Chan Sek Keong J:

This appeal raised a number of issues relating to the admissibility in evidence of "without prejudice" negotiations between the parties and their agents. At the conclusion of the hearing on 14 May 1991, we dismissed the appeal of the defendant and said we would give our reasons later.

On 30 October 1985, the plaintiffs commenced this action against the defendant for damages for breach of contract. In the statement of claim, the plaintiffs have averred the following: that on or about 28 June 1983, the defendant agreed to buy from the plaintiffs 640,000 shares (the said shares) in SPP Ltd., which shares were listed on the Stock of Exchange of Singapore, at the total price of $2,278,400 (at $3.56 per share), and to complete the purchase by September 1983; that pending completion, the defendant should reimburse the interest accruing on the plaintiffs' and CBG's overdraft accounts with 3 banks, subject as from February 1984 to an overdraft limit of $2,278,400; that the defendant failed to complete the purchase by September 1983 but continued to pay the plaintiffs the said interest calculated as aforesaid until September 1984; that on 24 December 1984, the defendant paid $20,000 and on 27 May 1985 paid another sum of $30,000 to account of interest due; that the defendant failed to complete the purchase in spite of repeated demands and thereupon the plaintiffs sold, on 10 December 1984 and 17 December 1984 respectively, the said shares in the open market in two lots, 500,000 at $1.10 per share and 140,000 at $1.10 per share, and realized the net sum of $696,079. Accordingly, the plaintiffs have claimed the difference of $1,582,231 and interest thereon against the defendant for breach of contract.

On 25 November 1985, the defendant took out an application to strike out the action on the ground that the defendant was not in Singapore on 28 June 1983, which he deposed to in his affidavit, and therefore could not have agreed to purchase the said shares.

On 15 February 1986, the plaintiffs filed an application for summary judgment against the defendant. CBG, the managing director of the plaintiffs, swore an affidavit filed on 18 February 1986 in which he deposed as follows: that on 28 June 1983 he offered the said shares to the defendant (who was then a substantial shareholder of SPP Ltd.) through the defendant's personal secretary, one JK, as the defendant was not in Singapore; that JK later on the same day telephoned him and accepted the offer on behalf of the defendant on the terms as set out in the statement of claim, except that in relation to interest, the plaintiffs subsequently agreed voluntarily to limit the interest payment to an overdraft limit of $2,278,400 as from February 1984; that the defendant paid with his own cheques the interest on the plaintiffs' and CBG's overdraft accounts for the months July 1983 up to September 1984; that in August 1984 the plaintiffs sent to the defendant their cheque for $19,200 being the net dividend declared and paid by SPP Ltd. on the said shares as the same had been sold to the defendant; that when the September interest was due, the defendant returned the said cheque to the plaintiffs together with the sum of $3,774 to make up the amount payable for interest in the statement of claim with his own cheques; that the defendant defaulted in the payment of interest from October 1984, except for the two sums of $20,000 and $30,000 referred to in the statement of claim; that the defendant failed to complete and the plaintiffs had to sell the said shares to mitigate their loss.

In his affidavit filed on 12 March 1986, JK deposed, inter alia, as follows: that in June 1983, the plaintiff approached him to dispose of the said shares at $3.56 per share "on an option basis open for 24 months subject during that period or until the exercise of the option to paying interest less dividends on his overdraft account at one of the banks; that he did not sell the said shares to the