Wong Fook Heng v Amixco Asia Pte Ltd

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 24 March 1992
• Neutral Citation: [1992] SGCA 19
• Docket Number: Civil Appeal No 9 of 1990
• Date: 24 March 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: R Doraisamy (Cooma Lau & Loh)
• Citation: [1992] SGCA 19
• Defendant Counsel: S Rai (Hin Rai & Tan)
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether there was consideration for the cheque,Payment of option money by cheque,Whether payee of cheque entitled to judgment for payment on the dishonoured cheque although option contract repudiated,Option to purchase properties,Whether failure of consideration,Cheque dishonoured due to countermand of payment,Consideration,Bills of Exchange and Other Negotiable Instruments,Alleged repudiation of contract by payee of cheque,Cheques,Contract,Sufficiency of consideration,Claim by payee of cheque for payment on dishonoured cheque

This is an appeal by the appellant against the decision of AP Rajah J, denying him judgment in his action against the respondents on a dishonoured cheque for the sum of $20,000. The facts of the case are as follows.

On 29 May 1981 the appellant, Wong Fook Heng, and three others granted the respondents, Amixco Asia Pte Ltd, an option to purchase certain office premises, namely, unit Nos 901-904, International Plaza (hereinafter `the properties`). The option was to expire at 4pm on 5 June 1981. The appellant owned unit 903 of the properties; his brother, Wong Dong, owned unit 901; his other brother, Wong Yoong Lee, owned unit 904; and his nephew, Wong Soh Har, owned unit 902. These three others were at no time parties to these proceedings. The appellant testified that the other three owners had given him the fullest authority and had entrusted him with the responsibility of selling their properties. All four properties were to be sold jointly in a single transaction. It was the appellant`s role to find a buyer. The other three owners would channel all inquiries regarding their properties to him.

On 30 May 1981 the respondents drew a Banque Nationale de Paris cheque for $20,000 dated 30 May 1981 in favour of the appellant. The cheque was given to the appellant in payment of the option money. He banked the cheque with the Bank of America to open a fixed deposit account.

On 1 June 1981 the appellant was informed by the Bank of America over the phone that the cheque he had received from the respondents would be dishonoured as the respondents had stopped payment.

On 2 June 1981 the appellant received a note from the Bank of America informing him that payment on the cheque had been countermanded by the respondents. Quek Chek Lan, the managing director of the respondents (`DW1`), testified that he had stopped the cheque because he became suspicious after he was informed by his colleague, Wong Soo Chong (`DW2`), that he (DW2) had received an `offer of sale` in respect of the properties which the respondents had earlier been granted an option to purchase. DW2 was also a director of the respondents. On further questioning by counsel for the plaintiff/appellant, DW1 admitted that no second option had yet been granted in respect of the said properties at the time he stopped the cheque. This is confirmed by DW2 who stated that the cheque was stopped `one or two days` before an option in respect of the properties was actually granted to him by the four property owners, including the appellant. On receipt of the note from his bank, the appellant consulted his solicitors and was advised that he could start anew in looking for potential buyers.

At this point, there is some slight confusion as to the facts. The appellant stated that on the night of 2 June or the morning of 3 June 1981, he received a phone call from callers interested in buying the properties. To the best of his memory, the appellant subsequently granted a second option in respect of the said properties on 3 June 1981. This is disputed by DW2 who eventually signed the acceptance copy of the second option. DW2 stated that if he remembered correctly, he gave his property agent the option money of $20,000 on 2 May or 2 June 1981, and in the late afternoon of the same day, he was given the option. He could not remember which month it was (May or June), but he remembered that `it happened on the same day`. However, on further questioning by counsel for the plaintiff/appellant, DW2 admitted that it could have been 2 June or 3 June 1981; he could not remember. The actual agreement for the second option was in fact dated 2 June 1981. DW2 eventually exercised his option and the properties were transferred to him.

On 4 June 1981 the respondents` solicitors sent the appellant`s solicitors a letter seeking to proceed with the purchase of the properties . A fresh cheque for $20,000 drawn by the respondents in favour of the appellant was enclosed as option money. By letter of even date, the appellant`s solicitors returned the cheque to the respondents` solicitors.

On 5 June 1981 the respondents sent a cashier`s order for $195,367.63, seeking to exercise the option granted to them on 29 May 1981. The appellant rejected this move.

In the present proceedings the appellant`s main contention is that there were, at all material times, two separate and distinct contracts in existence involving different parties. The first contract was the cheque contract between the appellant and the respondents. The second contract was the option contract between the respondents and the four property owners, ie Wong Dong, Wong Yoong Lee, Wong Soh Har and the appellant himself. Various authorities were cited to this court in support of the proposition that the giving and taking of a bill of exchange, such as a cheque, creates another contract separate from and additional to the original underlying contract. The cases relied on by the appellant include Pollway v Abdullah [1974] 1 WLR 493[1974] 2 All ER 381 Glennie v Imri [] 160 ER 773 and James Lamont & Co Ltd v Hyland Ltd [1950] 1 KB 585 These authorities are said to support the general rule in law that he who has given a bill of exchange cannot escape liability on the bill simply because something has gone amiss with the original underlying contract.

The appellant submits that the following constituted good consideration on his part for the cheque contract: his acceptance of the cheque in lieu of cash which he was legally entitled to demand; his warranty as to his ability to sell the properties in question; and his forbearance from dealing with the said properties at...