Lloyd's Maritime and Commercial Law Quarterly
UNJUST ENRICHMENT IN ASIA PACIFIC (BRUNEI, HONG KONG, MALAYSIA AND SINGAPORE)
Man Yip *
CASES
1. Benzline Auto Pte Ltd v Supercars Lorinser Pte Ltd
[2018] SGCA 2; [2018] 1 SLR 239 (Sing CA: S Menon CJ, A Phang JA and J Prakash JA); rvsg in part [2016] SGHC 281 (Sing HC: A Abdullah JC); [2018] RLR §1
Advance payment—failure of consideration
D held the Singapore master dealership rights for Lorinser cars, which were manufactured by Daimler AG. While P and D were negotiating an exclusive sub-dealership agreement for the Lorinser cars, P ordered a batch of cars with/through D and made an advance payment in respect of that order. The payment was made after P had received a copy of the draft agreement to be entered between D and Lorinser. It was intended that the exclusive sub-dealership agreement between P and D would be on substantially the same terms. The exclusive sub-dealership agreement was not ultimately concluded. P claimed for the recovery of the advance payment in unjust enrichment, on the basis of failure of consideration. The High Court allowed the claim. D appealed the decision.
Decision: The appeal was allowed in part. The unjust enrichment claim was unsuccessful. (1) The advance payment was made not to show good faith and seriousness, but to avoid delay in the supply of cars which P ordered. On the evidence, Daimler AG would not commence manufacturing until the required deposit was paid, but neither Lorinser nor D was willing to put up the funds first. Based on the evidence, P knew of the purpose for which the advance payment was made. (2) The implied basis of the payment was that D would offer P the exclusive sub-dealership agreement on terms which would materially correspond to the draft agreement between D and Lorinser. (3) The basis did not fail because it was P who refused to move forward with the exclusive sub-dealership agreement as it did not agree to provide the required standby letter of credit.
Held: (1) The basis must be determined objectively based on the communications exchanged between the parties. Subjective thoughts of the parties which had not been communicated would be disregarded. (2) Implication of basis must be derived on objective features of the transfer and its context, as opposed to being based on merely a fortuitous overlap between the parties’ unexpressed expectations.
636