Tapematic SpA v Wirana Pte Ltd and Another

• Judgment Date: 09 January 2002
• Date: 09 January 2002
• Docket Number: Suit No 146 of 2001 (Registrar's
• Court: High Court (Singapore)

Tapematic SpA

Plaintiff

and

Wirana Pte Ltd and another

Defendant

[2002] SGHC 5

Woo Bih Li JC

Suit No 146 of 2001 (Registrar's Appeal No 156 of 2001)

High Court

Agency–Evidence of agency–Actual authority–Whether actual authority must originate from agreement between principal and agent–Whether necessary for principal to specify all the acts that agent has authority to do–Agency–Evidence of agency–Apparent authority–Whether principal needs to make representations in relation to agent for apparent authority to arise–Whether a representation is required by agent to third party before relationship of agency arise–Civil Procedure–Pleadings–Striking out–Application to strike out parts of statement of claim–Whether application can be made at any stage in proceedings–Whether late application bound to fail–Order 18 r 19 (1) Rules of Court (Cap 322, R 5, 1997 Rev Ed)

The plaintiff (“Tapematic”) sold some equipment in a deal proposed by the second defendant (“Umar”). The first defendant (“Wirana”) applied for and caused to be issued letters of credit, which required the presentation of cargo receipts signed by an authorised signatory of Wirana before the issuing bank made payment.

Tapematic later received cargo receipts signed by Singh whom Tapematic alleged, Umar had represented was Wirana's authorised signatory, but these were rejected by the bank as they were not signed by Wirana's authorised signatory.

Tapematic sued Wirana for misrepresentation, in that Umar had misrepresented to Tapematic that he was Wirana's agent and that Singh was an authorised signatory. Wirana denied the allegations. Umar denied making the representations and alleged that he dealt with Wirana through an intermediary (“Nair”).

Wirana successfully applied under O 18 r 19 of the Rules of Court (Cap 322, R 5, 1997 Rev Ed) to strike out parts of Tapematic's statement of claim. Tapematic appealed.

Held, dismissing the appeal:

(1) Actual authority need not originate from an agreement between the principal and his agent; it could be express or implied. Further, a principal need not specify all the acts which his agent was authorised to do, so long as the agent's act was reasonably incidental to the function for which he was appointed to do: at [51].

(2) That Wirana applied for the letters of credit after discussing it with Umar did not mean that it had appointed him as its agent with actual authority to represent to Tapematic about Singh's supposed authority. Furthermore, Umar was neither Wirana's officer or employee. As for apparent authority, Wirana made no representation to Tapematic about Umar. It was also irrelevant whether Nair was Wirana's agent because Nair made no representation to Tapematic: at [52], [54], [55] and [58].

(3) While an application to strike out a pleading was to be made as soon as possible, a late application was not doomed to fail as the court could strike out a pleading at any stage of the proceedings: at [66].

British Bank of the Middle East v Sun Life Assurance Co of Canada (UK) Ltd [1983] 2 Lloyd's Rep 9; [1983] BCLC 78 (refd)

Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480; [1964] 1 All ER 630 (refd)

Halliday v Shoesmith [1993] 1 WLR 1 (distd)

Hongkong & Shanghai Banking Corp Ltd v Jurong Engineering Ltd [2000] 1 SLR (R) 204; [2000] 2 SLR 54 (distd)

Ocean Frost, The; Armagas Ltd v Mundogas SA [1986] AC 717 (refd)

Thomas & Betts (SE Asia) Pte Ltd v Ou Tin Joon [1998] SGHC 57 (refd)

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

Rules of Court (Cap 322, R 5, 1997 Rev Ed) O 18 r 19 (1) (consd)

Ashok Kumar and William Ong (Allen & Gledhill) for the plaintiff

Toh Kian Sing and Edric Pan (Rajah & Tann) for the first defendant

Dinagaran (Thomas Tham & Co) for the second defendant.

Woo Bih Li JC

Introduction

1 Tapematic SpA (“Tapematic”) is the plaintiff in this action.

2 It was alleged that in late 1999 and early 2000 one Umar Zen, who is the second defendant, had approached Tapematic to propose two deals concerning the sale of optical equipment to some Indonesian buyers. Subsequently, two contracts for the sale of optical equipment by Tapematic to the Indonesian buyers known by the acronym “KBEI” were entered into.

3 It was agreed that payment would be made by way of letters of credit. Tapematic alleged that they told Umar Zen that they would not accept letters of credit issued by Indonesian banks.

4 Arrangements were then made by Umar Zen for two letters of credit to be issued by Standard Chartered Bank (“SCB”) in favour of Tapematic.

5 The applicant for the letters of credit was the first defendant Wirana Pte Ltd (“Wirana”).

6 The letters of credit required original cargo receipts issued and signed by an authorised signatory of Wirana stating that the goods were received in good order to be presented.

7 Tapematic alleged that Umar Zen had represented to it that one Raj Kumar Singh was an authorised signatory of Wirana.

8 Subsequently, Tapematic received two cargo receipts on a letterhead with the name “Wirana Pte Ltd” and signed by one Raj Kumar Singh. Tapematic then tendered the cargo receipts to SCB for payment.

9 However SCB then sent two advices of refusal to Tapematic informing it that the cargo receipts were rejected on the basis, inter alia, that the cargo receipts were not signed by an authorised signatory of Wirana and Wirana had refused to waive the discrepancy.

10 Although Tapematic managed to get the equipment shipped back from Indonesia to Italy, it alleged it suffered some financial loss.

11 Tapematic then commenced action against Wirana, as first defendant, and Umar Zen, as second defendant.

12 The claim against Wirana was based on misrepresentation, ie that Umar Zen had misrepresented to Tapematic that Raj Kumar Singh was authorised to sign the cargo receipts and that Umar Zen was an agent of Wirana.

13 Wirana denied that it had authorised Umar Zen to act on its behalf. It also denied that Raj Kumar Singh was an authorised signatory. It alleged that no one by such a name was in its employ and it had no knowledge of such a person. Also, the cargo receipts were not made on its stationery or letterhead.

14 Umar Zen denied that he had represented to Tapematic that Raj Kumar Singh was...