Koh Chong Chiah v Treasure Resort Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 29 November 2012
• Date: 29 November 2012
• Docket Number: Suit No 849 of 2009 (Registrar's Appeal No 209 of 2011)
• Court: High Court (Singapore)

Koh Chong Chiah and others

Plaintiff

and

Treasure Resort Pte Ltd and another

Defendant

[2012] SGHC 239

Lai Siu Chiu J

Suit No 849 of 2009 (Registrar's Appeal No 209 of 2011)

High Court

Civil Procedure—Rules of court—Seven plaintiffs and 202 other persons seeking to pursue representative action against defendants—Whether plaintiffs and 202 persons had ‘same interest’—Whether each claimant had membership agreements that contained identical terms—Order 15 r 12 (1) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Civil Procedure—Rules of court—Seven plaintiffs and 202 other persons seeking to pursue representative action against defendants—Whether plaintiffs and 202 persons had ‘same interest’—Whether representation made by first defendant relied on by claimant—Order 15 r 12 (1) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Civil Procedure—Rules of court—Seven plaintiffs and 202 other persons seeking to pursue representative action against defendants—Whether plaintiffs and 202 persons had ‘same interest’—Whether representations made by first defendant to each claimant exactly the same—Order 15 r 12 (1) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Civil Procedure—Rules of court—Seven plaintiffs and 202 other persons seeking to pursue representative action against defendants—Whether plaintiffs and 202 persons had ‘same interest’—Whether same losses suffered by each claimant—Order 15 r 12 (1) Rules of Court (Cap 322, R 5, 2006 Rev Ed)

Contract—Collateral contracts—Claimants attempt to add new cause of action based on collateral contract to pleadings—Whether there was collateral contract between claimants and first defendant

Contract—Privity of contract—Contracts (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed)—Whether Act applied to preclude claimants from claiming any rights under option to purchase or transfer agreement—Sections 2 (1) and 2 (2) Contracts (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed)

Contract—Variation—Claimants pleading novation of contract—Whether there was novation of membership agreements from Sijori to first defendant by reason of transfer agreement

This was a representative action brought by the seven named plaintiffs (‘the named plaintiffs’) on their own behalf as well as on behalf of 202 other persons (‘the 202 persons’) (collectively, ‘the claimants’ or ‘members’); suing Treasure Resort Pte Ltd (‘the first defendant’), a resort manager incorporated in Singapore on 28 June 2005 and Colony Members Service Club Pte Ltd(‘the second defendant’), whose business was in recreation club management for alleged breaches of the terms of their memberships in Sijori Resort Club, Sentosa (‘the Club’). The Club, located in Sentosa Island, was started in 1994 and between then and 2004, each of the claimants entered into agreements with Sijori Resort (Sentosa) Pte Ltd (‘Sijori’) (‘the Membership Agreement (s)’) to become members of the Club.

The claimants alleged that on or about 14 November 2006, the Club was sold by Sijori to the first defendant pursuant to an option to purchase dated 26 January 2006 (‘the Option to Purchase’). The claimants then averred that on or about 16 November 2006, the first defendant concluded a Membership Management Transfer Agreement (‘the Transfer Agreement’) with Sijori. In this Transfer Agreement, the first defendant agreed to take over management of the Club from Sijori with effect from 16 November 2006. This would be pursuant to the terms of sale in the Option to Purchase.

In a 4 February 2008 letter (‘the 4 February letter’), the claimants alleged they were informed that the first defendant was renouncing its obligations as owner and manager of the Club. The 4 February letter informed members that the second defendant would arrange for new membership contracts to be offered to each of them, and that once accepted, future monthly subscriptions would be paid to the second defendant, and that the first defendant's obligations would cease.

The claimants complained that the membership fees that the second defendant proposed to charge would be five and a half times the original fees, and that they would be subject to further increases at the second defendant's discretion, and that the new membership contract offered by the second defendant was different from the Membership Agreements. The claimants based their claim against the defendants on, inter alia,fraudulent misrepresentation, negligence, and conspiracy to injure by unlawful means.

The first defendant applied to discontinue the suit (‘the Application’) on the ground that the claimants did not have the requisite ‘same interest’ stipulated under O 15 r 12 (1) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (‘the Rules’) so as to be able to maintain the representative action. The Application was dismissed by the court below. The first defendant subsequently appealed (‘the Appeal’) against the dismissal of the Application to a judge in chambers.

At the third hearing of the Appeal in January 2012, the claimants' solicitors had prepared for the court's consideration a draft statement of claim (‘Statement of Claim’) (Amendment No 2). However, it was never filed because of shortcomings in the draft and because of the claimants' pending appeal to the Court of Appeal. In that draft, the claimants attempted to add a new cause of action to the pleadings based on collateral contract.

Held, allowing the appeal:

(1) The claimants became members over a span of ten years between 1994 and 2004. If the Membership Agreement of each claimant and the benefits thereunder differed from those of another or other members, the claimants could not maintain they had a commonality of action against the first defendant based on the same interest. Each claimant would have to take the stand to prove his/her own contractual terms (either express or implied but not both) with Sijori and that those terms had been novated to the first defendant: at [41].

(2) Apart from the question of whether each of the claimants had Membership Agreements that contained identical terms, there was also the issue of the actual representations purportedly made by the first defendant and which formed the basis of the claimants' claim in misrepresentation. Did the first defendant make the exact same representation to each and every claimant? Did each claimant rely on the representation and if so to what extent? The same questions would arise in regard to the various letters sent by Sijori and/or the first defendant to the claimants, assuming each and every one of the claimants received those letters: at [42].

(3) The same questions in (2) above could be raised of the loss each claimant suffered as a result of the alleged breaches committed by the first defendant. It was highly unlikely that each and every one of the claimants suffered the same loss or suffered an identical loss to the same extent. Indeed the first defendant contended that 85 of the claimants did not suffer any loss of provision of facilities and complimentary accommodation at all. Clearly, a representative action would not be suitable if the claimants, should they succeed, have to return to court to prove individually the damages/loss each one of them suffered as a result of the first defendant's breaches of the Membership Agreements while other claimants suffered no loss at all: at [43].

(4) The ‘same interest’ element was missing from this case. The claimants in this action became members of the Club at different times and under different arrangements but all of them had to rely on the Transfer Agreement to found their claim, based on novation of Sijori's rights and obligations to the first defendant; this was problematic: at [63].

(5) On the issue of collateral contract, the contract in question was the Membership Agreement that each of the claimants entered into with Sijori. What did the first defendant promise to the claimants in return for entering into the Transfer Agreement if indeed it was novated? To compound the claimants' difficulties, they were faced with cl 16 of the Option to Purchase which excluded the applicability of the Contracts (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed) (‘the CRTP’). Clearly, cll 6 of the Option to Purchase read with s 2 (2) of the CRTP would apply to preclude the claimants from claiming any rights under that document or under the Transfer Agreement, because of Recital 2 therein: at [66].

(6) There was also doubt as to whether a change in management of the Club amounted to a novation of the Membership Agreements between the members and Sijori: at [67].

(7) There were no contractual provisions that prohibited other third parties (including the second defendant) from assuming the obligations of Sijori to members. The proposed Statement of Claim (Amendment No 2) would not have assisted to improve the claimants' class action against the first defendant: at [67], [68] and [73].

Carnie v Esanda Finance Corp Ltd (1995) 182 CLR 398 (refd)

Duke of Bedford, The v Ellis [1901] AC 1 (refd)

Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021 (refd)

Naken v General Motors Canada Ltd (1983) 144 DLR (3 d) 385 (refd)

Raffles Town Club Pte Ltd v Tan Chin Seng [2005] 4 SLR (R) 351; [2005] 4 SLR 351 (refd)

Shanklin Pier Ld v Detel Products Ld [1951] 2 KB 854 (refd)

Tan Chin Seng v Raffles Town Club Pte Ltd [2002] SGHC 278 (refd)

Tan Chin Seng v Raffles Town Club Pte Ltd [2003] 3 SLR (R) 307; [2003] 3 SLR 307 (refd)

Western Canadian Shopping Centres Inc v Dutton 2001 SCC 46 (refd)

Contracts (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed) ss 2 (1) , 2 (2) (consd)

Misrepresentation Act (Cap 390, 1994 Rev Ed) s 2

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 15 r 12 (1) (consd) ;O 18 r 12, O 18 r 19, O 56 r 3

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 34 (2) (d)

Alberta Rules of Court (Alta Reg 390/1968) r 42

Covent Garden Market Act 1828 (UK)

Rules of Practice of the...