Norwest Holdings Pte Ltd (in liquidation) v Newport Mining Ltd and another appeal
Jurisdiction | Singapore |
Judge | Chan Sek Keong CJ |
Judgment Date | 23 August 2011 |
Neutral Citation | [2011] SGCA 42 |
Court | Court of Appeal (Singapore) |
Docket Number | Civil Appeals Nos 151 and 153 of 2009 |
Published date | 29 August 2011 |
Year | 2011 |
Hearing Date | 30 November 2010 |
Plaintiff Counsel | David Chan and Koh Junxiang (Shook Lin & Bok LLP) |
Defendant Counsel | Ang Cheng Hock SC, Tay Yong Seng, Tan Xeauwei and Sylvia Tee (Allen & Gledhill LLP) |
Subject Matter | Contract |
Citation | [2011] SGCA 42 |
These were appeals by both Norwest Holdings Pte Ltd (“Norwest”) and Newport Mining Ltd (“Newport”) (respectively, “CA 151/2009” and “CA 153/2009”) against the decision of the trial judge (“the Judge”) in Suit No 28 of 2009 (see
After hearing submissions from both parties, we were satisfied that there was no binding contract between Newport and Norwest and that Newport was therefore under no obligation to complete the purchase of the Shares. That being the case, we dismissed Norwest’s appeal in CA 151/2009 and allowed Newport’s appeal in CA 153/2009. Even though we arrived at the same result as the Judge below, we respectfully differed in terms of the reasoning. We now set out below the detailed grounds for our decision.
The background factsNorwest is a company incorporated in Singapore. It was placed under compulsory liquidation on 11 January 2008 pursuant to an order of court. Mr Lai Seng Kwoon (“the Liquidator”) was appointed the sole liquidator of Norwest.
Norwest Chemicals is a wholly-owned subsidiary of Norwest. At the material time Norwest Chemicals owned 100% of the share capital of Sichuan Mianzhu Norwest Phosphate Chemical Company Limited (“Norwest China”), a company incorporated in the People’s Republic of China (“China”). Norwest China owns a 30,000 mtpa (
Newport is an Australian publicly listed company which was at the material time actively looking to acquire phosphate assets. In response to an information memorandum prepared by the Liquidator (“the Information Memorandum”) for the intended sale of the entire share capital of Norwest Chemicals, Taylor Collison Limited (“Taylor Collison”), acting as sharebrokers and investment advisers to Newport, indicated Newport’s interest in acquiring the Shares in a letter dated 27 February 20081 addressed to the Liquidator.
The purpose of the Information Memorandum2 prepared by the Liquidator in relation to the proposed sale of the Shares was to inform interested buyers of the conditions of the proposed sale (on an “as is where is” basis) so that those interested buyers could submit an Expression of Interest and “non-binding offer” to the Liquidator and to allow the Liquidator to determine which parties would be involved in the second stage of due diligence in order to finalise the sale process. Interested buyers had to carry out independent investigations at their own expense and make their own independent assessment of the potential value of Norwest Chemicals. It was further stated in the Information Memorandum (at para 3.0) that the intention of the Liquidator was to sell Norwest Chemicals together with Norwest China in its “present state and condition on an ‘as is, where is’ basis and subject to a Sale and Purchase Agreement”.3
The following timeline was provided for at para 3.1 of the Information Memorandum. As it contains several important pieces of information, it is reproduced in full as follows:
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In a letter dated 4 April 2008, Taylor Collison submitted an Expression of Interest (in the form of Appendix A to the Information Memorandum) to the Liquidator, making an offer of S$5.5m for the Shares on behalf of Newport.
On 2 May 2008, Newport submitted a Firm Letter of Offer (in the form of Appendix B to the Information Memorandum) (“First Firm Letter of Offer”), offering to purchase the Shares for S$10m. This was followed by a subsequent Firm Letter of Offer dated 9 May 2008 (“Second Firm Letter of Offer”), increasing the offer to S$10.25m. The material portions of the Second Firm Letter of Offer read as follows:
The words in italics were added by Newport to the standard form set out in Appendix B to the Information Memorandum.We have conducted our independent assessment of the available information and we hereby offer to purchase the shares held by you in [Norwest Chemicals] at Singapore Dollars
10,250,000 (ten million two hundred and fifty thousand) subject to the terms and conditions in the Sale and Purchase Agreementto be negotiated .In the event our offer is accepted, we agree to the aforesaid purchase price and will pay the balance of the purchase price, less the Cashier’s Order of Singapore Dollars
55,000 (fifty five thousand) that has been submitted to you, in accordance to the terms and conditions set out in the Sale and Purchase Agreementto be negotiated .This offer is irrevocable and is valid for a period of 45 days from 2 May 2008.
[emphasis added]
On 12 May 2008, at 2.28pm (Singapore time), a massive earthquake, measuring 7.9 on the Richter scale, struck the Sichuan province (“the Sichuan Earthquake”). On the very same day, at 4.20pm (Singapore time), the Liquidator sent an email to Newport, attaching a letter purporting to accept the offer made in the Second Firm Letter of Offer (“Acceptance Letter”).6 In the Acceptance Letter, the Liquidator stated that:
In the Acceptance Letter, the Liquidator also requested that Newport provide an additional sum of S$47,500 to make up for the shortfall in the 1% deposit (out of which Newport had already paid S$55,000).We hereby accept your offer of Singapore Dollars Ten Million Two Hundred Fifty Thousand (SGD10,250,000) for all the shares that we hold in [Norwest Chemicals]. A formal Sale and Purchase Agreement is to be negotiated and executed between [Newport] and [Norwest]. As previously indicated, the sale is on an “as is, where is” basis and we make no warranties, representations or undertakings as regards the assets and liabilities of [Norwest Chemicals] or its subsidiary [Norwest China].
Newport replied the following day, 13 May 2008, at 2.36pm, via email, thanking the Liquidator for his Acceptance Letter. Newport also stated that it would work towards the deadline of 1 June 2008, adhering to the revised timetable enclosed in a 10 April 2008 letter7 from the Liquidator to Taylor Collison, and requested the Liquidator to advise on the condition of the “mine and plant” as well as any information with respect to casualties and injuries amongst the staff and workers. On 14 May 2008 Newport transferred S$47,500 to Norwest.
No news regarding the damage caused by the Sichuan Earthquake to the Chinese Business was forthcoming from the Liquidator. The completion date of 1 June 2008 came but Newport did not complete the purchase of the Shares.
On 2 June 2008, Norwest’s solicitors sent a letter to Newport’s solicitors, stating that Newport had failed to fulfil its contractual obligation to complete the purchase of the Shares by 1 June 2008 and gave Newport a final extension of up to 4pm on 5 June 2008 to do so.8 The next day, on 3 June 2008, Newport’s solicitors replied, disavowing the existence of any “binding and enforceable contract in place for the sale and purchase” of the Shares.9
By a letter dated 6 June 2008, Norwest purported to accept Newport’s repudiation of the contract and gave notice that it would be seeking to mitigate its loss by seeking alternative buyers for the Shares. In August 2008, the Liquidator sold the Shares to Hwa Hong Edible Oil Industries (“Hwa Hong”) for S$4.5m. Hwa Hong was the main shareholder of Norwest (holding 49.5% of Norwest shares) and also the main creditor which put Norwest in liquidation because of unpaid management fees to the tune of S$4.9m.
In January 2009, Norwest...
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