Cavenagh Investment Pte Ltd v Kaushik Rajiv

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Chan Seng Onn J
• Judgment Date: 21 February 2013
• Neutral Citation: [2013] SGHC 45
• Citation: [2013] SGHC 45
• Docket Number: Suit No 566 of 2011/Z
• Published date: 11 April 2013
• Plaintiff Counsel: Balasubramaniam Ernest Yogarajah and Jispal Singh (Unilegal LLC)
• Date: 21 February 2013
• Defendant Counsel: Ian Lim and Freddie Lim (TSMP Law Corporation)
• Hearing Date: 06 November 2012,05 November 2012,07 November 2012,18 January 2013,08 November 2012
• Subject Matter: Contributory negligence,Change of position,Land,Agency by estoppel,Negligence,Incorporation of companies,Agency,Damages,Tort,Restitution,Trespass,Ratification,Companies,Lifting corporate veil

Chan Seng Onn J: Introduction

In this suit, the plaintiff, Cavenagh Investment Pte Ltd (“the Plaintiff”), claims against the defendant, Dr Rajiv Kaushik (“Dr Kaushik”), damages for trespass to land. These claims include a sum amounting to $352,704, being what the Plaintiff says is the market rent of the property for the period of 1 December 2008 to 6 October 2011 while Dr Kaushik was alleged to have wrongfully occupied and trespassed on the property, as well as a sum amounting to $12,000 for what it says is the cost of reinstatement for damage to the property. On the second day of the trial before me, counsel for the Plaintiff, Mr Ernest Balasubramaniam (“Mr Balasubramaniam”) said that it was no longer pursuing the second claim.

At issue before me is therefore, whether Dr Kaushik had committed the tort of trespass to land, and, if so, whether and to what extent he is liable to pay the Plaintiff damages.

The factual background

The background to the present dispute is fairly uncomplicated in so far as the undisputed facts are concerned.

The characters

The main subject matter of the present suit, 132 Tanjong Rhu, #15-10, Pebble Bay, Singapore 436919 (“the Property”) is owned by the Plaintiff. The Plaintiff describes itself as an “investment company” and is one of several companies which together form what is loosely known as the Lee Tat group of companies. The Plaintiff, like most of the other companies in the Lee Tat group, has as its sole shareholder and director, Madam Ching Mun Fong (“Madam Ching”). Also like most of the other companies, it has no employees. The Plaintiff’s only assets are the Property and another unit also at the same Pebble Bay condominium development (“Pebble Bay”). The properties of the Plaintiff and the other property-holding companies in the Lee Tat group are managed by Lee Tat Property Management Pte Ltd (“Lee Tat Property”), a company run by Madam Ching and several employees.

Dr Kaushik is a New Zealand citizen and was at the material time the President and a director of a company known as I2MS.Net Pte Ltd (“I2MS.Net”). Pursuant to the terms of his employment with the company, I2MS.Net provided him and his family with accommodation in Singapore.

Another important character to background of the present suit is a man known as Mohamed Razali bin Chichik (“Razali”) who was an employee of Lee Tat Property at the material time.

Dr Kaushik’s occupation of the Property The circumstances leading to Dr Kaushik’s occupation of the Property

In or around September 2008, Dr Kaushik and his wife came across an advertisement in the Straits Times newspaper seeking prospective tenants for the Property.¹ As Dr Kaushik and his family were already staying in Pebble Bay under a lease in a different unit with another landlord, the advertisement piqued his interest.² When he called the number listed on the advertisement, Razali answered and proceeded to invite Dr Kaushik and his wife to view the Property.³ Dr Kaushik’s wife attended the first viewing. At the second viewing, Dr Kaushik went with his wife. Dr Kaushik noticed that Razali had all the keys and access cards to the Property, and he seemed to be known to all the security guards at Pebble Bay.⁴

Some deliberation and negotiations with Razali over the rent and rectifications to the fittings in the Property (which Razali took care of) then took place.⁵ As to these rectifications which involved changing the curtains and doors of the Property, as well as repainting and cleaning, Dr Kaushik testified that Razali tended to them satisfactorily.⁶ Dr Kaushik then informed Razali that his employer I2MS.Net wanted to rent the Property for his family’s accommodation.⁷ On 23 October 2008, I2MS.Net received a letter of intent bearing a letter head which read “Cavenagh Investment Pte Ltd” and which was signed by Razali.⁸ Dr Kaushik signed this letter on behalf of I2MS.Net. Razali asked for payment of the monthly rental to him. Finding this unusual, Dr Kaushik insisted on a letter of authority from the Plaintiff.⁹ On 31 October 2008, Razali produced a signed letter bearing the letter head of the Plaintiff stating that Razali was authorised to receive the monthly rental.¹⁰ Subsequently on 3 November 2008, Dr Kaushik asked his staff at I2MS.Net to do due diligence, and found that the Property was owned by the Plaintiff, and that its sole director and shareholder was Madam Ching.¹¹ As a result, Dr Kaushik requested Razali to obtain the signature of Madam Ching on the tenancy agreement (“the Tenancy Agreement”) before I2MS.Net would finalise the lease.¹² On 1 December 2008, Razali attended at I2MS.Net’s office with a copy of the Tenancy Agreement bearing a stamp which read “Cavenagh Investment Pte Ltd”. It was purportedly signed by Madam Ching.¹³ The signature on this Tenancy Agreement was the same as the one on the letter authorising Razali to receive payment. The Tenancy Agreement was signed on behalf of I2MS.Net by its accounts executive, Eileen.

I2MS.Net paid a contractual deposit of $18,000 to Razali, and Dr Kaushik and his family moved into the Property after the purported lease commenced on 1 December 2008.¹⁴

The lease extension

In or around September 2010, when the first term of the purported Tenancy Agreement was ending, Dr Kaushik indicated to Razali that I2MS.Net wanted to extend the lease.¹⁵ Razali replied with a letter, again bearing the letter head of the Plaintiff, extending the lease by 2 years from 1 December 2010 to 30 November 2012.¹⁶

For the entire period from December 2008 to March 2011, I2MS.Net paid the monthly rent of $9,000 to Razali. The total sum paid amounted to $270,000 ($252,000 being rent for 28 months and $18,000 being the 2 months’ security deposit).¹⁷

Razali’s fraud unravels

On 8 March 2011, two employees of Lee Tat Property, one Lim Mui Wah (“Annie”) and another known only as Lynn, appeared at the Property and were surprised to find it occupied.¹⁸ According to them, the Property was supposed to be vacant. Lee Tat Property had found out that Razali was operating a fraud when a tenant of a property owned by another company of the group called up Lee Tat Property for clarification after Razali had asked for future rentals to be paid to him directly.¹⁹ The alarm having been raised, Annie and Lynn were sent to inspect the properties managed by Lee Tat Property.²⁰

As it turns out, Razali had been acting on his own accord and without the authority of the Plaintiff or Lee Tat Property. At trial, it emerged that the signatures on the Tenancy Agreement, the letter renewing the lease, and the letter authorising Razali to receive payment were not Madam Ching’s. The stamps on the Tenancy Agreement were also not the stamps of the Plaintiff.

Negotiations between the parties and Dr Kaushik vacating the Property

Letters were exchanged between the parties as regards their legal position.²¹ Meanwhile, I2MS.Net continued to pay the monthly rent for the period from April 2011 to September 2011 (amounting to $54,000), but paid these monies to the Plaintiff instead. Dr Kaushik and his family moved out of the Property on 3 October 2011, and handed the keys to the Plaintiff on 6 October 2011.²²

The present suit

In the present suit, the Plaintiff claims against Dr Kaushik for damages for trespass to land. The Plaintiff claims the sum of $352,704, being what it claims the Property would have fetched during Dr Kaushik’s occupation of the Property. It further claims damages of $12,000 for the cost of reinstatement of the Property. As I have noted at the outset, the Plaintiff decided not to pursue this latter claim on the second day of the trial.

The issues to be decided

The issues to be decided in this present suit may be summarised into the following: whether there was a valid lease binding on the Plaintiff such that Dr Kaushik’s occupation of the Property was not a trespass to land; whether any of the defences raised by Dr Kaushik apply; and if there was trespass to land, whether and to what extent Dr Kaushik is liable in damages.

My decision Whether there was a valid lease binding on the Plaintiff as a result of Razali acting as its agent

Dr Kaushik’s defence is that there was a valid lease binding on the Plaintiff. Consequently, there can be no trespass to land committed as a result of his occupation of the Property. In advancing this defence, Dr Kaushik makes four main arguments. First, Dr Kaushik relies on the signed Tenancy Agreement. Second, he avers that Razali had the ostensible authority to enter into a lease on behalf of the Plaintiff. Third, Dr Kaushik relies on the principle in the English Court of Appeal decision of First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194 (“First Energy”) to contend that Razali had the ostensible authority to communicate and represent to him the Plaintiff’s approval of the lease, thus binding the Plaintiff by doing so. Last, assuming all the above arguments fail, Dr Kaushik then argues that the Plaintiff had ratified the unauthorised acts of Razali, thus binding itself to the purported lease. I will deal with these arguments in turn.

The signed Tenancy Agreement

Relying on the signed Tenancy Agreement, Dr Kaushik alleges that there was a valid lease. At the trial, it was not disputed that the signatures on the Tenancy Agreement and the letter extending the lease were forged. While they were purported as having been signed by Madam Ching, it was in fact not so. Likewise, the stamp purporting to be the company stamp of the Plaintiff was a forgery. To this, the Plaintiff referred me to the decision of Ruben and Another v Great Fingall Consolidated and Others [1906] 1 AC 439 at 443 for the proposition that a forged document is a “pure nullity” which therefore cannot bind it. I accept that this principle covers the present case. As further explained by Brennan J (at [21] of his judgment) in the High Court of...