Colliers International v Senkee Logistics: Agency Agreement & Commission Dispute

Colliers International (Singapore) Pte Ltd sued Senkee Logistics Pte Ltd in the High Court of Singapore, seeking $300,000 in commission for allegedly facilitating the sale of Senkee's properties to Ascendas-MGM Fund Management Ltd. The court, presided over by Lai Siu Chiu J, dismissed Colliers' claim, finding that no contractual relationship existed between the parties regarding the commission and that Colliers was not the effective cause of the sale. The judgment was delivered on 2007-02-01.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's claim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Colliers International sues Senkee Logistics for commission on a property sale. The court dismisses the claim, finding no valid contract or effective cause.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Colliers International (Singapore) Pte LtdPlaintiffCorporationClaim DismissedLostKenneth Tan SC, Lim Tat, Krishnan Nadarajan
Senkee Logistics Pte LtdDefendantCorporationJudgment for DefendantWonEdmund Kronenburg, Leong Kit Wan, Joan Sim

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuJudgeYes

4. Counsels

Counsel NameOrganization
Kenneth Tan SCKenneth Tan Partnership
Lim TatTan Lim & Wong
Krishnan NadarajanTan Lim & Wong
Edmund KronenburgTan Peng Chin LLC
Leong Kit WanTan Peng Chin LLC
Joan SimTan Peng Chin LLC

4. Facts

  1. Colliers claimed commission for assisting in the sale of Senkee's properties to A-Reit.
  2. Colliers initially claimed 1% commission based on market custom, later limited to $300,000.
  3. Senkee had prior negotiations with Mapletree for a sale and leaseback arrangement.
  4. Ng from Colliers contacted Senkee, offering marketing services.
  5. CBRE, with Ng (formerly of Colliers), facilitated discussions between A-Reit and Senkee.
  6. Senkee signed an exclusive agency agreement with CBRE, excluding Mapletree.
  7. Senkee received a more favorable offer from Mapletree and accepted it, halting negotiations with A-Reit.
  8. Pearce from A-Reit contacted Colliers to explore recommencing negotiations with Senkee.
  9. Colliers contacted Senkee, informing them of A-Reit's continued interest.
  10. Senkee eventually sold the properties to A-Reit.
  11. CBRE demanded commission for the sale, and Senkee paid them $220,000 in settlement.

5. Formal Citations

  1. Colliers International (Singapore) Pte Ltd v Senkee Logistics Pte Ltd, Suit 862/2005, [2007] SGHC 18

6. Timeline

DateEvent
Defendant entered into preliminary negotiations with Mapletree Investments Pte Ltd regarding a possible sale and leaseback of the Property.
Defendant received an unsolicited mailer from Ng Ee Kiat of the plaintiff, asking for an appointment to sell the plaintiff’s services as the defendant’s marketing agent.
Meeting between Ng and the defendant’s representatives to discuss a sale and leaseback of the Property to A-Reit.
A-Reit approached the defendant, through CB Richard Ellis, expressing its interest in the sale and leaseback of the Property.
Defendant signed an Appointment Letter in favour of CBRE making the latter its exclusive agent to market the Property to prospective buyers with the sole exception of Mapletree.
Between this date and 2004-10-30, both Mapletree and A-Reit negotiated and exchanged tentative proposals with the defendant for the purchase of the Property.
A-Reit entered into a two-week exclusive negotiation period with the defendant.
The period of exclusivity between A-Reit and the defendant lapsed.
The defendant and A-Reit agreed, in principle, to the broad terms of an agreement in relation to a possible sale.
The Memorandum of Understanding was ready for execution, but the defendant requested the postponement of its execution for three days.
The defendant received a revised Letter of Offer from Mapletree.
The defendant executed the Letter of Offer from Mapletree.
Ng left the employment of CBRE and rejoined the plaintiff.
Douglas Leong met with Pearce, who remarked that A-Reit remained willing to recommence negotiations for the sale and leaseback of the Property with the defendant should the negotiations with Mapletree fall through.
Pearce contacted Yeo, informing Yeo that he had heard that the negotiations between Mapletree and the defendant had encountered problems and instructed Yeo to study the possibility of recommencing negotiations with the defendant.
Ng contacted Terence to inform the defendant that A-Reit remained keen on negotiating the sale and leaseback of the Property.
Meeting between Ng, Yeo and Terence to discuss the possibility of recommencing negotiations with A-Reit.
Terence sent a letter to CBRE purporting to confirm that the parties’ respective obligations under the agency agreement had ended.
Ng informed Terence that as a result of tax concessions unveiled in the 2005 Budget, a REIT listed on the SGX would be entitled to a waiver of the 3% stamp duty.
Ng sent an email with information on the tax concessions and suggested a meeting between the prospective buyer and the defendant.
Ng called Terence to check on the status of negotiations between Mapletree and the defendant.
Pearce contacted Terence to inquire on the progress of negotiations with Mapletree.
Terence informed Ng that there had been no developments on the deal with Mapletree since.
The defendant received a letter from Mapletree which highlighted the latter’s disagreement to various points in the proposed sale and leaseback.
Terence contacted Ng twice to discuss the possibility of a sale of the property to A-Reit as well as the specifics of such sale.
Terence informed Ng that he had already scheduled a meeting with Pearce three days later, viz. 21 March 2005.
Yeo and Ng met Richard and Terence before the lunch meeting.
Lunch meeting between Pearce and the defendant.
Ng contacted Terence for an update on the meeting. Later that same evening, upon being informed by Pearce that the defendant had scheduled another meeting with A-Reit the following day, Ng contacted Terence yet again to confirm the plaintiff’s attendance at the second meeting.
Second meeting between Pearce and the defendant. The parties agreed to renew negotiations in relation to the sale and leaseback of the Property, taking, as a starting point for negotiations, the MOU that was drafted back in November 2004. After several rounds of talks, the parties signed the revised MOU.
The defendant sent a letter to Mapletree highlighting that it was not proceeding with the proposed sale of the Property to the latter.
The plaintiff sent a letter to the defendant reiterating its claim that $300,000 would be due to it as agency fees or commission should the Property be sold to A-Reit.
MOU executed (dated the day after).
The defendant sent an email reply to the plaintiff, highlighting that it was “puzzled” by the commission letter and adding that should the latter’s services be required in future, the defendant would consider appointing the plaintiff.
The defendant sold the Property to A-Reit after agreeing to the terms of a Put and Call Option.
CBRE sent a letter to the defendant, demanding professional fees in the sum of $530,500 as commission for the eventual sale of the Property to A-Reit.
Settlement agreement between the defendant and CBRE.
Judgment reserved.
Costs

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that no valid contract existed between the parties regarding the payment of commission.
    • Category: Substantive
  2. Effective Cause of Sale
    • Outcome: The court held that the plaintiff was not the effective cause of the sale of the property.
    • Category: Substantive
  3. Offers to Settle
    • Outcome: The court did not award costs on an indemnity basis to the defendant after 27 April 2006 based on the defendant’s Offer to Settle.
    • Category: Procedural

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Claim for Commission

10. Practice Areas

  • Commercial Litigation
  • Real Estate Transactions

11. Industries

  • Real Estate
  • Logistics

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Deans Property Pte Ltd v Land Estates Apartments Pte Ltd & AnorCourt of AppealYes[1995] 2 SLR 371SingaporeCited for the principle that an agent's entitlement to commission depends on being the 'effective cause' of the sale, which is an implied term of the agency contract.
Tribune Investment Trust Inc v Soosan Trading Co LtdHigh CourtYes[2000] 3 SLR 405SingaporeCited regarding the difficulty in ascertaining the precise moment when a contract is formed.
Tan Yeow Khoon v Tan Yeow Tat & Another (No 1)High CourtYes[2000] 3 SLR 341SingaporeCited regarding the courts' aversion to negating agreements based on technical arguments about subsidiary terms.
Projection Pte Ltd v The Tai Ping Insurance Co LtdHigh CourtYes[2001] 2 SLR 399SingaporeCited for the principle that an objective test is applied to determine whether an agreement has been reached.
Ong Kee Ming (trading as FL Development and Property Consultants) v Quek Yong Kang and AnotherHigh CourtYes[1991] SLR 562SingaporeCited for the principle that to succeed in a claim for commission, the plaintiff must show an agency relationship and that it was the 'effective cause' of the sale.
Grandhome Pte Ltd v Ng Kok Eng and AnotherHigh CourtYes[1996] 1 SLR 775SingaporeDiscusses the elements that establish a prima facie case for being the 'effective cause' of a sale.
Emporium Holdings (Singapore) Pte Ltd v Knight Frank Cheong Hock Chye & Baillieu (Property Consultants) Pte LtdCourt of AppealYes[1994] SGCA 147SingaporeCited for the principle that no precise definition of 'effective cause' exists and much depends on the facts of each case.
Millar, Son & Co v RadfordEngland and Wales Court of AppealYes(1903) 19 TLR 575England and WalesCited for the principle that the right to commission does not arise from the mere introduction of a purchaser; the introduction must be an efficient cause of the sale.
Powers v Nashwaak Pulp & Paper CoNew Brunswick Supreme CourtYes[1937] 4 DLR 631CanadaCited for the principle that the plaintiff's act must be the causa causans of the transaction, not merely a causa sine qua non.
SBS Transit v Koh Swee AnnHigh CourtYes[2004] 3 SLR 365SingaporeCited regarding the obligatory nature of the prescribed format in Form 33 for Offers to Settle.
The EnduranceCourt of AppealYes[1999] 1 SLR 661SingaporeCited regarding the principle that an Offer to Settle should be a genuine offer to settle and not just a tactical move to obtain indemnity costs.
Singapore Airlines Ltd v Fujitsu Microelectronics (Malaysia) Sdn Bhd No 2Court of AppealYes[2001] 1 SLR 532SingaporeCited regarding the principle that an Offer to Settle should be a genuine offer to settle and not just a tactical move to obtain indemnity costs.
Peter Goutha v BDO BinderHigh CourtYes[1997] SGHC 85SingaporeCited regarding the refusal to award indemnity costs even when the defendants struck out the plaintiff’s claim as being frivolous and vexatious.
Man B &W Diesel S E Asia Pte Ltd & Anor v PT Bumi International Tankers & another appealCourt of AppealYes[2004] 3 SLR 267SingaporeCited regarding the conditions that must be satisfied for a defendant to be entitled to indemnity costs from the date of the offer to settle.
Teo Siew Peng v Neo Hock PhengHigh CourtYes[1999] 1 SLR 293SingaporeCited regarding the submission for the award of a certificate for three counsel to the defendant and that the plaintiff should also pay the costs on an indemnity basis for its refusal to agree to certain facts listed in the defendant’s Notice to Admit Facts.
Lin Securities (Pte)(in liquidation) v Official Assignee of the Property of Tan Koon SwanHigh CourtYes[1992] 1 SLR 1017SingaporeCited regarding the complaint that had his client known of the plaintiff’s decision much earlier, time and costs could have been saved by the defendant in the preparation for trial.
Stanley v PhillipsHigh Court of AustraliaYes(1966) 115 CLR 470AustraliaCited regarding the question of whether the services of more than one counsel are reasonably necessary for the adequate presentation of the case.
Data General (Canada) Ltd v Molnar Systems Group IncOntario Court of AppealYes(1991) 85 DLR (4th) 392CanadaCited regarding the application of the Rules of Civil Procedure O Reg. 560/84 in particular rule 49.10(1).

13. Applicable Rules

Rule Name
Order 22A of the Rules of Court (2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Commission
  • Agency Agreement
  • Effective Cause
  • Sale and Leaseback
  • Offer to Settle
  • REIT
  • MOU
  • Letter of Offer

15.2 Keywords

  • agency agreement
  • commission
  • effective cause
  • property sale
  • real estate
  • singapore
  • contract law

16. Subjects

  • Agency
  • Contract
  • Real Estate
  • Civil Procedure

17. Areas of Law

  • Agency Law
  • Contract Law
  • Real Estate Law