Lim Tjoen Kong v A-B Chew Investments Pte Ltd

• Jurisdiction: Singapore
• Judge: Chan Sek Keong J
• Judgment Date: 05 July 1991
• Neutral Citation: [1991] SGCA 19
• Docket Number: Civil Appeal No 91 of 1989
• Date: 05 July 1991
• Published date: 19 September 2003
• Year: 1991
• Plaintiff Counsel: Harry Wee (Braddell Bros) and Robin Lim (Lee Ang Wu & Wang)
• Citation: [1991] SGCA 19
• Defendant Counsel: K Chettiar and Dr Myint Soe (Murphy & Dunbar)
• Court: Court of Appeal (Singapore)
• Subject Matter: Privilege from disclosure of without prejudice negotiations,Whether defendant waived privilege by adducing his version of the same incident,Admissibility of evidence,'Without prejudice' negotiations,Evidence,s 23 Evidence Act (Cap 97, 1990 Ed),Waiver of privilege

This appeal raised a number of issues relating to the admissibility in evidence of `without prejudice` negotiations between the parties and their agents. At the conclusion of the hearing on 14 May 1991, we dismissed the appeal of the defendant and said we would give our reasons later.

On 30 October 1985, the plaintiffs commenced this action against the defendant for damages for breach of contract. In the statement of claim, the plaintiffs have averred the following: that on or about 28 June 1983, the defendant agreed to buy from the plaintiffs 640,000 shares (`the said shares`) in SPP Ltd, which shares were listed on the Stock Exchange of Singapore, at the total price of $2,278,400 (at $3.56 per share), and to complete the purchase by September 1983; that pending completion, the defendant should reimburse the interest accruing on the plaintiff`s and CBG`s overdraft accounts with three banks, subject as from February 1984 to an overdraft limit of $2,278,400; that the defendant failed to complete the purchase by September 1983 but continued to pay the plaintiffs the said interest calculated as aforesaid until September 1984; that on 24 December 1984, the defendant paid $20,000 and on 27 May 1985 paid another sum of $30,000 to account of interest due; that the defendant failed to complete the purchase in spite of repeated demands and thereupon the plaintiffs sold, on 10 December 1984 and 17 December 1984 respectively, the said shares in the open market in two lots, 500,000 at $1.10 per share and 140,00 at $1.10 per share, and realized the net sum of $696,079. Accordingly, the plaintiffs have claimed the difference of $1,582,231 and interest thereon against the defendant for breach of contract.

On 25 November 1985, the defendant took out an application to strike out the action on the ground that the defendant was not in Singapore on 28 June 1983, which he deposed to in his affidavit, and therefore could not have agreed to purchase the said shares.

On 15 February 1986, the plaintiffs filed an application for summary judgment against the defendant. CBG, the managing director of the plaintiffs, swore an affidavit filed on 18 February 1986 in which he deposed as follows: that on 28 June 1983, he offered the said shares to the defendant (who was then a substantial shareholder of SPP Ltd) through the defendant`s personal secretary, one JK, as the defendant was not in Singapore; that JK later on the same day telephoned him and accepted the offer on behalf of the defendant on the terms as set out in the statement of claim, except that in relation to interest, the plaintiffs subsequently agreed voluntarily to limit the interest payment to an overdraft limit to $2,278,400 as from February 1984; that the defendant paid with his own cheques the interest on the plaintiffs` and CBG`s overdraft accounts for the months July 1983 up to September 1984; that in August 1984 the plaintiffs sent to the defendant their cheque for $19,200 being the net dividend declared and paid by SPP Ltd on the said shares as the same had been sold to the defendant; that when the September interest was due, the defendant returned the said cheque to the plaintiffs together with the sum of $3,744 to make up the amount payable for interest in the statement of claim with his own cheques; that the defendant defaulted in the payment of interest from October 1984, except for the two sums of $20,000 and $30,000 referred to in the statement of claim; that the defendant failed to complete and the plaintiffs had to sell the said shares to mitigate their loss.

In his affidavit filed on 13 March 1986, JK deposed, inter alia, as follows: that in June 1983, the plaintiffs approached him to dispose of the said shares at $3.56 per share `on an option basis open for 24 months subject during that period or until the exercise of the option to paying interest less dividends on his overdraft account at one of the banks`; that he did not sell the said shares to the defendant; that he approached one IG, an Indonesian banker, who agreed to take up the option; that by October 1984, `the share [price] had dropped heavily and it was discovered that the representations or information given by the plaintiffs was false or inaccurate`; that, in para 15, IG `then began to have different views regarding the exercise of the option and after negotiations on behalf of [IG] and the plaintiffs the option was cancelled`.

JK`s affidavit was substantially confirmed by IG who in his affidavit filed on 14 March 1986 deposed, inter alia, that, in 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.`

CBG swore an affidavit on 31 May 1986 in reply to the affidavits of JK and IG. Having denied, in para 10, that he knew or heard of IG, CBG went on to say, in para 11:

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 John 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.

JK`s affidavit in reply was sworn on 15 May 1986. In para 9 thereof, he said:

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 had certain buyers who were interested in the property referred to therein and had requested more particulars thereof.

On 17 May 1986, CBG swore another affidavit, in paras 4 and 5 of which he said:

4 As to para 9 of the affidavit, annexed hereto and marked `CBG4` is a draft prepared by Mr Subhas Anandan which incorporated one of the proposals made by the defendant for securing payment of the amount claimed by the plaintiffs by the issue of shares to the plaintiffs by Alethea Pte Ltd which shares were to be paid for by capitalization of the defendant`s loans to his own family company.

(5) The proposal set out in `CBG4` fell through and the defendant offered to transfer three units of housing in the One Tree Hill Garden. For this purpose I had a valuation of the units made. Annexed hereto and marked `CBG5` is a copy letter to Mr Subhas Anandan dated 25 January 1985 enclosing the valuation. The price of the units to be transferred to the plaintiffs was to be the payment of the amount due to the plaintiffs. As the price of the three units pegged at $280 psft exceeded the amount of the plaintiffs` claim, the plaintiffs eventually agreed to take two units with the balance of its claim to be paid by the defendant in cash. I then instructed Messrs Goh Poh & Partners to help in drafting an agreement for this proposal. However, the searches showed that the property was encumbered to a limit of $5m. Annexed hereto and marked `CBG6` is a copy of the company search on Alethea Pte Ltd showing the charges registered against the company and a copy of the certificate of title showing the encumbrances marked `CBG7`. Goh Poh & Partners then wrote to Mr Subhas Anandan on 30 July 1985 as per annexure `CBG8`.

On 20 May 1986, the defendant took out an application to strike out and/or delete from the records of the court para 11 of CBG`s affidavit of 3 May 1986 and paras 4 and 5 of CBG`s affidavit of 17 May 1986. In support of this application, JK swore an affidavit on 20 May 1986, in paras 3, 7 and 8 of which he said:

3 The contents of the said affidavit and exhibits referred to were made in without prejudice negotiations entered into between the plaintiff represented by [CBG] and the defendant and [IG] who I represented.

(7) The said negotiations arose out of meetings between the plaintiffs and myself regarding outstanding interest on an option for the purchase of shares belonging to the plaintiff.

(8) However, during the course of these negotiations the plaintiff pleaded that he was in...