A-B Chew Investments Pte Ltd v Lim Tjoen Kong

• Jurisdiction: Singapore
• Judge: Punch Coomaraswamy J
• Judgment Date: 31 July 1989
• Neutral Citation: [1989] SGHC 68
• Citation: [1989] SGHC 68
• Date: 31 July 1989
• Published date: 19 September 2003
• Plaintiff Counsel: HE Cashin and Goh Joon Seng (Goh Poh & Partners)
• Docket Number: Suit No 10980 of 1985
• Defendant Counsel: Harry Wee and Lawrence Fong (Lee & Lim)
• Court: High Court (Singapore)
• Year: 1989

Cur Adv Vult

This appeal arises from the striking out of para 11 and paras 4 and 5 of the affidavits of Chew Beng Gim (Chew), a director of the plaintiffs`, filed on 3 May 1986 and 17 May 1986 respectively. The affidavits were filed by the plaintiffs in reply to affidavits filed by the defendant.

Before the assistant registrar, there were two applications. One was by the defendant to have the statement of claim struck out based on the ground that he was not a party to any contract with the plaintiffs. The other was the plaintiffs` application for summary judgment under O 14. The assistant registrar ordered that the three paragraphs referred to above be struck out on the grounds that the contents therein arose in the course of `without prejudice` negotiations between the plaintiffs, the defendant and their representatives.

Facts

The plaintiffs claim that by a contract made with the defendant, the defendant agreed to purchase the plaintiffs` shares in SPP Ltd, a Singapore company. The contract was claimed to have been arranged through a broker, Khoo Chin Inn (Khoo). One of the terms of this contract was that the defendant would, pending completion in September 1983, service the interest charged on the plaintiffs` and Chew`s overdraft accounts with certain banks. The plaintiffs contend that the defendant had failed to complete the purchase although he kept up the interest payments after the completion date had fallen due.

Defence

The defendant claims that he was not a party to the agreement with the plaintiffs as he was out of the country at the relevant time. He also denies making any interest payments to the plaintiffs` account. The defendant filed on 12 March 1986 an affidavit by Khoo to say that the plaintiffs` offer was in fact taken up by one Irwan Gozali, an Indonesian businessman.

Gozali confirmed this in his affidavit filed by the defendant on 14 March 1986 where he explained that the plaintiffs` option to purchase the shares was conveyed to him through Khoo sometime in June 1983. However, by October 1984, he had discovered that the shares had fallen heavily in value and that certain representations made to him by the plaintiffs were untrue. He thereupon sought to terminate the interest payments and to abandon the option. There followed a series of negotiations which forms the subject of the present application.

Negotiations

The fact of negotiations was first raised in Khoo`s affidavit filed by the defendant on 12 March 1986. In it, Khoo stated that the option was cancelled after negotiations on behalf of Gozali and the plaintiffs. Gozali then filed an affidavit on 14 March 1986 reaffirming this at para 10:

After a series of discussions between the plaintiffs and my intermediaries it was agreed in early December 1984 I could abandon the option provided I paid interest in the sum

of $50,000 payable in two instalments and I duly paid the same.

This was challenged by the plaintiffs in Chew`s affidavit filed on 3 May 1986. On the offending paragraphs, he said in para 11 of his affidavit:

I crave leave to refer to para 10 of the affidavit of Irwan Gozali. The negotiations were carried out between the defendant himself and on his behalf by Khoo with Mr Subhas Anandan and were on the methods of payment of the shortfall represented by the agreed price of $2,278,400 less the total proceeds of $696,079 from the sale of SPP Ltd shares in the market. One of the proposals put forth by the defendant to Mr Subhas Anandan to pay the shortfall of $1,582,231 plus the outstanding interest was by way of transfer of three units of housing at One Tree Hill Gardens being developed by TK Lim Realty Pte Ltd, the defendant`s company.

Annexed hereto and marked `F` is a copy of the telex from Khoo to Mr Subhas Anandan, a copy of the telex marked `G` from Mr Subhas Anandan to the said Khoo and a copy of the letter from Khoo to Mr Subhas Anandan marked `H` giving specifications and built-up area of the units offered by the defendant. The proposal was aborted as the development was encumbered and no satisfactory proposal to lift the encumbrances came from the defendant.

This sparked off a series of exchanges regarding what actually transpired at the negotiations and the identities of the parties involved.

In reply, on 15 May 1986, Khoo stated at para 9 of his affidavit filed that day by the defendant:

As regards para 11 of the said affidavit, I deny that there was any representation made by me on behalf of the defendant to Mr Subhas Anandan who was acting for me in the without prejudice negotiations regarding the balance of the overdraft interest and not the alleged shortfall claimed against the defendant. Mr Subhas Anandan has certain buyers who were interested in the property referred to therein and had requested more particulars thereof.

In reply to the matters set out above, Chew sets out his own version at paras 4 and 5 of his affidavit filed by the plaintiffs on 17 May 1986:

As to para 9 of this affidavit annexed hereto and marked `CBG-4` is a draft prepared by Mr Subhas Anandan which incorporated one

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