Ong & Co Pte Ltd v Ngu Tieng Ung

• Jurisdiction: Singapore
• Judge: Lim Teong Qwee JC
• Judgment Date: 30 June 1999
• Neutral Citation: [1999] SGHC 172
• Docket Number: Suit No 1 of 1998
• Date: 30 June 1999
• Published date: 26 November 2003
• Year: 1999
• Plaintiff Counsel: Woo Bih Li SC and Koh Chia Ling (Bih Li & Lee)
• Citation: [1999] SGHC 172
• Defendant Counsel: R Shankar (Krishna & Co)
• Court: High Court (Singapore)
• Subject Matter: Interim payments,O 14 r 12 Rules of Court,Civil Procedure,Whether question suitable for determination without full trial,O 29 rr 10 & 11(c) and/or 12(c) Rules of Court,Summary judgment

: The plaintiff is a company which carries on the business of dealing in securities in Singapore and is a member of the Stock Exchange of Singapore Ltd (`SES Ltd`). The defendant who resides in Malaysia has an account with the plaintiff to trade in securities. Paragraph 2 of the declaration in his form of application to open this account provides:

I request you to open an account and agree to abide by the Terms and Conditions governing this account as may be amended from time to time, Rules and Bye-Laws of the Stock Exchange of Singapore (SES) and the Terms and Conditions for the Operation of a Securities Account with the Central Depository (Pte) Ltd (CDP) where applicable and as amended from time to time governing the purchase and sale of shares quoted on the SES, SESDAQ or other Stock Exchanges.

On 9 September 1997 the plaintiff bought 250,000 Ralco for RM8.90 each. These are securities quoted on the Kuala Lumpur Stock Exchange (`KLSE`) but not on the Stock Exchange of Singapore (`SES`). They were bought for the defendant and in accordance with the requirements of the Securities Industry Act the plaintiff issued and gave to the defendant a contract note which contained this statement:

Bought By Order And For Account Of

Ngu Tieng Ung

No 174A-D 3rd Floor

Jalan Ipoh 51200

Subject to the Rules and Bye-laws of the Stock Exchange of Singapore Limited.

The contract note also contained this statement:

To settle in M$ KLSE Sett Rules.

I have taken this statement from the summons issued by the plaintiff but I have seen the contract note and I think there were in fact two statements. `To settle in M$` followed immediately after the statement of the amount payable and `KLSE Sett Rules` was printed on the form under `Remarks`.

The defendant did not pay for the securities. On 18 September 1997 the plaintiff sold the securities for RM7 each. There was a substantial shortfall or `contra loss` and by writ issued on 2 January 1998 the plaintiff claims RM516,940 for balance of payments made by the plaintiff and commissions earned after allowing for payments received by the plaintiff and for interest.

In his defence the defendant alleges that the securities were bought `on ready basis` and `subject to the Kuala Lumpur Stock Exchange (KLSE) Settlement Rules` and that under these Rules the `due date for payment` was the fifth trading day following the contract date and that if settlement was not made `the member companies shall institute a forced selling by the 6th market day`. He admits not having paid for the securities but he says that in breach of the contract the plaintiff failed to institute a selling out by 17 September 1997 which was the sixth market day after the contract date. It is not disputed that under the bye-laws of SES the plaintiff was entitled to sell the securities on 18 September 1997 as they in fact did if the due date was 16 September 1997. Two alternative defences are pleaded. It is alleged that the alleged loss was caused or occasioned by the plaintiff`s breach and further the plaintiff failed to take any reasonable steps to mitigate the loss or damage suffered.

The plaintiff issued a summons for an order

That, pursuant to O 14 r 12 of the Rules of Court 1996, the following question of construction of document may be determined, namely, whether the remark `To settle in M$ KLSE Sett Rules` in the relevant contract notes of the transactions on which the plaintiffs make their claim, properly construed, incorporated the force-selling rules of the Kuala Lumpur Stock Exchange (`KLSE`) (italics added) in the

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