Cheng William v Allister Lim & Thrumurgan and another and another appeal

• Judge: Sundaresh Menon CJ
• Judgment Date: 16 March 2015
• Neutral Citation: [2015] SGCA 15
• Citation: [2015] SGCA 15
• Docket Number: Civil Appeal Nos 148 and 152 of 2014
• Published date: 20 March 2015
• Hearing Date: 11 February 2015
• Plaintiff Counsel: Melvin Chan Kah Keen and Rachel Tan Pei Qian (TSMP Law Corporation)
• Date: 16 March 2015
• Defendant Counsel: Thomas Lei and Chua Lyn Ern (Lawrence Chua & Partners),Sixth respondent absent.,Fifth respondent in person,Christopher Anand s/o Daniel, Ganga d/o Avadiar and Foo Li Chuan Arlene (Advocatus Law LLP)
• Court: Court of Appeal (Singapore)
• Subject Matter: Tort,Damages,Apportionment,Contributory negligence,Negligence

Sundaresh Menon CJ (delivering the judgment of the court):

These two appeals concern a businessman who bought a shophouse (“the Shophouse”) in his wife’s and son’s names, thinking that it had a remaining lease of 62 years. Some weeks after the sale and purchase of the property had been completed, he discovered that there were only 17 years left on the lease. The businessman and his family then sued their conveyancing solicitor in negligence for the reduced value of the Shophouse. They say that their solicitor failed to inform them of the length of the remaining lease. The solicitor in turn pinned the blame on the seller who misrepresented the position; the family’s property agent who passed on that misrepresentation and so misled the family; and indeed on the businessman and his family for not having mentioned at any time their understanding of the length of the remaining lease or that such a representation as to the length of the remaining lease had been made to them and was being relied on by them.

Background Facts

The background facts are set out in full in the High Court judge’s (“the Judge”) judgment in Su Ah Tee and others v Allister Lim and Thrumurgan (sued as a firm) and another (William Cheng and others, third parties) [2014] SGHC 159 (“the Judgment”). We do not propose to repeat them in their entirety, but will highlight the salient facts that are germane to these appeals.

Mr Su Ah Tee (“Su”), a businessman, paid $900,000 for the Shophouse, which was located at Block 63 Kallang Bahru #01-423 Singapore 330063. The seller of the Shophouse was Mr William Cheng (“Cheng”). Su’s conveyancing solicitor was Mr Allister Lim (“Lim”) of M/s Allister Lim & Thrumurgan (“ALT”). Lim qualified as a solicitor in 1999 and has practised conveyancing law since 2004. He had acted for Su from time to time from December 2010 in the purchase of some other shophouses. Su’s property agent, Ng Sing (“Ng”) and Cheng’s property agent, Mr Sam Oh Seng Lee (“Sam”) jointly brokered the sale.

After the sale of the Shophouse was completed, Su realised that the Shophouse had a remaining lease of just 17 years. He, his wife and their son (“the Plaintiffs”) filed a professional negligence suit (“the Main Action”) against Lim and ALT (“the Defendants”) in the High Court. The Defendants then brought third party proceedings against Cheng, Ng and Ng’s alleged employer SGR Property Pte Ltd (“SGR Property”) (collectively “the Third Parties”), seeking a contribution of damages payable under s 15(1) of the Civil Law Act (Cap 43, 1999 Rev Ed) (“CLA”), which reads:

Entitlement to contribution 15.—(1) … [A]ny person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

The Judge entered judgment in default against SGR Property for failing to enter appearance (the Judgment at [225]–[227]). She also ruled against the Defendants, Cheng and Ng (the Judgment at [115]–[116], [194]–[195] and [220]–[223]).

The Judge found that Cheng made a fraudulent misrepresentation to both Sam and Ng that the Shophouse had a remaining lease of 62 years, who then repeated this misrepresentation to Su. At trial, Cheng argued that he did not make any misrepresentation, and that he in fact handed Ng an option to purchase that stated that the Shophouse had a remaining lease of 17 years. The Judge found that this option to purchase was in fact a forgery and accordingly rejected this argument (the Judgment at [43]–[46] and [192]–[196]). Ng was also found liable for negligent misrepresentation (the Judgment at [220]–[223]).

The Judge also held the Defendants liable for negligence in failing to inform Su that the Shophouse had a remaining lease of only 17 years (the Judgment at [69(f)], [91]–[100]). Lim did two title searches on the Shophouse, which showed that the Shophouse had a remaining lease of only 17 years (the Judgment at [69(f)] and [92]–[93]). But he did not give Su either of these title searches (the Judgment at [93]). The Judge also found that Su never informed the Defendants that he had been told by the vendor through Ng and Sam that he was purchasing a shophouse with 62 years remaining on its lease (the Judgment at [69(d)]). Even so, the Judge held that in property transactions, the duration of the term of the lease was of such vital importance that conveyancing solicitors were expected to keep their clients informed of such information as the number of years left on the lease (the Judgment at [98]–[100]).

Having found the Defendants as well as the Third Parties variously liable, the Judge proceeded to apportion liability between them. She ordered Cheng to bear 50% of the overall liability for damages, the Defendants to bear 45%, and Ng to bear the remaining 5% (the Judgment at [233]). She also ordered full costs in the Main Action in the Plaintiffs’ favour (the Judgment at [234]) and full costs in the third party proceedings in the Defendants’ favour (the Judgment at [235]–[236]).

Dissatisfied, both Cheng and the Defendants appealed. Cheng filed Civil Appeal No 148 of 2014 on 8 September 2014 (“CA 148/2014”). The Defendants filed Civil Appeal No 152 of 2014 on 10 September 2014 (“CA 152/2014”).

Arguments on appeal

On appeal, both Cheng and the Defendants argue that they are not liable and, in any event, that the respective proportions of the damages awarded against them are excessive. In CA 152/2014, the Defendants also take issue with the order on costs. The Defendants say that they should not be made to bear the Plaintiffs’ costs in the Main Action on their own as they had succeeded in the third party proceedings; the Third Parties ought therefore to contribute towards these costs. The Defendants also say that the Judge should have ordered SGR Property to indemnify the Defendants at least in relation to Ng’s portion of damages payable on the basis that SGR Property is Ng’s employer.

Ng appeared in person. He accepts the Judge’s finding that he is liable for negligent misrepresentation, but wishes to pay no more than 5% of the damages. SGR Property did not appear in the appeal and has not applied to set aside the judgment in default that was entered against it.

Our decision Overview

We do not accept the arguments made by Cheng and the Defendants that they are not liable for fraudulent misrepresentation and negligence respectively. In our judgment, the Judge rightly held them liable and we generally agree with the detailed reasons she gave in the Judgment, in which she painstakingly analysed the evidence and the law. We agree with much of what she said and, to that extent, we do not repeat the basis or the reasons set out in the Judgment. However, we respectfully disagree with three aspects of her decision: First, the Judge made no finding of contributory negligence on Su’s part. In our judgment, such a finding should have been made having regard to the evidence, the facts that were found, and the pleadings. Su’s case was that a fraudulent representation – that the Shophouse had a remaining lease of 62 years – was made to him and he then acted upon it. An essential element of such a case is reliance – that the representee had taken a certain course of action because the representation had been made to him and he believed it to be true. However, the Judge eventually found that Su had never informed either Lim or ALT of the fact of this representation that he said he had (and indeed was found to have) relied on. Given these three factors – the legal significance of the element of reliance in an action for misrepresentation and the two factual aspects, namely, Su’s awareness of the importance of the representation, as well as his failure to inform the Defendants about it – we find he should be held contributorily negligent; Second, we consider that the Judge’s apportionment of liability between Cheng, the Defendants, and Ng should be adjusted to reflect the greater degree of culpability on Cheng’s part in making a fraudulent misrepresentation; and Third, we have also found it necessary to revise aspects of the Judge’s order on costs. In this judgment, we confine ourselves to these points.

Contributory negligence General principles

Contributory negligence is a partial defence that reduces the quantum of damages payable to plaintiffs if they fail to safeguard their own interests (Froom v Butcher [1976] QB 286 at 291, approved in Parno v SC Marine Pte Ltd [1999] 3 SLR(R) 377 (“Parno”) at [59]; Astley v Austrust Ltd (1999) 197 CLR 1 at [30], approved in PlanAssure PAC (formerly known as Patrick Lee PAC) v Gaelic Inns Pte Ltd [2007] 4 SLR 513 at [119]). It is regarded as a salutary power to register disapproval of the plaintiffs’ conduct by a reduction of damages (Glanville Williams, Joint Torts and Contributory Negligence (Stevens & Sons Ltd, 1951) (“Joint Torts and Contributory Negligence”) at p 353). It used to be the case at common law that contributory negligence operated as a complete defence against a claim in damages, ie if the damage suffered by the plaintiffs was partly due to the plaintiffs’ failure to take reasonable care, the plaintiffs could not recover any damages at all from the defendant (Butterfield v Forrester (1809) 11 East 60, per Ellenborough CJ; Davies v Mann (1842) 10 M & W 546). This is no longer so following statutory intervention – England passed the Law Reform (Contributory Negligence) Act 1945 (c 28) and Singapore followed suit by enacting the Contributory Negligence and Personal Injuries Act (Cap 54, 2002 Rev Ed) (“Contributory Negligence Act”). The relevant provision in the Contributory Negligence Act is s 3, which reads:

Apportionment of liability in case of contributory negligence 3.—(1) Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect...