Ong Keh Choo v Paul Huntington Bernardo and another

• Jurisdiction: Singapore
• Judge: Judith Prakash JA
• Judgment Date: 16 July 2020
• Neutral Citation: [2020] SGCA 69
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 175 of 2019
• Year: 2020
• Published date: 21 July 2020
• Hearing Date: 20 May 2020
• Plaintiff Counsel: Lee Peng Khoon Edwin and Ng Wei Ying (Eldan Law LLP)
• Defendant Counsel: Narayanan Sreenivasan SC, Muralli Raja Rajaram, Tan Kai Ning Claire and Partheban s/o Pandiyan (K&L Gates Straits Law LLC)
• Subject Matter: Contract,Consideration,Failure,Formation,Acceptance,Misrepresentation,Materiality,Termination
• Citation: [2020] SGCA 69

Woo Bih Li J (delivering the judgment of the court): Introduction

This appeal arises from a claim by the owner of a property for $316,000 as an alleged option fee in respect of an option to purchase the property granted by the owner to a prospective purchaser. The property in question was known as Balmoral 8 #05-03 (“the Property”). Payment of the option fee was allegedly done pursuant to a cheque issued by the husband of the prospective purchaser. The judge below (“the Judge”) dismissed the claim with costs and the owner appeals against that decision.

The plaintiff owner was Ong Keh Choo, a Singapore citizen. That is her name according to her formal identity document. She is also known as Jeannette Ong. At the material time, she was a real estate agent with 34 years of experience.¹ We will refer to her as “the Appellant”.

The defendants are a married couple, Paul Huntington Bernardo and Tran Hong Hanh, also known as Alice. They are the respondents in this appeal. We will refer to them collectively as “the Respondents” and respectively as “R1” and “R2”.

R1 is a citizen of the United States of America and a permanent resident of Singapore. He was previously working as a scientist and consultant. R2 is a citizen of Vietnam and a permanent resident of Singapore. Her affidavit of evidence-in-chief (“AEIC”) described her occupation as a medical concierge. Importantly, R2 is able to read and write English.

Background

The Appellant commenced HC/S 258/2018 against the Respondents, claiming $316,000 against R1 and R2 respectively. She alleged that she had granted an option to purchase the Property dated 7 October 2017 (“the OTP”) to R2 and/or her nominee in exchange for a cheque issued by R1 in her favour for $316,000 (“the Cheque”). Her claim against R1 was as drawer of the Cheque. Her claim against R2 for the $316,000 was for the option fee payable under the OTP.

On 6 October 2017, the Respondents saw an online advertisement for the sale of the Property.² The Property was marketed by the Appellant under the name of Jeannette Ong. At all material times, the Respondents discussed the Property with the Appellant in the belief that she was a real estate agent representing the owner. They only knew her by the name Jeannette Ong. They did not know that her formal name was Ong Keh Choo or that she was the owner. Such information only surfaced later as we elaborate below.

A series of events took place on 7 October 2017. First, on that morning, the Respondents viewed the Property and were shown around it by the Appellant.

There was a second meeting at about 2.00pm that same day between the Appellant and the Respondents at the residence of the Respondents. During that meeting, R1 issued the Cheque in favour of “Ong Keh Choo”.

There was a third meeting that day at about 7.00pm between R2 and the Appellant. The Appellant was accompanied by another real estate agent, one Lee Chew Hsia who is also known as Judi Lee (“JL”). The Respondents had met JL earlier that same day while JL was marketing another unit in the same development as the Property. The third meeting was at the residence of R2’s friend where R2 was attending a dinner party hosted by her friend. At that meeting, the OTP was handed to R2.

After the Appellant and JL left the third meeting, R2 sent a copy of the OTP to her lawyer who advised her on it that same night of 7 October 2017. The substance of the advice was that, normally, the terms of an OTP would provide for payment of 1% of the price as the option fee and for another 4% to be paid upon exercise of the OTP, with the 4% being held by the owner’s lawyer pending completion of the sale.³ However, under the terms of the OTP, 10% of the price was payable as the option fee and 90% was payable upon exercise of the option by 4.00pm of 23 October 2017. Completion was to take place only some 14 weeks thereafter.

R2 conveyed this advice to the Appellant either directly or through JL, who was acting as an intermediary. Thereafter, R2 and the Appellant discussed amendments to the OTP. R2 wanted to bring the terms of the OTP in line with those normally found.

However, later that night, R2 asked the Appellant if the Cheque could be cancelled as R1 was worried that the Respondents might not have enough money to cover their expenses if it were cashed.

The next day, on 8 October 2017, the Respondents learned that the Appellant was the owner of the Property but R2 continued to discuss amendments to the payment terms in the OTP with the Appellant.

Later in the evening, there was a flurry of messages about the cancellation of the Cheque and a telephone call between R2 and the Appellant. The Respondents’ position was that they were entitled to terminate the OTP for misrepresentation and they did do so that evening. The Respondents also asserted that during the telephone conversation, the Appellant had agreed to terminate the OTP and to return the Cheque after she returned from an intended trip overseas. R2 also informed the Appellant that the Respondents had countermanded the Cheque. The Appellant’s version was that she had only agreed not to bank in the Cheque while she was away in Zurich and until the parties had a chance to meet to resolve the matter. This aspect of the OTP was also heavily disputed and we will elaborate on it later.

Although the Appellant knew that R2 had said that the Cheque had been countermanded, she proceeded to deposit the Cheque for payment into her bank account on 21 October 2017. Unsurprisingly, she was notified on 24 October 2017 by her bank that payment on the Cheque had been countermanded.

On 1 November 2017, the Appellant’s lawyer sent a written notice of dishonour of the Cheque to R2 and demanded payment of $316,000. On 6 November 2017, R2’s lawyer replied to deny liability to pay the sum. The Writ of Summons against the Respondents was filed on 9 March 2018. The Appellant sold the Property to another buyer for $3.682m in June 2018.

The decision below

The suit was heard before the Judge in July 2019. The main witnesses were the Appellant and the Respondents. In addition, JL was a witness for the Appellant and R2’s friend, who hosted the dinner party on 7 October 2017, was a witness for the Respondents.

On 3 September 2019, the Judge dismissed the claim of the Appellant with costs to be taxed, if not agreed. His written judgment in Ong Keh Choo v Paul Huntington Bernardo and another [2019] SGHC 204 (“Judgment”) said nothing about the counterclaim of the Respondents for a declaration that the OTP was void ab initio and for damages.

The Judge found R2 to be a credible and forthright witness and accepted her version that the Cheque was only “for show” in that it was issued to show the Respondents’ sincerity as genuine buyers and the Cheque would not be handed to the owner pending negotiation with the Respondents on the price. He also found that the Appellant had procured R2’s signature on the OTP without informing her of its nature. He accepted that R2 was not familiar with the procedure for purchasing a property as she was buying property in Singapore for the first time (Judgment at [7]). The Judge also found R1’s evidence to be direct and unwavering and that it corroborated R2’s evidence.

On the other hand, the Judge was of the view that the Appellant’s general demeanour throughout the trial suggested that she was an untrustworthy person. She had failed to disclose that she was the owner of the Property and this was contrary to the Council of Estate Agents’ Professional Service Manual, which serves as a guideline for ethical conduct. He found that she had engaged not only in an omission but in active deception as her messages to R2 referred to the owner as a third party (Judgment at [8]).

Furthermore, the Appellant’s persistent refusal to acknowledge that the terms of the OTP were unusual also detracted from her credibility. She had insisted that there was no normal option fee and refused to admit that paying the full price upon exercise of the option was clearly disadvantageous to the buyer. Her repeated refrain was that the OTP was unusual because R2 wanted it to be so. This created the impression of an opportunistic owner taking advantage of an unsuspecting and ignorant buyer.

The Judge was of the view that JL’s evidence appeared rehearsed to corroborate the Appellant’s evidence. JL also refused to acknowledge the unusual terms of the OTP.

The Judge also found that R2’s signature on the OTP was not an acknowledgment or acceptance of the OTP. The Appellant had told R2 to sign it to countersign against the cancellation of certain words in the OTP. This was corroborated by a message from the Appellant to R2 shortly thereafter (after R2 had received her lawyer’s advice on the night of 17 October 2017) (Judgment at [12]).

The Judge did not agree with the Appellant that R2 had engaged in extensive discussions about the terms of the OTP. Furthermore, when R2 had mentioned that the OTP had contained unusual terms (after receiving advice from her lawyer) including payment of the balance of the price upon exercise of the OTP (instead of payment of the balance being made later upon completion of the sale), the Appellant replied to say that this had been written by JL by mistake.

In the Judge’s view, a “mistake” as fundamental as the amount due upon exercise of the option suggested that there was no agreement on the terms of the OTP. He was of the view that the OTP was inchoate for want of proper endorsement (Judgment at [15]).

The Judge was also of the view that the Appellant had misled R2 into thinking that the Respondents were complying with a normal process of the sale and purchase of real property in which the Cheque was only “for show” (Judgment at [16]).

The main issues

The main issues from Defence (Amendment No 1) (“the Defence”) were: Whether the Cheque was issued “for show” only. Whether R2...