Fook Gee Finance Co Ltd v Liu Cho Chit and Another Action
Jurisdiction | Singapore |
Judge | Karthigesu JA |
Judgment Date | 06 February 1998 |
Neutral Citation | [1998] SGCA 6 |
Docket Number | Civil Appeals Nos 93 and 94 |
Date | 06 February 1998 |
Year | 1998 |
Published date | 19 September 2003 |
Plaintiff Counsel | Michael Khoo SC, Jimmy Yap and Josephine Low (Donaldson & Burkinshaw) |
Citation | [1998] SGCA 6 |
Defendant Counsel | Woo Tchi Chu and Harpal Singh (Harpal Wong & M Seow) |
Court | Court of Appeal (Singapore) |
Subject Matter | Elements,Requirements,Estoppel,Consideration,No evidence of payment for purchase of property,Equity,Contract,Whether clause in fallback agreement gave rise to inference that unpaid sum treated as paid,Whether acknowledgment of receipt of consideration in sub-sale agreement resulted in consideration treated as having been paid,No reliance on known untruth to found estoppel,Whether parties intended consideration to be treated as paid or satisfied other than by actual payment,Estoppel by course of conduct,Whether requirements satisfied in present case,Whether any evidence of agreement that unpaid sum to be treated as paid,Failure,Estoppel founded on acknowledgment in document,Whether mere silence amounted to representation founding estoppel |
Cur Adv Vult
(delivering the judgment of the court): These two appeals arise from the decisions of the High Court in two suits which were tried together. The first is Suit No 4141/83 in which a Hong Kong company, Fook Gee Finance Co Ltd (Fook Gee) claimed against one Liu Cho Chit (Liu) the sum of US$642,451.04 as a loan. The claim was dismissed with costs by the High Court, and against this decision Fook Gee appeals in CA 93/97. The second is Suit No 4149/84, in which the plaintiff is Liu`s wife, Lim Siam Soi (Madam Lim) and she sued four parties, Lee Tat Development Pte Ltd (Lee Tat), Tan Geok Tee (Tan), who had since died and is represented by his wife, Ching Mun Fong (Madam Ching), Lee Kai Investments Pte Ltd (Lee Kai) and Collin Tan (Collin), the daughter of Tan by Madam Ching. Madam Lim claimed, inter alia, a declaration that Lee Tat holds certain property known as Lot 1606 of Mukim 28 having an area of approximately five acres on trust for her and Collin in equal shares, or alternatively against Lee Tat and Tan the sums of S$631,579.10 and S$1,800,000 representing the balance of the purchase price of her share in the property. The High Court allowed the alternative claim and gave judgment in favour of Madam Lim in the sum of S$2,431,579.10. Against this decision, Lee Tat, Madam Ching representing the estate of Tan and Lee Kai appeal in CA 94/97.
2. Facts
The relevant facts that led to the dispute between the parties are these. In 1972, a company called Peng Ann Realty Pte Ltd (Peng Ann) was incorporated specifically to purchase a large parcel of land situate at Kampong Chai Chee comprising Lots 21-26, 4-4, 407, 120, 121, 122, 123 and 221 of Mukim 28 having an area of 186.7 acres. The purchase price for the property was $1,090,000. At all material times, Liu was the managing director of the company, and the other directors were Yip Ho Meng and Koh Chee Cheong. All three of them were also the only shareholders, each holding 1 share of $1 each. Yip Ho Meng was, in fact, a nominee of one Lok Bok Sim, who was then the managing director of Singapore Finance Ltd. The agreement for the purchase of the property was made on 18 July 1972 and under the agreement completion was to take place on 27 October 1972. The purchase was financed entirely by a loan of $1,500,000 from Singapore Finance Ltd, which was secured by a legal mortgage of the property and personal guarantees of the three directors.
3.Two days after the sale and purchase agreement was made, that is, on 20 July 1972, two of the lots, namely, Lots 221 and 4-4, with a total area of about 5.8 acres, were gazetted by the Government for acquisition; some neighbouring lands and other lands were also included in the gazette notification. As a result of the gazette notification, Liu and his co-directors became worried, as they were apprehensive that there would or might be a further acquisition of the remaining lots. They therefore decided to sell the remaining lots.
4.In December 1972, Liu was introduced to Tan and following the negotiations between the two of them, a sale and purchase agreement was made on 23 January 1973 between Peng Ann and Lee Kai, then known as Collin Investment Pte Ltd, whereby Peng Ann agreed to sell to Lee Kai three of the lots, namely Lots 21-26, 4-7 and 123 (the three lots), having a total area of about 178 acres, at the price of $2,050,000 (the main agreement). Lee Kai is one of Tan`s family companies. The main agreement was signed by Liu on behalf of Peng Ann and by Tan on behalf of Lee Kai. The three lots were within the five zones under the Master Plan, namely: rural, permanent residential, temporary residential, water catchment and open space. Of the three lots, Lot 21-26 with an area of 156 acres was the largest. The area zoned permanent residential was part of lots 21-26 and 4-7 and contained an area of 4.6 acres.
5.During the negotiations leading to the main agreement, Liu and Tan orally agreed to develop jointly a portion of Lot 21-26 containing an area approximately 4.6 acres zoned permanently residential (the joint venture site). The terms of their joint venture were subsequently reduced in writing and made in the names of Liu`s wife, Madam Lim, and Tan`s daughter, Collin. These terms were embodied in four written agreements (collectively called `the joint venture agreements`).
6.Briefly, these joint venture agreements were structured as follows: (i). First, there was the sub-sale agreement whereby a part of Lot 21-26 zoned residential and described as an `approximate area of 5 acres` (joint venture site) was sold by Lee Kai to Madam Lim and Collin at the price of $50,000. Special condition 1 of the sub-sale agreement provided that the purchasers would apply for subdivision of this site and the remainder of Lot 21-26 on behalf of the vendor, and the costs and expenses in respect thereof would be borne by the purchasers. Further, by special condition 4, if the purchasers should fail to obtain approval for the subdivision, the joint venture site would be developed in the name of the vendor, and the purchasers would be entitled to the benefit of the development and would be responsible for all liabilities incurred thereby.
(ii). Next, there was a pre-incorporation agreement, under which Madam Lim and Collin were to procure the incorporation of a company, Collden Realty Pte Ltd (Collden), with an authorised capital of $2m. It was agreed that notwithstanding their respective disparate shareholdings in Collden, Collin would bear 80% and Madam Lim 20% of the development costs of the joint venture site. However, it was further provided that should Madam Lim fail to contribute her share of the 20%, Collin would advance the amount with interest at the rate of 10.8% per annum, provided that she would not be required to contribute such development costs in excess of $1,500,000.
(iii). Thirdly, there was an agreement expressed to be made between Madam Lim and Collin of the one part and Collden of the other (Collden agreement), under which Madam Lim and Collin were to convey the joint venture site to Collden in return for 50,000 shares of $1 each credited as fully paid to be issued and allotted to Madam Lim and Collin in the following proportions: 22,500 shares (representing 45% thereof) to Madam Lim and 27,500 shares (representing 55% thereof) to Collin.
(iv). Lastly, there was the fall-back agreement which provided that if Lee Kai should fail under any circumstances to purchase the three lots under the main agreement from Peng Ann, the sub-sale agreement would become null and void; the sum of $50,000 paid would be forfeited; and each party would have no claim against the other.
7.The sub-sale agreement and fall-back agreement were signed by Tan on behalf of Lee Kai, and by Tan and Liu on behalf of Collin and Madam Lim respectively. The pre-incorporation agreement was signed by Liu on behalf of his wife and Tan on behalf of his daughter. Although the Collden agreement was expressed to be signed by a representative of Collden, the only signatures on that agreement were those of Liu on behalf of his wife and Tan on behalf of his daughter. All these agreements were backdated to 23 January 1973, the same date on which the main agreement was executed. It is not in dispute that at that time neither Madam Lim nor Collin was aware of the joint venture or the agreements signed on their behalf respectively.
8.The sale under the main agreement was completed on 14 March 1973 and all the three lots were conveyed on the written direction of Tan (presumably on behalf of Lee Kai) to Lee Tat, then known as Collin Development Pte Ltd, another company of Tan.
9.On 20 December 1973, Lee Tat through their architects, Lim Chew Kuan & Associates, applied to the competent authority for planning permission for a proposed condominium and a golf course to be developed on `Lots 21-26 pt and 123`. Although the joint venture site was excluded from the proposed development, no application for subdivision approval was made to excise the joint venture site from lot 21-26. The application for the planning permission was refused and a notice of refusal of such permission dated 21 September 1974 was issued. Two reasons were given for the refusal, namely: (i) there was no proper access to the site, and (ii) the site would be affected by a `Public Scheme`. An appeal against the refusal was immediately made to the Minister for National Development and was heard on 21 January 1975. The appeal was unsuccessful, and on 31 March 1975, Lee Tat were informed that the appeal had been disallowed.
10.About a year later, on 23 July 1976, the three lots, except a portion of 4.2 acres, were acquired by the Government, and compensation in the sum of $2,500,000 was awarded. The unacquired land comprised: (i) 3.7 acres of the joint venture site, and (ii) a portion of about 21,808 sq ft of land zoned rural, also part of Lot 21-26, which was immediately outside and adjoining the contemplated boundary of the joint venture site. The unacquired land was subsequently resurveyed and became known as resurvey Lot 1606 (Lot 1606). Along the northern boundary of Lot 1606 runs the Pan Island Expressway.
11.As it transpired, the joint venture did not materialise. Neither Liu nor Tan, and of course nor their respective nominees, took any step to implement the terms of the sub-sale agreement or any of the other joint venture agreements. In particular, neither of them applied to the competent authority for subdivision of Lot 21-26 for the purpose of obtaining a separate title for the joint venture site pursuant to the sub-sale agreement. None of the parties, Madam Lim, Collin, Liu or Tan, procured the incorporation of Collden as required by the pre-incorporation agreement. Neither Madam Lim nor Collin, nor Liu and Tan on their behalf respectively, did anything to cause or procure the joint venture site to be conveyed to Madam Lim and Collin pursuant to...
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