Wolero Pte Ltd v Lim Arvin Sylvester

• Jurisdiction: Singapore
• Judge: Tan Lee Meng SJ
• Judgment Date: 24 April 2017
• Court: High Court (Singapore)
• Docket Number: Suit No 887 of 2015
• Date: 24 April 2017

Wolero Pte Ltd

and

Lim Arvin Sylvester

[2017] SGHC 89

Tan Lee Meng SJ

Suit No 887 of 2015

High Court

Contract — Breach — Separate oral agreement contradicted and prevailed over contractual term — Whether original contractual term breached

Contract — Estoppel by convention — Party consistently represented state of affairs and both parties acted on it — Whether estopped by convention

Tort — Causing loss by unlawful means — Wrongful interference with actions of third party — Intention to cause loss — Whether tort made out if innocent party failed to plead unlawful means

The plaintiff, Wolero Pte Ltd (“Wolero”), rented one of its limousines to the defendant, Arvin Sylvester Lim (“Arvin”), under a contract of hire from December 2014. Wolero guaranteed Arvin 110 job assignments a month to allow him to offset the monthly hire. From May to July 2015, Arvin received less than 110 job assignments per month and wrote to Wolero to demand the earnings he would have received. Instead, Wolero terminated Arvin's contract in July 2015 on the basis that he failed to pay that month's hire. Arvin returned the limousine in August 2015 but remained disturbed by the incident. He heard that similar issues had happened with other drivers, and had read a newspaper article about illegal rental car taxis. These car rentals were illegal as their drivers' insurance did not cover their passengers. Arvin wrote to the Land Transport Authority (“LTA”) inquiring if there was any wrongdoing; LTA replied asking him to stop driving the limousine. Arvin then forwarded the LTA's reply to other drivers, who terminated their contracts with Wolero.

Wolero sued Arvin for: (a) liquidated damages of slightly more than $112,000 for failing to pay one month's hire in July 2015; (b) damages for causing loss by unlawful means by inducing four other drivers to breach their contracts; and (c) an injunction restraining Arvin from inducing more drivers to breach their contracts. Arvin counterclaimed against Wolero for $4,890 as compensation for the failure to provide 110 job assignments and for his deposit.

Held, dismissing the claim and allowing the counterclaim:

(1) Arvin did not breach the contract and so liquidated damages were not due. Clause 2.1 of the contract required Arvin to pay the monthly hire on the first day of the month, and cl 9.2.1 allowed Wolero to terminate the contract if Arvin failed to pay the monthly hire within seven days of it becoming due. However, in a presentation to Arvin prior to entering the contract, Wolero's senior manager, Niki Ong, said that the monthly hire would be set off against the sums due from the job assignments at the end of every month. This formed a separate agreement regarding the time of payment of the monthly hire which contradicted and prevailed over cl 2.1 of the contract: at [40] and [48].

(2) Alternatively, Wolero was estopped from claiming liquidated damages. Estoppel by convention was an estoppel arising out of a mutually held common belief in a state of affairs. Where these requirements were satisfied, the parties were precluded from denying the truth of that assumption if it would be unjust or unconscionable to allow them to go back on the agreed interpretation. Niki Ong, on behalf of Wolero, consistently represented that the monthly hire would be set off from the sums from the job assignments at the end of each month and the parties had conducted themselves as such from December 2014 to August 2015. It would be inequitable for Wolero to change its position without notice: at [50], [51] and [57].

(3) Wolero had not proved that Arvin caused it loss by unlawful means. Unlike the tort of inducing breach of contract, which concerned accessory liability that was dependent on the primary wrongful act of the contracting party, the tort of causing loss by unlawful means was a tort of primary liability that did not require a primary wrongful act. There had to be a wrongful interference with the actions of a third party in which the claimant had an economic interest and an intention to cause loss to the claimant. Wolero failed to plead the alleged unlawful means adopted by Arvin, did not produce proper evidence of any unlawful means adopted by Arvin and did not show how the freedom of the four drivers to deal with Wolero had been interfered with. Hence, its claim against Arvin for causing it loss by unlawful means was dismissed: at [59] and [78].

(4) Wolero's application for an injunction was dismissed since its claim in relation to the tort of causing loss by unlawful means had no merit whatsoever: at [80].

(5) Arvin's counterclaim for compensation for the shortage of jobs from May to July 2015 was granted. Clause 1.3 of the contract required Wolero to compensate Arvin for any shortfall in job assignments that it promised. Wolero could not fault Arvin for refusing to accept some job assignments as cl 1.2 of the contract required Wolero to provide one day's notice. Arvin was not precluded from complaining about a shortfall of job assignments merely because he made a payment in cash on 28 July 2015 for a shortfall in the hire for May and June 2015, as his solicitors wrote to demand compensation from Wolero less than two weeks after making those payments: at [85], [93] and [97].

[Observation: There was no reason why the tort of causing loss by unlawful means, which was an integral part of the basket of economic torts and was distinct from the tort of inducing breach of contract, should not be part of the law in Singapore. In two decisions which did not concern the tort of causing loss by unlawful means, the Court of Appeal referred to this tort without indicating that it was not part of the legal landscape in Singapore: at [60] and [61].

The ambit of “unlawful means” had been a troublesome aspect of the tort of causing loss by unlawful means. One view required the unlawful act to be actionable by the third party and to affect the freedom of the third party to deal with the plaintiff. Another view was that unlawful means embraced all acts a defendant was not permitted to do, whether by the civil law or the criminal law. In the closely-related tort of unlawful means conspiracy, unlawful means included both criminal acts and intentional tortious acts: at [63] and [64].]

Beckkett Pte Ltd v Deutsche Bank AG [2009] 3 SLR(R) 452; [2009] 3 SLR 452 (refd)

EFT Holdings Inc v Marinteknik Shipbuilders (S) Pte Ltd [2014] 1 SLR 860 (refd)

OBG Ltd v Allan [2008] 1 AC 1 (refd)

Panchaud Freres SA v Etablissements General Grain Co [1970] 1 Lloyd's Rep 53 (folld)

Paragon Shipping Pte Ltd v Freight Connect (S) Pte Ltd [2014] 4 SLR 574 (refd)

Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174 (refd)

Singapore Island Country Club v Hilborne [1996] 3 SLR(R) 418; [1997] 1 SLR 248 (folld)

Singapore Telecommunications Ltd v Starhub Cable Vision Ltd [2006] 2 SLR(R) 195; [2006] 2 SLR 195 (folld)

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

Ismail bin Atan (Salem Ibrahim LLC) for the plaintiff;

Reshma Nair and Chew Wai Yin, Michelle (TSMP Law Corporation) for the defendant.

24 April 2017

Judgment reserved

Tan Lee Meng SJ:

1 The plaintiff, Wolero Pte Ltd (“Wolero”), which is in the business of providing limousine services to corporate clients and private individuals, rented one of its limousines, an E-200 Mercedes Benz bearing the number SKQ5638H (“the limousine”), to the defendant, Mr Arvin Sylvester Lim (“Arvin”) for $3,850 per month and guaranteed him a minimum of 110 job assignments every month to enable him to completely offset the monthly hire for the limousine. Wolero sued Arvin for liquidated damages amounting to slightly more than $112,000 after terminating its hire arrangements with him on the ground that he failed to pay one month's hire totalling $3,850 on time in July 2015.

2 In addition, Wolero claimed damages from Arvin for inducing four of its other drivers (“the four drivers”) to breach their contracts for the hire of its limousines and for causing it loss by unlawful means. The four drivers are Mr Mohammed Samsuri bin Hussain (“Samsuri”), Mr Ahmad Masran bin Hassan (“Masran”), Mr Hasrin bin Hassan (“Hasrin”) and Mr Abdul Hafidz bin Mohd Amir (“Hafidz”).

3 Wolero also sought an injunction to restrain Arvin from inducing breaches of contract by its drivers and from unlawfully interfering with its contracts with its drivers.

4 Finally, Wolero claimed damages from Arvin for removing two of its logos from the limousine and for a damaged limousine key.

5 Arvin denied that he breached his contract with Wolero. He also asserted that he did not induce the four drivers to breach their contracts with Wolero and that he did not cause any loss to Wolero by unlawful means. Furthermore, he contended that the claim for liquidated damages pursuant to his agreement to hire the limousine should be dismissed because the amount claimed is a penalty rather than a genuine pre-estimate of Wolero's loss.

6 Arvin counterclaimed against Wolero for the sum of $4,890 as compensation for the latter's failure to provide him with the promised 110 monthly job assignments required to offset the monthly hire for the limousine from May 2015 onwards and for the deposit that he paid to Wolero for the hire of the limousine.

Background

7 Wolero has been in the limousine business since 2009. In 2014, Wolero decided to expand its business. In his affidavit of evidence-in-chief (“AEIC”), its senior manager sales, marketing & projects, Mr Ong Siew Tiong alias Iman Abdullah (“Niki Ong”), explained as follows:

12. Being in the industry for several years, I know that most ‘freelance’ limousine drivers fancy driving luxury vehicles but often [do] not have sufficient customers to meet the costs of renting and maintaining such vehicles, let alone purchasing one …

13. As the Plaintiff's business was fast expanding, it was thought that a person leasing the luxury vehicle...