Lee Siong Kee v Beng Tiong Trading, Import and Export (1988) Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 17 October 2000
• Date: 17 October 2000
• Docket Number: Civil Appeal No 37 of 2000
• Court: Court of Appeal (Singapore)

Lee Siong Kee

Plaintiff

and

Beng Tiong Trading, Import and Export (1988) Pte Ltd

Defendant

[2000] SGCA 57

Yong Pung How CJ

,

L P Thean JA

and

Chao Hick Tin JA

Civil Appeal No 37 of 2000

Court of Appeal

Contract–Breach–Damages–Whether agent could claim damages from principal if agent's failure to perform contract not occasioned by principal's breaches of agreement–Contract–Breach–Repudiatory breach–Whether breaches committed by principal were repudiatory–Whether repudiatory breach, if any, accepted by agent–Whether principal could enforce contract notwithstanding its own breaches–Whether repudiatory breaches rendered contract null and void–Contract–Remedies–Restitution–Quantum meruit–Whether term for payment on a quantum meruitbasis could be implied–Whether quantum meruit payable if contract was void–Equity–Estoppel–Averment in earlier legal proceedings against another party–Whether estopped from later relying on inconsistent plea–Restitution–Quantum meruit–Whether principle of quantum meruit on restitutionary basis applied–Words and phrases–“Null and void”–Whether these words in agency agreement meant agreement automatically terminated or merely voidable after expiry of deadline for performance of obligations

Under an agency agreement, the respondent, Beng Tiong, agreed to pay the appellant, Lee, a sum of $4.64m to contact the legal personal representatives of the estate of one Shaik Ahmad and procure the sale by the estate of certain properties which were vested in the Public Trustee to Beng Tiong. The deadline for Lee to secure the execution of the sale and purchase agreement for the sale of the properties to Beng Tiong - failing which the agency agreement would become null and void - was 15 July 1994, but this was subsequently extended to 31 December 1994. On the execution of the agency agreement, Beng Tiong made an advance of $250,000 to Lee and made another advance of $110,000 on Lee's request. Beng Tiong undertook not to interact with any of the beneficiaries or the legal personal representatives or the solicitors of the estate without first obtaining Lee's consent.

Some months prior to the execution of the agency agreement, Lee reached an oral agreement with 12 of the 14 beneficiaries of the estate, pursuant to which the beneficiaries filed an application in OS 489/1993 seeking an order to appoint one Syed Ali Redha Alsagoff (“Syed Ali”) and Robert Ng Jer Leong (“Robert Ng”) as trustees of the estate in place of the Public Trustee. After the agency agreement was signed on 10 August 1993, Lee procured the beneficiaries to execute an agreement with Beng Tiong on 12 August 1993 (“the beneficiaries agreement”). Shortly after, 11 of the 12 beneficiaries became hostile to the deal and took steps to repudiate it. They wrote to the Public Trustee indicating their intention to revoke their proposal to appoint Syed Ali and Robert Ng as trustees.

On 3 November 1993, Lee requested a further advance of $40,000 but Beng Tiong refused. Sometime in November 1993, Beng Tiong's managing director met some of the beneficiaries without the prior consent or knowledge of Lee.

Lee failed to secure the contract for sale of the properties to Beng Tiong by the extended deadline of 31 December 1994. Lee sued Beng Tiong for damages for breach of contract, alleging that Beng Tiong breached the agency agreement by: (a) interacting with the beneficiaries without Lee's consent; and (b) failing to make the advance of $40,000 as requested. He also claimed damages for Beng Tiong's wrongful repudiation on account of these breaches. In the alternative, Lee claimed a quantum meruit on the basis of an implied term or on a restitutionary basis. Beng Tiong denied the breaches and counterclaimed to recover the $360,000 advanced to Lee.

The trial judge held that Beng Tiong breached cll 2.2 and 2.3 of the agency agreement in interacting with the beneficiaries without Lee's prior consent and failing to make the advance of $40,000 as requested by Lee. However, the trial judge dismissed Lee's main claim and his alternative claim on the grounds that Lee did not suffer any loss or incur any expenses on account of Beng Tiong's breaches. As for the counterclaim, the trial judge gave judgment to Beng Tiong for the sum of $360,000. Lee appealed.

Held, allowing the appeal in part:

(1) On the assumption that the breaches of the agency agreement by Beng Tiong amounted to a repudiation, there was no acceptance of the repudiation by Lee. Lee was aware of Beng Tiong's breaches of the agency agreement, but treated the contract as effective and continued to attempt to perform services pursuant to the agency agreement. There was no evidence that Lee expressly or impliedly communicated his acceptance of the repudiation to Beng Tiong prior to 31 December 1994: at [19] to [21].

(2) The agency agreement clearly provided that the time for Lee to perform his obligation expired on 31 December 1994. After that date, the agency agreement ceased to have effect. The breaches committed by Beng Tiong could not prevent the contract from expiring on that day. However, they would entitle Lee to damages, if he had suffered any loss occasioned by such breaches: at [22].

(3) There was no evidence that Beng Tiong's breaches in any way caused Lee's failure to secure the contract for the sale of the properties. The change of mind on the part of the majority of the beneficiaries could not be attributed to Beng Tiong. For the same reasons, Lee could not argue that Beng Tiong's breaches resulted in his loss of chance to earn the remuneration of $4.64m under the agency agreement: at [23], [26] and [28].

(4) The trial judge was right to reject Lee's claim for quantum meruit. The parties' respective obligations regarding payment and refund had been explicitly set out in the agency agreement. There was thus no room to imply a term for payment of a reasonable sum. Additionally, such an implied term would be inconsistent with or contradictory to the express terms of the agency agreement. Lee's argument that he was entitled to quantum meruit on the basis that there was an implied term for payment of a reasonable sum could not stand because the implication of such a term was not necessary to give business efficacy to the agency agreement. Lee also could not claim quantum meruit on a restitutionary basis because the agency agreement was not terminated prematurely by Beng Tiong's breaches. Lee's labours were performed under a valid and binding contract because the agency agreement only lapsed upon the expiry of the agreed deadline, thus his claim for quantum meruitfor work done under a void contract was misconceived: at [30], [32], [37] to [39].

(5) In their suit against the beneficiaries, Beng Tiong averred that they had paid $240,000 to the beneficiaries as advance payment of the agreed price. Beng Tiong was now estopped from making an inconsistent plea that the sum was paid on Lee's account. Therefore Beng Tiong could only recover $120,000 with interest on its counterclaim: at [42].

Alpha Trading Ltd v Dunnshaw-Patten Ltd [1981] QB 290 (distd)

Brown Noel Trading Pte Ltd v Donald & McArthy Pte Ltd [1996] 3 SLR (R) 760; [1997] 1 SLR 1 (refd)

Craven-Ellis v Canons Ltd [1936] 2 KB 403 (distd)

Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 (refd)

Planche v Colburn (1831) 8 Bing 14; 131 ER 305 (refd)

Rover International Ltd v Cannon Film Sales Ltd [1989] 1 WLR 912; [1989] 3 All ER 423 (distd)

William Lacey (Hounslow) Ltd v Davis [1957] 1 WLR 932; [1957] 2 All ER 712 (distd)

Gregory Vijayendran and Kirindeep Singh (Wong Partnership) for the appellant

Stanley Wong (Jing Quee & Chin Joo) for the respondent.

L P Thean JA

(delivering the grounds of judgment of the court):

The parties

1 The appellant, Lee Siong Kee (“Lee”), entered into an agreement dated 10 August 1993 (“the agency agreement”), with the respondents, Beng Tiong Trading, Import and Export (1988) Pte Ltd (“Beng Tiong”), whereby in consideration, among other things, of a sum to be paid by Beng Tiong, Lee agreed to obtain the sale to Beng Tiong of certain immovable properties in Singapore (“the properties”) belonging to the estate of one Shaik Ahmad deceased (“the estate”) for the sum of $8.26m. Shaik Ahmad passed away in 1953 and by his will bequeathed his estate to 14 beneficiaries named therein. On the date of the agency agreement, the properties were vested in the Public Trustee, who was the trustee of the trusts as provided in the will.

The relevant facts

2 The terms of the agency agreement were briefly these. Beng Tiong agreed to pay to Lee a sum of $4.64m, and in consideration Lee agreed to provide “all necessary links and contacts with the legal personal representatives of the estate” and secure a contract for the sale of the properties by the estate to Beng Tiong for $8.26m. On the execution of the agency agreement, an advance of $250,000 was made to Lee, and Beng Tiong agreed to make further advances to Lee up to $150,000 during the period between 1 November 1993 and 15 July 1994. Beng Tiong undertook not to interact with any beneficiaries or the legal personal representatives or the solicitors of the estate without first obtaining Lee's consent. Lee on his part undertook to provide certain assistance in the matter of the application before the court in Singapore for the appointment of new trustees in place of the Public Trustee; to make goodwill payments at the time of signing of the “Consent of Sale of Properties by the Private Treaty” between Beng Tiong and the beneficiaries of the estate; and to secure the execution by the estate of the sale and purchase agreement for the sale of the properties to Beng Tiong for $8.26m not later than 15 July 1994, failing which the agency agreement would become null and void and Lee would refund to Beng Tiong all moneys paid by the latter to Lee under the agency agreement. Subsequently, the deadline of 15 July 1994...