Park Regis Hospitality Management Sdn Bhd v British Malayan Trustees Ltd

• Jurisdiction: Singapore
• Judgment Date: 11 December 2013
• Date: 11 December 2013
• Docket Number: Suit No 201 of 2011 (Registrar's Appeals Nos 98 and 99 of 2013; Summons No 2366 of 2013)
• Court: High Court (Singapore)

Park Regis Hospitality Management Sdn Bhd

Plaintiff

and

British Malayan Trustees Ltd and others

Defendant

[2013] SGHC 268

George Wei JC

Suit No 201 of 2011 (Registrar's Appeals Nos 98 and 99 of 2013; Summons No 2366 of 2013)

High Court

Civil Procedure—Pleadings—Striking out—Whether plain and obvious plaintiffs did not have reasonable cause of action—Order 18 r 19 (1) Rules of Court (Cap 233, R 5, 2004 Rev Ed)

Evidence—Principles—Admission of additional evidence in proceedings other than trial—Whether conditions laid down in Ladd v Marshall applicable to current appeal

Tort—Inducement of breach of contract—Defendants investing in third party to develop hotel—Plaintiffs appointed operator of hotel under operating agreement—Third party selling hotel—Whether sale breached operating agreement—Whether defendants induced breach—Whether operating agreement terminated

Tort—Release rule—Resolution agreement discharging liability for some parties—Whether release granted to one joint tortfeasor or to one joint debtor operated as discharge of other joint tortfeasor

The appellant was a hotel management company registered in Malaysia. The first respondent was the manager of Allco Property Return on Investment Fund (‘the Fund’). The assets of the Fund were redeemable preference shares in the company Taragon Capital Malaysia Sdn Bhd (‘Taragon’). The second respondent was the registered legal and beneficial owner of all the units in the Fund.

Sometime in 2005 and 2007, the trustee of the fund invested some moneys in Taragon to develop a hotel in Malaysia. On 16 August 2010, an operating agreement (‘the OA’) was signed between the appellant and Taragon. The appellant was appointed operator of the hotel. Sometime in 2011, Targon entered into an agreement to sell the hotel to Grace Hub Sdn Bhd (‘the SPA’). Taragon then served a notice of termination of the OA on the appellant pursuant to cl 3.5 of the OA, although this was subsequently rejected by the appellant, who expressly affirmed the OA and put Taragon on notice that it remained ready and willing to give full effect to the OA.

The appellant then sued Taragon in Malaysia for breach of the OA, and the respondents in Singapore for conspiracy to induce breach of contract. The Malaysian action was later withdrawn pursuant to a resolution agreement (‘the RA’) with Taragon. However, the Singapore action continued.

There were a number of interlocutory applications in the Singapore action, but the relevant one was a striking out application by the respondents (which was heard at the same time as an application to amend the appellant's statement of claim). These were heard by Assistant Registrar David Lee Yeow Wee (‘the AR’), who granted the respondents' application, striking out the appellant's claim in its entirety and consequently dismissing the application to amend the statement of claim.

The appellant then appealed against the AR's decision. The appellant also took out an application to adduce further evidence, which was heard together with the appeal.

Held, dismissing the appeal and application:

(1) The law pertaining to adducing further evidence in an appeal was not controversial, and was guided by the three conditions set out in Ladd v Marshall[1954] 1 WLR 1489 (‘the Ladd v Marshall Test’). Strictly speaking, the Ladd v Marshall Test only applied to appeals from a trial: at [23] and [24] .

(2) There was a distinction between the standard to be applied in appeals where there had been the characteristics of a full trial or where oral evidence had been recorded and those that were interlocutory in nature. In the former situation, the second and third conditions of the Ladd v Marshall Test should strictly apply, whereas in the latter situation, the court would be allowed to exercise its discretion more liberally: at [26] and [27] .

(3) The RA signed between Taragon and Park Regis settled the dispute between Taragon and Park Regis over the OA, but it was not clear whether cl 6 (a) of the RA released the respondents from their liability. However, this was inconsequential as any release of Taragon from the contract claim could not operate as a release of the respondents from the claim in Singapore in tort: at [45] to [47] .

(4) The release rule was the rule that a release granted to one joint tortfeasor, or to one joint debtor, operated as a discharge of the other joint tortfeasor, or the other joint debtor, the reason being that the cause of action, which was one and indivisible, having been released, all persons otherwise liable thereto were consequently released: at [58] .

(5) It was unclear whether the release rule continued to be applicable after the 1998 amendments to the Civil Law Act (Cap 43, 1999 Rev Ed). Nevertheless, given that this was a striking out application, it was not necessary to decide this, only to observe that it would have been plainly arguable as a matter of law. The action would not have been struck out on this alone: at [60] and [69] .

(6) Park Regis' main claim rested on the assertion that the sale of the hotel to Grace was in breach of cl 19 of the OA. A perusal of the OA made it clear that there was no express term which prohibited Taragon from entering into negotiations for the sale of the property during the lifetime of the OA. Whilst the OA did contain express warranties that Taragon was the owner of the property at the date of the agreement, there was no express warranty or promise that Taragon would remain the owner. If Taragon wanted to sell the property it was free to do so subject, of course, to its obligations under the OA. The signing of the SPA on 21 February 2011 did not mean that Taragon had put itself into a position whereby it was unable to perform its obligations under the OA: at [85] and [95] .

(7) Taragon had a duty to provide Park Regis with uninterrupted and unrestrained access to and control of the property, and the other possible way that the OA could have been breached was if Taragon prevented Park Regis employees from accessing the hotel property to perform its duties under the OA from about 21 February 2011. However, whether or not breaches of these clauses of the OA had actually taken place was not a matter that the court could or had to decide in the present case. Even if the alleged breaches had occurred, Park Regis did not claim that the respondents or their employees had anything to do with these alleged further acts of repudiation: at [99] and [103] .

(8) The final possible ‘breach’ by Taragon was the wrongful attempt to terminate the OA on 21 February 2011. There was no doubt that Taragon sent the notice of termination and that there was no basis for doing so under the terms of cl 3.5. However, Park Regis rejected the notice of termination and expressly affirmed the contract. The contract was therefore affirmed and continued to govern the relationship between Taragon and Park Regis: at [111] to [113] .

(9) It was clear that the OA was terminated by consent pursuant to the signing of the RA on 14 April 2011: at [113] .

Bryanston Finance Ltd v de Vries [1975] QB 703 (refd)

Bunga Melati 5, The [2012] 4 SLR 546 (folld)

Clayton v Kynaston (1701) 2 Salk 573; 91 ER 483 (refd)

Duck v Mayeu [1892] 2 QB 511 (refd)

Econ Piling Pte Ltd v Sambo E&C Pte Ltd [2010] 3 SLR 764 (refd)

Gabriel Peter & Partners v Wee Chong Jin [1997] 3 SLR (R) 649; [1998] 1 SLR 374 (folld)

Industrial and Commercial Bank Ltd v Li Soon Development Pte Ltd [1993] 3 SLR (R) 518; [1994] 1 SLR 471 (refd)

Ladd v Marshall [1954] 1 WLR 1489 (refd)

Lassiter Ann Masters v To Keng Lam [2004] 2 SLR (R) 392; [2004] 2 SLR 392 (refd)

Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd [1999] 1 SLR (R) 1053; [1999] 2 SLR 233 (refd)

Ng Chee Weng v Lim Jit Ming Bryan [2012] 1 SLR 457 (refd)

Nigel Watts Count Nikolai Tolstoy-Miloslavaski v The Right Honourable Toby Lowe [1989] L & TR 578 (refd)

North v Wakefield (1849) 13 QB 536; 116 ER 1368 (refd)

Tan Eng Khiam v Ultra Realty Pte Ltd [1991] 1 SLR (R) 844; [1991] SLR 798 (refd)

Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 (refd)

Wah Tat Bank Ltd v Chan Cheng Kum [1974-1976] SLR (R) 284; [1975-1977] SLR 1; [1975] AC 507 (refd)

WBG Network (S) Pte Ltd v Sunny Daisy Ltd [2007] 1 SLR (R) 1133; [2007] 1 SLR 1133 (folld)

XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 (refd)

Civil Law Act (Cap 43, 1999 Rev Ed) s 17

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 18 r 19 (1) , O 18 r 19 (2)

Civil Law (Property) Act 2006 (ACT)

Civil Liability (Contribution) Act 1978 (c 47) (UK) s 3

Law Reform (Married Women and Tortfeasors) Act 1935 (c 30) (UK) s 6 (1) (a)

Law Reform (Miscellaneous Provisions) Act 1955 (ACT) s 11 (2)

Cheah Yew Kuin and Michelle Lee (Wong & Leow LLC) for the plaintiff/appellant

Lee Eng Beng SC and Matthew Teo (Rajah & Tann LLP) for the defendants/respondents.

Judgment reserved.

George Wei JC

Introduction

1 These were appeals from the decision of the learned Assistant Registrar David Lee Yeow Wee (‘the AR’) to strike out the appellant's action against the respondents (‘the Respondents’), and consequentially, dismiss the appellant's application to amend their statement of claim. I considered the arguments of the parties bearing fully in mind the principles of striking out, most importantly, that it must be plain and obvious that there was no merit in the claim before the claim was to be struck out. After considering the issues before me, I am of the view that the AR did not err in law and fact in striking out the action (apart from potentially one point of law pertaining to the ‘Release Rule’) and therefore am dismissing both appeals.

The facts

The parties

2 The appellant, Park Regis Hospitality Management Sdn Bhd (‘Park Regis’), is a hotel management company registered in Malaysia and is part of the Staywell Hospitality Group (‘Staywell’)...