Lew, Solomon v Kaikhushru Shiavax Nargolwala and others

JurisdictionSingapore
CourtInternational Commercial Court (Singapore)
JudgeSimon Thorley IJ
Judgment Date05 February 2020
Neutral Citation[2020] SGHC(I) 2
Citation[2020] SGHC(I) 2
Defendant CounselRamesh Kumar s/o Ramasamy, Tan Shu-Ning Alyssa and Lim Min Li Amanda (Allen & Gledhill LLP),Chua Han Yuan, Kenneth, Benjamin Niroshan Bala, Hannah Alysha binte Mohamed Ashiq (TSMP Law Corporation),Christopher Anand s/o Daniel, Harjean Kaur, R Shriveena Naidu, T Varshini and Nigel Na (Advocatus Law LLP)
Plaintiff CounselPhilip Antony Jeyaretnam SC, Lee Chia Ming and Lee Jiemin Nicolette (Dentons Rodyk & Davidson LLP)
Docket NumberSuit No 2 of 2019
Published date11 February 2020
Date05 February 2020
Hearing Date10 January 2020,30 October 2019,07 November 2019,05 November 2019,06 November 2019,08 November 2019,08 January 2020,29 October 2019,01 November 2019,04 November 2019,31 October 2019

[2020] SGHC(I) 2

Singapore International Commercial Court

Simon Thorley IJ

Suit No 2 of 2019

Lew, Solomon
and
Kaikhushru Shiavax Nargolwala and others

Philip Antony Jeyaretnam SC, Lee Chia MingandLee Jiemin Nicolette (Dentons Rodyk & Davidson LLP) for the plaintiff;

Ramesh Kumar s/o Ramasamy, Tan Shu-Ning AlyssaandLim Min Li Amanda (Allen & Gledhill LLP) for the first and second defendants;

Christopher Anand s/o Daniel, Harjean Kaur, R Shriveena Naidu, T VarshiniandNigel Na (Advocatus Law LLP) for the third and fourth defendants;

Chua Han Yuan, Kenneth, Benjamin Niroshan Bala, Hannah Alysha binte Mohamed Ashiq (TSMP Law Corporation) for the fifth defendant.

Case(s) referred to

Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2001] Ch 437 (refd)

Bligh v Brent (1837) 2 Y & C Ex 268 (refd)

Bunga Melati 5, The [2016] 2 SLR 1114 (folld)

Caltong (Australia) Pty Ltd v Tong Tien See Construction Pte Ltd [2002] 2 SLR(R) 94; [2002] 3 SLR 241 (refd)

Credit Agricole Corp and Investment Bank v Papadimitriou [2015] 1 WLR 4265 (refd)

El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685; [1993] EWCA Civ 4 (refd)

First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd's Rep 194 (folld)

Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 (folld)

George Raymond Zage III v Ho Chi Kwong [2010] 2 SLR 589 (refd)

Guy Neale v Ku De Ta SG Pte Ltd [2015] 4 SLR 283 (refd)

Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 (folld)

Ho Seek Yueng Novel v J & V Development Pte Ltd [2006] 2 SLR(R) 742; [2006] 2 SLR 742 (refd)

Ivey v Genting Casinos (UK) Ltd [2018] AC 391; [2017] 3 WLR 1212 (refd)

JIO Minerals FZC v Mineral Enterprises Ltd [2011] 1 SLR 391 (folld)

Ng Chee Weng v Lim Jit Ming Bryan [2012] 1 SLR 457 (refd)

Norwest Holdings Pte Ltd v Newport Mining Ltd [2011] 4 SLR 617 (folld)

OBG Ltd v Allan [2008] 1 AC 1 (refd)

OCBC Capital Investment Asia Ltd v Wong Hua Choon [2012] 4 SLR 1206 (folld)

Pegaso Servicios Administrativos SA de CV v DP Offshore Engineering Pte Ltd [2019] SGHC 47 (distd)

Pritsker v Kazan 132 AD 2d 507 (1st Dept, 1987) (refd)

Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd [2012] Ch 453; [2011] Bus LR 1126 (refd)

Tribune Investment Trust Inc v Soosan Trading Co Ltd [2000] 2 SLR(R) 407; [2000] 3 SLR 405 (refd)

Watson v Spratley (1854) 156 ER 424 (refd)

Yenom Corp v 155 Wooster Street Inc 33 AD 3d 67 (1st Dept, 2006) (refd)

Yona International Ltd v La Reunion Francaise Societe Anonyme d'Assurances et de Reassurances [1996] 2 Lloyd's Rep 84 (folld)

Legislation referred to

Civil Law Act (Cap 43, 1999 Rev Ed) s 6(d) (consd)

Civil and Commercial Code BE 2551 (2008) (Thai) ss 366, 456, 797, 798, 821, 825, 851

Electronic Transactions Act BE 2544 (2001) (Thai) s 9

Statute of Frauds 1677 (c 3) (UK) s 4

Agency — Agency by estoppel — Whether sellers estopped from denying that agent had authority to bind sellers to oral contract

Agency — Construction of agent's authority — Buyer making offer for villa — Sellers expressing concerns and requesting for offer letter in writing with details — General manager of resort informing buyer that sellers had agreed to offer — Whether general manager was sellers' agent — Whether agent had authority to bind sellers to oral contract — Whether binding oral contract was formed

Conflict of Laws — Choice of law — Contract — Whether lex fori or three-stage approach applicable where parties disputed whether contract was made

Contract — Ratification — Whether sellers had ratified alleged oral contract by conduct

Tort — Inducement of breach of contract — Whether third party had induced sellers to breach alleged oral contract

Trusts — Accessory liability — Third party entering into company's register — Whether sellers' knowledge could be attributed to company — Whether there was dishonest assistance

Trusts — Recipient liability — Third party purchasing villa — Whether third party had knowledge of buyer's equitable interest — Whether there was knowing receipt

Facts

This was an action about a dispute over the ownership of a luxury villa, Villa 29, at the Andara Resort in Phuket, Thailand. Villa 29 was owned by the first and second defendants, Mr Kai Nargolwala and Mrs Aparna Nargolwala, through Querencia Ltd (“Querencia”), the fifth defendant.

On 11 October 2017, the plaintiff, Mr Solomon Lew, made an offer of US$5.25m for Villa 29 on a “walk in walk out basis” with “settlement within 14 days”. This was communicated to Mr Daniel Meury, the general manager of the Andara Resort, who in turn informed Mrs Nargolwala of the offer. Mrs Nargolwala informed Mr Meury that she had some concerns which needed to be resolved and that she needed an “offer letter in writing” with “details” so that the Nargolwalas could discuss the proposal. However, on the same day, Mr Meury told Mr and Mrs Lew that the Nargolwalas had agreed to Mr Lew's offer.

Mr Lew contended that a binding oral contract of sale was reached between him and Mr Meury on 11 October 2017, who he alleged was acting as the authorised agent of the Nargolwalas. The Nargolwalas disputed both that Mr Meury was acting as their agent and that, even if he was, any such binding agreement was reached.

In late October 2017, the fourth defendant, Mr Christian Larpin, was informed that Villa 29 was available for sale. Following negotiations with the Nargolwalas, a share purchase agreement (“SPA”) was executed on 14 November 2017 for the transfer of the shares in Querencia to Quo Vadis Investment Ltd (“Quo Vadis”), the third defendant. Quo Vadis was a company controlled by Mr Larpin. Completion took place on 16 November 2017 and the Nargolwalas resigned as directors of Querencia on that day.

Mr Lew asserted that in entering the SPA and in completing the deal, the Nargolwalas acted in breach of the alleged oral agreement of 11 October 2017 and consequently acted in breach of their fiduciary duty to Mr Lew and in breach of trust in transferring the shares to Quo Vadis. He further contended that Mr Larpin and hence Quo Vadis had knowledge of the alleged oral agreement such that they were liable for inducing the breach and that Querencia acted dishonestly in assisting the Nargolwalas in their breach of fiduciary duty and breach of trust. In addition, while Mr Lew contended that the proper law of the alleged oral agreement was Singapore law, the Nargolwalas' position was that Thai law governed the agreement instead.

Held, dismissing the claim:

(1) In determining the governing law of a contract, it was well established that the three-stage approach set out in JIO Minerals FZC v Mineral Enterprises Ltd[2011] 1 SLR 391 applied. The three-stage approach remained applicable notwithstanding that the fundamental dispute between the parties was whether a contract was made. For such cases, there would be instances where the lex fori ought to apply. However, there would be cases where the three-stage approach should be adopted, with necessary adjustments to take into account the fundamental dispute as to the existence of the contract. While it was unlikely for the express law to be stated in the case of a putative contract, the facts might allow the court to reach a clear conclusion as to what would been the parties' common intention as to the governing law if the contract were concluded (the second stage). Equally, the third stage could lead the court to the clear conclusion that a particular law was the one that had the closest connection with the putative contract rather than the lex fori. In both cases, the court should reach a clear conclusion that a particular law should be applied rather than the lex fori. In cases of doubt, the counsel of prudence was to apply the lex fori: at [159] to [164].

(2) It could be inferred from the intention of the parties that Singapore law was applicable. The Nargolwalas had insisted that Singapore lawyers be instructed at the time the alleged contract was made. While Mr Lew had initially misunderstood that the Nargolwalas wanted Thai lawyers to be instructed, once the preference for Singapore lawyers was drawn to his attention, he readily agreed to the change: at [165] and [166].

(3) Mr Meury was an agent of the Nargolwalas. He had implied actual authority to receive and convey messages on the Nargolwalas' behalf in seeking to facilitate a deal with Mr Lew. However, his authority did not extend any further than the authority conferred on a properly appointed real estate agent who would only have authority to take matters forward to the stage where it was appropriate to pass the matter into the hands of lawyers. Mr Meury did not have implied actual authority to bind the Nargolwalas by way of an oral contract: at [194] and [195].

(4) There was scope for the doctrine of ostensible authority to apply although there was no direct contact between the Nargolwalas and Mr Lew prior to 11 October 2017. The representation which created ostensible authority could take a variety of forms of which the commonest was representation by conduct. The nature and extent of any representation by conduct would depend upon the circumstances of the case. The question of ostensible authority was inextricably intertwined with the question of whether any, and if so what, binding oral contract was entered into on 11 October 2017: at [199], [200] and [202].

(5) The contemporaneous documents pointed clearly to the conclusion that Mr Lew considered at the time that the alleged agreement was merely the precursor to completion at a later date. An objective assessment of the documents led to the same conclusion. There was no binding oral contract entered into on 11 October 2017, nor did Mr Meury have ostensible authority to enter any such contract. The...

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2 cases
  • Lew, Solomon v Kaikhushru Shiavax Nargolwala and Others and another appeal
    • Singapore
    • Court of Three Judges (Singapore)
    • 10 February 2021
    ...against that latter aspect of the judge's costs order. [Editorial note: The decision from which these appeals arose is reported at [2020] 3 SLR 61.] Held, dismissing the appeal in CA 38 and allowing the appeal in CA 126: CA 38: the appeal on liability (1) There was no basis to disturb the j......
  • Larpin, Christian Alfred v Kaikhushru Shiavax Nargolwala
    • Singapore
    • High Court (Singapore)
    • 24 November 2020
    ...105 (refd) Jurong Town Corp v Wishing Star Ltd [2004] 2 SLR(R) 427; [2004] 2 SLR 427 (refd) Lew, Solomon v Kaikhushru Shiavax Nargolwala [2020] 3 SLR 61 (refd) Pacific Integrated Logistics Pte Ltd v Gorman Vernel International Freight Ltd [2007] 1 SLR(R) 1017; [2007] 1 SLR 1017 (refd) SK La......

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