Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd

JudgeLai Siu Chiu J
Judgment Date01 February 2007
Neutral Citation[2007] SGHC 18
Citation[2007] SGHC 18
Defendant CounselEdmund Kronenburg, Leong Kit Wan and Joan Sim (Tan Peng Chin LLC)
Published date12 April 2007
Plaintiff CounselKenneth Tan SC (Kenneth Tan Partnership) (instructed), Lim Tat and Krishnan Nadarajan (Tan Lim & Wong)
Date26 March 2007
Docket NumberSuit No 862 of 2005
CourtHigh Court (Singapore)
Subject MatterWhether contractual relationship between plaintiff and defendant established such that plaintiff entitled to commission under terms of contract,Plaintiff claiming to be marketing agent for sale of defendant's property,Agency,Whether plaintiff discharging requisite burden of proof to show it was effective cause of sale of defendant's property and entitled to commission on sale,Appointment requirements,Whether lack of agreement between parties as to quantum of commission integral consideration in determining whether valid contract concluded

1 February 2007

Judgment reserved.

Lai Siu Chiu J:

Introduction

1 This action was in respect of the plaintiff’s claim against the defendant for the sum of $300,000 being the commission purportedly due to the plaintiff for its assistance in effecting the sale of two of the defendant’s properties located at No 19 Pandan Avenue and No 21 Pandan Avenue respectively (collectively referred to as “the Property”), to Ascendas-MGM Fund Management Ltd (“A-Reit”), the manager of Ascendas-Real Estate Investment Trust, a business and industrial Real Estate Investment Trust (“REIT”).

2 By way of preliminary observation, the plaintiff had, in its statement of claim, initially contended that 1% of the sale price of the Property (i.e. $1,061,000) had been due to it as commission based on standard market custom. The parties agreed at the commencement of this trial, however, that the quantum of the contractual debt be limited to $300,000 in the event that I rule in favour of the plaintiff on its claim. Accordingly, the trial before me was confined solely to the question of liability.

The facts

3 The defendant is a family-run Singapore company in the business of providing logistics and moving services. The defendant’s day-to-day affairs are supervised generally by two brothers, namely Richard Yong Chin-Wee[note: 1] (“Richard”) and Terence Yong Chin-Ming[note: 2] (“Terence”), both of whom are directors of the defendant, although the defendant’s managing director is their father (Yong Siow Yong). The plaintiff is a Singapore company which is in the business of, inter alia, acting as a marketing agent in the sale and purchase of properties.

4 The defendant first entertained the possibility of entering into a sale and leaseback arrangement for the Property sometime in early 2004. To that intent and purpose, the defendant, in or around April 2004, entered into preliminary negotiations with Mapletree Investments Pte Ltd (“Mapletree”), a real estate investment company, in connection with the possible sale and leaseback of the Property.

5 On or about 25 May 2004, however, the defendant received an unsolicited mailer from one Ng Ee Kiat[note: 3] (“Ng”), an employee of the plaintiff, asking for an appointment so as to be given the opportunity to sell the plaintiff’s services as the defendant’s marketing agent in any property transaction. This was followed by a meeting on 16 June 2004 between Ng and the defendant’s representatives. At that meeting, the possibility of a sale and leaseback of the Property to A-Reit was discussed (although the party that had raised the subject of A-Reit as a prospective buyer in that meeting remains in dispute, with both parties claiming the credit for doing so in court). Suffice it to say, however, that nothing materialised from the meeting, save that the defendant’s representatives promised to revert to Ng should they require the plaintiff’s services.

6 Sometime in late June or early July 2004, however, A-Reit approached the defendant, through another property marketing agency, CB Richard Ellis (“CBRE”), expressing its interest in the sale and leaseback of the Property. It would be useful to note that by that time, Ng had left the plaintiff’s services and had joined CBRE together with one Daniel McDonald[note: 4] (“McDonald”).

7 In furtherance of A-Reit’s interest, one of its employees, Philip Pearce[note: 5] (“Pearce”) visited the Property with both Ng and McDonald to conduct a site review. Although there had been no formal appointment of CBRE as the defendant’s agent until then, CBRE continued to facilitate the discussions and negotiations between A-Reit and the defendant in relation to a possible sale and leaseback of the Property.

8 In recognition of such assistance, the defendant, on or about 9 September 2004, signed an Appointment Letter (“agency agreement”) in favour of CBRE making the latter its exclusive agent to market the Property to prospective buyers with the sole exception of Mapletree. The parties had agreed to exclude Mapletree from any such agency agreement since the defendant was already in direct contact with Mapletree prior to CBRE’s involvement. Although CBRE initially proposed a commission of 1.2% of the eventual sale price for the work rendered in connection with and in consideration of, being the defendant’s exclusive agent, it was eventually agreed that CBRE was to be remunerated 0.5% of the sale price for assisting in any successful deal.

9 Between 9 September 2004 and 30 October 2004, both Mapletree and A-Reit negotiated and exchanged tentative proposals with the defendant for the purchase of the Property. By 30 October 2004, it appeared that A-Reit had the upper hand and was going to be the successful purchaser of the Property, and in that context, entered into a two-week exclusive negotiation period with the defendant. Although the period of exclusivity lapsed on 14 November 2004, negotiations between A-Reit and the defendant had by then reached an advanced stage, and indeed, by 16 November 2004 (with the assistance of CBRE), the parties had agreed, in principle, to the broad terms of an agreement in relation to a possible sale. The parties therefore began drafting a Memorandum of Understanding (“MOU”) that would be expected to form the basis of the agreement between them. Although the MOU was ready for execution on 17 November 2004, the defendant requested the postponement of its execution for three days.

10 Unbeknownst to A-Reit, on 18 November 2004, the defendant received a revised Letter of Offer (“the Letter of Offer”) from Mapletree, one which provided more favourable terms than those offered by A-Reit. Upon receiving the Letter of Offer, Richard and Terence met with representatives from Mapletree, and after some discussion, decided to accept the Letter of Offer on behalf of the defendant and duly executed the same on 19 November 2004.

11 At this juncture, it is pertinent to note that in the context of such sale and leaseback transactions, it appeared to be established practice that the transaction would be first carried out via the initialling of some form of skeletal memorandum of understanding (in this case, the Letter of Offer), followed by further negotiations, which, if fruitful, would culminate in a more comprehensive agreement such as a Put and Call option. It is the latter agreement that effects the actual sale and purchase of the property in question. Put simply, the initialling of some form of preliminary agreement per se, would not be tantamount to a contract for the sale and leaseback transaction.

12 Reverting back to the facts before me, although Richard and Terence were the defendant’s representatives in their negotiations with Mapletree, in his e-mail dated 19 November 2004[note: 6] to Pearce informing Pearce of the defendant’s acceptance of the Mapletree offer and calling off negotiations with A-Reit, Richard had suggested, misleadingly, that their father was the cause of the defendant’s agreement with Mapletree. He did so with the untrue excuse that although both siblings wanted to sell the Property to A-Reit, Mapletree had, unbeknownst to them, directly contacted their father and after a meeting with the Mapletree representatives, their father had agreed to execute the Letter of Offer immediately.

13 Even though Pearce was disappointed over the development, over the course of the next few days, he attempted to revive negotiations between the defendant and A-Reit by making an unsolicited offer for the Property at a price that was substantially better than that offered by Mapletree in the Letter of Offer. Nonetheless, although Pearce’s offer was not explicitly rejected (as the Letter of Offer stipulated that the defendant could not engage in any other negotiations in relation to the sale of the Property), the plaintiff ceased all communications and negotiations with A-Reit and CBRE

14 From then on, until sometime in March 2005, the defendant’s solicitors entered into correspondence with Mapletree’s solicitors so as to come to further agreement on the precise terms that would govern the proposed sale and leaseback of the Property by the defendant to Mapletree.

15 In the interim (sometime on or about 27 January 2005), Ng left the employment of CBRE and rejoined the plaintiff. On 1 February 2005, the defendant’s corporate lawyer, one Douglas Leong (“Douglas”) met up with Pearce for drinks and to discuss the possible marketing of other unrelated properties to A-Reit. In the course of their conversation, Pearce remarked that A-Reit remained willing to recommence negotiations for the sale and leaseback of the Property with the defendant should the negotiations with Mapletree fall through. Although Douglas relayed the news of A-Reit’s continued interest in the Property to both Terence and Richard, neither sibling pursued the matter, their steadfast refusal no doubt motivated by the understanding that the re-commencing of negotiations with A-Reit may well put the defendant in breach of its obligations under the Letter of Offer.

16 On 14 February 2005, however, in order to pursue A-Reit’s continued interest in the Property, Pearce contacted one Dennis Yeo[note: 7] (“Yeo”), the Managing Director of the plaintiff, informing Yeo that he had heard that the negotiations between Mapletree and the defendant had encountered problems. Pearce therefore instructed Yeo to study the possibility of recommencing negotiations with the defendant in relation to the sale and leaseback of the Property to A-Reit. At about the same time too, Richard and Terence were beginning to entertain doubts about the attractiveness of a sale and leaseback of the Property with Mapletree, in the light of the slow pace at which the negotiations between them were proceeding.

17 The sequence of events that took place subsequent to the above events and prior to the conclusion of the sale of the Property to A-Reit was the subject of considerable dispute between the plaintiff and...

To continue reading

Request your trial
9 cases
  • Isabel Redrup Agency Pte Ltd v A L Dakshnamoorthy and others and another suit
    • Singapore
    • High Court (Singapore)
    • 3 March 2016
    ...Nevertheless, while the test in Grandhome has been described in Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd [2007] 2 SLR(R) 230 (“Colliers”) at [75] as a “useful guide to a principle or test in law”, the court in Colliers was careful to warn against a rigid applica......
  • Goh Lay Khim v Isabel Redrup Agency Pte Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • 10 February 2017
    ...(refd) Chase v News Group Newspapers Ltd [2003] EMLR 11 (refd) Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd [2007] 2 SLR(R) 230; [2007] 2 SLR 230 (refd) D v Kong Sim Guan [2003] 3 SLR(R) 146; [2003] 3 SLR 146 (refd) Deans Property Pte Ltd v Land Estates Apartments P......
  • Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties)
    • Singapore
    • High Court (Singapore)
    • 30 September 2010
    ...necessary for the adequate presentation of the case: see Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd [2007] 2 SLR(R) 230, at [125] – [126]. In New Civibuild Pte Ltd v Guobena Sendirian Berhad and another [2000] SGHC 47, Lai Siu Chiu J was of the view (at [6]) that ......
  • Chia Kok Kee v HX Investment Pte Ltd (So Lai Har (alias Chia Choon), third party in issue) (Tan Wah, third party in counterclaim)
    • Singapore
    • High Court (Singapore)
    • 28 September 2007
    ...culled. 90 On the issue of an offer to settle, I had (at [124]) in Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd [2007] 2 SLR 230 (“Colliers case”) also referred to the above tests. The same tests were approved and followed in subsequent cases (see Singapore Airlines......
  • Request a trial to view additional results
2 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2007, December 2007
    • 1 December 2007
    ...in a notice to admit facts are normally assessed on a standard basis. See Colliers International (S) Pte Ltd v Senkee Logistics Pte Ltd[2007] 2 SLR 230 at [127]. Assessment of damages Position when percentage of liability agreed upon 7.19 When a party”s liability has been fixed at a certain......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2007, December 2007
    • 1 December 2007
    ...essential terms cannot constitute a binding contract was applied in Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd[2007] 2 SLR 230. In that case, an estate agent”s claim against the vendor for commission purportedly due in respect of a sale of the vendor”s property fa......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT