Doo Wan Tsong Charles v Oxley Jasper Pte Ltd

• Jurisdiction: Singapore
• Judge: Andre Maniam J
• Judgment Date: 05 November 2021
• Court: High Court (Singapore)
• Docket Number: Suit No 1254 of 2018

Doo Wan Tsong Charles and others

and

Oxley Jasper Pte Ltd and another

[2021] SGHC 249

Andre Maniam J

Suit No 1254 of 2018

General Division of the High Court

Contract — Contractual terms — Condition precedent — Party rescinding contract as fulfilment of condition precedent no longer possible before stipulated date of fulfilment — Whether rescission allowed

Contract — Discharge — Rescission — Party rescinding contract as fulfilment of condition precedent no longer possible before stipulated date of fulfilment — Whether rescission allowed

Equity — Remedies — Rectification — Party alleging unilateral mistake as to nature and quality of particular term — Whether rectification available for such mistake

Held, dismissing the claim:

(1) The kind of mistake for which rectification was available. Rectification of a contract for unilateral mistake was only available when there was a mistake as to what the terms of the contract were, and not when there was a mistake as to the nature or quality of a particular term. Where one party had subsequently come to appreciate that it should not have agreed to the inclusion of a particular term, but there was no mistake as to what terms had been included, rectification was not available. Here, the CSC knew that the SPA contained the 120 units CP, and agreed to its inclusion. The mistake which the plaintiffs argued the CSC made, was as to the nature or quality of a particular term, namely, the 120 units CP. Accordingly, rectification of the SPA was not justified: at [23] to [25], [28] to [30] and [34].

(2) Contracts were rectified to give effect to the true agreement/intention of the parties, or at least what the mistaken party believed that to be. A contract could be rectified not only to reflect the true agreement/intention of the parties, but also to reflect what the mistaken party believed that to be. But a contract could not be rectified to reflect what the mistaken party (on its part) would like to have agreed to, although that would not be the true agreement/intention of both parties, nor even what the mistaken party believed that to be. Here, the only agreement or common intention between the parties was in relation to 120 units, not 112 units, nor whatever the maximum allowable number of units under the applicable guidelines was. The number 112 was not what the parties had agreed to, nor what the CSC believed the parties had agreed to; there was no actual/perceived agreement or common intention as to the number 112. The authorities on rectification for unilateral mistake did not support rectification in these circumstances: at [49] and [50].

(3) The CSC's mistaken belief. On the facts, the CSC did not mistakenly believe that 120 was the maximum permissible number of units under the prevailing guidelines. In fact, they were not thinking about the guidelines at all. Rather, they were simply concerned about whether the 120 units CP was achievable. However, Oxley's representative thought that the CSC was acting under a mistake, specifically, he thought the CSC believed that the maximum permissible number of units under the prevailing guidelines was 120. Regardless, the alleged mistake was one as to the nature or quality of what was agreed to, and such a mistake (even if made) did not justify rectification: at [77], [78] and [80] to [82].

(4) Oxley's right to rescind the SPA and its entitlement to a refund of the initial deposit paid. The plaintiff's argument that even if approval for the 120 units CP was no longer possible, Oxley would still have to continue performing the SPA (including the payment of a further deposit) until 27 December 2018 before it could rescind and cancel it, was uncommercial. The plaintiffs themselves submitted that a reasonable deposit was regarded as earnest money given to guarantee the due performance of the contract. It would run counter to that to require Oxley to pay a further deposit at a time when approval for 120 units could no longer be obtained. The obligation to pay the further deposit was subject to the 120 units CP, as was any right to forfeit the initial deposit if the further deposit were not paid. All those obligations and rights fell away upon non-fulfilment of the 120 units CP. Oxley was entitled to a refund of the initial deposit paid: at [90], [96], [97] and [114].

Case(s) referred to

A Roberts & Co Ltd v Leicestershire County Council [1961] 1 Ch 555 (refd)

Connolly Ltd v Bellway Homes Ltd [2007] EWHC 895 (folld)

Etablissements Georges et Paul Levy v Adderley Navigation Co Panama SA (The Olympic Pride) [1980] 2 Lloyd's Rep 67 (refd)

Frederick E Rose (London) Ld v William H Pim Jnr & Co Ld [1953] 2 QB 450 (refd)

FSHC Group Holdings Ltd v Glas Trust Corp Ltd [2020] Ch 365 (refd)

Industrial & Commercial Bank Ltd v PD International Pte Ltd [2003] 1 SLR(R) 382; [2003] 1 SLR 382 (refd)

Kok Lee Kuen v Choon Fook Realty Pte Ltd [1996] 3 SLR(R) 182; [1997] 1 SLR 182 (folld)

Tan Soo Leng David v Wee, Satku & Kumar Pte Ltd [1997] 3 SLR(R) 257; [1998] 2 SLR 83 (distd)

Thomas Bates and Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505 (folld)

Yap Son On v Ding Pei Zhen [2017] 1 SLR 219 (folld)

Facts

The plaintiffs were five of the 43 subsidiary proprietors of a property (the “Property”), which was sold en bloc to the first defendant (“Oxley”) for $95m. Oxley paid an initial deposit of $4.75m but later purported to rescind and cancel the sale and purchase agreement (“SPA”) because one of the stipulated conditions precedent could not be met. That condition was the obtaining of outline planning permission (“OPP”) from the authorities to develop no less than 120 units at the Property (“the 120 units CP”). The authorities only granted an OPP for 112 units and rejected a subsequent application for 120 units.

The plaintiffs argued that the Collective Sale Committee (“CSC”) made a mistake in agreeing to the 120 units CP – specifically, that the CSC mistakenly thought that 120 was the maximum permissible number of units under the prevailing laws, regulations and guidelines. The maximum permissible number of units under the prevailing guidelines was 112, although the authorities could nevertheless approve a higher number. The plaintiffs thus sought to rectify the SPA such that the 120 units CP would be satisfied if the approval was for only 112 units (for which approval had already been obtained). If the SPA were thus rectified, Oxley's purported rescission and cancellation of the SPA would be ineffective, and Oxley's initial deposit would have properly been forfeited for its failure to pay a further deposit. In the alternative, the plaintiffs argued that even if the SPA were not rectified, Oxley had acted prematurely in purporting to terminate it on 26 October 2018, which was before the long-stop date of 27 December 2018 for the fulfilment of the 120 units CP.

In riposte, Oxley argued that the law did not allow the SPA to be rectified for unilateral mistake of the kind asserted by the plaintiffs; and moreover, that allowing rectification of the SPA to what the plaintiffs would like it to be, would create a contract that the plaintiffs knew Oxley had not agreed to, and would not have agreed to.

Lee Ee Yang, Wilbur Lua, Douglas PangandMichelle Ong (Covenant Chambers LLC) for the plaintiffs;

Kelvin Poon, Devathas SatianathanandCai Xiaohan (Rajah & Tann Singapore LLP) for the first defendant;

Fong Weng Khai (W K Fong & Co) for the second defendant.

5 November 2021

Judgment reserved.

Andre Maniam J:

Introduction

1 When one party makes a mistake about the nature or quality of a contractual term, can it have that term rewritten by rectification? Or does that go too far, in creating a contract that the other party evidently had not agreed to, and would not have agreed to?

Background

2 The plaintiffs are five of the 43 subsidiary proprietors (“SPs”) of 5 Jalan Ampas (the “Property”), which was sold en bloc to the first defendant (“Oxley”) for $95m. Oxley paid an initial deposit of $4.75m (the “Initial Deposit”), but later purported to rescind and cancel the sale and purchase agreement (“SPA”) because one of the stipulated conditions precedent could not be met, namely, the obtaining of outline planning permission (“OPP”) from the Urban Redevelopment Authority (“URA”) to develop “no less than 120 dwelling units” at the Property (the “120 units CP”). The URA only granted an OPP for 112 units, and rejected a subsequent application for an OPP for 120 units.

3 After Oxley purported to rescind and cancel the SPA, however, the Collective Sale Committee (“CSC”) insisted that Oxley should nevertheless pay a further deposit of another $4.75m (the “Further Deposit”); when Oxley declined to do so, the CSC purported to forfeit the Initial Deposit.

4 The plaintiffs say the CSC made a mistake in agreeing to the 120 units CP – specifically, that the CSC mistakenly thought that 120 was the “maximum permissible number of dwelling units under the prevailing laws, regulations and guidelines”. The maximum permissible number of dwelling units under the prevailing guidelines (in particular, URA's 2012 Guideline) was 112, although URA could nevertheless approve a higher number.

5 The plaintiffs sought to rectify the SPA such that the 120 units CP would be satisfied if the URA approval was for only 112 units (which approval had already been obtained). If the SPA were thus rectified, Oxley's purported rescission and cancellation of the SPA would be ineffective, and Oxley's Initial Deposit would have properly been forfeited for its failure to pay the Further Deposit.

6 Oxley contends that the law does not allow the SPA to be rectified for unilateral mistake of the kind asserted by the plaintiffs; and moreover, that allowing rectification of the SPA to what the CSC would like it to be, would create a contract that the CSC knew Oxley had not agreed to, and would not have agreed to. Oxley also disputes the plaintiffs' case that the CSC had made the...