Lee Chee Wei v Tan Hor Peow Victor

CourtCourt of Three Judges (Singapore)
Judgment Date16 April 2007
Docket NumberCivil Appeals Nos 88 and 91 of 2006
Date16 April 2007

Court of Appeal

Andrew Phang Boon Leong JA


V K Rajah JA


Lee Seiu Kin J

Civil Appeals Nos 88 and 91 of 2006

Lee Chee Wei
Tan Hor Peow Victor and others and another appeal

Tan Chee Meng SC, Philip Fong Yeng Fatt, Jenny Chang Man Phing and Adrian Wee Heng Yi (Harry Elias Partnership) for the appellant in Civil Appeal No 88 of 2006 and the respondent in Civil Appeal No 91 of 2006

Ng Lip Chih (Ng Lip Chih & Co) for the first respondent in Civil Appeal No 88 of 2006

The second respondent in Civil Appeal No 88 of 2006 in person

K Muralidharan Pillai, Harveen Singh and Sim Wei Na (Rajah & Tann) for the third respondent in Civil Appeal No 88 of 2006 and the appellant in Civil Appeal No 91 of 2006.

Chua Kwok Fun Kevin v Etons Management Consultants Pte Ltd [1999] 1 SLR (R) 1088; [2000] 3 SLR 337 (refd)

Chuan Hup Marine Ltd v Sembawang Engineering Pte Ltd [1995] 1 SLR (R) 162; [1995] 2 SLR 629 (refd)

Chwee Kin Keong v Digilandmall.com Pte Ltd [2004] 2 SLR (R) 594; [2004] 2 SLR 594 (refd)

Cropper v Smith (1884) 26 Ch D 700 (refd)

Dies v British and International Mining and Finance Corporation Limited [1939] 1 KB 724 (refd)

Duncuft v Albrecht (1841) 12 Sim 189; 59 ER 1104 (refd)

Exklusiv Auto Services Pte Ltd v Chan Yong Chuan Eric [1995] 3 SLR (R) 728; [1996] 1 SLR 433 (distd)

Fraser & Neave Ltd v Yeo Hiap Seng Ltd [1988] 2 SLR (R) 407; [1988] SLR 96 (refd)

Ho Kian Siang v Ong Cheng Hoo [2000] 2 SLR (R) 480; [2000] 4 SLR 376 (refd)

Hong Fok Realty Pte Ltd v Bima Investment Pte Ltd [1992] 2 SLR (R) 834; [1993] 1 SLR 73 (refd)

Howe v Smith (1884) 27 Ch D 89 (refd)

IBM Singapore Pte Ltd v UNIG Pte Ltd [2003] SGHC 71 (refd)

Inntrepreneur Pub Co v East Crown Ltd [2000] 2 Lloyd's Rep 611 (folld)

John v Price Waterhouse [2002] EWCA Civ 899 (refd)

Johnson v Agnew [1980] AC 367 (refd)

Joo Leong Timber Merchant v Dr Jaswant Singh a/l Jagat Singh [2003] 5 MLJ 116 (refd)

Koek Tiang Kung v Antara Bumi Sdn Bhd [2005] 4 MLJ 525 (refd)

Lea Tool and Moulding Industries Pte Ltd v CGU International Insurance plc [2000] 3 SLR (R) 745; [2001] 1 SLR 413 (refd)

Lim Eng Kay v Jaafar bin Mohamed Said [1982] 2 MLJ 156 (refd)

Lim Lay Bee v Allgreen Properties Ltd [1998] 3 SLR (R) 1028; [1999] 1 SLR 471 (refd)

MacMillan v Kaiser Equipment Ltd [2004] BCJ 969 (folld)

Macronet Sdn Bhd v RHB Bank Sdn Bhd [2002] 3 MLJ 11 (refd)

Master Strike Sdn Bhd v Sterling Heights Sdn Bhd [2005] 3 MLJ 585 (refd)

Maxisegar Sdn Bhd v Silver Concept Sdn Bhd [2005] 5 MLJ 1 (refd)

Mayson v Clouet [1924] AC 980 (refd)

McDonald's Hamburgers Limited v Burgerking (UK) Limited [1987] FSR 112 (folld)

Pacific Century Regional Developments Ltd v Canadian Imperial Investment Pte Ltd [2001] 1 SLR (R) 614; [2001] 2 SLR 443 (refd)

Pamaron Holdings Sdn Bhd v Ganda Holdings Bhd [1988] 3 MLJ 346 (refd)

Penang Port Commission v Kanawangi s/o Sepurumaniam [1996] 3 MLJ 427 (refd)

Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 1 WLR 570 (refd)

Polskie Towarzystwo Handlu Zagranicznego Dla Elektrotechniki “Elecktrim” Spolka Z Ograniczona Odpowiadziolnoscia v Electric Furnace Co Ltd [1956] 1 WLR 562 (refd)

Power Consolidated (China) Pulp Inc v British Columbia Resources Investment Corp (1988) 14 ACWS (3d) 11 (refd)

Ratcliffe v Evans [1892] 2 QB 524 (refd)

Sere Holdings Limited v Volkswagen Group United Kingdom Limited [2004] EWHC 1551 (Ch) (refd)

Souster v Epsom Plumbing Contractors Ltd [1974] 2 NZLR 515 (folld)

Stickney v Keeble [1915] AC 386 (refd)

Tan Hock Keng v L&M Group Investments Ltd [2002] 1 SLR (R) 672; [2002] 2 SLR 213 (refd)

Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573 (refd)

Toh Tiong Huat v P M Gunasaykaran [1995] 3 SLR (R) 627; [1996] 1 SLR 384 (refd)

Triangle Auto Pte Ltd v Zheng Zi Construction Pte Ltd [2000] 3 SLR (R) 594; [2001] 1 SLR 370 (refd)

Vishva Apurva, The [1992] 1 SLR (R) 912; [1992] 2 SLR 175 (refd)

Watford Electronics Limited v Sanderson CFL Limited [2001] EWCA Civ 317 (refd)

Yee Chee Pang v Wong Nam Sang Enterprise Sdn Bhd [1988] 2 MLJ 57 (refd)

Evidence Act (Cap 97,1997 Rev Ed)ss 93, 94

Misrepresentation Act (Cap 390,1994 Rev Ed)s 3

Rules of Court (Cap 322,R 5, 2006 Rev Ed)O 33r 2

Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)s 11

Civil Procedure–Bifurcation of proceedings into liability and assessment of damage phases–Importance of applying early–Either party can apply–Civil Procedure–Pleadings–Failure to expressly plead assessment of damages–Relevance of parties' conduct of case–Whether court having discretion to order assessment of damages–Contract–Contractual terms–Rules of construction–“Entire agreement” clauses–Application and effect of such clauses–Contract–Contractual terms–Rules of construction–When factual matrix may be relevant–Contract–Remedies–Damages–When damages awarded in lieu of specific performance–Contract–Remedies–Specific performance–Contract for sale of shares in company pursuing public listing–Whether specific performance appropriate remedy–Circumstances in which specific performance will be granted

In February 2005, the plaintiff entered into an agreement to sell his shares in Distribution Management Solutions Pte Ltd (“DMS”) (the “Agreement”), a subsidiary of Accord Customer Care Solutions Ltd (“ACCS”), to the fourth defendant for $4.5m. The Agreement expressly provided for the parties' position if listing did not take place and further contained an “entire agreement” clause.

Shortly thereafter, the Commercial Affairs Department began an investigation into the affairs of ACCS and some of its senior officers, which included the first, third and fourth defendants. As a result, the prospective listing plans of DMS were abandoned, and the fourth defendant refused to complete the agreement. The first, third and fourth defendants were subsequently convicted and sentenced to imprisonment for engaging in a conspiracy to cheat and the falsification of documents. The plaintiff commenced proceedings against all four defendants for breach of the Agreement, alleging that the fourth defendant entered into the Agreement on behalf of all the defendants.

The defendants argued that the plaintiff was not entitled to enforce the Agreement on the grounds that: (a) the failure to list DMS on the Main Board of the Singapore Exchange, a contingent condition of the Agreement; (b) the failure to provide a resolution of the board of directors of DMS approving the registration of the transfer of the shares as required by the Agreement; and (c) that the failure to list DMS frustrated the purpose of the Agreement.

The trial judge rejected the defendants' arguments and found that the first and third defendants were the principal parties interested in the purchase of the plaintiff's shares and accordingly held the first, third and fourth defendants liable for breach of the Agreement. Nonetheless, the trial judge ordered nominal damages of $300 and disallowed the plaintiff's claims for specific performance or damages in lieu of specific performance due to the failure by the plaintiff to plead for damages “to be assessed”. A counterclaim by the fourth defendant for repayment of the sum of $750,000 paid as an initial deposit under the agreement was also allowed on the basis that the plaintiff was not entitled to retain the money paid unless the Agreement specifically provided that it was paid as a non-refundable deposit or if the plaintiff actually performed his part of the bargain. The plaintiff was dissatisfied and appealed on the grounds: (a) that specific performance of the sale and purchase agreement for shares in a public company should have been ordered; (b) if not, damages in lieu of specific performance and the assessment should have been granted; and (c) that the counterclaim for payment of the sum of $750,000 should have been allowed. The fourth defendant cross-appealed in relation to the finding of liability.

Held, allowing the plaintiff's appeal in part and dismissing the fourth defendant's cross-appeal with costs:

(1) Whether listing was or was not a contingent condition of the Agreement should primarily be determined by reference to the plain terms of the Agreement. The fact that the prospect of non-listing was more than a conceivable possibility and yet was not expressly excluded by the Agreement was most pertinent. It was one thing to suggest that the court should contemplate the “factual matrix” in order to assist in the interpretation of a document, but entirely another to refer to extrinsic evidence in a contrived and misguided attempt to persuade the court to “infer” a contingent condition that was clearly inconsistent with the express terms of the contract: at [17], [20] and [21].

(2) The effect of an entire agreement clause was essentially a matter of contractual interpretation and necessarily depended upon its precise wording and context. Generally, such clauses were conducive to certainty as they defined and confined the parties' rights and obligations within the four corners of the written document, thereby precluding any attempt to qualify or supplement the document by reference to pre-contractual representations. However, in so far as contracts were not interpreted in a vacuum, objective facts could potentially assist in the interpretation of ambiguous terms. Entire agreement clauses would usually not prevent a court from justifiably adopting a contextual approach in contract interpretation. Such clauses had little bearing on textual or interpretative controversies as to the meaning of particular words or terms in contracts: at [25] and [41].

(3) The contention by the defendants that there was a breach of a promissory condition that the plaintiff would obtain a resolution approving the transfer of the shares from DMS' board of directors was entirely without merit: at [43] to [45].

(4) The failure to list did not...

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