United Artists Singapore Theatres Pte Ltd & Another v Parkway Properties Pte Ltd & Another

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JC
• Judgment Date: 20 August 2002
• Neutral Citation: [2002] SGHC 185
• Docket Number: Suit No 755 of 2001
• Date: 20 August 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Stephen Christopher Soh and Wong Chiao Shan (Arthur Loke Bernard Rada & Lee)
• Citation: [2002] SGHC 185
• Defendant Counsel: Joseph Ang and Sean Tan (Tan Kok Quan Partnership)
• Court: High Court (Singapore)
• Subject Matter: Entitlement to repayment,Money had and received,Failure of consideration,Whether agreement 'subject to contract' incomplete,Pre-contract payment,Contract not materialising,Formation,Restitution,Total failure of consideration,Contract,Recovery of money paid in course of negotiations

Judgment

GROUNDS OF DECISION Cur Adv Vult

Introduction

1. This action arose out of the proposed development of a 7- screen cineplex at Parkway Parade Shopping Centre ("Parkway Parade"). It was a sizeable project no less complicated by the fact that the site for the proposed cineplex was to be on common property belonging to the 2^nd Defendants.

2. As early as 1994, the parties to this action were in discussions for the development of the cineplex. Initially, the proposal was for the Plaintiffs to undertake the construction of the cineplex and thereafter lease the cineplex for 21 years from the 2^nd Defendants. Some years later, owing to changes in circumstances, the Plaintiffs decided not to undertake the entire project. Further negotiations for a revised development scheme where the Plaintiffs would only lease the cineplex started in March 1999. Negotiations between the parties came to an end with the sale of the 1^st Defendants’ interest in Parkway Parade in February 2000. In the end, no lease was signed.

3. In this action, the Plaintiffs are claiming repayment of various sums of money totalling $1,846,900 as money had and received by the Defendants to the Plaintiffs’ use. The Defendants are resisting the claim primarily on the ground that the money was part of the Plaintiffs’ share of non-refundable differential premium paid to the Land Office for permission to develop the proposed cineplex. The 1^st Defendants assert that, on the contrary, it is the Plaintiffs who owed them money. The 1^st Defendants have filed a cross-claim in this action for either $1,618,100 or $1,200,000 being the balance of the Plaintiffs’ share of agreed contribution towards differential premium ("DP").

The Parties

4. The 1^st Plaintiffs, United Artists Singapore Theatres Pte Ltd ("UAST"), are a company incorporated in Singapore. At all material times, UAST managed and/or operated some cinemas in Singapore.

5. The 2^nd Plaintiffs, Pacific Media PLC ("Pacific Media"), are a public listed company incorporated in the United Kingdom and are in the media business. The 1^st Plaintiffs are a joint venture company of the 2^nd Plaintiffs and United Artists Theatre Circuit Ltd ("United Artists"). Both corporations exercise joint management of the 1^st Plaintiffs. However, in late 1998 or thereabouts, Pacific Media bought United Artists’ stake in UAST and consequently acquired full control of the 1^st Plaintiffs. That explains the change in the team involved in the negotiations from Tom Elliot of United Artists in Denver, Colorado to Michael Buckley of Pacific Media in London.

6. The 1^st Defendants, Parkway Properties Pte Ltd ("PPPL"), are a company incorporated in Singapore and is a wholly owned subsidiary of Parkway Holdings Limited ("PHL"). Until February 2000, PPPL owned 76% of the strata lots in Parkway Parade.

7. The 2^nd Defendants, Management Corporation Strata Title Plan no. 1008 ("MCST"), are the management corporation incorporated for Parkway Parade and is constituted under the Land Titles (Strata) Act.

8. PPPL and PHL were the owners of Parkway Parade until it was sold in February 2000. Tan Kai Seng ("Tan") is a director of the 1^st Defendants and PHL. Tan’s involvement with the cineplex project started about 1997. At all material times, he was also chairman of MCST.

9. At all material times, Soh Seok Yian ("Elizabeth") was the Group Property Manager of the 1^st Defendants. She was also the executive director of Development Planning & Management Pte Ltd ("DPM") and she was involved in the cineplex project throughout. Until the sale of Parkway Parade, DPM, a subsidiary company of the 1^st Defendants, was the managing agent of MCST.

10. On the side of the Plaintiffs, the dramatis personae were Tom Elliot of United Artists and Michael Buckley of Pacific Media. Gary Quick became involved in the cineplex project from about February 1998. Gary Quick was the only witness for the Plaintiffs.

11. For present purposes, I will refer to the Defendants, DPM and PHL collectively as "Parkway", only distinguishing between them where necessary to draw a distinction as between the status, rights and obligations of the companies. It is apparent that in their dealings, the parties made no distinction between DPM, MCST, PPPL and PHL.

The Witnesses

12. The negotiations over the period of seven years were well documented. The written testimony of Gary Quick and of Elizabeth with whom Tan adopted as his affidavit of evidence-in-chief provide a chronological account of events reconstructed with the aid of contemporaneous documents in the case.

13. Tan and Elizabeth did not have a good recollection of events than they actually had. Gary Quick was a shade better. It is understandable, especially when their evidence is given years after the event. On matters outside of what had been recorded in the contemporaneous documents, I am unable to regard any of the three witnesses as reliable historians.

14. The parties here have documented the progress and outcome of their negotiations. The issue whether they have entered into a binding contract at law, and if so on what terms, is primarily to be resolved by construing, objectively, the documents in their factual setting. The intentions of the individuals participating and their beliefs then or later, as to the effect of the documents are irrelevant except to the limited extent to which such matters form part of the factual setting. See Harmony Shipping Co. S.A. v Saudi –Europe Line Ltd [ 1981] 1 Lloyd’s Rep. 337 at 414.

15. Therefore, the testimonies of the witnesses on matters of individual intention and belief are, unless they are properly material to the factual setting, excluded from my review of the evidence in coming to a decision on whether there was:

(i) a concluded and binding agreement between the parties under either the original or revised plan and/or;

(ii) a concluded and binding free-standing agreement between the parties in respect of a contribution from the Plaintiffs towards the payment of DP to the Land Office.

The Dispute

(1) The Plaintiffs’ case

16. The Plaintiffs’ case for money had or received is pleaded on various alternative bases. They are: (i) total failure of consideration; (ii) mistake of fact; (iii) recovery of monies paid/deposits/advances made in the course of negotiations for a contract which never materialised; (iv) recovery of monies/advances made in connection with a contract wholly executory on the Defendants’ part or which had been terminated.

17. Alternatively, the Plaintiffs’ pleaded case is that, if there is a finding that there existed a binding agreement between the parties prior to the sale of Parkway Parade, the Defendants are liable for damages in the sum of $1,846,900 in that they had breached this agreement by not ensuring that the new owners continue with the cineplex project with the Plaintiffs.

18. In respect of a payment in the sum of $346,900 made on 14 January 1999, the Plaintiffs’ pleaded case, as an alternative to a claim for restitution, is based on the Defendants’ alleged agreement to refund the money.

(2) The Defendants’ case

19. The Defendants say that the total sum of $1,846,900 was the Plaintiffs’ partial payment of their share of agreed contribution towards DP. They were paid to PPPL to on-pay to the Land Office or to reimburse PPPL for payments made on the Plaintiffs’ behalf to the Land Office. The Plaintiffs are therefore not entitled to claim the money back as money had and received. The payments were not advances or deposits paid in the course of negotiations for a lease of the cineplex. There was no total failure of consideration or operative mistake of fact.

20. In any event, no restitution is permissible at law, as the Defendants had changed their position in that the money was paid to the Land Office and is not refundable.

21. Further, the refund of the sum of $346,900 was superseded by the Plaintiffs’ offer of 4 August 1999 to utilise this money as part payment of DP which offer was accepted by the Defendants on 6 August 1999.

22. The 1^st Defendants alleged that as the Plaintiffs had agreed to contribute either $3,465,000 or $3,046,900 towards DP, the Plaintiffs still owed them the sum of $1,618,100 or alternatively $1,200,000 being DP paid by the 1^st Defendants at the Plaintiffs’ request and on their behalf. The 1^st Defendants accordingly counterclaim against the Plaintiffs.

23. The 1^st Defendants further pleaded that if the court finds that there was a binding contract to lease the cineplex, they counterclaim the sum of $7,442,857 as damages.

Contract Claim

(1) Is there a binding agreement under either the original plan or revised plan for a straight lease?

24. Although raised in pleadings by both sides, it was not seriously argued that there was a concluded contract under either the original or revised plan.

25. In fact, on 2 May 2000, lawyers acting for PPPL in the sale of Parkway Parade to Lend Lease took the position that there was no concluded contract between the parties and they told the lawyers of Lend Lease so.

26. In respect of both arrangements, the documentation showed that the negotiations between the parties were "subject to contract". I will first deal with the various exchanges of correspondence pertaining to the original plan on this topic.

(i) Original Plan - Construction of shell structure, fit-out and lease arrangement

27. In the early 1990s, Parkway had envisaged a multiplex cinema in Parkway Parade. This project would involve demolishing the play deck and construction of a cinema structure from the car park below. In those days, Parkway was in discussions with Golden Village Entertainment (S) Pte Ltd for the purchase of the common property at the top level of the Shopping Centre Podium Block and for the construction and operation of a multiplex cinema. The idea back then in 1993 was for PPPL to enter into a joint venture with Golden Village Katong Pte Ltd. In the end, negotiations came to...