Chew Tong Shing v Hotel Royal Ltd

• Jurisdiction: Singapore
• Judge: Goh Joon Seng J
• Judgment Date: 29 June 1992
• Neutral Citation: [1992] SGCA 43
• Docket Number: Civil Appeal No 108 of 1989
• Date: 29 June 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: Moti Vaswani Udharam (Phang & Co)
• Citation: [1992] SGCA 43
• Defendant Counsel: Trevor Philipson QC and Raymond Lam (Lee Lam & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Forebearance to sue and credit given to debtor,Guarantees and indemnities,Guarantor,Contractual term not defined in contract,Parol evidence rule,Contractual terms,Dispute as to intended meaning of contractual term,Whether extrinsic evidence admissible to determine meaning of contractual term,Guarantee,Whether there was consideration for the guarantee,Terms of guarantee,Whether extrinsic evidence admissible to prove additional consideration,Credit and Security,Consideration,Contract

The plaintiffs/respondents (`the plaintiffs`) are the owners and operators of the Hotel Royal at No 36 Newton Road, Singapore.

In the course of their business as hoteliers, they provided board and lodging to tour groups brought in by a company, Eagle Express Pte Ltd (`Eagle`). Payment by Eagle was initially by cash on departure. Later, Eagle was given 30 days` credit for settlement of its accounts. Eagle failed to honour its obligations to the plaintiffs, and by 30 April 1981 Eagle was indebted to the plaintiffs in the sum of $303,832.15. The plaintiffs` general manager, one C Marc-Antonio, thereupon wrote to Eagle on 29 May 1981 as follows:

Mr Frank Chew

Managing Director

Eagle Express Pte Ltd

Block 13, 4 York Hill Singapore 0316

Dear Mr Chew

With reference to our letter of offer dated 25 September 1980 p 2, cl 3, credit facilities are extended to you for only 30 days.

We have to bring to your attention that as at 30 April 1981 your account with us is outstanding by $303,832.15 :

January 1981 $38,774.15

February 1981 106,184.20

March 1981 124,538.70

April 1981 34,335.10

$303,832.15

We request you to remit the above amount within seven days. Otherwise we will have no alternative but to insist on cash payments upon departure of all your future groups.

At the same time, please be informed that your May`s account with us as at 17 May 1981 has already amounted to $26,014.85.

Your prompt action on the above would be appreciated.

Receiving no satisfactory response from Eagle, the plaintiffs revoked the 30-day credit to Eagle, and C Marc-Antonio on 4 June 1981 wrote to Eagle as follows:

Dear Mr Chew,

Further to my letter dated 29 May 1981 ... I would like to remind you that your next group checking into our hotel on 9 June 1981 will have to have its account settled upon departure by cash ...

This was followed by a further letter from C Marc-Antonio to Eagle of 17 June 1981 which read as follows:

Dear Mr Chew

Four groups checking in between 19-21 June 1981

With reference to our telephone conversation about your returned cheque, we would like to advise you that your above four groups will not be accepted by us unless we receive your cash payment of $5,177 (as per the list enclosed) before 19 June 1981 ...

As no payment was made by Eagle, no tour groups of theirs checked in at the Hotel Royal after 17 June 1981.

On 30 June 1981 the plaintiffs` managing director, Lee Chin Chuan (`Lee`) met with the defendant and his son, Frank, who was then Eagle`s managing director. Lee`s evidence was that at this meeting he agreed to resume the provision of board and lodging to the tour groups of Eagle on the following terms:

(i) Eagle would pay on a `cash on departure` basis;

(ii) Eagle would pay $50,000 towards its outstanding indebtedness to the plaintiffs and thereafter would be granted additional credit facilities to the extent of $40,000;

(iii) Eagle would reduce its debts to $100,000 by the end of August 1981.

At that meeting on 30 June 1981, the defendant signed a guarantee (`the guarantee`) in favour of the plaintiffs which provides as follows:

In consideration of your providing board and lodging on credit, upon the request/s of Messrs Eagle Express Private Limited of Singapore -

(1) I hereby guarantee to you the payment of all moneys (now or) at any time or time (hereafter) to become due to you in respect of any board and lodging but so that my liability to you is in no event to exceed sum of $310,000.

(2) I agree that you are to be at liberty to grant to the said travel agent such extension of credit or time for payment or other indulgence as you may think proper without discharging or impairing my liability hereunder.

(3) ...

(4) I reserve the right to myself or my personal representatives by (one month) notice in writing to your above-named company at any time or revoke this guarantee as to all future dealings by you or your said company with the said Eagle Express Pte Ltd.

Lee further said that it was agreed that the plaintiffs would not seek to enforce the debt in consideration of the defendant giving a guarantee.

The defendant said that at the meeting, Lee had agreed to give Eagle 30 days` credit if the defendant would sign the guarantee and that Lee had also agreed that Eagle could repay its outstanding debts by reasonable instalments beginning from the end of 1981.

After the 30 June meeting, business was resumed between the respondents and Eagle on a `cash on departure` basis. However, Eagle failed to...