Thomas Teddy and another v Kuiper International Pte Ltd

• Judge: Quentin Loh J
• Judgment Date: 10 January 2013
• Neutral Citation: [2013] SGHC 7
• Citation: [2013] SGHC 7
• Court: High Court (Singapore)
• Published date: 21 March 2013
• Docket Number: Originating Summons No 340 of 2010 (Registrar’s Appeal No 183 of 2012)
• Plaintiff Counsel: Andrew J Hanam (Andrew LLC)
• Defendant Counsel: Paul Seah and Tay Guang Yu (Tan Kok Quan Partnership)
• Subject Matter: Tort,Conversion
• Hearing Date: 21 November 2012

Quentin Loh J:

This appeal from the District Court raises two discrete legal issues on the tort of conversion: first, what facts are required to establish an intention on the part of the defendant to act inconsistently with the owner’s proprietary right; and secondly, whether or not substantial damages can be ordered against a defendant who did not use the owner’s property for his own benefit and caused no actual loss to the owner.

This is an unfortunate case that could and should have been settled through amicable means. I note that the learned District Judge below had inquired if the parties wished to settle but the appellants had refused.¹

Facts

The appellants are husband and wife. The second appellant was employed by the respondent around February or 1 March 2010. The second appellant helped set up the respondent, hiring employees and setting up contracts with third parties. The respondent alleges, and it is not denied, that when the second appellant was first employed by the respondent, her husband’s company had been wound up and she offered to let the respondent use the first appellant’s computer file server, (“the File Server”). The second appellant was employed as an Operations Manager when her employment was terminated on 7 March 2012.

The respondent alleges the termination was for cause. This is disputed by the second appellant and the circumstances of the termination of the second appellant’s employment are the subject of a separate dispute in DC Suit No. 3086 of 2012 and are not at issue in the present case.

After the termination of the second appellant’s employment, the appellants, through their solicitors, sent a letter dated 27 April 2012 to the respondent demanding, inter alia, the return of the File Server by 2 May 2012.² The solicitors for the respondent replied on 11 May 2012 stating, inter alia, that the respondent stood ready to return the file server and asked for 3 days’ notice prior to the second appellant sending her contractors to dismantle and remove the File Server.

The second appellant did nothing. Three months passed. The respondent then asked their solicitors to send a reminder. On 13 August 2012 the respondent’s solicitor wrote to the appellants’ solicitor asking them to collect the File Server on or before 20 August 2012.

The second appellant’s solicitors replied on 21 August 2012 stating that they would need the respondent to give them the password to check the File Server before they dismantled and removed the same. They put forward a collection date of 25 August 2012 at 11 am. The second appellant’s solicitors subsequently sent a facsimile on 27 August 2012,³ asking for a change of the collection date to 29 August 2012 at 10 am but also stated:

As the servers were up and running in good condition when our client left your client’s company, our client would be performing checks after re-assembling the server and reserves the right to claim against your client for any damages to the server.

The respondent’s solicitors replied on 28 August 2012, ⁴ agreeing to the change but replied:

However, our client disclaims all responsibility for the condition of the server. Our client has no knowledge of the state or condition the server was in from the time your client was in the company to date.

Further, the server was donated by your client to our client in 2010 and therefore the return of the server to your client now is a gesture of goodwill on our client’s part.

It appears that the respondent was concerned about claims being made for damage to the File Server and had second thoughts about a handover without some form of agreed procedure for checking for damage. By then the respondent had already dismantled the File Server. The respondent’s solicitors subsequently sent an e-mail on 28 August 2012 at 8.21pm (“the 28 August e-mail”) to the appellants’ solicitors stating:⁵

Given that our clients have not reached an agreement with regard to the issue of assumption of liability for any damage that may have been caused to the file servers, it may be best for us to postpone the collection of the server to a later date.

We will take our clients’ instructions and revert to you shortly.

The second appellant complains that the email was sent after office hours and that she had by then already made arrangements for the collection of the File Server. On the following day, 29 August 2012, the appellants’ contractor and workers were turned away when they arrived at the respondent’s premises to collect the File Server.

There was no communication between the parties thereafter. Seven days later, on 5 September 2012, the appellants’ solicitors filed the originating summons⁶ and sent a letter dated 6 September 2012 to the respondent’s solicitors asking if the latter had instructions to accept service of process.⁷

The respondent’s solicitors replied by letter on 7 September 2012⁸ stating that the respondent “has always stood ready to deliver the file server” to the appellants and reiterated the offer for the appellants to collect the file server from the respondent’s premises at a time that was convenient for both parties. The respondent’s solicitors also state that the originating summons was unnecessary and that their client would look to the appellants for costs occasioned by the application.

There was another offer from the respondent’s solicitor dated 13 September 2012 for the appellants to collect the File Server any time from 17 to 19 September 2012 between 10 am and 5 pm but reserving their rights. The appellants did not take up the offer. The respondent’s solicitors wrote again on 24 September 2012, noting that they had not heard from the appellants’ solicitors and gave the appellants another opportunity to collect their File Server at any time from 25 to 28 September 2012 between 10 am and 5 pm.

The File Server has since been collected. I was told by Mr Hanam, counsel for the appellants, that prayer 1 of the originating summons, which called for the return of the File Server, has been “superceded”. Mr Hanam also told me there was no claim in respect of the return of the File Server in “good working condition”.

The Decision Below

The parties proceeded to the hearing below on a claim for unlawful detention of the File Server from 29 August 2012 to 7 September 2012, and the appellants claimed substantial damages.

The learned District Judge dismissed the application, citing the cases of Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd [2009] 4 SLR(R) 1101 (“Orix Leasing”); Chartered Electronics Industries Pte Ltd v Comtech IT Pte Ltd [1998] 2 SLR(R) 1010 (“Comtech (CA)”) and Comtech IT Pte Ltd v Chartered Electronics Industries Pte Ltd [1997] SGHC 277 (“Comtech (HC)”) (collectively, “the Comtech cases”). The appellants being dissatisfied with the decision filed this appeal.

Liability for Conversion

The crux of the appellants’ submission on liability is that the respondent had unjustifiably refused to return the File Server notwithstanding the appellant’s demand for the same. I turn now to the leading Singapore case on the tort of conversion, Orix Leasing, where the Court of Appeal laid out certain propositions of law at [45]-[46]:

45 ... The following propositions are nevertheless now regarded as established. Generally, an act of conversion occurs when there is unauthorised dealing with the claimant's chattel so as to question or deny his title to it (Clerk & Lindsell at para 17-06). Sometimes, this is expressed in the terms of a person taking a chattel out of the possession of someone else with the “intention of exercising a permanent or temporary dominion over it” (R F V Heuston and R A Buckley, Salmond & Heuston on the Law of Torts (Sweet & Maxwell, 21st ed, 1996) (“Salmond & Heuston on Torts”) at p 99). For example, it has been held in New Zealand that the unlawful taking of a car for a joy-ride was an intentional assertion of a right inconsistent with the rights of the owner and therefore constituted conversion (see Aitken Agencies Limited v Richardson [1967] NZLR 65 at 66). Inconsistency is the gist of the action, and thus there is no need for the defendant to know that the goods belonged to someone else or for the defendant to have a positive intention to challenge the true owner's rights (Halsbury's Laws of England vol 45(2) (Butterworths, 4th Ed Reissue, 1999) at para 548).

46 Where the defendant takes or uses the goods as his own, or sells goods not belonging to the person who transferred possession of the goods to him, the intention to do an act inconsistent with the owner's right is necessarily present, even if the defendant does not know or intend to challenge the property or possession of the owner (Salmond & Heuston on Torts at p 98 and R H Willis and Son v British Car Auctions Ltd [1978] 1 WLR 438 (“R H Willis”) at 442 (per Lord Denning MR).

[emphasis in bold italics added]

The Court went on to say at [69]:

The mere retention of another's property on its own is not conversion, unless the defendant has shown an intention to keep the thing in defiance of the true owner (Clayton v Le Roy [1911] 2 KB 1031 at 1052; see also [64] above). Neither is possession of a chattel without title considered to be either conversion or a tort (see Salmond & Heuston on Torts ([45] supra) at p 99 and Caxton Publishing Company Limited v Sutherland Publishing Company [1939] AC 178 at 202). Where detention of goods is concerned, the plaintiff suing in conversion will usually prove that the defendant's detention of the chattel is adverse to its interests by showing that the defendant had refused or neglected to comply with the demand made by it for the delivery of the chattel, though the making of such a demand is not a prerequisite in every case (Salmond & Heuston on Torts at p 100, Clerk & Lindsell ([44] supra) at para 17-22 and London Jewellers Limited v Sutton (1934) 50 TLR 193; see further Kuwait...