Koh Chong Chiah and others v Treasure Resort Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 01 October 2013
• Neutral Citation: [2013] SGCA 52
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 36 of 2012
• Year: 2013
• Published date: 02 December 2013
• Hearing Date: 20 May 2013
• Plaintiff Counsel: Koh Swee Yen, Paul Loy and Benjamin Fong (WongPartnership LLP)
• Defendant Counsel: Adrian Tan and Jackson Eng (Drew & Napier LLC)
• Subject Matter: Civil Procedure,Representative Proceedings
• Citation: [2013] SGCA 52

Chao Hick Tin JA (delivering the judgment of the court): Introduction

The present appeal raises the question of the scope and application of O 15 r 12(1) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules of Court”), which concerns when a representative action may be brought.

The facts Background to the originating suit

The suit from which this appeal arises, Suit No 849 of 2009 (“Suit 849”), was commenced pursuant to O 15 r 12(1) of the Rules of Court (“O 15 r 12(1)”) by seven persons, viz, Koh Chong Chiah, Soh Kah Wah alias Vincent Leow, Ong Hong Poh Cecilia, Yip Kum Thong, Tsu Pei Yuke, Yeo Choon Hock Christopher and Rozario Roland Charles (“the Representative Plaintiffs”), on behalf of themselves as well as 202 other persons listed in Schedule 2 of the Statement of Claim (Amendment No 2) dated 9 April 2012 (“SOC No 2”), all of whom were members of Sijori Resort Club, Sentosa (“the Club”). The Representative Plaintiffs are the appellants in the present appeal. In this judgment, we shall refer to the 202 persons listed in Schedule 2 of SOC No 2 as “the Represented Persons”, and to the Representative Plaintiffs and the Represented Persons collectively as “the Claimants”.

Treasure Resort Pte Ltd (“Treasure”) is the first defendant in Suit 849 and the respondent in the present appeal. Colony Members Service Club Pte Ltd (“Colony”) is the second defendant in that suit, but it is not a respondent in this appeal. Both Treasure and Colony are subsidiaries of Maxz Universal Development Group Pte Ltd.

The land on which the Club’s premises and facilities are situated (“the Land”) was leased by Sentosa Development Corporation (“SDC”) to Sijori Resort (Sentosa) Pte Ltd (“Sijori”) for a period of 81 years until 2075 pursuant to a building agreement dated 21 October 1994 (“the Building Agreement”).

Between 1994 and 2004, Sijori, through various means, including brochures, marketing agents and tie-ups with credit card companies, invited the public to apply for membership of the Club. Individuals who wished to become Club members had to submit a membership application form and pay an entrance fee to Sijori. There were eight different versions of the membership application form (numbered “M1” to “M8” in Schedule 3 of SOC No 2) in use during that period to enable the public to apply for Club membership.¹ The entrance fees paid by Club members ranged from $10,000 to $25,750. Club members also had to pay a monthly subscription fee of $30 for an individual membership and $50 for a family membership.

On 26 January 2006, Sijori sold the Club to Treasure pursuant to an option to purchase of the same date (“the OTP”).² Under the terms of the OTP, Sijori also granted Treasure an option to purchase the property on the Land. Clause 2(g) of the OTP provided as follows in relation to the status of the Club members:³

[Treasure] agrees to offer to members of [the Club] who have contracted with [Sijori], a new contract of membership on substantially the same terms and conditions which they (the members) have entered into with [Sijori]. Provided always, [Treasure] shall be at liberty to impose such other terms and conditions as [Treasure] shall deem fit for such membership and for the avoidance of doubt [Treasure] shall in its own discretion decide which of such members it will make the aforesaid offer to. In the event the members do not accept the offer by [Treasure], [Treasure] shall have no further liability to the said members under this clause. [emphasis added]

In July 2006, Sijori and Treasure agreed to amend cl 2(g) of the OTP by deleting the words in italics above.⁴

The sale was subject to the novation of the Building Agreement to Treasure in order for it to operate a hotel on the Land. On 14 November 2006, Treasure, Sijori and SDC signed a deed of novation under which Treasure became the new lessee of the Land and agreed to perform the Building Agreement in place of Sijori. On the same day, Treasure and SDC also entered into a supplemental agreement under which SDC leased to Treasure a piece of land adjacent to the Land (“the Additional Land”), and Treasure further agreed to redevelop the existing property on the Land and the Additional Land into a hotel development.

On 16 November 2006, Sijori and Treasure concluded a membership management transfer agreement (“the Transfer Agreement”) covering the Club members, which then numbered approximately 1,591. The Transfer Agreement was expressed to be “supplemental to the conditions stated in [the OTP] with reference to membership concerns”.⁵ Pursuant to the Transfer Agreement, Treasure agreed to take over the management of the Club’s membership with effect from 16 November 2006, and also to accord “substantially similar terms and conditions of membership”⁶ to the Club members with reference to certain membership privileges, including complimentary room vouchers for three nights yearly and free use of the swimming pool and the gymnasium.

Pursuant to cl 11 of the Transfer Agreement, on 16 December 2006, Treasure wrote to inform all the Club members that (inter alia): it was the new owner of the Land; Club members would be able to continue enjoying the membership privileges accorded to them under their existing membership with the Club as long as they continued to pay their monthly subscription fees to Treasure; the membership privileges which Club members would continue to enjoy included all existing benefits extended to them when the Club was owned by Sijori; and Treasure would correspond with the Club members in due course and was “making the necessary paperwork arrangements for the transfer to be completed by end January 2007”.⁷ On 18 December 2006, Sijori sent a letter with broadly similar contents to the Club members.⁸

On 27 December 2006, Treasure wrote to inform the Club members to direct their monthly subscription fees to it with effect from January 2007.⁹ Accordingly, from January 2007 onwards, the Club members, including the Representative Plaintiffs, made payment of their monthly subscription fees to Treasure.

On 4 February 2008, Treasure wrote to inform the Club members, including the Representative Plaintiffs, of an offer of a new Club membership contract through Colony in lieu of their existing Club membership contracts.¹⁰ The offer and the terms of the new Club membership contract were set out in Colony’s letter of the same date to the Club members. Amongst the changes, the monthly subscription fees under the new Club membership contract would be $165 for an individual membership and $275 for a family membership, a more than five-fold increase from the original monthly subscription fees (see [5] above). Club members were given until 5 March 2008 to accept the offer; they were also informed that those who rejected the offer would not be entitled to any rights and privileges as a member of Colony, and would have to look to Sijori for any recourse.

Eventually, on 12 October 2009, the Representative Plaintiffs, on behalf of themselves and 198 Club members, filed Suit 849 against Treasure and Colony. Of the causes of action pleaded in the Representative Plaintiffs’ Statement of Claim dated 12 October 2009 (“the Original SOC”), those which are material for the purposes of this appeal are the following: vis-à-vis Treasure – breach of contract, repudiation of contract and misrepresentation; and vis-à-vis Treasure and Colony jointly – conspiracy to injure. In respect of their contractual claims, the Representative Plaintiffs alleged that from January 2007 onwards, Treasure acted in breach of the terms of the Club members’ membership agreements with Sijori (“the Original Membership Agreements”), which membership agreements had been novated to Treasure (the Original Membership Agreements will be referred to as “the Novated Membership Agreements” after their alleged novation to Treasure). The Representative Plaintiffs further pleaded that on or around 4 February 2008, Treasure, by reason of (inter alia) its letter of the same date to the Club members, repudiated the Novated Membership Agreements. With regard to their claim for misrepresentation, the Representative Plaintiffs pleaded that Treasure made the representations set out at [9(b)]–[9(d)] above (“the Representations”) fraudulently; they also relied on s 2 of the Misrepresentation Act (Cap 390, 1994 Rev Ed) in the alternative. As for the claim based on conspiracy to injure, that was based on Treasure’s alleged breach and repudiation of the Novated Membership Agreements as well as the matters outlined at [11] above. The Original SOC was later amended on 2 December 2009 to add four more persons to the list of Club members set out in Schedule 2.

As we see it, the reliefs sought in respect of the above causes of action are, in brief: a declaration that each of the Claimants is entitled to damages (to be assessed separately at the assessment of damages stage) from Treasure for breach and repudiation of contract, as well as for misrepresentation; and a declaration that Treasure and Colony are jointly and severally liable to each of the Claimants in damages (likewise to be assessed separately at the assessment of damages stage) for conspiracy to injure by lawful or unlawful means.

Treasure’s interlocutory applications

On 28 June 2010, Treasure filed Summons No 2965 of 2010 for an order that Suit 849 be discontinued pursuant to O 15 r 12(1) (“the Discontinuation Application”), and Summons No 2967 of 2010 for an order that certain paragraphs of the Representative Plaintiffs’ then statement of claim (viz, Statement of Claim (Amendment No 1) dated 2 December 2009 (“SOC No 1”)) be struck out (“the Striking-Out Application”).

The same assistant registrar (“the AR”) heard both applications and dismissed both of them in his decision issued on 27 June 2011. Dissatisfied, Treasure appealed against both decisions of the AR by way of Registrar’s...