United Lifestyle Holdings Pte Ltd v Oakwell Egineering Ltd

JudgeLee Seiu Kin JC
Judgment Date17 April 2002
Neutral Citation[2002] SGHC 73
Docket NumberSuit No 875 of 2001
Date17 April 2002
Published date19 September 2003
Plaintiff CounselTan Kay Kheng and Lena Wong (Wong Partnership)
Citation[2002] SGHC 73
Defendant CounselJimmy Yap (Jimmy Yap & Co)
CourtHigh Court (Singapore)
Subject MatterLegislative and administrative background,Words and Phrases,'Change of the use',HDB refusing to grant approval for change of use to 'warehousing',Contract,Whether scope of condition covers application for change of use to 'warehousing',Purchaser seeking to terminate agreement and recover deposit,Evidence,s 94 proviso (f) Evidence Act (Cap 97, 1997 Ed),Relevance of context and factual background of transaction,Property in 'Light Industry' zone,Sale of land,Purchase contingent upon approval by HDB for change of use,Land,Whether evidence of negotiations or intentions of parties admissible,Whether evidence of factual background admissible,Contractual terms,Whether purchaser only can apply to change to restricted category of uses,Intention of parties,Conditions of sale,Context and factual background,Option to purchase industrial leased property,Rules of construction,Whether construction leads to absurd result,Admissibility of evidence



1 This action turns on the interpretation of the expression "change of the use" in an agreement ("the Agreement") for the sale and purchase of a lease of an HDB building and land ("the Property"). The Agreement was made by way of an option ("the Option") granted by the Defendant on 12 March 2001 and accepted by the Plaintiff on 26 March. The contentious phrase is contained in term 7.1 of the Option which makes the contract contingent upon two conditions. Term 7.1 provides as follows

"The sale and purchase herein shall be subject to and conditional upon the approval in writing of the Housing & Development Board ("HDB") for (i) the sale of the Property to the Purchaser by the Vendor and for (ii) the change of the use by the Purchaser of the Property (in this Option called "HDB’s Approval", which expression shall, unless the context otherwise requires, include the approval of any other relevant government or competent authority)."

In respect of both conditions, term 8.3 provides for the agreement to be determined by either party without compensation if they could not be fulfilled within a certain deadline. Term 8.3 provides as follows:

"Subject to there being no default refusal neglect and failure on the part of the Vendor and/or the Purchaser hereunder, if the Purchaser does not receive a copy of HDB’s Approval by 31st May 2001, then both Vendor’s and Purchaser’s solicitors shall revert to HDB to obtain HDB’s Approval by 15 June 2001 and, Completion shall then be scheduled on 29 June 2001. If the Purchaser does not receive a copy of the HDB’s Approval by 15 June 2001 then either party shall be at liberty to terminate this Agreement by written notice in that behalf to the other party’s solicitors. This Agreement shall then be null and void and shall be treated as cancelled and rescinded and deemed abortive; and the same shall be of no further effect whatsoever. The Vendor shall refund the Purchaser all monies paid together with any GST paid by the Purchaser hereunder free of interest and neither party shall then have any further demand claim right or action against the other for costs damages compensation or otherwise."

2 The Option was drafted by the solicitors of both parties and was settled after nine drafts made between 7 November 2000 and 9 March 2001, although term 7.1 itself did not undergo as many revisions. After the Option was accepted, the Plaintiff immediately applied to the HDB for approval for change of use of the Property to warehouse, from its existing use which was: (a) at the first storey, precision metal stamping (special industry); (b) at the second storey, assembling electrical and electronic component (light industry); and (c) at the third storey, ancillary office. The HDB refused to grant approval for such change and also rejected an appeal by the parties. The Plaintiff then purported to terminate the Agreement pursuant to term 8.3 and requested the Defendant to refund the deposit of $597,400 that had been paid over. The Defendant refused to do so and the Plaintiff took out this suit to recover the money. The Defendant contended that term 7.1 limited the Plaintiff to seeking approval to change to a use that was within what the Property was zoned under the Master Plan.

3 Counsel for the parties agreed that a finding on the construction of term 7.1 would determine the outcome of this action. Although evidence was given in relation to the negotiation of the transaction, at the submission stage counsel for the parties agreed that parol evidence was not required for the purpose of the interpretation of the Option. It is therefore not necessary for me to go into that aspect of the evidence. However the context of the transaction is relevant. In Prenn v Simmonds [1971] 1 WLR 1381 at p 1383, Lord Wilberforce said as follows:

" In order for the agreement … to be understood, it must be placed in its context. The time has long passed when agreements, even those under seal, were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations. … We must … inquire beyond the language and see what the circumstances were with reference to which the words were used, and the object, appearing from those circumstances, which the person using them had in view. Moreover, at any rate since 1859 (Macdonald v. Longbottom, 1 E. & E. 977) it has been clear enough that evidence of mutually known facts may be admitted to identify the meaning of a descriptive term."

It was argued in that case that prior negotiations could be looked at in aid of the construction of the written agreement. Lord Wilberforce rejected this and described in the following manner the nature of the evidence that was admissible (at p 1385):

"In my opinion, then, evidence of negotiations, or of the parties’ intentions, and a fortiori of [the plaintiff’s] intentions, ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including the evidence of the ‘genesis’ and objectively the ‘aim’ of the transaction."

4 Lord Wilberforce had occasion to revert to this question in Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989, in which he said at p 995:

"… No contracts are made in a vacuum: there is always a setting in which they have to be placed. The nature of what is legitimate to have regard to is usually described as ‘the surrounding circumstances’ but this phrase is imprecise: it can be illustrated but hardly defined. In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating."

5 In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, Lord Hoffman said as follows in relation to the approach to be taken to resolve an ambiguity in the terms of a contract (at p 775):

" It is of course true that the law is not concerned with the speaker’s subjective intentions. But the notion that the law’s concern is therefore with the ‘meaning of his words’ conceals an important ambiguity. The ambiguity lies in a failure to distinguish between the meanings of words and the question of what would be understood as the meaning of a person who uses words. The meaning of words, as they would appear in a dictionary, and the effect of their syntactical arrangement, as it would appear in a grammar, is part of the material which we use to understand a speaker’s utterance. But it is only a part; another part is our knowledge of the background against which the utterance was made. It is that background which enables us, not only to choose the intended meaning when a word has more than one dictionary meaning but also, in the ways I have explained, to understand a speaker’s meaning, often without ambiguity, when he has used the wrong words."

6 In Tan Hock Keng v L&M Group Investments Ltd (Civil Appeal No.600120/2001, 12 April 2002) the Court of Appeal held that where a contractual term is not clear, s 94(f) of the Evidence Act applies and extrinsic evidence is admissible to assist in the determination of the true construction.

7 Those authorities hold that evidence may be admitted of the factual background known to the parties at the time of contracting, including the genesis and purpose of the transaction, but not of the negotiations or intentions of the parties. In the present case, the relevant context and background include not only the facts of the transaction but also the legislative and administrative background. It is useful to set out the latter first.

Legislative and Administrative Background

8 The primary governing legislation is the Planning Act ("the Act") which seeks, as its long title states:

"… to provide for the planning and improvement of Singapore and for the imposition of development charges on the development of land and for purposes connected therewith."

Rules have been made by the Minister pursuant to powers granted under s 61 in relation to a wide range of matters but the only relevant one is the Planning (Use Classes) Rules which will be dealt with in detail below. I now set out the provisions of the Act and rules, as well as the HDB administrative requirements, that are relevant to the matter before me.

Master Plan

9 Section 6 of the Act defines the Master Plan as follows (hereafter all emphases have been added unless otherwise stated):

"The Master Plan means the Master Plan that was originally submitted to and approved by the Governor in Council on 5th August 1958 under the provisions of Part IV of the Singapore Improvement Ordinance (Cap. 259, 1955 Ed.) as subsequently amended under the repealed Act or this Act, and includes the approved maps and written statement."

The term "approved map" is not defined while "written statement" is defined in s 2 as:

"… that part of the Master Plan which includes a summary of the main proposals of the Master Plan with such descriptive matter as the competent authority considers necessary to illustrate the proposals of the Master Plan or as the Minister may, from time to time, direct for that purpose."

10 The Government has published a document entitled Master Plan Written Statement 1998 ("the Written Statement"). The parties agree that this is the written statement under s 6 of the Act. I set out below relevant paragraphs of the Written Statement:

"2.2 From the effective date (being the date of the Minister’s approval) of the amendment to the Master Plan, all applications in respect of land within the demarcated area to which the Amendment Plan applies … shall be considered in accordance with the Amendment Plan and this Written Statement and not the Master Plan prior to the effective date of the amendment.

3.1 The contents and provisions of the...

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2 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2002, December 2002
    • 1 December 2002
    ...or interpretation instead of formation, the Singapore High Court decision of United Lifestyle Holdings Pte Ltd v Oakwell Engineering Ltd[2002] 2 SLR 308 endorsed the importance of this general principle which applies equally to both formation and interpretation alike. Lee Seiu Kin JC (as he......
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    • Singapore Academy of Law Journal No. 2013, December 2013
    • 1 December 2013
    ...Ltd v Black & Veatch Singapore Pte Ltd[2004] 1 SLR(R) 333 at [51]; United Lifestyle Holdings Pte Ltd v Oakwell Engineering Ltd[2002] 1 SLR(R) 726 at [7]; Management Corp Strata Title Plan No 1933 v Liang Huat Aluminium Ltd[2001] 2 SLR(R) 91 at [10]–[11]; Ling Chee Ewe v Serial System Pte Lt......

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