Tonny Permana v One Tree Capital Management Pte Ltd

• Jurisdiction: Singapore
• Judge: Chan Seng Onn J
• Judgment Date: 16 February 2021
• Court: High Court (Singapore)
• Docket Number: Suit No 751 of 2017

Tonny Permana

and

One Tree Capital Management Pte Ltd and another

[2021] SGHC 37

Chan Seng Onn J

Suit No 751 of 2017

General Division of the High Court

Agency — Construction of agent's authority —Written authority —Scope of written authority —Written authority in agency contract —Authority to dispense advice —Whether agent had authority to contract on behalf of principal

Agency — Duties of agent —Breach —Breach of duty of reasonable care, skill and diligence —Whether agent breached duty of reasonable care, skill and diligence —Whether non-disclosure was breach of duty of reasonable care, skill and diligence —Whether change in nature of principal's investment was breach of duty of reasonable care, skill and diligence

Agency — Duties of agent —When arising —Care, skill and diligence —Agent's duty of reasonable care, skill and diligence —Scope of duty —Whether agent owed duty of reasonable care, skill and diligence —Whether duty was contractual or tortious in nature —Whether contractual and tortious duties could coexist

Companies — Fraudulently inducing investment —Change in nature of investment —Whether change in nature of investment was authorised —Whether change in nature of investment was fraudulent —Whether principal was aware of change in nature of investment —Whether principal gave informed consent to change in nature of investment

Contract — Contractual terms —Express terms —Entire agreement —Entire agreement clause —Whether entire agreement clause excluded implied terms —Whether entire agreement clause excluded terms implied in law —Whether entire agreement clause had to expressly exclude specific terms

Contract — Contractual terms —Implied terms —Terms intrinsic to contract —Terms extrinsic to contract —Whether term intrinsic to contract —Whether term necessary for business efficacy —Terms implied in law —Whether term to be implied in law —Whether term incorporating duty of reasonable care, skill and diligence to be implied in law

Contract — Misrepresentation Act —Whether representations on future events were actionable —Whether representations were made fraudulently —Misrepresentation Act (Cap 390, 1994 Rev Ed)

Equity — Dishonest assistance —Primary liability —Secondary liability —Dishonest assistance as secondary liability —Whether dishonest assistance could be established absent primary liability

Equity — Fiduciary relationships —Duties —Breach of duty —Whether agent breached fiduciary duties to principal —Whether agent breached duty of loyalty —Whether agent breached duty to act in good faith in principal's best interests

Equity — Fiduciary relationships —When arising —Agent's fiduciary duties —Scope of agent's fiduciary duties —Fiduciary duties in dispensing advice —Fiduciary duties in conducting principal's affairs —Duty of loyalty —Duty to act in good faith in principal's best interests —Whether agent owed fiduciary duties

Tort — Misrepresentation —Fraud and deceit —Representations on future events —Representations implying faciendum —Whether representations on future events were actionable —Whether representations were made fraudulently

Tort — Negligence — Breach of duty —Duty of reasonable care, skill and diligence —Whether agent breached duty of reasonable care, skill and diligence

Tort — Negligence — Duty of care —When arising —Agent's duty of care —Agent's duty of reasonable care, skill and diligence —Whether agent owed duty of reasonable care, skill and diligence

Held, dismissing the claim:

(1) Agent's duties had to be clearly and specifically pleaded. Where the pleadings and allegations pertaining to an agent's authority were unclear, it would not be easy to distil the duties that arose from the agency relationship. Here, the precise basis of each claim lacked clarity. The plaintiff left it unclear whether “duties of agent” in the Statement of Claim pertained to contractual or tortious duties, and how these duties specifically arose: at [53], [71], [72], [89], [90], [104] and [111].

(2) The legal term “agent” was not homogenous or monolithic. “Agent”, in its general sense, simply referred to a relationship, often undergirded by a contractual agreement, where one party was able to act for another party. As a result of being able to act for his/her principal, and thereby influence his/her principal's position and interests, the law imposed various duties on agents. These duties arose for the protection of the principal, who often reposed trust and confidence in the agent. Different duties might arise, attendant to a relationship of agency, such as fiduciary duties, duties of skill and care, and any contractual duties stipulated in the agreement between agent and principal. In this sense, the law of agency involved and overlapped with several other overlapping areas of law such as contract, tort and equity: at [91].

(3) Simply using the terms “agent”, “relationship of agency” or “duties as agent” shed little to no light on the nuances of the relationship between a specific agent and his or her principal. It went without saying that different agents affected their principals' interests to different degrees. This depended on the extent of authority conferred upon the agent. The extent of authority that an agent possessed was a question of fact that was discerned from any express agreement between the parties as well as the parties' conduct and the surrounding circumstances: at [92] and [93].

(4) Each unique agency relationship would be accompanied by distinct sets of rights and obligations. It was not the case that every agent would owe, for example, fiduciary duties. In principle, the fact that fiduciary duties could be modified by the agency contract or even completely excluded would mean that situations of agency might involve agents that did not owe fiduciary duties. In general, the more extensive the agency relationship, ie, the greater an agent's authority or ability to affect the principal's interests, the more onerous would be the duties imposed upon the agent. This followed, as a matter of first principles, from the various areas of law that were engaged in the agency analysis: at [94].

(a) From the perspective of contract law, this was simply a matter of holding parties to their bargain, as embodied by the contract of agency. This was trite and was rooted in the notion of consensus ad idem. The law would give effect to what the parties had expressly agreed on, nothing more and nothing less (save terms to be implied in fact or in law): at [95].

(b) In the context of tort law, this was a question of the extent of the duty of care that arose on the facts. For instance, in the area of negligence, this was broadly construed based on the proximity between agent and principal. The existence and contours of an agent's tortious duties were also shaped by the specific context in which they arose: at [96] and [97].

(c) Also relevant were the principles on the interface between contractual and tortious duties and how these interacted. The relevant questions were whether, and to what extent, any contractual instrument curtailed or expanded on the common law tortious duties, and whether similar duties could coexist in both contract and tort: at [98].

(d) Viewed from the lens of equity or the law on fiduciaries, this was a question of the extent of the agent's position of ascendancy over the principal and authority to act on behalf of the principal. Where an agent was able to unilaterally and significantly influence his/her principal's position or interests and had been conferred such powers in trust and confidence, extensive fiduciary duties might arise. On the other hand, where the agent had limited authority and discretion, the agent would owe few, if any, fiduciary duties. Just because an agent might be considered a fiduciary in a limited manner (specifically, for matters in which he or she was allowed to exercise judgment or discretion to affect certain interests of the principal), this did not mean that every duty the agent owed to the principal was a fiduciary duty: at [99] to [101].

(5) Agency stood at the intersection of these various other areas of law but did not displace the fundamental principles that undergirded each. Defining a particular agency relationship hence depended on an application of the rules established within these different areas of law: at [102].

(6) On the evidential approach to questions of agency, any express agreement or implied agreement (as evinced by conduct) between the parties would be relevant. It was important in every case to identify and establish the existence and terms of any contractual instruments entered into by parties. Relevant also would be to scrutinise the conduct of the parties in the course of the relationship of agency, and how they had acted in transactions involving the principal. Specifically, one had to focus on transactions in which the agent was able to exercise the authority conferred by the principal. Only then could one reach a conclusion on the degree to which an agent was able to affect the principal's interests, and consequently the duties that were to be imposed on the agent: at [104].

(7) Based on the foregoing, a general three-step framework could be adopted in cases involving alleged breaches of the duties of agents. This framework did not involve the espousal of any new law. It was a suggested manner of synthesising the various relevant areas of law, as they currently existed, that often arose in the agency analysis, and to aid with the identification and understanding of the veiled issues of fact and law that often lurked beneath the façade of the parties' cases. The purpose of the framework was to clearly identify an agent's duties in any given case and to allow for a neat and comprehensive resolution of disputes involving duties of agents: at [107].

(8) The first step was to identify all the relevant contractual instruments and any other relevant conduct by the parties, in order to establish the...