Wong Kai Chung v Automobile Association of Singapore

• Jurisdiction: Singapore
• Judge: Goh Joon Seng J
• Judgment Date: 28 May 1993
• Neutral Citation: [1993] SGCA 42
• Docket Number: Civil Appeal No 20 of 1992
• Date: 28 May 1993
• Year: 1993
• Published date: 19 September 2003
• Plaintiff Counsel: Jimmy Yim and Yew Woon Chooi (Drew & Napier)
• Citation: [1993] SGCA 42
• Defendant Counsel: Paul Chen (Donaldson & Burkinshaw)
• Court: Court of Appeal (Singapore)
• Subject Matter: Termination immaterial,Rights of agent,Parol evidence rule,Agency,Contractual terms,Remuneration,Entitlement of agent to commission,Whether commission due and payable to appellant,No ambiguity as to intent and meaning of written document,s 94(f) Evidence Act (Cap 97),Whether appellant effective cause of bank loan entered into by respondents,Contract,Whether extrinsic evidence admissible,Agent appointed to procure bank loan,Appellant's agency terminated before formal agreement entered into

Cur Adv Vult

In the 1970s the Automobile Association of Singapore (`AAS`) owned premises at 336 River Valley Road which it occupied. Those premises were destroyed by a fire in 1979. The AAS moved temporarily into rented premises in nearby Lloyd Road and immediately set about making plans for the redevelopment of the fire-devastated site at River Valley Road. To this end architects were engaged to prepare plans and make an estimate of the project costs which included an inspection centre at Jalan Eunos. The first projected costs were in the region of $10m. The AAS intended in the first instance to take a loan of $6m, the balance being available from its savings and self-generating funds which could be accumulated.

The president of AAS at that time, Milton Tan Hong Moh (`Milton Tan`) who gave evidence at the trial, testified that he, personally, had been trying to get a loan of $6m at rates of interest between 12% to 13% but had got no firm commitment from any prospective lender by the end of that year, 1979, or early 1980. He himself had been negotiating with the DBS Bank. In December 1979 the general secretary of AAS, Tang Tuck Wah (`TTW`) who also gave evidence at the trial, told Milton Tan that the plaintiff, Wong Kai Chung (`KC Wong`) could help AAS raise the necessary loan. This resulted in AAS addressing a letter dated 10 December 1979 (the letter of appointment) to Ban Hong Investments Co which was duly handed over to KC Wong by TTW. It was signed by Milton Tan in his capacity as president of AAS. The material paragraph reads as follows:

We intend to take a loan of S$6m by one lump sum from your lenders or bankers whoever they may be for a period of seven to ten years. According to the introducer of the said loan, the interest payable on the loan is from 6% to 9%pa (or any other interest rate agreed upon) plus the following charges immediately deducted from the loan:

(1) 2% to M/s KC Wong, the introducer

(2) 2% to Ban Hong Investments Co

We are agreeable to the above charges provided the loan is successful and the terms are acceptable to us in every respect.

KC Wong`s claim against AAS in this action is for damages for breach of contract or alternatively for three sums of money being $480,000 or $360,000 or $240,000 each alternative to the other being the commission of 4% payable under the letter of appointment and interest. His claim was dismissed by the learned judicial commissioner who tried this action. She found that KC Wong had not proved his claim. Further she found that even if KC Wong had introduced a lender, namely, the Bank of Tokyo, KC Wong`s appointment was terminated on 30 September 1980 by notice dated 25 September 1980 before a formal loan agreement was entered into between the Bank of Tokyo and AAS on 11 November 1981 and in any event KC Wong was not the effective cause through whose efforts the Bank of Tokyo gave a loan of $12m to AAS but that the efforts of Mrs Akiko Aw (`Mrs Aw`), a key witness at the trial, were the effective cause of the Bank of Tokyo entering into the loan agreement with AAS.

The decision of the learned judicial commissioner was essentially factual as it turned on her assessment of the credibility of principally, KC Wong, Milton Tan and Mrs Aw and to a lesser extent TTW and her evaluation of their evidence and the documents, in the nature of minutes of meetings, relied on by Milton Tan, Mrs Aw and TTW which were introduced in evidence. We will, therefore, have to carefully scrutinize the evidence and the documents, bearing in mind of course the limitations of an appellate court to overturn the findings of fact of a trial judge based on direct evidence as opposed to inferences drawn from such evidence. In this connection see the judgment of the Privy Council in Dominion Trust Co v New York Life Insurance Co [1919] AC 254 where the Board held that a distinction should be drawn between cases in which the issue depends upon the veracity of the witnesses, and those cases in which it depends upon the proper inferences to be drawn from truthful evidence. In the latter class of case the original tribunal is in no better position than the judges of the appellate court.

However, before we go into the evidence we can dispose of two matters. The first is to determine the true meaning of the letter of appointment and the second is to state the principles governing the determination of the effective cause of a particular transaction. In fact the second matter can be disposed of first as the learned judicial commissioner not only correctly stated the issue she had to determine but also accepted the principle stated in the cases for determining that issue. She said:

The only issue to be determined is whether the plaintiff (KC Wong) was the effective cause of the loan totalling $12m made by the bank (Bank of Tokyo) to the defendants (AAS) and if he was whether he is entitled to the various sums he has claimed.

And,

Numerous authorities pertaining to claims by estate and other agents were cited by counsel in support of his contention including the local case ( Ong Kee Ming v Quek Yong Kang [1991] 3 MLJ 294 ). I accept the principle common to all the cases that it is a question of fact in each case whether a claimant is or is not the causa causans for a transaction. It is then a question of law based on the facts whether a plaintiff has earned his commission.

Notwithstanding this we think it instructive to refer to that part of Chan Sek Keong J`s judgment in Ong Kee Ming v Quek Yong Kang [1991] 3 MLJ 294 where he refers to Glentree Estates Ltd v Gee [1981] 259 EG 332 as it illustrates a significant point and that is, the termination of KC Wong`s appointment before the Bank of Tokyo entered into the loan agreement with AAS is immaterial, provided that as a matter of fact it is shown that the claimant (in this case KC Wong) and none other (in this case Mrs Aw) was the effective cause for the concluded transaction. This is how Chan Sek Keong J referred to the Glentree Estates case.3 He said:

In Glentree Estates Ltd v Gee (1981) 259 EG 332, GEL was appointed the sole agent for the sale of G`s house for two months. GEL found a buyer, F, whose offer was rejected by G as being too low. G then purported to withdraw the property from GEL and instructed another firm, HHE, to sell it. HHE advertised the property. This revived the interest of F who made an offer direct to G and eventually completed the sale. The court held that GEL was entitled to the commission as the effective cause of the sale was its original introduction and that the chain of causation was not broken by G`s rejection of the original offer and the instruction of new agents. It should be noted that in this case, GEL did not rely on the premature termination of their sole agency as a cause of action and that the court did not regard it as a relevant factor for the purpose of determining the effective cause.

We should mention that in the instant case KC Wong by his statement of claim has contended that the notice of termination was unreasonably short and that in any event the termination was wrongful but neither of these points were pursued before us.

Turning now to the interpretation of the letter of appointment, the learned judicial commissioner gave it a subjective meaning by admitting oral evidence from Milton Tan and TTW as to what they intended by the words within brackets which read: `or any other interest rate agreed upon`. When we deal with the evidence in greater detail later we will see how these words came to be written in the letter of appointment. For the present it is sufficient to note that both Milton Tan and TTW said in evidence that these words were put in as they intended that KC Wong should earn his commission only if he was able to get a loan for AAS at interest rates below 6%. Accordingly the learned judicial commissioner held that on the true construction of the letter of appointment KC Wong would have to get a loan for AAS at interest rates between 6% to 9% or lower to earn his commission. In her judgment she addressed this question as follows:

It is true that no extrinsic evidence can be admitted to explain a document which terms are clear as Mr Yim contended was the case for exh P1 (the letter of appointment). However, the court is entitled to consider as a relevant fact the scenario of interest rates at the time when exh P1 was given to the plaintiff (KC Wong). In this regard, PW2/DW2 (Michael Tay Kok Hwa a bank officer with Bank of Tokyo; he was called both by the plaintiff as well as by the defendants) had testified that the bank`s (Bank of Tokyo`s) prime lending rate on 10 December 1979 was 9.25% which means the bank`s best customers would have been charged a minimum rate of 10.25% on loans (see also exh D5). Common sense dictates that when the defendants (AAS) gave the plaintiff

exh P1, neither party could be thinking that the plaintiff would be paid his 4% commission if he procured a loan from the bank at the then prevailing interest rate or at an interest rate above 9%. DW3 (Milton Tan) contended that otherwise he should have had his head examined for signing exh P1. DW3`s understanding of exh P1 was shared by DW5 (TTW). Under s 94(f) of the Act (Evidence Act) the court can admit evidence which shows in what manner the language of exh P1 is related to existing facts.

With all due respect to the learned judicial commissioner we doubt the correctness of her reasoning. Firstly, it seems to us that AAS`s greater difficulty was in getting a loan at all. The evidence clearly bears this out. Secondly, surely s 94(f) of the Evidence Act (Cap 97) which provides that `any fact may be proved which shows in what manner the language of a document is related to existing facts` does not permit the admission of subjective evidence to interpret the written word. If any authority is needed for this proposition...