Png Siaw Luan v Wong Tui San and Others

• Jurisdiction: Singapore
• Judge: Karthigesu JC
• Judgment Date: 20 July 1990
• Neutral Citation: [1990] SGHC 47
• Docket Number: Originating Summons No 523 of 1990
• Date: 20 July 1990
• Year: 1990
• Published date: 19 September 2003
• Plaintiff Counsel: Roderick Martin and B Vijayan Peter (Ramdas & Wong)
• Citation: [1990] SGHC 47
• Defendant Counsel: Davinder Singh and Jimmy Yim (Drew & Napier),Abdul Rashid and Latiff Ibrahim (Khattar & Wong),Michael Hwang and Chow Khiaw Sing (Allen & Gledhill)
• Court: High Court (Singapore)
• Subject Matter: Lack of urgency to justify ex parte application,Civil Procedure,Settlement agreement,Contract,Contractual terms,Injunctions,Discharging interim injunction,Rules of construction,Failure to make full and frank disclosure,Whether order of sub-clauses could be rearranged,Intention of parties,Sufficient basis to discharge injunction,Construction,Serious omission

By an agreement in writing dated 23 May 1989 (the settlement agreement) the plaintiff, the third defendant, the fourth defendant and several other persons and companies who are parties to that agreement agreed that the various disputes and differences which had arisen between them should be settled upon the terms and in the manner set forth in the settlement agreement. For present purposes it would be sufficient to note that the natural persons who are parties to the settlement agreement are members of the Phng family or of the extended Phng family and are shareholders in one or more of the corporate persons which are also parties to the settlement agreement.

The broad terms of the settlement was a disposal of all the assets owned by the natural and corporate persons who are parties to the settlement agreement and in order to effect this the parties to the settlement agreement had agreed, before the settlement agreement was entered into, that the task of disposal of their assets should be entrusted to a professional accounting firm. The accounting firm agreed on was Ernst & Whinney now known as Ernst & Young. Accordingly provision was made in the settlement agreement for each of the parties to the settlement agreement to appoint as their attorneys/sales agents Wong Tui San (first defendant) and Abbasbhoy Haider Nakhoda (second defendant) both of Ernst & Young of Singapore for Singapore and Michael Yee Kim Shing and Yeo Eng Seng both of Ernst & Young Kuala Lumpur for Malaysia. See cll 2.4 and 25 of the settlement agreement.

It should be noted however that the attorneys who would be appointed subsequent to the date of the settlement agreement and pursuant to the provisions therein contained were not made parties to the settlement agreement.

The consideration supporting the settlement agreement was one of `mutual benefits` and `mutual covenants`. The `mutual benefits` the parties to the settlement agreement would enjoy was obviously the distribution of the proceeds of sale from the disposal of all the assets. This was to be achieved, as provided in the settlement agreement, by three stages of sale, each stage following upon the failure of the earlier stages. See cll 2.1, 2.2, and 2.3 of the settlement agreement. At the date of the commencement of these proceedings the third stage as provided by cl 2.3 of the settlement agreement had been reached, that is a sale subject to the reserved price to one or more purchasers at the best price obtainable in the open market.

Clause 2.3 provides as follows:

Sale of assets of principal/subsidiary/associated companies

If within two (2) months from the date hereof, all the shares in the principal/subsidiary/associate companies have not been sold and/or all the immovable properties of the principal companies in which shares are left unsold pursuant to cl 2.2 hereof have not been sold, the principal companies concerned as are parties hereto hereby irrevocably:

2.3.1 offer for sale, subject to the property reserved price, all or any of its/their assets (movable or immovable), and to one or more purchasers, at the best price obtainable in the open market;

(2) .3.2 cause its subsidiary/associate companies (where applicable) to offer for sale, subject to the property reserve price, all or any of its/their assets (movable or immovable), and to one or more purchasers, at the best price obtainable in the open market.

It should be pointed out that cl 1.1.64 of the settlement agreement provided a one-year sale period from the date of the settlement agreement or any variation thereof as agreed upon by a concurrence of the majority of groups A and B members within which all the assets must be sold and if not upon the expiry of this period the winding-up provisions set out in cl 6 of the settlement agreement will commence.

The `mutual covenants` referred to in cl 2.1 of the settlement agreement is stated in these terms in cl 24.

Mutual covenants

All parties hereto recognize and accept that it is impracticable to provide herein for every contingency that may arise in the course of the performance of the various covenant terms and conditions contained in this agreement and accordingly they hereby declare it to be their mutual intention and hereby covenant that in all cases they shall each use their best endeavours to ensure that this agreement operates as between them fairly and equitably and none of the parties hereto shall do any act or thing which either directly or indirectly may result in any of the other parties suffering any loss or damages whatsoever.

As stated earlier, at the date of the commencement of these proceedings, the third and final stage of sale had been reached but before such a sale could be concluded the natural persons who are parties to the settlement agreement were entitled to the right of first refusal to purchase the asset or assets of the company in which that party was a shareholder. This is provided in cl 3.2 of the settlement agreement.

These proceedings are concerned with the construction of the provisions contained in cll 3.1 to 3.4 and arise in this way.

The fourth defendant was the owner of a property in Singapore known as No 1 Kampong Ampat (the property). To effect the sale of the property, inter alia, under the provisions of the settlement agreement the fourth defendant pursuant to cll 2.4 and 25 thereof by an instrument in writing and executed under seal dated 23 May 1989 (the power of attorney) appointed the first and second defendants (jointly referred to as `the attorneys` and severally as `the attorney`) their lawful attorneys for them and in their name to perform the several acts specified in the power of attorney severally. The power of attorney, inter alia, provided for the sale of all or any assets of the fourth defendant (cl 1); to appoint engage and remunerate professional advisers (cl 3); to do and carry out all or any acts, deeds, matters and things which the fourth defendant is obliged or required to do under or pursuant to the settlement agreement (cl 6) and to do and carry out all or any acts, deeds, matters and things which are necessary or incidental to the exercise of the powers contained in the power of attorney (cl 7). The word used in cl 7 is `herein`.

By a letter dated 3 May 1990, the attorney addressed a letter in identical terms to the plaintiff and the third defendant and possibly to the other shareholders in the fourth defendant informing them, inter alia, that a right of first refusal had arisen in respect of the property. A copy of this letter exhibited both by the plaintiff and the third defendant shows it was despatched to each of them by local urgent mail. The attorney states in an affidavit that both letters were despatched on 4 May 1990. The third defendant states in an affidavit filed by him on 18 June 1990 that the letter was received by him on 5 June 1990. There is no evidence of the date the plaintiff received the letter.

The attorney`s letter dated 3 May 1990 reads as follows:

1 As you are a shareholder of Phng Realty & Development Pte Ltd, who is entitled to the right of first refusal pursuant to cl 3.1 of the settlement agreement, we write to notify you that we have now received an offer to purchase the above-mentioned property free from encumbrances at the price of Singapore Dollars Eleven million two hundred fifty thousand only (S$11,250,000) subject to the terms and conditions set out in the attached Form Of Tender.

(2) If you wish to exercise your right of first refusal to purchase the above-mentioned property, you are required to make an offer in accordance with cl 3.2 by completing the attached Form Of Tender and submitting it to us c/o Ernst & Young, 10 Collyer Quay #21-01) Ocean Building, Singapore together with a cashier`s order/banker`s draft for the sum of Singapore Dollars Five hundred thousand only (S$500,000) drawn in favour of Phng Realty & Development Pte Ltd`s solicitors, Messrs Khattar Wong & Partners by way of tender deposit and to account of the purchase price of the subject property, under sealed cover marked `No 1 Kampong Ampat - Attention Mr TS Wong`.

(3) Unless the completed Form Of Tender together with the tender deposit of S$500,000 are received by us on or before 10am, 14 May 1990, the right of first refusal referred to in cl 3.1 of the settlement agreement will lapse and cease to be of any force and effect. Further, the attorneys will disregard and will not be bound to accept any offer received from any shareholder within the stated time unless such offer is made on the basis outlined in para 2 above.

(4) In the event that more than one shareholder exercising the right of first refusal, there will be a bidding amongst the shareholders who have exercised their right of first refusal and the property shall be sold to the highest bidder in accordance with cl 3.3.

The attorney`s letter dated 3 May 1990 was followed by another letter dated 10 May 1990 addressed to the plaintiff`s solicitors, Messrs Ng & Ng, and the third defendant respectively. The letter reads as follows:

As you are aware, shareholders who wish to exercise their right of first refusal to purchase are required to submit their firm offers to reach the attorneys on or before 10am, 14 May 1990.

This is to inform you that there will be a meeting of shareholders/solicitors at 10am, 14 May 1990, at Ernst & Young`s board room, level 22, Ocean Building to receive shareholders` offers and in the event that more than one shareholder exercising the right of first refusal, to conduct a bidding amongst the shareholders.

The plaintiff and the third defendant in compliance with the attorney`s letters of 3 and 10 May 1990 duly submitted their respective `firm offers` in sealed envelopes to the attorneys on the appointed day and before the appointed time (before 10am on 14 May 1990). At 10am, the attorneys called the meeting to order....