Lim Yong Swan v Lim Jee Tee and Another

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 31 December 1992
• Neutral Citation: [1992] SGCA 89
• Date: 31 December 1992
• Subject Matter: O 20 r 5(5) Rules of the Supreme Court 1970,Leave not to be granted where new cause of action bound to fail,Amendment of statement of claim to add a time -barred cause of action,Pleadings,Amendment,Principles applicable,Civil Procedure
• Docket Number: Civil Appeal No 173 of 1991
• Published date: 19 September 2003
• Defendant Counsel: Joseph Ang and Sharon Koh (Lee & Lee)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Cheong Yuen Hee and Chia Yong Whatt (Lim & Gopalan)

This was an appeal against the grant of leave to the respondents to amend their statement of claim to raise two new time-barred causes of action. We allowed the appeal at the end of the hearing for the reasons which follow.

The principal action arises out of an agreement dated 13 May 1981 (`the agreement`) by which the appellant agreed to sell to the respondents the properties known as Nos 191 and 193 Serangoon Road, Singapore. The sale was subject to two special conditions. Special condition A provided that the sale should be subject to satisfactory replies to the respondents` legal requisitions while special condition B, which lay at the heart of the appeal, provided:

B If any notice of intended acquisition or if an acquisition order is issued, made or served by the government or other competent authority acquiring or intending to acquire the property or any part thereof before the date of completion, then in such an event, it shall be lawful for the purchasers to withdraw from the said purchase and the vendor shall forthwith refund to the purchasers the deposit paid by the purchasers to the vendor hereunder free from all interest and thereupon this agreement shall absolutely cease and be null and void and of no effect and neither party hereto shall have any claim whatsoever against the other for costs damages compensation or otherwise whatsoever in the matter. Each party hereto shall bear its own costs in the matter.

On 24 June 1981, the respondents` then solicitors received a reply to their requisition to the Development Control Division (`the DCD`) which indicated that the properties were affected by a road proposal approved by the Governor in Council in 1918. The respondents then took time to investigate the reply and the parties agreed to extend the completion date of the sale and purchase to 31 August 1981. On that date, the respondents wrote to terminate the agreement. This letter read, where material:

As you are aware, the reply to our legal requisition to the Development Control Division discloses that the property is affected by an approved road proposal. We have applied for and were informed that a road interpretation plan is not available. However, based on the road interpretation plan furnished by you, the property is affected by the approved road proposal to an extent unacceptable to our clients.

Our clients have with the consent of your clients submitted plans for the proposed development of the property. The said plans were disapproved by the competent authority and our clients have just received notice of refusal of written permission on the ground that `the subject site is affected by a public scheme`.

In accordance with our clients` rights under the agreement, we are now instructed to and do hereby on their behalf give you notice that our clients will no longer proceed to complete the purchase and that this agreement is hereby treated as null and void and of no further effect.

The appellant treated the letter as a wrongful termination of the agreement and refused to return the deposit. Subsequently, some nine months later, the government gave notice of intention to acquire the properties by declaration in the Gazette on 22 May 1982 (`the declaration`). The acquiring authority took possession of the properties on 2 September 1983.

The respondents commenced Suit No 3727 of 1983 by a writ dated 30 July 1983 for the recovery of the deposit paid. The indorsed statement of claim set out the basis of the respondents` claim as being the unsatisfactory reply from the DCD to their solicitors` requisition. Paragraphs 3-5 of the statement of claim read:

3 It was an express condition of the agreement that should any of the replies of the various government departments to legal requisitions submitted by the plaintiffs` solicitors prove not to be satisfactory to the plaintiffs then the agreement could be rescinded and all moneys paid thereunder be returned to the plaintiffs without deduction therefrom.

4 On or about 30 June 1981 the plaintiffs` solicitors received a reply from the Public Works Department in response to their requisitions which revealed that the property was affected by a road widening scheme. The plaintiffs were entitled to consider whether the said reply was satisfactory up to the date of actual completion of the proposed sale and were entitled to consider the same in light of all the information available to them. Before such completion the plaintiffs reached the conclusion that the aforesaid reply was not satisfactory within the meaning of the said condition.

5 By a letter dated 31 August 1981 the plaintiffs` solicitors informed the defendant`s solicitors of the unsatisfactory nature of the said reply and by reason thereof rescinded the agreement.

It was pleaded in the alternative that special condition A was too vague and uncertain.

The respondents then applied for summary judgment and succeeded before the assistant registrar on 18 November 1983 but the appellant`s appeal was allowed by the judge-in-chambers on 10 February 1984. The appellant then filed her defence and counterclaim on 17 February 1984. The defence contended that the reply was not unsatisfactory or, alternatively, that the respondents had affirmed the agreement or had waived or lost their right to rescind. The counterclaim was based on the appellant`s loss as a result of the acquisition of the properties. No claim for specific performance was made. The respondents` reply and defence to counterclaim was filed on 2 March 1984. The appellant applied for summary judgment on her counterclaim but failed both before the assistant registrar and the judge in chambers, on 7 May and 25 June 1984 respectively.

Suit No 3727 of 1983 was set down for hearing on 4 September 1984 and fixed for trial on 6 March 1989 but the dates were vacated. On 12 August 1991, by way of notice for further directions, the respondents made the application out of which the appeal arises. The proposed amendments were to insert the following paragraphs:

(8) Further or alternatively, it was an express condition of the agreement that if any notice of intended acquisition or if an acquisition order was issued, made or served by the government or other competent authority acquiring or intending to acquire the property or any part thereof before the date of completion, then in such an event, it shall be lawful for the plaintiffs to withdraw from the said purchase and the defendant shall forthwith refund to the plaintiffs the deposit paid free from interest and thereupon the agreement shall absolutely cease and be null and void and of no effect.

(9) By Government Gazette Extraordinary dated 22 May 1982, the government of the Republic of Singapore declared its intention on 15 May 1982 to acquire the property. The said intention was carried out on 2 September 1983.

(10) If (which is denied), the plaintiffs were not entitled to rescind the agreement by 31 August 1981 or had affirmed the agreement and/or waived their right to rescind or had by reason of laches lost their right to rescind as alleged, the plaintiffs were entitled pursuant to special condition B of the agreement to withdraw from the purchase and the refund of the deposit paid amounting to $464,828.

(11) In the further alternative, the plaintiffs contend that by virtue of the matters stated in para 9 hereof, the agreement became impossible of performance and the agreement was thereby frustrated. In the premises, the plaintiffs were discharged from further performance of the agreement. The plaintiffs were further entitled, pursuant to special condition B of the agreement, to a refund of the deposit paid amounting to $464,828.

Leave was granted by the assistant registrar and the appellant`s appeal to the judge-in-chambers was dismissed.

The issues

It was not disputed that the amendments raised two new causes of action for the recovery of the deposit moneys that were both time-barred, ie that special condition B applied because the events specified had occurred or because the agreement had been frustrated. The respondents argued that leave could be granted under O 20 r 5(1) or O 20 r 5(5). On the other side, the appellants contended that leave to make the amendments could only be granted under O 20 r 5(5) and that the respondents did not come within that rule. Alternatively, it was said that the proposed amendments disclosed no reasonable causes of action. It was therefore necessary for us to consider the operation of O 20 r 5 in some detail.

Order 20 r 5

The rule, which is in pari materia with the equivalent English rule of court, reads as follows:

(5) (1) Subject to Order 15, Rules 6, 7 and 8 and this Rule, the court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.

(2) Where an application to the court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

(3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.

(4) An amendment to alter the capacity in which a party sues (whether as plaintiff or as defendant by counterclaim) may be allowed under paragraph (2) if the capacity in which, if the amendment is made, the party will sue is one in which...