Singapore Insulating Glass Pte Ltd v Newspaper Seng Pte Ltd

• Jurisdiction: Singapore
• Judge: Lim Teong Qwee JC
• Judgment Date: 20 May 2000
• Neutral Citation: [2000] SGHC 88
• Citation: [2000] SGHC 88
• Date: 20 May 2000
• Year: 2000
• Plaintiff Counsel: Ramalingam Kasi and Uthaya Chandran (Raj Kumar & Rama)
• Docket Number: Suit No 1558 of 1999
• Defendant Counsel: Rabi Ahmad (PK Wong & Advani)
• Court: High Court (Singapore)
• Published date: 19 September 2003

: This is a claim for damages and other reliefs for breach of contract contained in an agreement in writing dated 10 December 1997 (`sale agreement`) for the sale by the plaintiff (`SIG`) to the defendant (`NS`) of its land in Jurong for $4. 28m. NS disputed the claim and counterclaimed for a declaration that the sale agreement had become null and void and for the return of the deposit which had been paid to a stakeholder. There was concurrently an originating summons in which the stakeholder had obtained an order and paid the amount of the deposit in court. At the conclusion of the trial in this action I dismissed SIG`s claim and allowed NS`s claim for a declaration and I stood over the claim for payment out of the amount of the deposit to the hearing of the originating summons. SIG has given notice of appeal and these are my written grounds.

The land is described in the sale agreement as `the whole of Pte Lot A14567 ... together with the building(s) erected or to be erected thereon`. It is not disputed that all that SIG had was the benefit of an agreement dated 25 October 1996 (`JTC agreement`) with Jurong Town Corporation (`JTC`) to enter upon the land at Pte Lot A14567 and to construct certain buildings on it at its own expense and upon satisfactory completion of the construction works to have the right to a lease for a term of 30 years from 1 June 1995.

At the date of the sale agreement the construction works had not been completed. The JTC agreement provided for completion of the construction works within two years from 1 June 1995 but by letter dated 9 April 1997 a copy of which was attached to the sale agreement between the parties as App III time was extended by JTC to expire on 31 December 1997. The sale agreement provides for an undertaking by SIG to apply to JTC for a further extension of time.

Under the JTC agreement SIG agreed to perform and observe a large number of stipulations one of which was:

Not to assign charge create a trust or agency let sublet or underlet or grant a licence or part with or share his interest under this Agreement, or the possession or occupation of the said land, or any part thereof except that, subject to the[JTC`s] prior written consent, which consent shall not be unreasonably withheld, [SIG] may mortgage or charge his interest under this Agreement by way of assignment or debenture (as the case may be) to secure the repayment of such sum or sums as [SIG] may require for the purpose only of erecting or completing the building or other structure to be built on the said land ...

The 30-year lease to be granted would also be subject to the covenants and conditions set out in the schedule to the JTC agreement and anyone having any familiarity with JTC leases would expect to see a covenant against assignment but for some unknown reason the schedule was not included among the documents before me and no reference has been made to any such covenant.

The stipulation against assignment or parting with any interest under the JTC agreement was unconditional and unqualified. Under the JTC agreement SIG was granted a licence to enter upon the land and to construct the buildings and `for the installation of equipment fixtures and fittings thereat for the purpose of manufacturing of double glazed insulating panels, laminated glass and tempered glass only in accordance with the stipulations hereinafter contained and for no other purpose whatsoever`. This was not what NS intended to use the land for.

Again the restriction as to use would also be set out in the schedule which has not been produced. For the sale agreement to be carried into effect JTC`s consent was clearly necessary and the conditions referred to as special conditions provide:

1(a) The sale and purchase herein is subject to the written consent of [JTC] (hereinafter referred to as `the JTC`) being obtained by [SIG] for the sale and it is also subject to [NS] obtaining the written consent of the JTC and all other relevant authority to use the property for packing and storage of waste paper. [NS] warrants that they will comply with the URA`s/JTC`s requirement in utilising 60% of the gross floor area (GFA) for production and 40% of the GFA for storage and office space only.

1(d) [SIG] and [NS] agree and undertake to comply with all the terms and conditions that will be imposed by the JTC in respect of the sale and purchase and the proposed change of use provided always that [NS] shall have the right to rescind this agreement in the following circumstances:

(1) if JTC requires [NS] to invest more than $200 psm of the land area ($1,000,000. 00) on plant and machinery for the 30 year lease with effect from 1 June 1995;

(2) [SIG] is unable to assign the benefit of the investment on the building and civil works to [NS];

(3) [NS] is required by JTC to undertake to apply and obtain the TOP and CSC which are [SIG`s] responsibilities and obligations under the terms of this Agreement and [SIG] is unable to comply with JTC`s requirement so as to enable [NS] to undertake to do so with JTC;

in which event(s) [SIG] shall return to [NS] all deposit paid free of interest herein in exchange for the withdrawal of caveats and all entries made against the property by [NS] or arising from [NS] and thereafter neither party shall have any claim against the other. Each party shall then bear their own solicitor`s costs and expenses.

2(a) In the event the consents mentioned in Clause 1(a) is not obtained or shall be refused for any reason whatsoever by 27th May 1998, the sale shall become null and void ...

2(b) In the further event that the JTC`s consent in Clause 1(a) is not obtained or is refused due to the neglect and/or default of either party other than in respect of the representations and warranties herein, neither party shall be compensated for all losses, damages, costs, expenses and/or inconveniences incurred and suffered as a result of the defaulting party`s act of default and/or neglect.

Special condition 2(b) appears here in the form as amended by the agreement of both counsel. I think `60% for production and 40% for storage and office only` in special condition 1(a) means not less than 60% to be used for production and not more than 40% to be used for storage and office.

Special condition 1(a) contemplates the consent of JTC for the sale being obtained by SIG and the consent of JTC and `all other relevant authority` for change of use being obtained by NS. This is what it says and it is made clear by special condition 1(b) which refers to applications to be made for the two consents and special condition 1(c) which provides for the separate responsibility of each party for fees payable for the two consents.

By letter dated 18 December 1997 SIG`s solicitors applied to JTC for its `approval` in respect of the sale. The letter refers to SIG`s `application form` but no document has been identified as such. There was an error in the letter and this was corrected by the solicitors` letter of 8 January 1998.

NS also made an application and for this purpose it completed and submitted to JTC its standard form consisting of Pts I to IV and sections A and B. Parts I and IV contain information relating to NS and its business activities including financial statements and Pts II and III contain applications for clearance from the relevant authorities. Section A identifies the seller but is otherwise not applicable and section B identifies the buyer and gives the reasons for the purchase and the causes.

On 18 March 1998 JTC wrote to SIG`s solicitors:

Proposed Assignment of Lease on Pte Lot A14567 at Penjuru Rd

We refer to the above captioned.

2 We regret to inform that the application for assignment of the above mentioned lot has been unsuccessful. The reason being that the assignee is not able to meet our value-add and space utilisation requirements. `

A copy of this letter was given to NS`s solicitors. It seems quite clear that JTC has refused to give its consent to SIG for the sale and this is not in dispute. It is for SIG to obtain such consent and such consent has not been obtained or has been refused by 27 May 1998.

On 20 May 1998 SIG`s solicitors wrote to NS`s solicitors to say that the parties had `agreed to mutually extend the consent period required under cl 2(a) to 27 July 1998` and requested their confirmation. This confirmation NS`s solicitors duly gave by letter dated 21 May 1998.

On 20 May 1998 NS`s solicitors submitted a revised application to JTC. In the first submission the financial statements related to the years to 31 December 1996 and 31 December 1997. In the second submission they related to the years to 31 December 1997 and 31 December 1998. In the case of the financial years which were current at the time of the submission the financial statements were estimates and projections. There were differences because of the change in the accounting years but in all other respects the forms as completed were substantially the same.

By letter dated 13 July 1998 JTC called for NS`s financial statements for the six months to 30 June 1998 and two letters of undertaking. These were duly supplied on 20 July 1998. On 24 July 1998 JTC wrote to NS`s solicitors:

Based on the balance sheet submitted, the half-yearly figures for Newspaper Seng Pte Ltd are S$5. 28m, but their projected figures for the year ended 1998 are S$17. 02m. In view of this, please advise us how your client can achieve the said figure of S$17. 02m. `

In the second submission NS had projected sales of $17. 02m for the year to 31 December 1998 but in the first six months it had only achieved sales of $5. 28m. On 27 July 1998 NS`s solicitors replied to JTC. Its letter arrived by fax at about 1710 hrs.

There is no evidence that SIG took any further steps to obtain JTC`s consent after JTC`s refusal or to appeal against such refusal. Nothing was heard about SIG having obtained the consent of JTC for the...