Sim Tony v Lim Ah Ghee (trading as Phil Real Estate & Building Services)

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 30 June 1994
• Neutral Citation: [1994] SGHC 178
• Date: 30 June 1994
• Subject Matter: Contract,Whether agreement invalidated on ground of public policy,Plaintiff CPIB officer at the time of transaction,Whether plaintiff gave sufficient consideration,Past consideration,Whether agreement tainted with illegality,Illegality and public policy,Consideration,Plaintiff's services rendered being past acts and independent of the agreement,ss 43 & 168 Penal Code (Cap 224),Staututory illegality,Whether exception to the general rule applies,Breach of Instruction Manual
• Docket Number: Suit No 1205 of 1992
• Published date: 19 September 2003
• Defendant Counsel: G Raman (G Raman & Partners)
• Court: High Court (Singapore)
• Plaintiff Counsel: Joe Chellam and MP Kanisan (Palakrishnan & Partners)

Cur Adv Vult

This is a claim by the plaintiff against the defendant for the sum of $116,347 (the sum). This amount is said to represent a quarter share of the 1/2% commission amounting to $465,388.26 received by the defendant as commission for effecting the sale of several properties in Goldhill Plaza and in Goldhill Centre (the properties). The sale was effected in May 1989 by a group of companies controlled by one William Goei (Goei) to another group of companies controlled by an Indonesian, Lauw Siang Liong for about $90m.

The plaintiff claims to be entitled to the sum on the basis that there was an agreement between him, one Kang Lye Kim (Kang), Lena Wong Sook May (Lena Wong) and the defendant, that the 1/2% commission was to be shared amongst them equally. The defendant has refused to pay the sum and the plaintiff commenced this action against the defendant for his alleged share of the commission.

The pleadings

At the commencement of the hearing, I allowed an application by counsel for the plaintiff to amend substantially the original statement of claim which lacked material particulars, including the agreement upon which this action was based.

By his statement of claim, the plaintiff alleged that sometime in April 1989 he was requested by Goei to seek a purchaser for the properties. At about the same time, Kang and Lena Wong had found a potential buyer in Lauw. Kang and Lena Wong were estate agents and were, at that time, associates. The two of them could not approach Goei directly because Lena Wong had previously given a bribe to one of Goei`s managers for which a corruption case was pending, upon Goei`s complaint to the Corrupt Practices Investigation Bureau (CPIB). They therefore approached the defendant to seek his assistance in conducting the negotiations. The defendant was both an appraiser as well as an estate agent and is the sole proprietor of Phil Real Estate & Building Services.

The plaintiff pleaded that the defendant was introduced to the seller by him and that there was an agreement that the commission for the sale was to be divided equally between the four of them. The sale was completed and the plaintiff claimed that he was entitled to the sum as commission. The 1/2% commission was only paid out to the defendant after he had commenced proceedings against the vendors and had successfully obtained summary judgment for $465,388.26. The plaintiff subsequently sent a letter of demand dated 29 May 1992, for payment of the commission due to him but the defendant refused to pay.

In his defence, the defendant denied any agreement with the plaintiff to share the commission which he ultimately received. Instead, he claimed that the 1/2% commission as provided in the sale and purchase agreement for the properties was to be paid as commission by the vendors to him absolutely, as the estate agent who introduced the buyer to the sellers. It was admitted by the defendant in his defence that he did obtain judgment for the 1/2% commission from the sellers. However, it was denied that the plaintiff was entitled to any part thereof.

The evidence

In the light of the evidence which emerged at the trial, the pleadings of both parties were somewhat inadequate. As will be seen later, some material issues relied on by both parties were not sufficiently addressed in the pleadings. The basic issue before me was simply whether there was an enforceable agreement whereby the plaintiff was to be entitled to a quarter (1/4) share of the 1/2% commission recovered by the defendant. The determination of this issue necessarily depended upon several findings of fact which I reached after considering the evidence.

The evidence of the plaintiff as deposed to in his affidavit was this. He was a personal friend of Goei since 1979. Goei controlled three companies, Guan Seng Kee Pte Ltd, Sunland Realty Pte Ltd and Goldhill Properties Pte Ltd, which owned the properties in question. Sometime in April 1989, the plaintiff was asked by Goei to refer to him any prospective buyers. He informed Lena Wong and Kang, both of whom he had met sometime earlier in 1989, of the offer to sell the properties. Lena Wong told him that she had a potential buyer, Lauw (who is also known as Amir Soemedi). As Lena Wong and Kang were not able to approach Goei themselves because of the bribery incident, Lena Wong introduced the defendant to the plaintiff and asked the plaintiff to introduce the defendant to Goei. The defendant was to conduct the negotiations of the sale for them and generally, to act as their `front man`.

The plaintiff contacted Goei and brought the defendant to meet him. Subsequently, they met Goei again with Lauw. The plaintiff claimed that he acted as an intermediary between Goei, Lauw and the defendant. The commission that was payable upon the successful completion of the sale, amounting to 1/2% of the sale price, was to be shared equally between the defendant, Kang, Lena Wong and the plaintiff. When the sale went through, the four of them celebrated with a Chinese dinner and they each contributed a quarter share towards the cost of jade pieces purchased as thanksgiving to the Goddess of Mercy at the Waterloo Street temple.

In cross-examination, the plaintiff admitted that he was, at the material time, a CPIB officer. The plaintiff was later subjected to a disciplinary inquiry in which he admitted liability for violating the instruction manual with respect to the transactions here. He left the CPIB in November 1990. He was aware that as a CPIB officer he could not expect any form of gratification for any service which he may render.

He met Goei in 1979 when he was conducting an investigation into some matter and subsequently they became friends. The plaintiff met Lena Wong whilst he was investigating the bribery case against Goei`s manager. The plaintiff later became friendly with Lena Wong and subsequently introduced some property transactions to her. Counsel for the defendant cross-examined the plaintiff at length on the roles played by Lena Wong and Kang. However, nothing much turns upon this aspect of the evidence although it was clear that during this period of negotiations, Goei was not aware of the involvement of either Lena Wong or Kang. Goei only came to know of their involvement after completion of the sale of the properties.

Initially, the plaintiff considered his assistance to Goei as gratuitous and he did not expect any reward in return nor did he ask for any commission from Goei. However, Goei later assured him that it was alright to receive some commission despite the fact that he was a civil servant as it pertained to a private transaction between friends without any sinister or corrupt motive. Goei told the plaintiff at a meeting that he would speak to the plaintiff`s superiors with respect to the transaction. This occurred after the plaintiff brought the defendant and Lauw to see Goei. Goei obviously did not speak to the plaintiff`s superiors as otherwise the plaintiff would not have had to face disciplinary proceedings which led to his leaving the CPIB.

At the meeting in which the plaintiff introduced the defendant to Goei, the defendant according to the plaintiff asked for 1% commission. However, Goei was only prepared to pay 1/2% as the sale price was quite substantial and 1/2% therefore would already amount to a few hundred thousand dollars. No agreement between Goei and the defendant as to the commission was reached then. At the first meeting between Goei, the defendant and Lauw, the plaintiff could not remember whether the rate of commission was also discussed but he recalled that Goei had told the defendant to `take care of Tony` and that the defendant had replied something to the effect of `don`t worry, I will`. According to the plaintiff, this meant that the defendant was to pay him a part of the commission. He admitted that he did not take part in the discussions that ensued between the other three, with respect to the properties.

The plaintiff disagreed with counsel`s contention that there was a third meeting with Goei in which he was present, he asserted that there were only two meetings. He denied the contention that at the first two meetings, Goei had agreed to pay commission of 1% to the defendant and that at the third meeting, the defendant`s commission was reduced to 1/2% as Goei himself would pay commission of 1/2% to the plaintiff. He said that it was Lena Wong who subsequently told him that Kang, the defendant and herself had agreed to share the 1/2% commission equally with him.

After the sale, the plaintiff notified Goei`s Financial Controller, Lam Siat Khevn (also known as Mrs Eng) (Lam), that the 1/2% commission was to be shared by four persons and asked her to make out three separate cheques. One cheque was to be issued to Kang for her 1/4 share, another to the plaintiff himself for his 1/4 share and a third to the defendant for the remaining half share between him and Lena Wong. Lam (PW4) prepared the cheques accordingly. The plaintiff was with the defendant at Lam`s office on the day the cheques were to be collected. The defendant was unhappy that the cheques were separately issued and wanted the entire commission paid to him. Lam wanted the defendant to sign a statement acknowledging the receipt of all the cheques as full and final settlement. The defendant refused and a quarrel ensued between Lam and the defendant. Both of them left Lam`s office without collecting their cheques. The plaintiff admitted that he knew that the amount of his share was as shown on the cheque made out to him. When asked by counsel for the defendant why he did not take the cheque, he explained it was because the defendant did not collect his cheque and he felt that he was not in desperate need of the money.

The plaintiff denied counsel`s contention that he had subsequently requested the defendant to send an invoice dated 29 July 1989 to Goei for an additional 1/2% commission. During the period after the...