable to the respondents` new offer and would be making the arrangements for the flights themselves. Mindef therefore rejected the respondents` offer and cancelled the agreement, relying on para 3.2 of its letter dated 11 September 1995 (referred to above). Meanwhile, the respondents had on 17 October 1995 requested the appellants to quote for another charter which was to take place in November 1995. The appellants replied on the same day enclosing their revised quotation and the new flight schedule for November. They also informed the respondents that the outstanding sum of US$200,000 would be set off against the price of the November charter, should it proceed. On 30 October 1995, however, the respondents informed the appellants that the November charter would not be proceeding.

13.The respondents submitted the invoice to Mindef. The appellants were informed of this by a facsimile dated 22 November 1995. Mindef rejected the respondents` claim on the ground, according to Abdul Hamid, that the `compensation charges` were `exorbitant`. He informed the appellants of Mindef`s response on 28 December 1995 and requested for the charges to be reduced or abolished. The appellants replied that they were unable to reduce the charges as the sum of US$200,000 was the down payment to be paid by them to the carrier. In this regard, it is noteworthy that the appellants had originally claimed 25% of the charter price as a cancellation fee due and payable to them upon cancellation or termination of the charter agreement, in...

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