Wah Tat Bank Ltd and Others v Chan Cheng Kum

• Jurisdiction: Singapore
• Judge: Viscount Dilhorne
• Judgment Date: 27 January 1975
• Neutral Citation: [1975] SGPC 1
• Docket Number: Privy Council Appeal No 22 of
• Date: 27 January 1975
• Published date: 19 September 2003
• Year: 1975
• Plaintiff Counsel: JG Le Quesne QC, FP Neill QC, M Karthigesu (from Singapore) and A Coleman (Coward Chance)
• Citation: [1975] SGPC 1
• Defendant Counsel: RJ Parker QC and HWB Page (Linklaters & Paines)
• Court: Privy Council
• Subject Matter: ection 11(1)(a) Civil Law Act (Cap 30, 1970 Ed),Section 11(1)(a) Civil Law Act (Cap 30, 1970 Ed),Tort,whether intention was to abolish the common law rule in its entirety,construction of statute to reform common law rule,Whether liability of joint tortfeasor established,Whether common law rule that recovery from joint tortfeasor barred once judgment recovered from second joint tortfeasor abolished,Statutory Interpretation,Conversion

Cur Adv Vult

From 1926 until 30 December 1960 the respondent was the sole managing proprietor of a shipping business which he carried on under the style of the Hua Siang Steamship Co. From 1954 until the end of 1960, one of his regular customers was Tiang Seng Chan (Singapore) Ltd (TSC). TSC bought goods which were loaded on to the respondent`s ships at the Sarawak port of Sibu for carriage to Singapore where they were destined to be sold. TSC financed these purchases through loans from the first appellants, who were its bankers in Sarawak. When the goods were loaded on board, Mate`s receipts were used instead of bills of lading. The Mate gave TSC receipts for the goods acknowledging that they had been received on board in apparently good condition and designating the second appellants, who were the first appellants` agents in Singapore, as the consignees of the goods. The Mate`s receipts were passed on by TSC to the banks who advanced money against them. The delivery on board in the above circumstances constituted a delivery to the ship as bailee for the banks and gave the banks a good possessory title to the cargo. It follows that if, on arrival at Singapore, the ship delivered the cargo to TSC or to anyone else without authority from the banks, this would constitute a conversion for which the respondent would be responsible. Nevertheless the respondent pursued a deliberate policy of delivering cargoes to TSC in Singapore without production of the Mate`s receipts, or an authority from the banks or anything else other than an indemnity from TSC. This means that the respondent habitually converted the goods comprising the cargoes and would have been liable in damages had the banks suffered any damage as a result of the conversion. Fortunately for him this did not happen because the goods were turned over quickly in Singapore and TSC were able to make the necessary payments to the banks, and the banks then released the Mate`s receipts which in due course were returned to the respondent.

On 30 December 1960 the respondent caused the Hua Siang Steamship Co Ltd (HSC) to be incorporated. He became Chairman and Managing Director of this company which took over the whole of his shipping business. He, however, retained ownership of the ships which had been used in the business and chartered them to HSC.

From 31 December 1960 onwards, the business was carried on by HSC without any change of policy. More particularly HSC continued the policy of accepting goods on board for which a Mate`s receipt was given designating the banks as consignees and thereafter delivering the goods to TSC in Singapore on their indemnity and without production of Mate`s receipts or any authority from the banks. After the incorporation of HSC the respondent concerned himself with finance, freight-rates and ship repairs whilst his son Chan Kim Yam concerned himself with decisions as to whether or not to release cargo on indemnity. Early in 1961 only a few weeks after the incorporation of HSC the respondent was told by his son of prolonged delays between the delivery of the goods to TSC and the production by TSC of the relevant Mate`s receipts. This suggested that TSC were experiencing difficulties in meeting their obligations to the banks. The respondent immediately went to see the directors of TSC and came to an agreement with them that HSC would thereafter continue to release goods to TSC as before, but only if the directors would on demand give their personal indemnity to HSC against any liabilities which that company might incur arising from such release.

Four shipments of goods were made from Sibu in Sarawak arriving in Singapore between the end of May and the beginning of July 1961. The usual practice was followed. On the arrival of those goods in Singapore, they were all delivered to TSC without the production of any Mate`s receipts or authority from the banks. In order to obtain this delivery, the directors of TSC had, in accordance with the agreement made between them and the respondent early in 1961, given their personal indemnity to HSC, in addition to the indemnity of their company, against any liability which HSC might incur as a result of so delivering the goods to TSC.

Unfortunately, TSC failed to discharge their obligations to the banks in respect of the money which had been advanced by the banks on the security of those goods and of the Mate`s receipts relating to them. The banks then brought an action in the High Court of Malaysia against the respondent and HSC claiming damages for conversion of the goods in question. This action was originally tried before Kulasekaram J who, for reasons to which it is unnecessary to refer, dismissed the claim and entered judgment in favour of both defendants. The banks then appealed to the Federal Court of Malaysia. That appeal was allowed and the judgment of Kulasekaram J was set aside. The Federal Court held that the evidence clearly established conversion against HSC, ordered that judgment should be entered against that company for damages to be assessed and that `the remaining issue as to whether [the respondent] is also liable in conversion be remitted for a retrial.` HSC and the respondent then appealed to this Board from that decision and both appeals were dismissed on 29 March 1971. By that date, the damages against HSC for conversion had been finally assessed as $570,500 and judgment entered for that amount. That judgment remains wholly unsatisfied.

The issue as to whether the respondent was jointly responsible with HSC for the now undisputed conversion by HSC was retried by Winslow J. At that trial the banks put in evidence certain passages from the testimony given by the respondent before Kulasekaram J at the original trial. The banks contended that this evidence afforded strong prima facie proof that the respondent had procured the commission of the conversion by HSC. It is possible that if the respondent had gone into the witness box, he might have explained this evidence away or adduced other evidence which would have thrown a new light on the case exculpating him from liability. On the other hand, his evidence might have made the case against him even stronger than it is, if that is possible. However this may be, the respondent elected not to give any evidence himself nor to call any witness on his behalf. Winslow J held that the respondent was responsible for the conversion but that the action against him was barred by the judgment already entered in favour of the banks for $570,500 against HSC. The banks appealed and the Court of Appeal of Singapore dismissed that appeal on the ground that the action against the respondent was barred as Winslow J had found and also on the ground that Winslow J had erred in holding that the respondent had been a party to the conversion by HSC. From that decision the banks now appeal to this Board.

The facts set out in this judgment are uncontradicted and mostly taken from passages in the respondent`s own evidence before Kulasekaram J. Their Lordships consider that these facts speak for themselves and lead irresistibly to the conclusion reached by Winslow J namely that the respondent was a party to the conversion. In their Lordships` respectful view the Court of Appeal had no grounds for reversing the judgment of Winslow J on this point.

No doubt the fact that the respondent is chairman and managing director of HSC does not of itself make him personally liable in respect of that company`s tortious acts. A tort may be committed through an officer or servant of a company without the chairman or managing...