Candid Water Cooler Pte Ltd v United Overseas Bank Ltd

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 16 May 2006
• Neutral Citation: [2006] SGHC 80
• Docket Number: Originating Summons No 187 of 2006
• Date: 16 May 2006
• Year: 2006
• Published date: 18 May 2006
• Plaintiff Counsel: Lim Chor Pee and Tan Yin Tze (Chor Pee & Partners)
• Citation: [2006] SGHC 80
• Defendant Counsel: Hri Kumar and Tham Feei Sy (Drew & Napier LLC)
• Court: High Court (Singapore)
• Subject Matter: Appeals,Application for leave to appeal,Leave,Whether trial judge's substantive decision containing prima facie case of error of law or case concerning issue of importance upon which determination of Court of Appeal would be to public's advantage,Civil Procedure,Section 34(2)(a) Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed)

16 May 2006

Woo Bih Li J:

1 In this action the plaintiff, Candid Water Cooler Pte Ltd (“Candid”), sought a declaration that it had completed the purchase of a leasehold property at 13 Woodlands Walk, Singapore 738813 (“the Property”) within the time stipulated in a contract of sale and purchase of the Property between the defendant, United Overseas Bank Limited (“UOB”), and Candid. The rest of the reliefs sought were consequential ones.

2 The background to the action was straightforward. UOB was a mortgagee in possession of the Property. By an option dated 12 April 2005 (“the Option”), UOB granted Candid an option to purchase the Property on the terms stated therein at a purchase price of $3.83m.

3 On 26 April 2005, Candid exercised the Option resulting in a binding contract for the sale and purchase of the Property. The contract was subject to the written approval of the Jurong Town Corporation (“JTC”), the head lessor.

4 On 18 May 2005, JTC wrote to UOB to state that it had in principle no objection to the assignment of the lease of the Property to Candid, subject to various conditions being complied with. I will refer to this letter as “the Consent Letter”. The material condition for the purpose of the dispute was JTC’s condition that an environmental baseline study (“EBS”) be obtained. Paragraph 2.3(c) of the Consent Letter stated:

(c) Environmental Baseline Study (EBS)

(c1) You as the assignor shall at your own cost engage a reputable independent consultant to conduct an Environment Baseline Study (“assignor’s EBS”) to determine the level of minerals, hydrocarbons and chemicals on and beneath the property. Please refer to Annex C for the minimum requirements for the assignor’s EBS.

(c2) A written copy of the results of the assignor’s EBS shall be submitted to us within four (4) months from the date of this letter and at least 3 weeks before legal completion of the assignment.

(c3) If the results of the assignor’s EBS indicate that the level of minerals, hydrocarbons or chemicals present at the time of the assignor’s EBS exceeds –

(c3.1) that shown in a previous Environment Baseline Study, if any, submitted to us at or about the time of the commencement of the (original) lease term (“the First Baseline Study”); or

(c3.2) that permitted by the laws, bye-laws, orders, rules and regulations prevailing at the time of the assignor’s EBS (“such laws”), or in the absence of such laws, the prevailing Dutch standards regulating intervention levels (“the prevailing Dutch Standard”)

(“contamination”) then before legal completion of the assignment, unless we permit the assignee to take over the assignor’s obligation in accordance with sub-paragraph c4 below, the assignor shall, at his own cost, properly carry out all works necessary to decontaminate the Property …

[Emphasis in original in bold and in underline]

5 Clause 2 of the “Special Conditions” of the Option (“the Special Conditions”) stipulated the formula for determination of the completion date of the sale and purchase as follows:

The balance of the Purchase Price shall be paid and this sale and purchase shall be completed at the office of DREW & NAPIER LLC at 20 Raffles Place #09-01 Ocean Towers Singapore 048620 or such other venue as may be directed by the Vendor’s Solicitors on the expiry of twelve (12) weeks from the date of exercise of this Option or three (3) weeks from the date of the written approval of Jurong Town Corporation (“JTC”), all relevant authorities and/or the lessor of the Property (“the necessary approval”), whichever is the later …

[Emphasis in original in bold]

6 If the Consent Letter constituted JTC’s written approval, the contractual completion date would have been 19 July 2005, being more than three weeks from the date of the Consent Letter and being 12 weeks from the date of the exercise of the Option on 26 April 2005.

7 Candid’s solicitors, Chor Pee & Partners (“Chor Pee”), must have considered the Consent Letter as constituting JTC’s written approval because by a letter dated 1 June 2005 Chor Pee wrote to UOB’s solicitors, Drew & Napier LLC (“D&N”), to ask them to confirm that completion “is now scheduled to take place on 19^th July 2005”.

8 By another letter dated 7 June 2005, Chor Pee wrote to D&N to refer to the EBS condition and to seek D&N’s confirmation that UOB was taking steps to obtain the EBS.

9 D&N replied on 9 June 2005. They referred to cl 26(a) of the Special Conditions and stated that pursuant to that provision, Candid was required to obtain the EBS. The last sentence of their reply confirmed that completion was scheduled for 19 July 2005.

10 There was an impasse between UOB and Candid as to who was to obtain the EBS. Eventually Chor Pee sent a telefax on 18 July 2005 to say that Candid would instruct them (Chor Pee) to appoint a consultant to obtain the EBS and also to undertake steps of decontamination, without prejudice to Candid’s rights. The telefax also stated that it might take one month to obtain the EBS, suggested that no interest be charged by either party for delay in completion and proposed a new completion date of 30 August 2005.

11 D&N replied on 19 July 2005 stating that as the EBS had not been carried out “it is premature for parties to agree to a date for completion”. D&N also stated that it was premature to consider Candid’s request to waive late completion interest. D&N’s response was slightly inaccurate in so far as Chor Pee had not suggested that only UOB waive interest for late completion but that both sides waive such interest.

12 The EBS was eventually obtained by Candid and forwarded to JTC. JTC replied on 6 September 2005 stating that it would accept the results of the EBS. On 12 September 2005, Chor Pee forwarded to D&N a copy of the EBS dated 18 August 2005 and JTC’s letter dated 6 September 2005 and asked when UOB would be ready to complete.

13 On 14 September 2005, D&N replied to say that UOB was ready, able and willing to complete and asked when Candid wished to complete to enable D&N to render the completion account. D&N also stated that UOB would be charging interest for late completion from 20 July 2005.

14 Chor Pee responded on 15 September 2005 stating that as D&N had only given notice to complete on 14 September 2005, UOB was not entitled to charge interest. Chor Pee also asked for the completion account.

15 By a letter dated 15 September 2005, JTC stated to D&N that it had no objection to the execution and registration of the Deed of Assignment to assign the leasehold interest to Candid.

16 Completion was effected on 5 October 2003 with Candid paying $128,499.69 to be held by D&N as stakeholders pending resolution of the dispute as to whether 19 July 2005 was the contractual completion date. That sum was made up of the following components:

(a)	$72,717.26	being interest for late completion from 20 July to 4 October 2005, at $944.83 per day for 77 days
(b)	$36,722.06	being Candid’s share of property tax from 20 July to 31 December 2005 (5 months and 12 days) at $6,816.67 per month, as UOB had paid such tax up to 31 December 2005
(c)	$19,060.37	being Candid’s share of licence fee from 20 July to 30 September 2005 (2 months and 12 days) at $7,984.75 per month inclusive of GST, as UOB had paid the licence fee up to 30 September 2005

17 Although Chor Pee had previously taken the position that it was for UOB, and not Candid, to obtain the EBS, they did not pursue this point before me. Indeed, in view of cl 26(a) of the Special Conditions, it was clear that although JTC had imposed that obligation on UOB, Candid had, by virtue of that provision, agreed to comply with the same.

18 It was also clear that had Candid proceeded immediately to obtain the EBS after the Consent Letter, it would have been able to obtain the EBS by 19 July 2005.

19 In the action before me, Candid was taking the position that JTC’s approval was given by its letter of 15 September 2005 when JTC said it had no objection to the execution and registration of the Deed of Assignment. Candid disputed that the Consent Letter constituted JTC’s approval. If Candid was correct, the contractual completion date would be 6 October 2005, being three weeks after 15 September 2005. It would then not be liable for the interest claims of UOB for late completion and the other items stated in [16] above would have to be adjusted based on the actual completion date of 5 October 2005. In that scenario, Candid was claiming reimbursement from UOB for the licence fee it had paid for the period 1 October to 5 October 2005 amounting to $1,287.76.

20 However, if the Consent Letter constituted JTC’s approval, then the contractual completion date would be 19 July 2005. In that event, UOB would be entitled to the $128,499.69.

21 Before I go on, I should mention that Chor Pee had sought confirmation from JTC that its letter of 15 September 2003 constituted its “official approval”. Unfortunately for Candid, JTC’s responses dated 28 September, 24 October and 5 December 2005 suggested that in its view the Consent Letter constituted its approval, although the condition about the EBS had to be satisfied prior to completion. Notwithstanding this, Candid sought to argue in correspondence and in the supporting affidavit of Lim Chiaw Chang, its managing director, that unless the EBS condition was complied with, JTC would not have given its approval. I will come back to this argument later.

22 For the time being, I would say that Chor Pee had sought JTC’s view to bolster Candid’s position that the Consent Letter did not constitute JTC’s approval. In my view, JTC’s responses militated against Candid’s position. Nevertheless, I was mindful that JTC’s view was not binding on Candid or UOB or the court.

23 In so far as Candid had raised the point that UOB had not given a notice to complete prior to 15 September 2005, I was of the view that this point was misplaced. The right to contractual...