Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal and other matters
Jurisdiction | Singapore |
Judge | Sundaresh Menon CJ |
Judgment Date | 22 March 2017 |
Neutral Citation | [2017] SGCA 21 |
Plaintiff Counsel | Kelvin Poon, Avinash Pradhan and Alyssa Leong (Rajah & Tann Singapore LLP) |
Date | 22 March 2017 |
Docket Number | Civil Appeals No 168 and 171 of 2015 and Summonses No 16 and 17 of 2016 |
Hearing Date | 10 March 2016 |
Subject Matter | Issue Estoppel,Discharge,Implied Terms,Contractual Terms,Contract,Res Judicata,Breach |
Published date | 06 April 2017 |
Defendant Counsel | Irving Choh and Melissa Kor (Optimus Chambers LLC),Adrian Tan, Ong Pei Ching, Yeoh Jean Wern, Lim Siok Khoon and Joel Goh (Morgan Lewis Stamford LLC) |
Court | Court of Appeal (Singapore) |
Citation | [2017] SGCA 21 |
Year | 2017 |
This case puts to the test the familiar axiom that even a bad settlement is better than a good trial.
Settlement and litigation involve different risk paradigms. Litigation brings with it risks and uncertainty but accompanying that might be the prospect of a more complete vindication; settlement on the other hand is expected to deliver certainty though this often comes with compromise. Yet, certainty is not guaranteed. Whether a settlement does in the end deliver certainty will depend, among other things, on whether the parties are sincerely committed to it and whether their agreement satisfactorily addresses the essential variables. If there is no such commitment or if the agreement between the parties is poorly drafted, settlements may even spawn further litigation.
The action that led to the present appeals concerns a consent order that was entered into on 22 February 2006 by, among others, some of the appellants and all of the respondents in the appeals before us to settle certain minority oppression actions in respect of two companies. More than ten years on, the parties are still disputing the construction of the consent order. In the court below, the respondents were successful in setting aside the consent order and reinstating the underlying minority oppression actions. The appellants have appealed against that decision.
The factual background The parties The five appellants in Civil Appeal No 168 of 2015 (“CA 168”) are Mr Koh Khong Meng (“Koh KM”), Mr Tan Chee Beng (“Tan CB”) and three companies. The three companies are:
The appellant in Civil Appeal No 171 of 2015 (“CA 171”) is Mr Tan Huat Chye. He is the father of Tan CB and is referred to by the parties and in this judgment as “Tan Senior”. We will refer to the appellants in both appeals collectively as “the Appellants”.
CA 168 and CA 171 involve the same three respondents, Mr Yeo Boong Hua, Mr Lim Ah Poh and Mr Teo Tian Seng. We will refer to them as “the 1st Respondent”, “the 2nd Respondent” and “the 3rd Respondent” respectively and collectively as “the Respondents”.
TCAE and TCPL, both of whom are appellants in CA 168, are nominal parties to these proceedings. They are also the very subject of the proceedings, and of the minority oppression actions that had led to the consent order. They were set up as part of a joint venture that was entered into by the other appellants and the Respondents as well as some others. We will refer to them as “the JV Companies”. The Respondents are minority shareholders in the JV Companies, while Koh KM and SAA are majority shareholders. Tan CB in turn is a director of, and controls, SAA.
The formation of the JV Companies The joint venture involved a large plot of land of about 557,000m
The SLA received only two bids for the lease in the tender exercise. The first bid was submitted by the Respondents through their joint venture vehicle, Bukit Timah Carmart Pte Ltd (“BTC”).
The second bid was tendered by five individuals, Tan Senior, Tan CB, Koh KM, one Ng Chye Samuel (“Samuel Ng”) and one Ong Cher Keong (“Ong CK”), and their bid was submitted in the name of SAA. We will adopt the terminology used in the court below, and refer to these five individuals as “the SAA Group” even though not all the individuals were involved in SAA. Only Tan CB and Ong CK were directors and shareholders of SAA. Tan Senior used to be a director and shareholder, but had sold his shares to Tan CB and ceased to be a director in February 2001, a month before the tender. Neither Koh KM nor Samuel Ng was involved in SAA. They were Tan Senior’s business partners in a separate company that sublet spaces to car dealerships.
We should also highlight that two members of the SAA Group — Samuel Ng and Ong CK — are not parties to the present set of appeals. Samuel Ng had not taken any substantive role in the proceedings from the outset. Ong CK defended the action below, and initially filed an appeal (Civil Appeal No 173 of 2015 (“CA 173”)) but the appeal was deemed withdrawn after the time for the filing of the requisite documents lapsed.
The joint venture arose out of a chance meeting between the Respondents and three members of the SAA Group (Tan Senior, Tan CB and Koh KM) at the office of the SLA when the two groups had each gone to submit their bids on 2 March 2001. A conversation started between them as Tan Senior and Koh KM were acquainted with the 3rd Respondent. Having established that they had each submitted or was planning to submit a bid, the discussion turned to the possibility of their jointly developing and operating the Site regardless of who, between them, won the bid. The identity of the bidders and their bid amounts were released later on the same day. BTC had submitted a bid of $260,000 per month while SAA’s bid was for $390,000 per month.
Six days later, on 8 March 2001, the parties met at Punggol Marina. At this meeting, Ong CK presented a business plan (“the Business Plan”), which set out the following salient points:
These discussions culminated in the parties signing a memorandum of understanding (“the MOU”) on the same day. The salient terms of the MOU are as follows:
Although the MOU envisaged that the joint venture would take place through the incorporation of only one company, two companies (the JV Companies) were eventually created. It is common ground that there was at least one oral agreement between the parties that altered the MOU to that end. However, before the trial judge (“the Judge”), the parties disputed whether they had agreed to other changes or to any additional terms (see [15]–[16] of the judgment below, which is reported as
The first of the JV Companies, TCPL, was incorporated on 9 April 2001 while the second, TCAE, was incorporated on 25 April 2001. At the time of incorporation, Tan Senior and Ong CK were the sole directors of the JV Companies. Subsequently, on 25 June 2001, the Respondents and the other members of the SAA Group were also appointed as directors of TCPL. As for TCAE, the 3rd Respondent, Tan CB and Koh KM were appointed as directors on 23 October 2001, 9 February 2002 and 28 February 2004 respectively.
It was envisaged that part of the Site would be developed as a used car centre and another part would be developed into a shopping mall. The former would be operated by TCAE and the latter by TCPL. TCAE and TCPL were to be responsible for the renting or licensing of the individual lots or units to the ultimate tenants or licensees. Their main source of revenue would come from the rent or fees payable by these ultimate tenants or licensees. The JV Companies would also be responsible for the cost of developing and operating the Site, and would pay SAA an aggregate monthly rent consisting of two components – the amount of the rent that was due to the SLA and a further 3% of that rental amount as a premium.
On 25 April 2001, the SLA informed SAA that its bid was accepted. In a letter addressed to SAA, the SLA stated as follows:
…
The term of the tenancy will be
three (3) years (excluding rent-free period) with option to renew for a three (3)-year term plus a further option for a three (3) year term, subject to rental revision at prevailing market rate and new tenancy terms and conditions. The grant of the options is at the absolute discretion of the Collector of Land Revenue. … [emphasis in original]
On 10 July 2001, the SLA and SAA entered into a tenancy agreement at a rent of $390,000 per month for three years from 1 September 2001 (“the 2001 Head Lease”).
On the same day, SAA entered into separate sub-tenancy agreements (“STAs”) respectively with TCAE and TCPL for a period of three years less one day from 1 September 2001. We will refer to these two STAs as “the 2001 STAs”. Under the 2001 STAs,...
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