Nurlinda Lee @ Lee Beng Hwa and another v Doktor Kereta Pte Ltd

• Jurisdiction: Singapore
• Judge: Chua Wei Yuan
• Judgment Date: 16 July 2018
• Neutral Citation: [2018] SGDC 188
• Court: District Court (Singapore)
• Docket Number: DC/District Court Suit No 2281 of 2017 (DC/Summons No 3799 of 2017)
• Year: 2018
• Published date: 08 November 2018
• Hearing Date: 22 June 2018,09 April 2018,20 February 2018
• Plaintiff Counsel: Yan Chongshuo and Suhaimi bin Lazim (Mirandah Law LLP)
• Defendant Counsel: Rafidah Wahid and Shahira Nassir (RW Law Practice)
• Citation: [2018] SGDC 188

Deputy Registrar Chua Wei Yuan:

This is the plaintiff’s application for summary judgment in an action for the setting aside of a contract for the sale of a car and for damages to be assessed on the ground of fraudulent misrepresentation. Rarely, one might think, would such applications succeed, but in my view this was one where I thought it should. My reasons and orders follow.

Facts

The plaintiffs, Mdm Nurlinda Lee @ Lee Beng Hwa and Mr Zakaria bin Hashim, are a married couple. On 27 July 2016, they traded in their Nissan Teana (the “Nissan”) and bought a second-hand Mercedes-Benz E200 (the “Mercedes”) from the defendant, a company carrying on business as a second-hand car dealer. The defendant had acquired the Mercedes from Ms Adlin Sandhora binte Bahar (“the Ex-Owner”). It is undisputed that, at the time the second plaintiff viewed the Mercedes, its odometer reading was approximately 115,700km. The plaintiffs, wishing to be reassured of its roadworthiness, had the defendant arrange for an inspection by STA Inspection Centre shortly after purchase. Among other things, the inspection report (“the STA Report”) indicated that the Mercedes had not been involved in a major accident.

As it turned out, the Mercedes gave the plaintiffs more trouble than they had expected. One persistent problem led them to send the Mercedes for repairs at Cycle & Carriage Industries Pte Ltd (“C&C”), an authorised dealer for Mercedes-Benz cars. This was on 3 May 2017. In a surprising turn of events, C&C refused to repair the Mercedes on the ground that its odometer had been tampered with. C&C’s records showed that odometer reading was already 153,075km on 26 November 2015 when the Ex-Owner sent the Mercedes to it for servicing. These facts were reported to the Land Transport Authority (“LTA”) and, not long after, the police.

After this suit was commenced, the plaintiffs located the new owner of the Nissan, one Mr Ab Karim bin Abbas (“Karim”). They found that the Nissan’s odometer reading had changed — during, it seemed, the two days between when the plaintiffs traded the Nissan in and when Karim bought it. As of 19 December 2017, its odometer reading was 137,453km, whereas its odometer reading was already 165,480km on 12 February 2014 (the day that the plaintiffs bought the Nissan). This too was reported to the police.

The plaintiffs concluded that the defendant had tampered with the odometers in both the Mercedes and the Nissan, and brought this action for the rescission of the contract and for damages for fraudulent misrepresentation or, in the alternative, negligent or innocent misrepresentation. They say that the defendant made two actionable representations — first, that the Mercedes was in a good working condition (“the Roadworthiness Representation”) and, second, that the Mercedes had travelled approximately 115,000km as of 27 July 2016 (“the Mileage Representation”).¹ However, before me, summary judgment was sought only on the basis of the latter. The defendant resists the application and essentially accuses the plaintiffs of trying to exit a bad bargain by opportunistically raising matters that were never in their minds when they bought the Mercedes.

The law

The law on summary judgment and the law on fraud are broadly regarded as settled, but it is not often that the interaction between these two bodies of law is specifically considered. An application for summary judgment in an action for fraud is uncommon and, as one might expect, success is rare. In view of that, I will state my view of the law before proceeding.

Proving fraud

I begin with how fraud is proved to the satisfaction of the court.

A representation is fraudulent if it is made (1) knowingly, (2) without belief in its truth, or (3) recklessly, without caring whether it is true or false (William Derry and others v Sir Henry William Peek(1889) 14 App Cas 337 (“Derry”) at 374 per Lord Herschell; Panatron Pte Ltd and another v Lee Cheow Lee and another[2001] 2 SLR(R) 435 (CA) (“Panatron”) at [13] per L P Thean JA (delivering the judgment of the court)). To be sure, the third category is a subset of the second; as one who makes such a statement would have no real belief in its truth (Derry at 374). The touchstone of fraud is dishonesty (Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another[2013] 3 SLR 801 (CA) (“Anna Wee”) at [35] per Andrew Phang Boon Leong JA (delivering the judgment of the court)). Framed in the converse, an honest belief in the truth of a statement means that it was not made fraudulently (Derry at 374; Panatron at [14]).

In civil proceedings, fraud — as is the case with all other allegations — must be proved on a balance of probabilities (Alwie Handoyo v Tjong Very Sumito and another and another appeal[2013] 4 SLR 308 (CA) (“Alwie Handoyo”) at [159] per V K Rajah JA (delivering the judgment of the court)), that is, shown to be more likely than not to have happened. The court reiterated its rejection of any earlier suggestions of a possible third standard of proof (Alwie Handoyo at [158], referring to Tang Yoke Kheng (trading as Niklex Supply Co) v Lek Benedict and others[2005] 3 SLR(R) 263 (CA) (“Tang Yoke Kheng”) at [14] per Choo Han Teck J).

Admittedly, this proposition has been qualified with expressions that vary from case to case. It has been said, for example, that “cogent” evidence is required to prove fraud given its serious implications (Alwie Handoyo at [161]; iTronic Holdings Ptd Ltd v Tan Swee Leon and another suit[2016] 3 SLR 663 at [64] per George Wei J), or that “more evidence” is required to prove fraud than would be the situation in an ordinary civil case (Chua Kwee Chen and others (as Westlake Eating House) and another v Koh Choon Chin[2006] 3 SLR(R) 469 (HC) (“Chua Kwee Chen”) at [39] per Andrew Phang Boon Leong J (as he then was).

However, these distinctions have been pithily observed to be semantic, rather than logical, in nature (Tang Yoke Kheng at [14]). Crucially, these qualifications are but general in nature, and their application ultimately turns on the inherent probability of what is being alleged. The underlying reason for these qualifiers is that allegations of fraud, compared to other allegations, are generally considered more serious and therefore inherently less probable. In such circumstances, the need for judicial vigilance arises (see, eg, Jeffrey Pinsler SC, Evidence and the Litigation Process (LexisNexis, 6th Ed, 2017) at para 12.094 et seq). This determines the quantity and quality of evidence required to overcome the improbability of such an allegation (ie, to show that it was more likely than not to be true), whatever label may be placed on it — “strong”, “cogent”, “forceful”, “compelling” or otherwise. To be sure, the improbability of a claim is not always commensurate with its seriousness (Re S-B (Children)[2009] UKSC 17per Lady Hale). Thus, to be precise, the more improbable the allegation, the more cogent the evidence required to prove it (In re Dellow's Will Trusts[1964] 1 WLR 451 at 455 per Ungoed-Thomas J). As illustrated in Secretary of State for the Home Department v Rehman[2003] 1 AC 153 at [55] by Lord Hoffmann:

“… some things are inherently more likely than others. It would need more cogent evidence to satisfy one that the creature seen walking in Regent’s Park was more likely than not to have been a lioness than to be satisfied to the same standard of probability that it was an Alsatian. On this basis, cogent evidence is generally required to satisfy a civil tribunal that a person has been fraudulent or behaved in some other reprehensible manner. But the question is always whether the tribunal thinks it more probable than not.”

Put another way, the difference in civil proceedings between proving fraud and proving other allegations lies in the cogency of the evidence needed to tip the balance and not the degree to which it must be tipped (Chua Kwee Chen at [28], citing Re H and R (Child Sexual Abuse: Standard of Proof [1995] 1 FKR 643 (CA) at 659 per Millett LJ). The inquiry ultimately lies in the sphere of practical application and not theoretical speculation (Chua Kwee Chen at [39], cited with approval in Alwie Handoyo at [159]–[160]).

Applying for summary judgment

I turn to the principles for the application of summary judgment.

A plaintiff may apply for summary judgment on a claim (or a particular part of it) where the defendant has no defence to it (O 14 r 1). Broadly, the summary judgment process can be thought of as involving two stages.

At the first stage, the plaintiff must establish a prima facie case for summary judgment (Associated Development Pte Ltd v Loong Sie Kiong Gerald[2009] 4 SLR(R) 389 at [22] per Judith Prakash J (as she then was); Terrestrial Pte Ltd v Allgo Marine Pte Ltd and another[2014] 1 SLR 985 at [8] per Andrew Ang J; Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte Ltd[2014] 2 SLR 1342 (“Ritzland”) at [43] per Vinodh Coomaraswamy J).

In the civil context, this means that the plaintiff must prove facts from which in the absence of an explanation liability could properly be inferred (Gan Soo Swee v Ramoo [1968–1970] SLR(R) 324 (FC, Malaysia) at [21] per Wee Chong Jin CJ, cited in Re Nalpon Zero Geraldo Mario[2012] 3 SLR 440 (HC) (“Nalpon”) at [8] per Chan Sek Keong CJ, cited in turn in Phosagro Asia Pte Ltd v Piattchanine, Iouri[2016] 5 SLR 1052 (CA) at [72] per Andrew Phang Boon Leong JA). The meaning of a prima facie case was examined in some detail in Nalpon at [6]–[29], and Chan CJ concluded that such evidence must not be inherently incredible and must be sufficient to establish liability either directly (ie, as a primary fact) where it is not shown to be manifestly unreliable, or inferentially (ie, as a secondary fact) where such inferences could reasonably be drawn (at [22] and [24]–[26]).

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