Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal and other matters

JudgeSundaresh Menon CJ
Judgment Date22 March 2017
Neutral Citation[2017] SGCA 21
Plaintiff CounselKelvin Poon, Avinash Pradhan and Alyssa Leong (Rajah & Tann Singapore LLP)
Date22 March 2017
Docket NumberCivil Appeals No 168 and 171 of 2015 and Summonses No 16 and 17 of 2016
Hearing Date10 March 2016
Subject MatterIssue Estoppel,Discharge,Implied Terms,Contractual Terms,Contract,Res Judicata,Breach
Published date06 April 2017
Defendant CounselIrving 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)
CourtCourt of Appeal (Singapore)
Citation[2017] SGCA 21
Sundaresh Menon CJ (delivering the judgment of the court):

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: Turf Club Auto Emporium Pte Ltd (“TCAE”), which was previously known as Turf Club Auto Megamart Pte Ltd; Turf City Pte Ltd (“TCPL”); and Singapore Agro Agricultural Pte Ltd (“SAA”).

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 557,000m2 in Bukit Timah (“the Site”). The Site used to be a part of the former Bukit Timah Turf Club. On 5 January 2001, the Singapore Land Authority (“the SLA”) (which was then known as the Singapore Land Office) invited tenders for the lease of the Site. The tender notice and advertisements put up by the SLA indicated that the tenure of the lease was to be for a period of “3+3+3 years”.

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: All eight individuals, including Tan CB, were to be shareholders and directors of a company that would be set up for the proposed joint venture. Most of the construction and professional works in relation to the Site would be managed by Goodland Development Pte Ltd (“Goodland”), a company controlled by Tan CB, and Architects Group Associates Pte Ltd (“AGA”), a company controlled by Ong CK. The Site would be leased from the SLA “for Commercial Use for a period of 3 years + 3 years + 3 years” with effect from April 2001.

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: The “First Party” (which referred to the Respondents) and the “Second Party” (which referred to Koh KM, Samuel Ng, Tan Senior and SAA or its nominees) were the parties to the joint venture. A new company would be incorporated to develop and operate the Site, and the parties would jointly operate the project with the First Party holding 37.5% of the shares of this company and the Second Party holding 62.5%. Only shareholders would be deemed to be directors of the new company that would be formed. The project manager for the “whole project during the duration of the full lease” would be AGA and Goodland. The MOU bore the signatures of the Respondents, Samuel Ng, Tan Senior, Koh KM, Tan CB and Ong CK.

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 Yeo Boong Hua and others v Turf Club Auto Emporium Pte Ltd and others [2015] SGHC 207 (“the Judgment”)). The Judge did not think it was necessary to make a finding on this. The Respondents have not pursued the existence of the oral agreements or the additional terms on appeal.

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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22 cases
  • Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal
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    ...on 22 March 2017 (reported as Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal and other matters [2017] 2 SLR 12) (“Turf Club (No 1)”) finding that the Consent Order had been breached. In that judgment, we directed the parties to submit on three issue......
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    ...issues and substantive rights of the parties, much less to set aside such orders: Turf Club Auto Emporium Pte Ltd v Yeo Boon Hua [2017] 2 SLR 12 (“Turf City”) at [159] and [163]. By contrast, assuming the Judgment is a “no objections” consent order, it can arguably be set aside on relativel......
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    ...at [36], [64] and [65]). In Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal and other matters [2017] 2 SLR 12 at [94], the Court of Appeal endorsed the observations made in Goh Nellie v Goh Lian Teck and others [2007] 1 SLR(R) 453 at [28] (which in t......
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9 books & journal articles
  • Dispute resolution
    • United Kingdom
    • Construction Law. Volume III - Third Edition
    • 13 Abril 2020
    ...that “no-one ever lost a settlement”. Similarly, “a bad settlement beats a good trial”: Turf Club Auto Emporium Pte Ltd v Yee Boong Hua [2017] SGCA 21 at [1]. 59 As to accord and satisfaction, see paragraph 23.51f. 60 Pursuant to the United Nations Convention on International Settlement Agr......
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    • Construction Law. Volume III - Third Edition
    • 13 Abril 2020
    ...see also Royal Bank of Scotland NV v TT International Ltd [2015] SGCA 50 at [98]–[105]; Turf Club Auto Emporium Pte Ltd v Yee Boong Hua [2017] SGCA 21 at [81]. 1374 Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28 at [20]. 1375 Blair v Curran (1939) 62 CLR 464 at 531–532, per Dixon ......
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    • Singapore Academy of Law Journal No. 2022, March 2022
    • 1 Marzo 2022
    ...Bank v Motorcycle Industries (1973) Pte Ltd [1992] 3 SLR(R) 841 at [13]–[20]. 190 See Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua [2017] 2 SLR 12 at [152]. 191 Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131 at [95]. 192 Rakna Arakshaka Lanka Ltd v A......
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    • Singapore
    • Singapore Academy of Law Annual Review No. 2018, December 2018
    • 1 Diciembre 2018
    ...Ochroid Trading Ltd v Chua Siok Lui [2018] 1 SLR 363 at [40]. 59 See para 23.1 above. 60 Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua [2017] 2 SLR 12. 61 Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua [2018] 2 SLR 655 at [91]. 62 Turf Club Auto Emporium Pte Ltd v Yeo Boong Hua [2018] 2 ......
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