Dickson Trading (S) Pte Ltd v Transmarco Ltd

JurisdictionSingapore
Judgment Date08 December 1987
Date08 December 1987
Docket NumberSuit No 2443 of 1987
CourtHigh Court (Singapore)
Dickson Trading (S) Pte Ltd
Plaintiff
and
Transmarco Ltd
Defendant

[1987] SGHC 59

Chan Sek Keong JC

Suit No 2443 of 1987

High Court

Civil Procedure–Injunctions–Sale of shares in company by competitive bidding–Plaintiff submitting higher bid but after deadline–Dispute as to whether plaintiff successful in its bid–Motion for interlocutory injunction to restrain disposal of shares–Balance of convenience–Whether interlocutory injunction should be granted to maintain status quo until judgment given in respect of dispute–Whether limited injunction should be granted pending appeal–Contract–Formation–Offer–Sale of shares in company–Invitation to submit bids for shares before stipulated deadline–Competing bidders–Plaintiff submitting higher bid but after deadline–Whether invitation constituted unilateral contract or invitation to treat–Whether deadline ineffectual, waived or extended

The plaintiff had bid unsuccessfully for all the issued shares (“the shares”) of the Hour Glass Pte Ltd, a wholly-owned subsidiary of the defendant. Both the plaintiff and a competing party, the Tays, had been invited to make bids for the shares by 6.00pm on 13 August 1987. The Tays had submitted a bid of $11m before the deadline, while the plaintiff submitted its bid of $11.2m after the deadline. The defendant thus decided to sell the shares to the Tays.

The plaintiff applied for an interlocutory injunction to restrain the defendant from disposing of or parting with the shares, on the basis that a binding contract had been concluded between the plaintiff and defendant on 13 August 1987.

The plaintiff argued that there was a serious question as to whether the plaintiff had a concluded contract with the defendant on 13 August 1987. The plaintiff thus sought an interlocutory injunction to maintain the status quo. Three arguments were made in support of the application. First, the defendant's invitation to the Tays and the plaintiff to bid was in the nature of a unilateral contract, such that the plaintiff had concluded the contract for the sale of shares by submitting a higher bid. Second, the 6.00pm deadline was ineffectual, waived or extended since it was an implied term of the unilateral contract that the defendant would do nothing to prevent the fulfilment of the condition specified in the invitation. Since the initial invitation mentioned no deadline, the plaintiff was entitled to a reasonable time to make its bid. The 6.00pm deadline was in breach of this term as to reasonable time. Third, the defendant's merchant bank advisers had waived or extended the deadline by allowing the plaintiff to leave the sealed bid with them and then opening it.

The court made an order dismissing the plaintiff's application for an interlocutory injunction (“the Order”). The plaintiff then applied for an interim injunction pending an appeal against the Order.

Held, dismissing the applications:

(1) The correct approach was to consider the plaintiff's case on the basis it was put (ie the defendant had assumed a legal obligation to the plaintiff which was conditional upon the submission of a higher bid by 6.00pm on 13 August 1987). On this basis, it was undisputed that the plaintiff had not fulfilled this condition when 6.00pm expired. Thus, the real issue was whether the 6.00pm deadline was ineffectual or had been waived or extended by the defendant: at [37].

(2) The plaintiff's submissions that the deadline was ineffectual or had been waived or extended did not raise any triable issues of law and of fact, for three reasons. First, the plaintiff had an obligation to make its bid in accordance with the conditions of the offer. A term that the plaintiff was entitled to a reasonable time to make its bid was not necessary to give effect to a unilateral contract. Moreover, a term as to reasonable time for performance cannot be implied when, as would be in the case of such unilateral contracts, it is the performance itself which brings forth the contract: at [38].

(3) Secondly, although the offeror in a unilateral contract was obliged not to revoke the offer after the offeree had embarked on the performance of the condition, the defendant had neither revoked its offer nor prevented the plaintiff from submitting the bid. That it had been submitted only at 6.15pm was due entirely to its own fault or caution. It could not be said that the plaintiff had not had sufficient time to submit or had been prevented from submitting a timely bid: at [39].

(4) Thirdly, the “unilateral contract”, not having been converted into a synallagmatic contract by a timely bid, lapsed and ceased to exist at the expiry of 6.00pm on 13 August 1987. The bid submitted at 6.15pm could not have been a submission made pursuant to a non-existent unilateral contract. The defendant could, of course, have made a new offer to the plaintiff on the same terms with a new expiry date but, there was no evidence that such an offer had been made and what the terms (including the new deadline) were. It could not have done so without making another offer, whatever its terms may be, to the Tays in view of the overriding consideration to obtain the highest of the best price for the shares. Thus, the conduct of the defendant's merchant bank advisers in allowing the bid to remain with them and in opening it later could not amount to making a new offer to the plaintiff: at [40].

(5) The plaintiff therefore had no prospect of success at trial and it was unnecessary to consider the application on the balance of convenience. In any event, this issue would have been decided in favour of the defendant and the Tays. Firstly, if the interlocutory injunction were not granted, all that the plaintiff could ultimately lose would have been the opportunity to carry on the business in a company. This would not necessarily be a loss to it because there was no certainty that the business would give an adequate commercial return on its investment. As against this, the defendant would lose the certainty of having a cash asset of $11m as a result of many reasons eg if the sale to the Tays was not completed by June 1988, the Tays would no longer be bound by their contract, but with no corresponding certainty that in that situation the plaintiff would or would be able to complete the sale. Moreover, the real dispute in this matter was between the plaintiff and the Tays. As far as the defendant was concerned, it had sold the shares and should be entitled to be paid for them. The result of granting an interlocutory injunction would be to deny it payment: at [41].

(6) Secondly, an interlocutory injunction would cause great inconvenience to the Tays as they would not know if they were managing the company for their own benefit or for the plaintiff's benefit. The company's business and staff morale were more likely than not to be adversely affected: at [41].

(7) The plaintiff was not entitled to a limited injunction pending appeal because the plaintiff's action, if ultimately successful, would not be affected by its failure to obtain an interlocutory injunction. The Tays were purchasers of the shares with notice of the plaintiff's rights, and would thus take the shares subject to the plaintiff's prior claim (if this was established later): at [47].

American Cyanamid Co v Ethicon Ltd [1975] AC 396; [1975] 1 All ER 504 (refd)

Daulia Ltd v Four Millbank Nominees Ltd [1978] Ch 231; [1978] 2 All ER 557 (distd)

Erinford Properties Ltd v Cheshire County Council [1974] Ch 261; [1974] 2 WLR 749 (refd)

Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd [1984] 2 All ER 65, HC (distd)

Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd [1985] Ch 103; [1985] 1 All ER 261, CA (distd)

Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd [1986] AC 207; [1985] 2 All ER 966, HL (distd)

Serangoon Garden Estate Ltd v Ang Keng [1953] MLJ 116 (distd)

Syarikat Berpakat v Lim Kai Kok [1983] 1 MLJ 406 (distd)

Wilson v Church (No 2) (1879-1880) 12 Ch D 454 (refd)

Tongel Yeo and Peter Chong (Peter Chong & Partners) for the plaintiff

Michael Hwang and Loh Wai Mooi (Allen & Gledhill)for the defendant

JGrimberg and K Shanmugam (Drew & Napier) for the interveners.

Judgement reserved.

Chan Sek Keong JC

1 This is a motion by the plaintiffs for an interlocutory injunction to restrain the defendants, whether by themselves, their directors, officers, servants or agents of any of them or otherwise from parting with or disposing of any of the 3,650,000 shares (“the Hour Glass shares”) being all the issued shares owned by the defendants in The Hour Glass Pte Ltd (“the company”) otherwise than to the plaintiffs until judgment in this action or further order.

2 After hearing the submissions of counsel for all the interested parties, I dismissed the plaintiffs' application. The plaintiffs then applied for an interim injunction pending an appeal against my order. I also dismissed this second application. I said I would give my reasons for dismissing both applications. Here are my reasons.

Application for interlocutory injunction

3 The company is a wholly-owned subsidiary of the defendants who in turn is a subsidiary (53.23%) of Metro Holdings Ltd, a public company whose shares are quoted in the Stock Exchange of Singapore. The plaintiffs were the unsuccessful bidders in competition with the successful bidders,viz Dr Henry Tay and Madam Chan Siew Lee (“the Tays”) for the Hour Glass shares.

4 The facts as seen by the plaintiffs were as follows. On 16 July 1987 three representatives of the plaintiffs, one of whom was Yeo Hung Khiang (“H K Yeo”), the managing director of the plaintiffs, met with two representatives of the defendants, one of whom was Jopie Ong (“JO”), the chairman of the board of directors of the defendants, to discuss the plaintiffs' interest in the acquisition of the company. At this meeting, the defendants invited the plaintiffs to bid for the...

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1 books & journal articles
  • A REVIEW OF DEVELOPMENTS IN SELECTED AREAS OF CIVIL PROCEDURE1
    • Singapore
    • Singapore Academy of Law Journal No. 1996, December 1996
    • December 1, 1996
    ...this approach was drawn from the judgment of Chan Sek Keong JC, as his Honour then was, in Dickson Trading (S) Pte Ltd v Transmarco Ltd[1989] 2 MLJ 408, at p 415; and the judgment of Kirby P in the Court of Appeal of New South Wales in Alexander v Cambridge Credit Corp Ltd(1985) 10 ACLR 42,......

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