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Grounds publishedDecided 20 Jan 2014
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Court of Appeal

Fairview Developments Pte Ltd v Ong & Ong Pte Ltd and another appeal

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[2014] SGCA 5Case no. Civil Appeals Nos 51 and 52 of 2013

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  1. Andrew Phang Boon Leong JA (delivering the grounds of decision of the court):

  2. Introduction

  3. [1] The present appeals (Civil Appeal No 51 of 2013 (“CA 51”) and Civil Appeal No 52 of 2013 (“CA 52”)) were brought, respectively, by the defendant (Fairview Developments Pte Ltd (“Fairview”)) and the plaintiff (Ong & Ong Pte Ltd (“OOPL”)) in respect of the decision by the judge (“the Judge”) in Suit No 369 of 2011. The proceedings below arose out of a dispute between OOPL and Fairview in relation to architectural services provided by OOPL and its predecessor, Ong & Ong Architects (“OOA”). The Judge delivered a detailed oral judgment (“the Judgment”), in which he: (a) dismissed OOPL’s claim for Fairview’s termination of its services; (b) allowed OOPL’s claim for fees for abortive works on a quantum meruit basis; and (c) dismissed Fairview’s counterclaim against OOPL.

  4. [2] At the hearing before us, we dismissed Fairview’s appeal in CA 51 and allowed OOPL’s cross-appeal in CA 52. We now give the detailed grounds for our decisions.

  5. [3] Indeed, the present appeals raised a number of significant legal issues, a few of which are broadly as follows.

  6. [4] First, when the text and the context of the express terms of a contract clearly express the intention of the parties, the court ought to give effect to that intention. This is not only logical and commonsensical but also just and fair. Indeed, as we shall see, this was a central motif in the present appeals before this court. The facts in the present appeals were in fact the converse of that referred to recently by this court in PT Bakrie Investindo v Global Distressed Alpha Fund 1 Limited Partnership [2013] 4 SLR 1116 (“Bakrie”) (especially at [2]–[4]), as there were several instances where the text and the context of the contract were, contrary to what counsel suggested, irrefutably clear.

  7. [5] Another central motif in the present appeals was the doctrine of novation. As we shall see, although the general legal principles are generally clear and uncontroversial, the difficulty lies – as is the case with most (if not all) legal doctrines – in the sphere of the application of the law to the relevant facts.

  8. [6] A couple of issues pertaining to the law of limitation of actions were also raised and these will also be dealt with below.

  9. [7] More generally (and as already alluded to with regard to the issue of novation (above at [5])), whilst it is imperative to be clear about the relevant legal principles that are applicable to the case at hand, it is often the case that these principles are in fact clear and that the real difficulty lies with ascertaining the precise factual matrix to which those principles are to be applied. Indeed, as we shall see below, this was the case with regard to virtually all the legal issues raised in the context of the present appeals. More importantly, the many decisions cited by Fairview’s counsel were – as a result – of little (if any) significance, save in so far as they illustrated the basic legal principles which were, in our view, clear in any event.

  10. [8] With these preliminary observations in mind, let us now turn to the relevant facts.

  11. The facts

  12. [9] Although we set out the salient facts in this part of the judgment as far as possible in a chronological fashion, for greater clarity, we would do so in the context of the salient issues raised for decision in the present appeals (as to which see below at [38]).

  13. Parties to the dispute

  14. [10] Fairview is a subsidiary of the Tong Eng Group of companies, incorporated as a single asset company to develop Lot 248 Mukim 18, a 40-acre plot of land off Yio Chu Kang Road (“Lot 248”). It was managed by Mr Teo Tong Wah (“TTW”) from 1972 until he passed the mantle to his brother, Mr Teo Tong Lim (“TTL”), and another director, Mr Yeap Lam Hai (“YLH”) in 1989. TTW passed away in 2007.

  15. [11] OOA is an architecture firm founded by Mr Ong Teng Cheong (“OTC”) in 1972, which his wife, Mrs Ong Siew May (“OSM”) subsequently joined. In 1975, Mr Ong left OOA when he was appointed as a minister in the government and OSM took over the management of OOA. In 1992, OOPL was incorporated. In 1994, the son of OTC and OSM, Mr Ong Tze Boon (“OTB”), joined OOA. In 1996, OSM began to transfer the business of OOA to OOPL. This process was derailed when OSM fell ill in 1997 and passed away in 1999. In 2001, OTC re-joined OOPL. He then passed away in 2002. OOA ceased its operations on 30 April 2001.

  16. Facts pertaining to an agreement allegedly reached in 1983

  17. [12] In 1972, Fairview engaged OOA to carry out the necessary works to apply for planning approval to develop the entire Lot 248 as a condominium development. On 6 March 1980, in-principle approval for the development was obtained. Thereafter, OOA made a number of resubmissions to comply with the requirements of the various authorities. Subsequently, because of the high development charge (“DC”) levied by the authorities in May/June 1981, Fairview decided to develop Lot 248 in phases instead of as one single large development.

  18. [13] Fairview confirmed this change of plans to OOA by way of a letter dated 5 April 1982 (“the 5 April 1982 Change of Plans Letter”). For ease of reference, the work done by OOA since its engagement in 1972 until the 5 April 1982 Change of Plans Letter will be referred to herein as “the Early Abortive Works”.

  19. [14] There were a few key pieces of documentary evidence pertaining to the issue of OOA’s fees for the Early Abortive Works. The first is a handwritten note by OSM dated 23 August 1982 (“OSM’s Handwritten Note #1”) stating as follows:

  20. TTL, the only surviving party to the meeting referred to in OSM’s Handwritten Note #1, testified that he had no recollection of such a meeting.

  21. [16] The third document is a third handwritten note by OSM dated 17 May 1983, recording as follows (“OSM’s Handwritten Note #3”):

  22. Above these words were some calculations resulting in the figure of $600,000 for the Early Abortive Works.

  23. [17] The first formal correspondence between the parties on the subject of OOA’s fees for the Early Abortive Works was a letter from Fairview to OOA dated 7 June 1983 and signed by TTW stating as follows:

  24. For ease of reference, the agreement between OOA and Fairview (for the former to be the latter’s architect for the entire development of Lot 248) alleged by OOPL to be evidenced in this letter will be referred to hereafter as “the 1983 Agreement”.

  25. [18] OSM replied on behalf of OOA on 26 November 1983 stating as follows:

  26. [19] Thereafter, Fairview used OOA’s services to develop Lot 248 in stages. Phase 1 and Phase 2 of the development were completed in August 1992 and August 1995, respectively.

  27. Facts pertaining to the basis of OOA’s architectural fees

  28. [20] On 5 March 1993, OSM wrote on behalf of OOA to Fairview stating as follows:

  29. For ease of reference, the agreement with respect to architectural fees mentioned in this letter will be referred to herein as “the 1993 Agreement”.

  30. [21] About three years later, on 6 May 1996, OOA wrote to Fairview stating as follows:

  31. [22] Fairview replied on 11 May 1996 referring to the above letter and stating “we confirm our acceptance of the terms”.

  32. Facts pertaining to the alleged novation of the alleged 1983 Agreement

  33. [23] On 3 April 2001, under OOA’s letterhead, OTC and OTB signed and sent the following letter to Fairview in relation to OOPL’s succession of OOA (“the 3 April 2001 Succession Letter”):

  34. [24] On 27 April 2001, TTL and YLH replied on behalf of Fairview that it had “no objection to [OOA’s] plan to let [OOPL] succeed [OOA]”.

  35. Facts pertaining to the Later Abortive Works and the termination of OOPL

  36. [25] Prior to the exchange of letters in April 2001, OOA undertook the following work for Phase 3 of the development of Lot 248 (“the Phase 3 Abortive Works”):

  37. (a) 121 units of conventional housing development for which submission for Provisional Permission (“PP”) was made on 10 June 1993;

  38. (b) 310 units of conventional housing development for which submission for PP was made on 13 July 1994;

  39. (c) 310 units of conventional housing development for which PP was obtained on 4 July 1997; and

  40. (d) 239 units of conventional housing development for which Written Permission (“WP”) was obtained on 21 July 2000.

  41. [26] In November 2000, after obtaining the WP for conventional housing mentioned above at [25(d)], Fairview instructed OOA to do works for cluster housing as it wanted to consider that option as well. Meanwhile, Fairview obtained a two-year extension of the conventional housing WP and OOPL took over as the architect. Fairview eventually decided to proceed with cluster housing for Phase 3 and the conventional housing works were thus aborted (ie, the Phase 3 Abortive Works). The main Phase 3 was completed in 2003, while Phase 3a and Phase 3b were completed in March 2009 and April 2009, respectively.

  42. [27] In addition, OOA and/or OOPL also undertook the following works for Phase 4 pursuant to Fairview’s instructions (“the Phase 4 Abortive Works”):

  43. (a) 353 units of cluster housing development for which schematic design was produced in 2000;

  44. (b) 344 units of cluster housing development for which schematic design was produced in 2000; and

  45. (c) 108 units of cluster housing development for which PP was obtained on 23 July 2002.

  46. [28] On 6 February 2004 and 1 August 2004, OTB on behalf of OOPL wrote to Fairview asking for Fairview’s decision as to whether to proceed with conventional or cluster housing for Phase 4. On both occasions, Fairview did not make a decision.

  47. [29] On 1 October 2009, Fairview wrote to OOPL to terminate its services and asked for a letter of release (“LR”) (“the 1 October 2009 Termination Letter”). No reason for the termination was cited in this letter. In response to this, OOPL made some attempts to discuss the matter with Fairview. On 3 November 2009, Fairview replied declining to meet OOPL and reiterated its request for the LR along with a new request for OOPL’s invoice for work done to date. On 18 November 2009 and 3 December 2009, Fairview repeated its requests for OOPL’s invoice as well as the LR. Both times, OOPL replied requesting for more time to go through the voluminous documents.

  48. [30] On 18 December 2009, Fairview sent a Letter of Demand to OOPL copied to the Board of Architects (“BOA”) giving OOPL 14 days to provide the LR on Fairview’s undertaking to pay “such reasonable fees as [OOPL is] entitled to, for all work done to date in relation to the above project”. On 21 December 2009, OOPL gave its commitment to submit its claims by end April 2010. On 30 December 2009, Fairview stated that it did not know that there were still outstanding fees and requested the BOA to order OOPL to give its estimate of such fees so that Fairview could furnish the necessary security to obtain the LR.

  49. [31] After further exchanges of letters, on 28 January 2010, OOPL estimated that Fairview owed it $6,512,158.80 in loss of profits and $9.888 million in professional fees. On 1 March 2010, Fairview denied that OOPL was entitled to claim for loss of profits and contested the estimate of OOPL’s professional fees as being only $703,551.50 without prejudice to its defence that the OOPL’s claim was time-barred. Subsequently, there were further exchanges of letters and the BOA appointed a committee to resolve the matter. On 17 May 2010, the BOA wrote to the parties fixing the security at $3.3 million. On 24 May 2010, the BOA confirmed receipt of a banker’s guarantee for this sum. On 31 May 2010, OOPL issued the LR.

  50. Summary of pleadings

  51. [32] OOPL claimed for: (a) loss of profits of $5,626.653.31 (or alternatively, damages to be assessed) arising from what it alleged was Fairview’s wrongful termination of its services; and (b) fees of $4,511,474.97 (or alternatively, damages to be assessed) for the Phase 3 Abortive Works and Phase 4 Abortive Works (collectively, “the Later Abortive Works”). Fairview counterclaimed for damages arising from OOPL’s delay in issuing the LR.

  52. The decision in the court below

  53. [33] The proceedings below were bifurcated, so that the trial below was confined to issues of liability. The Judge first dismissed OOPL’s claim for wrongful termination. He found that OOA and Fairview had arrived at an agreement in 1983 for OOA to be the architect for the development of the entire Lot 248 (“the 1983 Agreement”) (see the Judgment at [12]–[13]). However, this was found not to have been novated to OOPL (see the Judgment at [22]–[29]).

  54. [34] Next, the Judge allowed OOPL’s claim for the Later Abortive Works. He found that parties would have construed the 3 April 2001 Succession Letter to mean that: (a) OOPL would be entitled to payment from Fairview instead of OOA in respect of works already completed by OOA; and (b) OOPL undertook to complete the outstanding works and Fairview would pay OOPL according to the terms earlier agreed between Fairview and OOA (see the Judgment at [17]–[21]). The Judge further held that there was an implied term that the basis of payment for the Later Abortive Works would be on a quantum meruit basis (see the Judgment at [40]–[47]). The right to payment for the Later Abortive Works accrued when Fairview issued the 1 October 2009 Termination Letter. Since this was within the statutory limitation period of six years, the defence of time-bar did not apply (see the Judgment at [48]–[51]).

  55. [35] Finally, the Judge dismissed Fairview’s counterclaim for damages arising from OOPL’s delay in issuing the LR. He found that the four months that OOPL took to render its bill was not unreasonable (see the Judgment at [59]). Even if three months was the reasonable period, Fairview would still have failed to show causation (ibid). Furthermore, Fairview had failed to mitigate its damages (see the Judgment at [60]).

  56. The parties’ cases

  57. [36] Fairview filed CA 51 against the Judge’s decision that it is liable in respect of the Later Abortive Works. It should be noted that Fairview’s appeal in CA 51 was confined to OOPL’s claim below; Fairview did not appeal against the Judge’s dismissal of its counterclaim.

  58. [37] OOPL filed CA 52 against: (a) the Judge’s dismissal of its claim for wrongful termination; and (b) the Judge’s assessment of its damages for the Later Abortive Works on a quantum meruit basis.

  59. The issues

  60. [38] Due to the overlap in issues between CA 51 and CA 52, we will deal with the substantive issues in a composite manner and in the following order:

  61. (a) Issue 1: OOPL’s claim for wrongful termination:

  62. (i) Whether the alleged 1983 Agreement existed;

  63. (ii) If the answer to (i) is in the affirmative, whether the 1983 Agreement had been novated to OOPL;

  64. (iii) If the answer to (ii) is in the affirmative, whether there had been wrongful termination of the 1983 Agreement; and

  65. (iv) If the answers to (i)–(iii) are in the negative, whether there was nevertheless a wrongful termination of OOPL’s engagement to develop the remaining undeveloped land on Lot 248.

  66. (b) Issue 2: OOPL’s claim for the Later Abortive Works:

  67. (i) Whether OOA’s entitlement to fees for its portion of the Later Abortive Works was novated to OOPL;

  68. (ii) Whether the quantum of the Later Abortive Works should be assessed on a quantum meruit basis;

  69. (iii) Whether OOPL’s claim for the Later Abortive Works had been time-barred under the Limitation Act (Cap 163, 1996 Rev Ed) (hereinafter referred to as “the Limitation Act” or “the Singapore Limitation Act” as the context requires).

  70. Our decision on Issue 1

  71. [39] We first turn to set out the reasons why we allowed OOPL’s claim against Fairview for wrongful termination.

  72. The existence of the 1983 Agreement

  73. [40] As alluded to earlier, the Judge found that the 1983 Agreement for Fairview to retain OOA as the architect for the development of the entire Lot 248 existed (see the Judgment at [12]–[13]). In brief, this was firstly because the Judge found that there was a valid offer by Fairview to retain OOA as the architect for the development of the entire Lot 248 as evidenced by OSM’s Handwritten Note #1 (reproduced above at [14]), OSM’s Handwritten Note #3 (reproduced above at [16]), Fairview’s letter dated 7 June 1983 (reproduced above at [17]) and OOA’s letter dated 26 November 1983 (reproduced above at [18]). This offer was accepted by OOA in consideration of $250,000 as full settlement of the fees for the Early Abortive Works. The 1983 Agreement was also found to be sufficiently certain.

  74. [41] On appeal, Fairview argued that the only agreement reached in 1983 in consideration of the discount for the Early Abortive Works was for Fairview to appoint OOA for Phase 1 only, and not for the entire development of Lot 248. It was submitted that even up to the time of OSM’s Handwritten Note #3 dated 17 May 1983 (reproduced above at [16]), OOA did not have the assurance that it would be engaged for the entire development. No agreement for OOA to be the architect for the entire development was reached by Fairview’s letter dated 7 June 1983 (reproduced above at [17]). Otherwise, Fairview argued, OOA would not have sought further discussion on the $250,000 and suddenly refer to a verbal assurance that OOA would continue to be the architect for the entire development in its letter dated 26 November 1983 (reproduced above at [18]). The “new scheme of development” and the “fresh scheme” referred to in Fairview’s letter dated 7 June 1983, Fairview submitted, referred only to Phase 1 of the development. It was also argued by Fairview that in OOA’s letter dated 26 November 1983, OOA was actually seeking to be the architect for more than just Phase 1. In addition, Fairview argued that its “verbal assurance” that “[OOA] will continue to be the architect for the whole 40 acres site regardless of whether it is developed in part or in whole” that was recorded in that letter was not intended to create legal relations. Neither was this verbal assurance supported by consideration since OOA’s discount for the Early Abortive Works was given 5 months before this verbal assurance. In accordance with Fairview’s case that the only agreement reached between the parties pertained to Phase 1 only, it was also submitted that OOA’s letters dated 5 March 1993 (reproduced above at [20]) and 6 May 1996 (reproduced above at [21]) merely set out OOA’s fees if it (OOA) were to be retained for other phases of the development.

  75. [42] We were unable to accept Fairview’s arguments. Turning first to Fairview’s 7 June 1983 letter (reproduced above at [17]), the reference to the “new scheme of development” and “fresh scheme” should, as we had highlighted at the outset, be objectively construed, not just on its text, but also in its context. It would be recalled that the parties’ original plan all along was for OOA to be the architect of the entire Lot 248, developed as a single development. It was because of the high DC and the prevailing market conditions that Fairview decided to proceed with phased development in lieu of a single development. Having regard to this context, it would be extremely artificial to interpret the phrases “new scheme of development” and “fresh scheme” as referring to Phase 1 only. Clearly, on an objective (and contextual) view, Fairview had, in the discussions referred to in its letter dated 7 June 1983, offered to retain OOA as the architect for the entire development of Lot 248. This offer, as the Judge rightly found, was accepted by OOA in (sufficient) consideration of a reduced sum of $250,000 in full settlement of the Early Abortive Works. The mere fact that the representatives of OOA and Fairview dealt with each other on a somewhat informal basis, had goodwill, and knew each other personally, did not detract from the inexorable fact that the parties were essentially dealing with each other on a commercial basis with an undoubted intention to create legal relations.

  76. [43] Even if the 7 June 1983 letter did not exist, we would have had no hesitation in finding that an agreement between the parties for OOA to be the architect for the entire development existed in the form of the verbal assurance that Fairview gave to OOA as referred to in OOA’s letter dated 26 November 1983 (reproduced above at [18]). The terms of this verbal assurance could not be clearer – “[OOA] will continue to be the architect for the whole 40 acres site regardless of whether it is developed in part or in whole” [emphasis added]. This verbal assurance would not have failed for want of consideration either. Under our local jurisprudence, very little is required to find sufficient consideration in law (see, for example, the Singapore High Court decisions of Chwee Kin Keong and others v Digilandmall.com Pte Ltd [2004] 2 SLR(R) 594 (“Chwee Kin Keong”) at [139] (affirmed (but without discussion of this particular point) in Chwee Kin Keong and others v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502) and Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric (practising under the name and style of WP Architects) [2007] 1 SLR(R) 853 at [28]–[30] (reversed (but again without discussion of this particular point) in Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric [2007] 3 SLR(R) 782); the decisions of this court in Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal [2009] 2 SLR(R) 332 at [92]–[118] and Rainforest Trading Ltd and another v State Bank of India Singapore [2012] 2 SLR 713 (“Rainforest Trading”) at [38]; as well as the detailed exposition in Koo Zhi Xuan, “Envisioning the Judicial Abolition of the Doctrine of Consideration in Singapore” (2011) 23 SAcLJ 463). Indeed, as this court observed in Rainforest Trading (at [38]), “[t]he courts are understandably (and justifiably) reluctant to invalidate otherwise perfectly legitimate and valid commercial transactions on as technical a basis as consideration”. In the context of Fairview’s verbal assurance, the mutual exchange of promises would have been sufficient consideration (see Chwee Kin Keong at [139]). And, as mentioned in the preceding paragraph, the parties had clearly intended to create legal relations.

  77. [44] For the reasons set out above, we affirmed the Judge’s finding that the 1983 Agreement existed. We now turn to the issue of whether the 1983 Agreement (which was between Fairview and OOA) had been novated to OOPL in 2001.

  78. The novation of the 1983 Agreement

  79. [45] As we stated earlier, the Judge was of the view that the 1983 Agreement had not been novated to OOPL (see the Judgment at [22]–[30]). The key points of his reasoning were as follows. First, OOA’s 3 April 2001 Succession Letter (reproduced above at [23]) stating that OOPL would “succeed OOA” and “handle and manage all … OOA projects and billings” could not reasonably be construed to include the 1983 Agreement. There was no direct or indirect reference to the 1983 Agreement. The 1983 Agreement was neither necessary nor was there any evidence that contracts such as this were the norm in the engagement of architects. In the absence of clear words, TTL and YLH could not be fixed with the knowledge of the 1983 Agreement (which was essentially an oral one) since TTL was not directly involved in the 1983 Agreement and YLH was not involved at all. Second, the Judge was of the view that there was no consideration provided for the alleged novation. The Judge reasoned that the present situation which entailed Fairview living with the services provided by OOPL instead of OOA was different from a debt situation in which there would be no difference between paying money to one party or another. Therefore, the mere discharge of Fairview from its obligation to retain OOA as the architect for the entire Lot 248 development did not, in the Judge’s view, constitute consideration for the novation flowing from OOPL to Fairview.

  80. [46] We respectfully disagreed with the Judge’s finding that the 1983 Agreement had not been novated to OOPL. To explain why, it would be useful to first briefly review the governing legal principles on novation. The term “novation” refers to the process by which the contract between the original contracting parties is discharged through mutual consent and substituted with a new contract between the new parties. A novation is therefore to be distinguished from an assignment. In a novation, both the benefits and the burdens of the original contract are transferred to the new contracting parties, essentially because, as just mentioned, the original contract is extinguished and a new contract is formed. And, as Lord Selborne LC observed in the House of Lords decision of Benjamin Scarf v Alfred George Jardine (1882) 7 App Cas 345 (at 351), the new contract can, of course, be either between the same parties to the original contract or between different parties. The learned Law Lord also referred (ibid) to the term “novation” as being one derived from the Civil Law (cf also the doctrine of frustration) as well as to the fact that the necessary (and sufficient) consideration consists in the discharge through mutual consent of the original contract. In an assignment, however, only the benefits of the contract are transferred to the assignee. The assignor remains bound to perform the obligations under the contract. The assignee does not become a party to the contract, which continues to subsist as between the contracting parties. Accordingly, in an assignment, the consent of the other contracting party is not necessary for a contracting party to assign the benefits under the contract to a third party. All these legal principles are well-established (see, for example, Andrew Phang Boon Leong & Tham Chee Ho, “Exceptions to the Rule of Privity” in The Law of Contract in Singapore (Academy Publishing, 2012) (Andrew Phang Boon Leong gen ed) (“The Law of Contract in Singapore”) ch 15 at paras 15.059–15.067 and Chitty on Contracts Vol 1 (Sweet & Maxwell, 31st ed, 2012) (“Chitty on Contracts”) at para 19-086).

  81. [47] The determination of whether there has in fact been a novation turns on the ordinary principles of contractual interpretation. The reality is that there is often more than one immutable meaning to words, and a fortiori, to phrases (see the decision of this court in Bakrie at [1]–[3]). When faced with rival meanings, the court must, in carrying out its role of giving effect to the objective intentions of the contracting parties, consider the relevant contractual, contextual and commercial background against which the document containing the disputed words and phrases came about. This can be summed up in the fundamental principle referred to above (at [4]), viz, text and context (and on the concept of context, see generally J W Carter, The Construction of Commercial Contracts (Hart Publishing, 2013) at chs 6 and 7).

  82. [48] In the present case, it was evident to us that there was only one reasonable interpretation of the 3 April 2001 Succession Letter. By this letter, OOA had sought Fairview’s consent for OOPL to step into its shoes, including (not surprisingly) the 1983 Agreement. And Fairview’s reply on 27 April 2010, objectively construed, was an unequivocal acceptance of such a novation. In our respectful view, the Judge adopted too narrow an approach by focussing too much on the phrase “handle and manage all [OOPL] and [OOA] projects and billings” in the 3 April 2001 Succession Letter (see the Judgment at [23]). The important principle of construing both text and context was not, with respect, applied comprehensively – with the focus being more on the former rather than the latter when, in fact, both constituted part of an integrated whole. To that end, regard should also have been given to the other portions of the 3 April 2001 Succession Letter, specifically, the references to: (a) the “succession” of OOA by OOPL as part of OOA’s “streamlining” plans; (b) the notice that OOA would cease operations with effect from 30 April 2001; and (c) the fact that there would be “no change to the organisational set-up”. Having regard to the 3 April 2001 Succession Letter in its entirety against the backdrop of its context, we did not see how this letter could reasonably be construed in any other way other than that OOPL was to take over OOA entirely – lock stock and barrel. OOA’s intention for such a wholesale succession was so clear and certain that we could not see how the absence of a specific reference to the 1983 Agreement could be significant.

  83. [49] To that end, it mattered not that TTL and YLH, who were Fairview’s directors at the material time of the succession, did not know about the 1983 Agreement. It bears reiterating that the court gives effect to the intentions of the contracting parties, objectively ascertained. The lack of personal knowledge on the part of individual directors is not a valid reason to defeat a commercial transaction entered into by the company. We noted that Fairview’s instructed counsel in their written and oral submissions agreed with the trite legal proposition that a contract is to be construed objectively. It therefore seemed incongruous that such an argument was still canvassed before us. We mention this because this was not the only instance where a party’s subjective intention was used to buttress Fairview’s case on the objective interpretation of a contract (see below at [64]).

  84. [50] Having found that there was an agreement between Fairview and OOPL for the latter to step wholly into OOA’s shoes, we now turn to the issue of whether that agreement was supported by consideration. The arguments presented below and on appeal centred mainly on the analysis of the following legal proposition as set out in Chitty on Contracts (at para 19-088) that:

  85. At [25] of the Judgment, the Judge pointed out that, since Fairview was obliged to appoint OOA as the architect for the entire development under the 1983 Agreement, Fairview was the debtor (A) and OOA was the creditor (B), not the other way round as OOPL contended. The Judge further pointed out that OOPL (C) was procured not to stand in the place of the debtor Fairview (A) but in the place of the promisee OOA (B). The Judge’s attempts to analogise the present facts to the example set out in the preceding paragraph appeared to us to be unnecessary.

  86. [51] In finding that OOPL did not furnish sufficient consideration for the novation, the Judge reasoned that the novation would fail for lack of consideration because the present situation was unlike a debt situation where it mattered not who was servicing the debt. In this regard, the Judge pointed out: (a) the difference in corporate structure (OOPL being a limited liability company as opposed to OOA which was a partnership); and (b) issues of the quality of the architectural services now to be provided by OOPL. With respect, the Judge, in so reasoning, had erroneously ventured into the issues of the adequacy of the consideration. Such an approach was contrary to the general principle that the courts will only consider the sufficiency of the consideration and not the relative merits of the bargains that the parties had contracted for. As it is oft said, consideration need not be adequate so long as it is sufficient. In this regard, the following observations by Assoc Prof Lee Pey Woan are apposite (see Lee Pey Woan, “Consideration” in The Law of Contract in Singapore, ch 4 at paras 04.023–04.025):

  87. Further, as we had earlier pointed out above at [43], very little is needed to find sufficient consideration.

  88. [52] For these reasons, we found that the 1983 Agreement had been novated to OOPL. We now turn to the issue of whether this agreement had been wrongfully terminated by Fairview.

  89. Wrongful termination of the 1983 Agreement

  90. [53] The Judge below dismissed OOPL’s claim for wrongful termination of the 1983 Agreement on the basis that the 1983 Agreement had not been novated to it (see the Judgment at [39]). It was not clear whether the Judge had impliedly decided the issue of wrongful termination in OOPL’s favour and would have allowed its claim if not for the fact that (as the Judge held but with whose holding we have disagreed) OOPL had failed to prove that the 1983 Agreement had been novated to it.

  91. [54] On appeal, OOPL sought to invite this court to imply a term into the 1983 Agreement that an architect has the right and duty to act as the architect of a project until its completion in the absence of express terms to the contrary. In this regard, OOPL relied on Nicholas Dennys, Mark Reaside and Robert Clay gen eds, Hudson’s Building and Engineering Contracts (Sweet & Maxwell, 12th ed, 2010) at paras 2-018 and 2-139 and Stephen Furst and Vivian Ramsey, Keating on Construction Contracts (Sweet & Maxwell, 9th ed, 2012) at para 14-062 as authority for this argument.

  92. [55] Fairview, on the other hand, contended that there was no basis to imply such a term into the 1983 Agreement as it was onerous and not necessary to give business efficacy to the 1983 Agreement. Instead, all that was required to give the 1983 Agreement business efficacy was an implied term that the 1983 Agreement could be terminated upon reasonable notice, this being consistent with contracts of service in general. Fairview also relied on the Singapore High Court decision of Chung Meng Soon and Others v Lee Kai Investment (Pte) Ltd [1993] SGHC 26 (“Chung Meng Soon”) for what it perceived was the proposition to the effect that that it is an implied term of an employer’s engagement of an architect that the standard conditions of the Singapore Institute of Architects (“the SIA Conditions”) applied, because architects in Singapore invariably adopt the SIA Conditions. Consequently, Fairview also relied on cl (j) of the SIA Conditions of Engagement in the Singapore Institute of Architects Yearbook 1983 (“the SIA Conditions 1983”) at p 75 which provided that:

  93. As for what “reasonable notice” entails, Fairview relied on cl 1.29 of the Singapore Institute of Architects Conditions of Appointment and Scale of Professional Charges 1985 (“the SIA Conditions 1985”) and its successor provisions for the proposition that one month’s notice would suffice.

  94. [56] Proceeding on the basis referred to in the preceding paragraph, Fairview further submitted that its failure to give OOPL one month’s notice did not render such failure a repudiatory breach. Fairview argued that, at the most, OOPL should only be entitled to claim damages for non-compliance with the notice clause, which in this case would be nominal as OOPL did not suffer any loss as a result of the non-compliance. Fairview also argued that OOPL had waived its right to claim damages for such non-compliance as OOPL did not raise this in its correspondence nor did it plead such damages.

  95. [57] In our view, the arguments presented by both parties, with respect, were off the mark. This issue could and should be resolved by reference to the express terms of the 1983 Agreement instead of resorting to implied terms. It will be recalled that the essence of the 1983 Agreement was that OOA (and because of the novation, also OOPL) was to be the architect for the entire development of Lot 248. Put another way, the 1983 Agreement itself had already expressly provided that OOA/OOPL could not be terminated as the architect for the development of Lot 248 without just cause. That being the case, Fairview clearly had no right under the terms of the 1983 Agreement to terminate OOPL’s services in the manner that it did. The conclusion that inexorably followed was that Fairview’s termination was wrongful. Given our views on this issue, it was not necessary for us to consider OOPL’s alternative argument that Fairview had wrongfully terminated OOPL’s engagement to develop the remaining undeveloped land on Lot 248. We would also add, parenthetically, that we did not agree with the manner in which Fairview’s counsel sought to rely on Chung Meng Soon to establish its case on implied terms.

  96. Conclusion on Issue 1

  97. [58] In the circumstances, we allowed OOPL’s appeal and found Fairview liable for OOPL’s loss of profits arising out of the remaining undeveloped land. This, however, is to be assessed by the Registrar hearing the assessment of damages taking into account our decision on Issue 2 and the principle that there should be no double recovery.

  98. Our decision on Issue 2

  99. [59] We now turn to set out our reasons as to why we also allowed OOPL’s claim for the Later Abortive Works.

  100. Novation of OOA’s entitlement to fees

  101. [60] It would be recalled that part of OOPL’s claim for the Later Abortive Works encapsulated work done by OOA (see above at [25] and [27]). It is evident from [20] of the Judgment that the key factor that weighed in the Judge’s decision that OOA’s entitlement to its fees had been novated to OOPL was the phrase “[OOPL] will succeed OOA and will handle and manage all [OOPL] and OOA projects and billings” in the 3 April 2001 Succession Letter (set out above at [23]). The Judge was of the view that OOA and Fairview would have construed that to mean that from that particular point in time, OOPL, instead of OOA, would be entitled to the outstanding payment from Fairview.

  102. [61] On appeal, Fairview argued that this particular phrase in the 3 April 2001 Succession Letter evinced an intention on the part of OOA to allow OOPL to collect OOA’s fees only, as opposed to an intention on the part of OOA to novate to OOPL its entitlement to its fees. Fairview argued that, from OOA’s perspective, it would not have been commercially sensible for it to have given up its right to its fees. There was also no evidence of consideration provided by OOPL or evidence that OOPL had agreed to be liable to Fairview for OOA’s breaches and/or negligence. It was further argued that, from Fairview’s perspective, it would not have made commercial sense for it to agree to give up its right to claim against individual partners of OOA and agree to only claim against OOPL, a private limited company. TTL also gave evidence that he would have disagreed to such a novation because he would have had concerns about tax consequences.

  103. [62] We were unsympathetic to Fairview’s arguments for a variety of reasons. First and foremost, we have earlier explained (see above at [46]–[52]) that the 3 April 2001 Succession Letter and Fairview’s acceptance of it evinced an agreement between the parties for OOPL to completely step into OOA’s shoes. We would further point out, in this specific context of the novation of the entitlement to OOA’s fees, that if OOA had only intended for OOPL to be an agent to collect OOA’s fees, Fairview’s consent would not have been necessary. Moreover, a mere assignment of OOA’s right to OOPL, which as pointed out above (at [46]) would not require Fairview’s consent, would have sufficed to transfer this benefit to OOPL. The context of the 3 April 2001 Succession Letter was also highly significant. It bears reiterating that, at the material time, OOA was undergoing streamlining and its operations were to cease shortly thereafter; the change in entities was merely a change in form and not substance. It was commercially absurd to contend that OOA was prepared to let its legal rights to its outstanding fees fade away into a legal black hole.

  104. [63] Next, since the issue of lack of consideration was not challenged by Fairview at the proceedings below, it did not lie in its mouth to now seek to rely on the alleged absence of any evidence of consideration provided by OOPL for such a novation. Matters of evidence aside, we very much doubted Fairview’s ability to convince us that the novation should fail for lack of consideration. As we have earlier pointed out (see above at [43]), very little is needed to find consideration.

  105. [64] Finally, as we had earlier pointed out (see above at [49]), Fairview’s reliance on TTL’s purported concerns about tax consequences in aid of its case that there could not have been an agreement for OOA’s entitlement to fees to be novated to OOPL was ultimately irrelevant in the context of the objective assessment of the parties’ intentions.

  106. [65] For these reasons, we affirmed the Judge’s finding that OOA’s entitlement to fees in respect of its share of the Later Abortive Works had been novated to OOPL. It followed that it was not necessary for us to determine the factual dispute as to the exact delineation between works done by OOA and OOPL respectively. We held that OOPL is entitled to fees in respect of all of the Later Abortive Works, regardless of whether it was OOA or OOPL who performed them.

  107. The computation for the Later Abortive Works

  108. [69] Having considered the parties’ arguments, we respectfully disagreed with the Judge’s finding. We found, instead, that the Later Abortive Works should be calculated on a percentage basis. Let us elaborate.

  109. [70] First and foremost, the $250,000 lump sum payment for the Early Abortive Works should have been considered in the context of it being a reduced sum accepted by OOA specifically in consideration of the 1983 Agreement. It was evident from OSM’s handwritten notes (reproduced above at [14]–[16]) that prior to the $250,000 payment, the parties had proceeded on the basis that OOA was entitled to fees for the Early Abortive Works on a percentage basis. The relevant extract from OSM’s Handwritten Note #1 is set out below:

  110. The relevant extract from OSM’s Handwritten Note #2 is set out below:

  111. The relevant extract from OSM’s Handwritten Note #3 is set out below:

  112. [71] Next, we agreed with OOPL that on a true construction of the 7 June 1983 letter, OOA and Fairview had only agreed that the quantum meruit basis was applicable in the event of a scheme being rejected by the relevant authorities. The relevant paragraph of the said letter is reproduced below, as follows:

  113. It should be noted that the paragraph quoted above began with Fairview’s specific instructions to “draw up a fresh scheme for submission” to the relevant authorities. It was only thereafter that Fairview had stated that “[i]n the event of the fresh scheme being disapproved” [emphasis added], the fees would be based on a quantum meruit basis. Viewed in the context of that entire paragraph, it was clear that the parties’ agreement with regard to a quantum meruit basis extended only to works that are aborted because of disapproval from the relevant authorities. The Judge’s view that the parties had had a course of dealing of resolving payment for abortive works on a quantum meruit basis even where the reason for the abortion had nothing to do with disapproval from the relevant authorities was therefore, with respect, misplaced.

  114. [73] This agreement in 1983 was then subsequently varied in 1993 pursuant to a meeting between the parties’ representatives. It was recorded in OOA’s 5 March 1993 letter (see above at [20]) that the parties had agreed that an increasingly lower percentage would be payable for the later phases of development:

  115. Fairview did not point us to any evidence that such a variation had not in fact been agreed to. It should be noted that Fairview’s reliance on the 2001 $50,000 Payment and its without prejudice computation in its letter to the BOA dated 21 March 2001 were events that transpired much later in time. At best, Fairview could argue that those events constituted a later further variation of this agreement (and even then we do not agree (see below at [77]–[79])), but there was no basis to find that a variation had not taken place in 1993.

  116. Not only did OOPL not pursue a case based on the above letter, it had actually denied the existence of such a variation in its pleadings. Presumably, this was because, in the proceedings below, Fairview had relied on this letter to plead that inter alia: (a) the SIA Conditions 1985 applied; and (b) the purported agreement in 1996 constituted a full and final settlement of all works (including abortive works) done by OOA up to May 1996. These arguments, if fully made out, might have had the effect of bolstering Fairview’s case that there had been no wrongful termination of OOPL’s services and/or that OOPL’s claim for the Later Abortive Works was time-barred. We note that Fairview did not pursue these specific lines of arguments on appeal.

  117. [75] Notwithstanding the parties’ positions on appeal, we were minded to find that the parties’ agreement as to OOA/OOPL’s fees had in fact been further varied in 1996. At this juncture, it would be useful to set out the following summary of the applicable principles relating to variation of a contract from Sean Wilken and Karim Ghaly, The Law of Waiver, Variation and Estoppel (Oxford University Press, 3rd ed, 2012) (at para 2.14):

  118. OOA’s letter dated 6 May 1996 (reproduced above at [74]) and Fairview’s unqualified acceptance of those terms in a letter dated 11 May 1996 clearly and objectively evinced a consensus that OOA was to be paid 4.5% of the construction costs henceforth. The fact that OOPL subsequently submitted a claim for Phase 3 abortive works on a percentage basis that was inconsistent with that set out in OOA’s letter dated 6 May 1996 did not, in the final analysis, detract from the validity of the further variation in 1996 (see below at [78]).

  119. [76] It suffices to note at this juncture that, pursuant to the 6 May 1996 letter, the agreement between the parties was also varied inasmuch as the SIA Conditions 1985 were henceforth to be incorporated into the agreement. However, those conditions were incorporated only in so far as the “mode and time of payment” were concerned. The 6 May 1996 letter therefore had no bearing at all on our finding with regard to Issue 1 that there had been wrongful termination of OOPL’s employment (see above at [53]–[57]). In the final analysis, neither did this letter have a bearing on our decision on the inapplicability of the limitation defence (see below at [84]–[91]).

  120. [79] The third point to be made about the letter dated 11 October 2001 is this. It was apparent that Fairview had proposed the quantum meruit sum of $50,000 because it had taken the view that the particular abortive work concerned was, in fact, not very substantial. This letter dated 11 October 2001 was therefore different from OOA’s letter dated 6 May 1996 (which we found sufficient to vary the agreement between the parties (see above at [75])) as there was nothing in Fairview’s letter dated 11 October 2001 that could be objectively construed as an offer from Fairview that all abortive works were henceforth to be calculated on a quantum meruit basis. The parties clearly had not arrived at any consensus to the effect that the fees for abortive works were to be varied to a quantum meruit basis. Accordingly, having regard to the contractual principles on variation set out above (at [75]), we rejected the possibility that the variation in 1996 was further varied to a quantum meruit basis in 2001.

  121. [80] We were also unable to accept Fairview’s reliance on the fact that it had stated that in its letter to the BOA dated 1 March 2010 that its percentage basis computation was on a without prejudice basis. The relevant portion of the said letter is reproduced below, as follows:

  122. Viewed in its full context, and in particular having regard to the word “[n]onetheless” in para 14 of the letter which linked back to the preceding paragraph (viz, para 13), it was clear that Fairview’s express reservation that the computation was on a “without prejudice” basis was made in relation to its assertion that OOPL’s claim had been time-barred. Put another way, the “without prejudice” reservation was not made in relation to any dispute on the part of Fairview that the parties had agreed to, or had agreed to vary to a quantum meruit basis for all abortive works.

  123. [81] Finally, for the reasons already canvassed earlier (see above at [78]), the fact that Fairview’s computation to the BOA was done on the basis of the figures set out in the 1993 Agreement and not the subsequent variation in 1996 did not detract from the existence of the latter.

  124. [82] For the above reasons, we concluded, firstly, that the parties had agreed in 1983 for OOA (and by extension, OOPL) to be paid on a percentage and not quantum meruit basis for all works including those that were aborted, but excluding works that were aborted by reason of regulatory disapproval. The exact percentage was subsequently varied in 1993 and further varied in 1996 back to the original terms in the 7 June 1983 letter (ie, 4.5% for all works pertaining to Lot 248). Finally, since only the SIA Conditions 1985 pertaining to the mode and timing of payment were incorporated into the terms of the parties’ engagement with each other after the variation in 1996, we rejected Fairview’s argument that the works set out above at [27(a)] and [27(b)] were considered as Preliminary or Additional Services, not Basic Services, and thus should be remunerated on a quantum meruit basis pursuant to the SIA Conditions 1985.

  125. Limitation

  126. [83] Fairview’s primary case in relation to the issue of limitation was that, even if OOPL was entitled to claim for fees for the Later Abortive Works, the claim had been time-barred under the Limitation Act. OOPL’s argument in response was that the time-bar defence was inapplicable, and even if it was applicable, there had been a valid acknowledgment of debt by Fairview which therefore restarted the limitation clock. Fairview’s counter-argument was that there had been no valid acknowledgment of debt, and that, even if there was such an acknowledgment, it should not restart the limitation clock. We will turn to consider each of these arguments seriatim.

  127. Applicability of the time-bar defence

  128. [84] We turn first to the primary issue centring on the applicability of the time-bar defence. The Judge held (albeit without delving into much detail) that the right to payment for the Later Abortive Works accrued only when Fairview gave its instructions to abandon the project on 1 October 2009, and since this was within six years of the filing of the suit on 20 May 2011, the time-bar defence was inapplicable (see the Judgment at [48]–[51]).

  129. [85] On appeal, Fairview argued that the Judge had erred in finding that OOPL’s right to payment accrued only when Fairview terminated its engagement, as OOA/OOPL’s entitlement to payment arose upon completion of the various stages of work pursuant to cl 2.2 of the SIA Conditions 1985. In response, OOPL contended that the Judge’s finding was correct as OOPL had the additional and separate (as well as independent or free-standing) right to bill for works at the time that they became abortive.

  130. [86] We arrived at the same conclusion as the Judge who held that the time-bar defence was not applicable, albeit for somewhat different reasons. First and foremost, as pointed out earlier (see above at [74]–[76]), the SIA Conditions 1985 applied, but only in so far as the terms pertaining to the mode and time of payment were concerned. In other words, only the relevant clauses in section 6 of the SIA Conditions 1985 titled “Mode and Time of Payment and Partial Services” were applicable to the terms of the parties’ engagement. In particular, Condition 6.1 provided as follows:

  131. [87] When both the opening paragraph of Condition 6.1 and Note (a) are read together, it was evident that while an architect became entitled to progress payments upon the completion of the various stages, such progress payments only became “due and payable” upon the issuance of the relevant invoice(s). Accordingly, while an architect’s entitlement to payment accrues upon completion of various stages, no right and corresponding cause of action to sue upon such a right arises unless and until the relevant invoice(s) had been issued. To put it another way, the entitlement to fees crystallises into a right upon which a cause of action accrues only when the invoice is issued.

  132. [88] Our interpretation in the preceding paragraph accords, first, with the permissive and open manner in which it was stated in the opening paragraph of Condition 6.1 that the architect “shall be entitled” to progress payments on completion of each stage, as opposed to words with a more mandatory effect such as “the client shall pay to the architect”. Our interpretation also accords with the absence of any condition setting out a timeline within which an architect must render its invoice. Any concern that such an interpretation would result in developers being inundated by invoices relating to works completed an inordinately long time ago (possibly even beyond the six year limitation period for contractual claims) was, in our view, valid but, in the final analysis, overstated. An architect would not (for obvious commercial reasons) want to be put out of pocket for too long. And so long as the working relationship between the parties is on-going, the flexibility to decide when to bill (even if it would be more than six years after the completion of a particular stage of work) would be commercially beneficial to both the architect and its client, particularly where the construction project in question is a long and drawn out one. The architect would be assured of its due entitlement to payment while, on the other hand, the client would have room to negotiate with the architect on when the invoice is to be issued and when the actual payment is to be made based on the parties’ respective commercial considerations.

  133. [89] In the light of our interpretation, we disagreed with Fairview’s contention that OOA/OOPL’s cause of action arose immediately upon the completion of each stage of work. We also disagreed with OOPL’s characterisation of a “separate and free-standing right”. There was only ever one cause of action in respect of each item of the Later Abortive Works, and that accrued upon the service of the relevant invoice. However, as we shall proceed to explain, this was inapplicable on the present facts as the 1983 Agreement had been wrongfully terminated.

  134. [90] In our view, once Fairview had wrongfully terminated OOPL’s services on 1 October 2009, r 6(1) of the Architects (Professional Conduct and Ethics) Rules (Cap 12, R 2, 2003 Rev Ed) (“r 6(1)”) was triggered, thereby causing the cause of action founded upon contract to arise. Rule 6(1) reads as follows:

  135. Although r 6(1) similarly speaks of “entitlement” (the phrase “the claimant shall be entitled to such fees” refers), the meaning of the word “entitlement” within the context of r 6(1) was different from that within the context of Condition 6.1. As there was no equivalent provision similar to Note (a) in r 6(1), the entitlement that arose in r 6(1) was not contingent upon any other further event to crystallise as an actionable right. Put simply, once OOPL’s service was terminated, the cause of action to recover the outstanding sums arose immediately and the limitation clock started ticking. Such an interpretation of r 6(1), in our view, accords sensibly with the specific fact scenario that it addresses, namely, where the relationship between the parties has come to an end.

  136. [91] In the circumstances, we agreed with the Judge’s conclusion that OOPL’s cause of action arose only on 1 October 2009, and that accordingly, the time-bar defence was inapplicable.

  137. Acknowledgment of debt by Fairview

  138. [92] Even if Fairview was able to rely on the time-bar defence, we would have found (as the Judge did in passing at [52] of the Judgment) that there had been a valid acknowledgment of debt by Fairview which resulted in the fresh accrual of action pursuant to s 26(2) of the Limitation Act. The said provision reads follows:

  139. [93] A useful summary of the applicable legal principles governing what would constitute a valid acknowledgment within the meaning of s 26(2) of the Limitation Act is set out in the Singapore High Court decision of Kim Eng Securities Pte Ltd v Tan Suan Khee [2007] 3 SLR(R) 195 (“Kim Eng Securities”) at [40], as follows:

  140. [94] With the above legal principles in mind, we now turn to set out the details of the relevant facts, with particular regard to the correspondence between the parties.

  141. [95] It would be recalled that Fairview’s termination of OOPL’s services was communicated on 1 October 2009. On 3 November 2009, Fairview rejected OOPL’s request to meet to resolve the matter and stated at the end of the letter as follows:

  142. [96] Subsequently, in response to OOPL’s request on 13 November 2009 for more time to “assess the immense work done to date”, Fairview replied on 18 November 2009 stating as follows:

  143. [97] On 3 December 2009, Fairview sent a reminder letter stating as follows:

  144. [98] On 14 December 2009, OOPL responded to Fairview’s letter dated 3 December 2009, stating as follows:

  145. [99] Fairview thereafter responded on 18 December 2009 stating as follows:

  146. [100] Subsequently, by way of a letter dated 30 December 2009 to the BOA and copied to OOPL, Fairview wrote as follows:

  147. [101] And in a separate letter to OOPL also dated 30 December 2009, Fairview wrote as follows:

  148. [102] By a letter dated 15 January 2010, the BOA wrote to Fairview stating as follows:

  149. [103] On 28 January 2010, Fairview replied to the BOA and copied to OOPL, stating as follows:

  150. [104] Finally, on 1 March 2010, Fairview wrote to the BOA contending (for the first time) that OOPL’s claim had been time-barred:

  151. [105] Having regard to the overall chain of correspondence between the parties (and the BOA) set out above (at [95]–[104]), it was evident to us that, although Fairview did not acknowledge the exact amount owing to OOPL, it had acknowledged the existence of a debt owing to OOPL. Such an acknowledgment, as noted in [40] of Kim Eng Securities (cited above at [93]), was sufficient for the purposes of the operation of s 26(2) of the Limitation Act, so long as reference could be made to extrinsic evidence to ascertain the said amount.

  152. [106] In coming to our conclusion that there was a valid acknowledgment of debt, we noted in particular that in Fairview’s letter dated 3 November 2009 (see above at [95]), instead of enquiring if there were any outstanding fees, Fairview had, on its own initiative, sought OOPL’s invoice without any prior prompting from OOPL. We also disagreed with Fairview’s submission that the words “reasonable” and “entitled” in its letters dated 18 December 2009 (see above at [99]) and 30 December 2009 (see above at [100]–[101]) were qualifications that negated the coming into existence of any acknowledgment of debt. In our view, the only reasonable interpretation of those letters was that Fairview was merely reserving its position to pay fees which were reasonable in quantum. And, most significantly, we noted that in the face of the BOA’s direct question to Fairview as to the latter’s views on OOPL’s entitlement as to fees, Fairview did not deny such entitlement in its response dated 28 January 2010 (see above at [103]) even though it had had the benefit of legal advice then. All that was asserted by Fairview was that it was not in a position to give its views as to the “amount of fees” that OOPL was entitled to.

  153. [107] In short, Fairview’s reservation of its position with regard to the issue of limitation in its letter to the BOA dated 1 March 2010 was too late, as there had already been a valid acknowledgment of debt prior to that. In any event, this issue was rendered academic in light of our earlier finding that the limitation defence was not applicable to Fairview in the first place (see above at [84]–[91]).

  154. Restarting of the limitation clock

  155. [108] As alluded to earlier (see above at [83]), Fairview raised the further argument on appeal that, even if there had been a valid acknowledgment of debt on its part, such acknowledgment, having been made after the purported expiry of the limitation period, ought not to restart the limitation clock. As we found that the limitation period had not expired (see above at [84]–[91]), this issue was also an academic one. Nevertheless, we would take this opportunity to address the arguments raised by Fairview.

  156. [109] The key question can be summed up as follows – can an acknowledgment made after the expiry of a limitation period restart the limitation clock? The short answer, based on the authority of this court’s decision in Chuan & Company Pte Ltd v Ong Soon Huat [2003] 2 SLR(R) 205 (“Chuan & Company”) at [33]–[35] (which was applied in the Singapore High Court’s decision in Kim Eng Securities at [40] and [45]) is that it can. Fairview did not dispute that this is the position under our law. However, while recognising that this matter might be one best left for Parliament to look into, Fairview invited us to reconsider the common law position on the basis that the legislative history behind s 26(2) of the Limitation Act was not considered in Chuan & Company, and that such consideration would have made a difference to the conclusion reached.

  157. [110] Having considered the matter, we disagreed with Fairview’s contention and saw no basis to differ from the conclusion that we arrived at in Chuan & Company. It would, first and foremost, be useful to note that the Singapore Limitation Act was adopted from the Limitation Act 1939 (c 21) (UK) (“UK Limitation Act 1939”) (see per the then Minister for Labour and Law, Mr K M Byrne in Singapore Parliamentary Debates, Official Report (2 September 1959) vol 11 at cols 586–587):

  158. [111] In particular, s 26(2) of the Singapore Limitation Act (reproduced above at [92]) is in pari materia with s 23(4) of the UK Limitation Act 1939. English decisions such as In re Gee & Co (Woolwich) Ltd [1975] 1 Ch 52 have interpreted s 23(4) of the UK Limitation Act 1939 as permitting acknowledgments made both before and after the expiry of the limitation period to restart the limitation clock.

  159. [112] To make good its case that this court should reconsider its decision in Chuan & Company, Fairview relied primarily on the English High Court decision of Dwr Cymru (Welsh Water) v Carmarthenshire County Council [2004] EWHC 2991 (“Dwr Cymru”) (at [30]) for the proposition that the restarting of the limitation clock was intended to apply only when the acknowledgment was made before the expiry of the limitation period:

  160. Fairview argued that when this judge-made law was later put onto a statutory footing and consolidated into the UK Limitation Act 1939, it did not go so far as to allow acknowledgements made after the expiry of the limitation period. It was on this basis that Fairview invited us to reconsider our decision in Chuan & Company.

  161. [113] In our view, it might well have been the case, as suggested in Dwr Cymru at [30] (and quoted in the preceding paragraph), that, historically, only acknowledgements made before the expiry of the limitation period could restart the limitation clock. However, it was clear that the common law had developed and the English courts began to also permit acknowledgements made after the expiry of the limitation period to restart the limitation clock. This much was acknowledged in 1936 in the UK Law Revision Committee, Fifth Interim Report (Statutes of Limitation) (Cmd 5334, 1936) (“1936 Report”) at p 25, as follows:

  162. [114] This was also consistent with the UK Law Reform Committee, Twenty-First Report (Final Report on Limitation of Actions) (Cmnd 6923, 1977) (“1977 Report”) at para 2.68:

  163. [115] It was also significant that the UK Law Revision Committee expressly recommended in 1936 that the pre-existing rule (viz, that acknowledgements made after the expiry of the limitation period can restart the limitation clock) should be retained, save that such acknowledgments would bind only the maker and his personal representatives. In this regard, the UK Law Revision Committee concluded as follows in the 1936 Report at p 29:

  164. [116] In the 1977 Report, the UK Law Reform Committee confirmed that this recommendation in 1936 was followed through viz the UK Limitation Act 1939 at para 2.69:

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