Oxley Consortium Pte Ltd v Geetex Enterprises Singapore (Pte) Ltd

• Jurisdiction: Singapore
• Judge: Vinodh Coomaraswamy J
• Judgment Date: 05 November 2020
• Neutral Citation: [2020] SGHC 235
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 1334 of 2018
• Published date: 10 November 2020
• Year: 2020
• Hearing Date: 06 August 2019,26 August 2019,30 September 2019
• Plaintiff Counsel: Paul Tan, Jonathan Lai and Torsten Cheong (Rajah & Tann Singapore LLP)
• Defendant Counsel: Lok Vi Ming, SC and Qabir Singh Sandhu (LVM Law Chambers LLC)
• Subject Matter: Arbitration,Award,Recourse against award,Appeal under Arbitration Act
• Citation: [2020] SGHC 235

Vinodh Coomaraswamy J: Introduction

The defendant purchased commercial property from the plaintiff in December 2012. The parties’ sale and purchase agreement was in the standard form prescribed by statute to govern the sale and purchase of all commercial property. When the property was completed, the defendant refused to proceed and claimed a contractual right to terminate the contract and secure a refund from the plaintiff. In accordance with the parties’ agreement, the resulting dispute was referred to arbitration. The arbitrator upheld the defendant’s claim in its entirety.

The plaintiff now appeals, with my leave, on five questions of law arising from the award.

Having considered the parties’ submissions, I have answered all five questions in favour of the defendant. The plaintiff has appealed against my decision. I now set out the grounds for my decision.

Background facts The plans for Oxley Tower

The plaintiff is the developer of Oxley Tower, a mixed-use commercial building on Robinson Road. In December 2012, the defendant purchased three units in Oxley Tower from the plaintiff. This dispute relates only to two of those three units: Unit #04-01 (“Unit 1”) and Unit #04-02 (“Unit 2”) (collectively, “the Units”). As their unit numbers suggest, both Units are on the fourth floor of Oxley Tower.

In February 2012, ten months before the defendant purchased the Units, the plaintiff submitted its building plans for Oxley Tower to the Building and Construction Authority (“BCA”) for approval. These plans show the following on the fourth floor of Oxley Tower. The Units are the only two units on the floor. The floor comprises the two Units and a mix of vegetation (“softscape areas”) and constructed features such as paths and walls (“hardscape areas”). The floor is open to the elements on the sides. Each Unit has an indoor area and an outdoor area. The indoor area for each Unit is smaller than its outdoor area. Unit 1 is a gym or a spa with a swimming pool in its outdoor area. Unit 2 is a restaurant with a garden in its outdoor area. The arbitrator found as a fact that, as described by the plans, the gardens which form part of the softscape areas are not elevated from the hardscape areas and are flush with them.¹

In March 2012, the BCA approved the plaintiff’s plans for Oxley Tower. I shall refer to these plans as “the 2012 BCA Plans” and to the BCA’s letter of approval as “the BCA Approval”. The BCA Approval was subject to a condition, however.² The condition was that the plaintiff had to obtain clearance from the technical departments listed in the BCA Approval. One of the technical departments expressly listed was the Fire Safety & Shelter Department of the Singapore Civil Defence Force (“FSSD”).³ The task of the FSSD is to ensure that buildings to be erected in Singapore comply with the requirements of the Singapore Fire Code.

As required by the BCA Approval, the plaintiff submitted the 2012 BCA Plans to the FSSD. The FSSD raised certain concerns under the Singapore Fire Code. To address those concerns, the plaintiff amended the 2012 BCA Plans to elevate the softscape areas by 300mm from the hardscape areas.

In April 2012, the FSSD approved the plaintiff’s plans as amended. I shall refer to these amended plans as “the 2012 FSSD Plans”. From April 2012, therefore, the 2012 FSSD Plans became the building plans for the construction of Oxley Tower in place of the 2012 BCA Plans.

The options to purchase

In November 2012, the defendant’s representatives visited the showroom for Oxley Tower and received a copy of the plaintiff’s marketing brochure. The marketing brochure stated expressly that its contents were based on building plans for Oxley Tower described by a particular building plan number and dated 6 March 2012.⁴ The only building plans which match the description in the brochure are the 2012 BCA Plans. It appears therefore that the plaintiffs did not amend the brochure to reflect the amendments to the 2012 BCA Plans. The brochure therefore does not mention the 2012 FSSD Plans or depict the softscape areas as elevated from the hardscape areas. As shown in the 2012 BCA Plans, the illustrations in the brochure show the softscape areas on the fourth floor flush with the hardscape areas.⁵

The defendant decided to purchase both Unit 1 and Unit 2. The defendant completed two reservation forms, one for each Unit. The reservation forms are a precursor to an option to purchase. The defendant’s reservation of Unit 2 for purchase was unconditional. But its reservation of Unit 1 was conditional. The condition was recorded in the reservation form for Unit 1 by the following manuscript words inserted just above the signature of the defendant’s representative: “This unit is purchased based on converting from gym/spa to restaurant (exactly like #04-02)”.⁶ What the defendant wanted was for the plaintiff to make two changes to Unit 1 to make it exactly like Unit 2: (a) change the indoor area of Unit 1 from a gym or a spa to a restaurant; and (b) change its outdoor area from a swimming pool to a garden.

In late November 2012, the plaintiff granted the defendant an option to purchase Unit 2 at $12m. The defendant paid the 5% booking fee for Unit 2 unconditionally.

A few days later, the plaintiff granted the defendant a separate option to purchase Unit 1 at just over $9m. But the plaintiff had not yet confirmed that the two changes to Unit 1 were feasible. The plaintiff therefore granted to the defendant a conditional option to purchase Unit 1 and received the defendants’ booking fee conditionally. The condition was that if the plaintiff subsequently informed the defendant that the two changes to Unit 1 were not possible, the defendant could cancel the option for Unit 1 and receive a full refund of its booking fee.⁷

The December 2012 Letter

Having consulted its architects, the plaintiff confirmed to the defendant that it was indeed possible to carry out the two changes to Unit 1.⁸ The defendant therefore decided to proceed with the purchase of Unit 1.

The parties then exchanged drafts of the sale and purchase agreements for both Units. As required by s 5 of the Sale of Commercial Properties Act (Cap 281, 1985 Rev Ed) (“the Act”) read with r 7 of the Sale of Commercial Properties Rules (Cap 281, R 1, 1999 Rev Ed) (“the Rules”), the draft agreement for each unit was in the standard form prescribed by Form D to the Rules. I shall refer collectively to the Act and to the Rules, including Form D, as “the legislative scheme”.

In the course of their correspondence over the sale and purchase agreements, the plaintiff supplied to the defendant a copy of the BCA Approval⁹ (see [6] above).

By a letter dated 3 December 2012 (“December 2012 Letter”) and addressed to the defendant, the plaintiff set out formally the conditions on which it would agree to carry out the two changes to Unit 1.¹⁰ The letter runs to three pages. It subjects the plaintiff’s agreement to carry out the two changes to 19 detailed conditions. It is obvious – and quite understandable in my view – that the plaintiff’s solicitors drafted the December 2012 Letter for the plaintiff to issue on its own letterhead.

The effect of the December 2012 Letter is that, if any of the conditions set out in it were not satisfied, the plaintiff would remain entitled to deliver vacant possession of Unit 1 to the defendant upon completion without the two changes, ie, as a gym or a spa with an outdoor swimming pool.

The conditions which the plaintiff set out in the December 2012 Letter which are material for present purposes may be summarised as follows: Subject to the condition which I set out at [18(b)] below: the plaintiff reserved to itself the right to construct Unit 1 as a gym or a spa with a pool if the authorities: (1) declined to approve the two changes;¹¹ (2) approved the two changes subject to terms which the plaintiff for any reason did not agree to;¹² or (3) initially approved the two changes and then revoked or terminated the approval.¹³ the plaintiff reserved to itself the right to accept in its sole discretion any terms or variations imposed by the authorities in order to grant approval for the two changes.¹⁴ The plaintiff undertook to give notice in writing to the defendant if any of the events described at [18(a)] above occurred. If the plaintiff gave such notice, the defendant had the right to terminate the agreement within 14 days of receiving the notice. If that happened, the plaintiff would be obliged to repay to the defendant all of its progress payments.¹⁵ If the plaintiff gave such notice but the defendant did not exercise the right to terminate the agreement, the defendant was obliged to accept Unit 1 constructed by the plaintiff as it saw fit, whether with or without the two changes.¹⁶

The defendant accepted the conditions set out in the December 2012 Letter on 10 December 2012.¹⁷ The plaintiff thereby undertook a critical obligation to the defendant and conferred on the defendant a critical right with respect to Unit 1. The plaintiff undertook an unqualified obligation to give notice to the defendant if the authorities were to impose any terms for approving the two changes which terms the plaintiff decided to accept. The plaintiff conferred upon the defendant an unqualified right to terminate the contract upon receiving such notice.

The sale and purchase agreements

In late December 2012, the defendant entered into two sale and purchase agreements with the plaintiff, one for each Unit. The agreements were both in Form D and were identical in all material respects save, of course, for the quantum of the purchase consideration and the description of the Units.

Schedule B of the agreement for Unit 2 read with the definition of “the Unit” in cl 1.1.1 describes the unit as “The Restaurant Unit in the Building known or to be known as Oxley Tower … situated on the 4th storey of...