Yuen Chow Hin and Another v ERA Realty Network Pte Ltd

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 05 February 2009
• Neutral Citation: [2009] SGHC 28
• Date: 05 February 2009
• Subject Matter: Option form had defendant's logo printed on it,Whether or not agent's conduct was breach of duties of agent,Agency,Duties of agent,Agency relationship between housing agent and principal,Breach,Defendant had held out associate as agent,Agent had assisted his boss's wife to make profit,Commission agreement had defendant's letterhead and addressor was identified as defendant,Agency by estoppel
• Docket Number: Suit No 137 of 2008
• Published date: 06 February 2009
• Defendant Counsel: Leonard Loo Peng Chee (Leonard Loo & Co)
• Court: High Court (Singapore)
• Plaintiff Counsel: Gan Kam Yuin (Bih Li & Lee)

5 February 2009 Judgment reserved

Choo Han Teck J:

1 The first plaintiff, a businessman, is the husband of the second plaintiff. They owned a flat in a condominium known as Riverside Piazza at Keng Cheow Street. They decided to sell the flat and by recommendation from the first plaintiff’s mother, sister, and brother, they asked one Ang Teik Soon, known to them as “Jeremy” to help them find a buyer. Jeremy was a “Senior Marketing Director” of the defendant company although the latter asserted in its defence that none of the agents or directors named or involved in this suit were its servant or employee. It claimed that they were independent contractors known as “associates”. I shall return to this point shortly.

2 Jeremy was regarded as an agent of “ERA” (as the defendant is more famously known). The plaintiffs understood ERA to be a company that provided the services of a housing agency; and that a person carried an ERA calling card or who advertised himself as a housing agent under the banner of ERA was an ERA agent.

3 Jeremy had just prior to his engagement by the plaintiffs, found a buyer for a flat owned by the mother of the first plaintiff and was recommended to the plaintiffs as a competent agent. Jeremy worked as a subordinate to one Mitul Ratilal Parikh, known as “Mike”. Mike had at all material times, about 200 agents working under him, all of whom used the defendant’s ERA name and logo. The arrangement in place was that whenever an agent under Mike has successfully helped a client to complete a sale and purchase transaction he would share his commission with Mike and the defendant. There was some discrepancy in the evidence as to what the applicable ratio was, and it seemed that a flexible formula was used. In this respect, the evidence of the defendant’s former Legal Manager Tan Keng Yong’s account differed from that given by Mike. The exact ratio, however, was not important but the fact that the defendant and Mike shared in an agent’s commission was relevant in establishing the nature of the relationship between Jeremy, and Mike, and the defendant. It was a relationship in which the defendant could not be heard to say that it had nothing to do with the conduct of Jeremy or Mike.

4 The first plaintiff was frequently away on business and he therefore left it to the second plaintiff to manage the sale of their Riverside Piazza flat. The second plaintiff was the one who appointed Jeremy as the agent for that purpose in June 2007. Jeremy reported to her sometime in mid-June that the OCBC Bank had valued the flat between $650,000 and $700,000. He told her that he would soon place an advertisement for the sale of the flat. Jeremy telephoned the second plaintiff about 4 July 2007 and told her that he had a Chinese client who wanted to buy the flat for $650,000. According to the second plaintiff, Jeremy described this client as a “regular” client of his. This “client” turned out to be one Natassha Sadiq (”Natassha”), who was (and still is) Mike’s wife. The second plaintiff asked Jeremy why she was not offered the valuation price of $700,000. Jeremy told her in reply that it was because she had recently renewed the tenancy for the flat, implying that a tenancy encumbered flat had a lower value. The second plaintiff then asked Jeremy to make a counter-offer of $688,000. Natassha, who later testified for the defendant, said in her evidence that she had offered to buy the flat at $650,000 after a discussion with her husband, and that they decided on this sum because it was the serial number of her identity card (which was in fact “6500003”). This was not a crucial piece of evidence in itself; it was useful only in my assessment of the witness’s credibility. Jeremy then told the second plaintiff that the seller had accepted her offer. The second plaintiff’s evidence was that she then granted an option dated 12 July 2007 addressed to “Natassha Sadiq or nominee(s)” for her to buy the flat at $688,000, and also signed a commission agreement also dated 12 July 2007 agreeing to pay a commission of $6,880 (1%). The commission agreement was on the defendant’s letterhead, and the addressor was identified in the phrase “Yours sincerely, ERA REALTY NETWORK PTE LTD” and signed by Jeremy in his proper name “Ang Teik Soon”. Between 5 July 2007 and 12 July 2007 there were some negotiation concerning the price and the completion period but this was not relevant to the issues before me.

5 Jeremy claimed that the option and the commission agreement were signed on 5 July 2007 and not on 12 July 2007. I have no hesitation in preferring the second plaintiff’s version. In any event, in my view, it was not a major issue although Jeremy’s point was that the second plaintiff knew as at 5 July 2007 that Natassha was likely to sub-sell the property because of the words “or nominee(s)” appearing in the option form. What was significant was that the defendant filed a claim against the plaintiffs for the commission due from the sale of the flat. That claim was made in the Small Claims Tribunal in the Subordinate Courts by the defendant; not by Jeremy.

6 Natassha exercised her right of option on 26 July 2007, thus contracting to buy the plaintiffs’ flat for $688,000. The plaintiffs did not know at that time that Natassha was Mike’s wife; and they also did not know that Mike was Jeremy’s superior in the defendant organisation. Neither did they know that Jeremy had known Mike for a very long time and was employed by Mike personally when he (Jeremy) was retrenched in 1999 by his previous employer. Mike subsequently suggested that Jeremy join the defendant and that was how Jeremy became an “associate” of the defendant. More importantly, unknown to the plaintiffs, Mike had placed newspaper advertisements for the sale of the flat; and conversely, Jeremy did not place any advertisement. The second plaintiff thought he did because he told her that “no one had responded to the advertisement”. When cross-examined Jeremy told the court that he believed that telling his regular clients (which was in fact Mike, who used his wife as nominee) constituted advertisement. That clever answer did not explain why he had said to the second plaintiff that no one answered the advertisement. Perhaps Jeremy did not think that counsel knew the difference between a tip-off and an advertisement. I think that it is fair to say that most people know the huge difference between those two words. The plaintiffs subsequently discovered that Mike had placed at least two advertisements in the Straits Times; one on 7 July and the other on 14 July. It also transpired that Natassha granted an option to purchase the flat to one Teo Su Kee on 18 July 2007 for the price of $945,000. Teo Su Kee exercised his right of option on 25 July 2007, the day before Natassha exercised her right of option granted by the second plaintiff. Teo Su Kee testified that he bought the flat through Mike in response to a newspaper advertisement.

7 The plaintiffs were puzzled when they received a query from the Central Provident Fund Board (“the Board”) asking them why they had sold their flat below valuation. They asked Jeremy whether that was so. Jeremy told them that it was not true and helped them draft a reply to the Board. The reply was not entirely truthful but that was not a major issue and adds only to the court’s assessment of Jeremy. The plaintiffs received no further communication from the Board after that but they sensed that something was not right. They then searched the newspapers and found the advertisements placed in the Straits Times by Mike. They also discovered through a search made at the Registry of Marriages that Natassha was Mike’s wife. On these facts the plaintiffs sued the defendant for breach of contract and specifically,...