Tan Chin Seng and Others v Raffles Town Club Pte Ltd (No. 2)

• Jurisdiction: Singapore
• Judgment Date: 11 August 2003
• Date: 11 August 2003
• Docket Number: Civil Appeal No 148 of 2002
• Court: Court of Appeal (Singapore)

Tan Chin Seng and others

Plaintiff

and

Raffles Town Club Pte Ltd

Defendant

[2003] SGCA 27

Chao Hick Tin JA

,

Lai Siu Chiu J

and

Tan Lee Meng J

Civil Appeal No 148 of 2002

Court of Appeal

Contract–Contractual terms–Implied terms–Rules of club giving discretion to proprietors to admit as many members as they wanted–Whether discretion must be exercised consistent with object of contract–Contract–Misrepresentation–Statements of intention–Representations made about club while club still under construction–Whether representations actionable–Contract–Misrepresentation Act–Whether common law position as to what is actionable misrepresentation changed by s 2 (1) Misrepresentation Act (Cap 390, 1994 Rev Ed)

During the launch of a club owned and managed by the respondent, certain representations as to the club were made through a number of agents. These agents made representations that there were certain advantages with being a founder member of the club, and that such membership would be exclusive. Relying on these representations, the appellants signed up as founder members. After the club opened, the appellants experienced crowdedness at the club premises. It was subsequently discovered that the club had admitted almost 19,000 founder members. The appellants sued for misrepresentation and breach of contract. The trial judge dismissed their action and they appealed.

Held, allowing the appeal:

(1) An actionable misrepresentation was a false statement of existing or past fact. A statement as to a man's intention could be considered a statement of fact. However, a statement as to the future was in truth a promise and was not actionable unless it could be shown to be part of a contract: at [20] to [21].

(2) Section 2 (1) of the Misrepresentation Act only changed the law as to the reliefs that could be obtained in the case of any non-fraudulent misrepresentation. It did not alter what constituted an actionable misrepresentation: at [23].

(3) To provide business efficacy for the contract entered into between the parties, it would be necessary to imply into the contract the term that the respondent would exercise its discretion as provided by the rules in such a manner that there would be no breach of its obligations to provide a premier club: at [31] to [32].

(4) The respondent, by admitting the number of members that it did, was in breach of this term of the contract: at [51].

[Observation (per Chao JA): The damages recoverable could not include the depreciation in the price of the club membership caused by the dip in general market conditions: at [55].]

140 Pub Company Ltd v Hoare (21 March 2001) (folld)

Brown v Raphael [1958] Ch 636 (distd)

Edgington v Fitzmaurice (1885) 29 Ch D 459 (folld)

Forum Development Pte Ltd v Global Accent Trading Pte Ltd [1994] 3 SLR (R) 1097; [1995] 1 SLR 474 (distd)

G Scammell and Nephew Ltd v Ouston [1941] AC 251 (folld)

Livesey v Jenkins [1985] AC 424 (folld)

Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206; [1939] 2 All ER 113 (folld)

Wales v Wadham [1977] 1 WLR 199; [1977] 2 All ER 125 (folld)

Misrepresentation Act (Cap 390, 1994 Rev Ed) s 2 (1) (consd)

Molly Lim SC, Roland Tong and Wang Shao-Ing (Wong Tan & Molly Lim LLC) for the appellants

K Shanmugam SC and Candace Ler (Allen & Gledhill) for the respondent.

Chao Hick Tin JA

(delivering the judgment of the court):

1 This appeal is brought by the appellants (ten in all) for themselves, as well as for 4,885 other members of the Raffles Town Club (“the Club” or “RTC” as may be appropriate), against a decision of the High Court dismissing the action which they instituted against the respondent, Raffles Town Club Pte Ltd (“RTC Ltd”), for misrepresentation and breach of contract.

The background

2 RTC Ltd is a private exempt company. It was incorporated to own and manage the Club as a proprietary club. It erected the Club premises at the junction of Dunearn Road and Whitley Road.

3 In November 1996, while the Club premises were still at the drawing board stage, RTC Ltd initiated an introductory launch to invite selected members of the public to join the Club as founder members at the discounted price of $28,000. A number of financial institutions and other bodies were enlisted as agents to carry out the launch. Each of these agents wrote to its own customers stating, in each instance, that the addressee was specially selected and invited to apply for the founder membership. The invitees were told that after this launch, people would have to pay $40,000 to become members. Enclosed with each invitation letter were the following documents:

1. (a) aglossy brochure describing the Club facilities (“the brochure”);

2. (b) a document containing questions and answers to give more information to the invitee (“Q&A sheet”); and

3. (c) a Priority Application Form.

The invitation letter and the above three documents will hereinafter be referred to collectively as “the promotional materials”.

4 Each of the appellants, having received such an invitation letter, applied for membership, paying a down-payment of $3,000, with the balance to be paid in 48 instalments. They duly became founder members.

5 What subsequently upset them was that they learnt in March 2001, from the evidence adduced in an unrelated action in the High Court between the shareholders of RTC Ltd, that in total some 18,992 persons had been admitted as founder members and another 56 persons as “ordinary” members, paying the increased membership fee of $40,000, making a grand total of 19,048 members. Before then, while they had experienced crowdedness at the Club premises, they did not know the size of its membership.

6 Relying on certain statements in the brochure and the Q&A sheet, the appellants alleged that they were induced to become founder members by those statements and prayed for a rescission of the contract and the refund of the membership fee they had paid. In the alternative, they averred that there were breaches of contract and asked for damages.

7 At the High Court, S Rajendran J ruled that there were no merits in both claims and dismissed the action. He held that there was no actionable representation. While he found that the representations made in the promotional materials that the Club would be a premier club with first class facilities were the basis upon which the appellants had joined the Club and that they were properly to be implied into the contract, he did not think, on the evidence presented, that there was any breach of these implied terms of the contract.

Issues

8 In the light of the submissions made by the parties in their respective cases, the main issues which arise for the consideration of this court may be categorised as follows:

1. (a) Whether any of the statements in the promotional materials constitutes a representation;

2. (b) If they are not representations, whether any of the statements would nevertheless form a term of the contract subsequently entered into between the parties; and

3. (c) If the answer to (b) is in the positive, whether RTC Ltd has breached any of the terms of the contract.

These are largely the same issues canvassed in the court below.

The representations

9 The appellants alleged that in the promotional materials, the following express representations were made:

(a) It was planned that the Club would have nearly 600 car park lots for the use of the members;

(b)“Club members will enjoy unparalleled privilege and facilities”;

(c)“The Club's exclusive and limited membership will be fully transferable … the most prestigious private city club … of Singapore”;

(d) The Club would be constructed to have a total built-up area in excess of 400,000 sq ft catering for the “business, entertainment, networking, socialising, personal and family leisure requirements” of members. The Club would have “separate formal, casual, sporting, children's and family facilities” for members;

(e) Asupplementary card would be issued to the spouse or fiancé of each member with full membership privileges and benefits at no additional cost;

(f) The Club would be “without peer in terms of size, facilities and sheer opulence”; and

(g) There would be two categories of individual members. First, a limited number of exclusive transferable founder members at the entrance fee of $28,000, who should submit their applications no later than 30 November 1996. Second, the ordinary members and this would include those who should submit their applications after 30 November 1996 at the price of $40,000, as well as those who did not succeed under the initial launch.

10 The appellants contended in their Amended Statement of Claim that by these representations, they understood that they would be joining “an exclusive and premier club” and that “the total number of members would be limited such that at any given time no member and the supplementary card-holder would be shut out from or be unable to use the facilities of the Club … in the manner or up to the standard as represented in the prospectus”.

Nature of the statements

11 We should, at this juncture, observe that no fraud is alleged against RTC Ltd or its promoters. It is, therefore, necessary to determine the nature of the statements. Do they constitute representations?

12 Arepresentation is a statement which relates to a matter of fact, which may be a past or present fact. But a statement as to a man's intention, or as to his own state of mind, is no less a statement of fact and a misstatement of the state of a man's mind is a misrepresentation of fact: per Bowen LJ in Edgington v Fitzmaurice (1885) 29 Ch D 459 at 483.

13 The point that a statement as to intention could be a statement of fact was further elucidated by Tudor Evans J in Wales v Wadham [1977] 2 All ER 125 at 136:

A statement of intention is not a representation of existing fact, unless the person making it...