UDL Marine (Singapore) Pte Ltd v Jurong Town Corp

• Jurisdiction: Singapore
• Judge: Zhuo Wenzhao AR
• Judgment Date: 03 January 2011
• Neutral Citation: [2011] SGHC 2
• Court: High Court (Singapore)
• Docket Number: Suit No. 502/2010 (Summons No. 5748/2010; 5856/2010)
• Year: 2011
• Published date: 11 January 2011
• Hearing Date: 22 December 2010
• Plaintiff Counsel: Ang Wee Tiong and Olivia Low (TSMP Law Corporation)
• Defendant Counsel: Dinesh Dhillon and Felicia Tan (Allen and Gledhill LLP)
• Subject Matter: Civil Procedure,Administrative law,Procedure,Remedies
• Citation: [2011] SGHC 2

Zhuo Wenzhao AR: Introduction

The points of contention in this case relate to two interlocutory applications in a dispute over a lease granted to a private entity by a statutory authority. I heard both applications together on 22 December 2010 and reserved judgment. After some consideration, I reject the Defendant’s application to strike out the Plaintiff’s Statement of Claim (“SOC”), and allow the Plaintiff’s application to amend the same. The reasons for my decision are set out below.

Background to the dispute

The plaintiff, UDL Marine (Singapore) Pte Ltd (“the Plaintiff”), is in the marine industry business. The Defendant, Jurong Town Corporation (“the Defendant”), is a statutory authority whose primary focus is on leasing and developing industrial property in Singapore. At the time of writing, the Plaintiff was the lessee of certain premises (“the Premises”) owned by the Defendant.

The Plaintiff’s case against the Defendant is based on proprietary estoppel. Briefly, the Plaintiff had a lease over the Premises (“the Lease”) that was due to expire on 31 December 2010. In anticipation of the expiration of the Lease, the Plaintiff had, in 2004, sought to dispose of its remaining interest in the Lease and seek an alternative location for its business. Upon hearing of the Plaintiff’s intention to dispose of the Lease, the Economic Development Board of Singapore (“EDB”) contacted the Plaintiff in early 2005 to persuade the Plaintiff to reconsider this decision. The EDB made representations to the Plaintiff that a) the Defendant would consider granting extensions of 20 years leases over yards in the area, including the Premises; b) the Defendant would grant a renewal of the Plaintiff’s Lease over the Premises if the Plaintiff had a good business plan that was supported by EDB These representations were made with the Defendant’s authority/knowledge.

Pursuant to these discussions with the EDB, the Plaintiff submitted a business plan to the Defendant and made formal applications for the renewal of the Lease in 2008 and 2009. The Defendant did not at any point in time indicate that the Plaintiff’s business plan was inadequate. However, in November 2009, the Defendant informed the Plaintiff that the Defendant would not renew the Lease. Upon learning of this, the Plaintiff contacted EDB and received confirmation from EDB in January 2010 that the Plaintiff’s business plan was good and compatible with the needs of the marine industry. The EDB further told the Plaintiff that it would liaise with the Defendant to allocate a new parcel of land to the Plaintiff for development in accordance to the Plaintiff’s business plan. Unfortunately, this eventually came to naught. On 19 May 2010, the Defendant wrote to the Plaintiff stating that the Defendant and the EDB had “jointly evaluated” the Plaintiff’s business plan and was unable to support the Plaintiff’s application for a new lease for the Premises.

Consequently, the Plaintiff commenced suit against the Defendant on 8 July 2010 seeking a) a declaration that the Defendant’s refusal to renew the Lease was wrongful; b) a declaration that the Defendant is estopped from refusing the renewal of the Lease or refusing the grant of a new lease for the Premises; c) an order that the Defendant renew the Lease or grant a new lease for the Premises or, in the alternative, grant the Plaintiff equitable compensation in satisfaction of the Defendant’s refusal to renew the lease or grant a new lease for the Premises.

The summons

Summons 5748 of 2010 is the Defendant’s application to strike out the Plaintiff’s SOC pursuant to O18 r 19 of the Rules of Court Cap. 322, Rule 5). The grounds for striking out are that the Plaintiff SOC discloses no reasonable cause of action.

Summons 5856 of 2010 is the Plaintiff’s application to amend its SOC. The proposed amendments fall into two categories. The first category of amendments was made in response to the Defendant’s striking out application. They involve the addition of particulars related to the Plaintiff’s primary case of proprietary estoppel. The second category of amendments involves the addition of an alternative cause of action against the Defendant, namely that the Defendant had acted irrationally and/or unreasonably in refusing to renew the lease. The remedy which the Plaintiff seeks for this alternative cause of action is a declaration that the Defendant’s refusal to renew the lease was irrational and/or unreasonable.

Two main issues arise from the summons before me. First, does the Plaintiff’s claim in proprietary estoppel (taking into account the Plaintiff’s proposed amendments) disclose a reasonable cause of action? Second, should the Plaintiff be allowed to amend its Statement of Claim to include a claim that the Defendant had acted irrationally and/or unreasonably in refusing to renew the lease? For ease of reference, I shall refer to the first issue as the “proprietary estoppel issue” and the second issue as the “judicial review issue”.

Proprietary estoppel issue

The main elements required to sustain a claim based on proprietary estoppel were laid down in the case of Hong Leong Singapore Finance Ltd v United Overseas Bank [2007] 1 SLR(R) 292 at 170: a) There must be a representation on the part of the party against whom the estoppel is sought to be raised; b) There must be reliance on the part of the party seeking to raise the estoppel; and c) There must be detriment on the part of the party seeking to raise the estoppel

Counsel for the Defendant, Mr Dhillon, claimed that the Plaintiff’s SOC did not disclose a reasonable cause of action because it did not make any representation to the Plaintiff that the Lease would be renewed. Two arguments were raised in support of this claim. First, there was no representation from either the Defendant or EDB that the Lease will be renewed. EDB merely informed the Plaintiff that the Defendant would consider applications for renewal of leases in the vicinity, including the Premises. There was no promise that the Lease would definitely be renewed. Second, EDB had informed the Plaintiff that its support for the Plaintiff’s application for the renewal of the Lease was conditional on the Plaintiff’s production of a good business plan. Even then, the Defendant had the final right to decide whether the Plaintiff’s business plan was good enough for its lease to be renewed. Therefore, this was a “subject to contract” case and the Plaintiff could not have been labouring under any impression that EDB’s nod of approval would definitely result in the renewal of its lease.

I do not agree with the Defendant’s arguments. As counsel for the Plaintiff, Mr Ang, had pointed out, the Plaintiff’s SOC goes beyond asserting that the Defendant would consider a lease renewal application from the Plaintiff if the latter could produce a good business plan. The proposed amendment at the new paragraph 14 of the SOC pleads that

On or around 20 December 2005, in a telephone conversation between Leung and the Defendant’s Mr Ernest Tay, Mr Leung informed Mr Tay that EDB had told him that so long as the Plaintiff’s business plan was good, EDB would support the business plan, and the Defendant would grant a renewal of the Lease.

[emphasis added]

Clearly, the Plaintiff’s claim was that the Defendant’s renewal of the Lease was conditioned solely on EDB’s approval of its business plan. This is sufficient to amount to a representation concerning an interest in land that the Plaintiff could rely on. Whether such a representation had been made, and whether it was reasonable for the Plaintiff to rely on it, are questions of disputed fact.

During the hearing, Mr Dhillon further submitted that EDB’s approval of the Plaintiff’s business plan was given only in January 2010, after the Defendant had already rejected the Plaintiff’s application in November 2009. Hence, even if the...