Olivine Capital Pte Ltd and another v Chia Chin Yan and another matter

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

[1] This was an appeal against the decision of the High Court judge (“the Judge”) in Olivine Capital Pte Ltd and another v Lee Chiew Leong and another [2013] SGHC 168 (“the GD”) dismissing Registrar’s Appeal No 125 of 2013 (“RA 125/2013”). That was an appeal against the decision of the assistant registrar (“the AR”) in Summons No 608 of 2013 (“SUM 608/2013”), an application made pursuant to O 14 r 12 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules of Court”). The Judge agreed with the AR that the parties had compromised all the claims between them. We allowed the appeal against the ruling of the Judge and now give the detailed grounds for our decision.

[2] The first appellant, Olivine Capital Pte Ltd (“the First Appellant”), was the leaseholder of a plot of land at 180–188 Rangoon Road. The second appellant, Ong Puay Guan @ Steven Ong (“the Second Appellant”), is the chief executive officer (“CEO”) and a director of the First Appellant. The First Appellant sought to redevelop the land and initially hired Chia Chin Yan (“the Respondent”) as the professional engineer and one Lee Chiew Leong (“Lee”) as the architect in May 2006.

[3] Work began on the redevelopment project (“the Project”) in late 2007. In September 2007, an underground sewer pipe was damaged during piling work. The First Appellant and the Second Appellant (collectively, “the Appellants”) alleged that the damage was caused by the negligence of the Respondent and Lee. The Appellants alleged that the Respondent had negligently failed to ascertain whether there was an underground sewer during the preparation of the piling plan, had given the go-ahead to proceed with the piling and had also failed to supervise the piling operation. The Respondent denied the foregoing, and alleged that the Appellants were negligent in commencing the piling work without his knowledge and consent. The alleged negligence of Lee is not germane to this appeal as it was not the subject of the O 14 r 12 proceedings.

[5] The Respondent oversaw the repair work on the damaged sewer from December 2007 to February 2008. On 28 April 2008, the PUB invoiced the First Appellant an amount of $512,939.18. The First Appellant has yet to make the requisite payment.

[6] After a dispute with the initial builder for the Project in June 2009, the First Appellant appointed a second builder, HPC Builders Pte Ltd (“HPC”). Contemporaneously with this, the Respondent took on the additional roles of architect and project coordinator, on top of his initial role as professional engineer. According to the Appellants, the Respondent was to be paid by HPC under this new arrangement.

[7] On 16 July 2009, the Respondent was charged with an offence under s 14(1) of the Sewerage and Drainage Act (Cap 294, 2001 Rev Ed) (“the Act”). No other parties were charged at that time.

[8] On 15 October 2009, the Respondent resigned and gave the Second Appellant a letter (“the Compromise Letter”) on the Respondent’s company letterhead. The material parts of the Compromise Letter are as follows:

The letter was signed by the Respondent. The Second Appellant signed the letter in his capacity as CEO of the First Appellant below the phrase “I agree and acknowledge receipt of this letter”.

[9] On 9 March 2012, almost three years after the Respondent was initially charged, the PUB charged the Second Appellant and Lee with offences under ss 14 and 20 of the Act. The Respondent was also charged with an additional offence under s 20 of the same.

[10] On 11 September 2012, the Appellants filed Suit No 762 of 2012 (“Suit 762/2012”) against the Respondent and Lee, essentially alleging that they were negligent and claiming, inter alia, an indemnity for compensation payable to the PUB. The Respondent denied these allegations in his defence, and also counterclaimed for an order that the Appellants indemnify him against all losses arising from the charges brought against him under the Act. On 1 February 2013, the Respondent filed SUM 608/2013 seeking a determination under O 14 r 12 of the Rules of Court as to whether the Compromise Letter was effective to release him from any liability to the Appellants apropos the damaged sewer. The AR held that the Compromise Letter did have this effect. The Judge in turn dismissed the Appellants’ appeal against the AR’s decision (viz, RA 125/2013).

[11] The Respondent argued that the Compromise Letter compromised all claims between the Appellants and him with regard to his roles as architect, professional engineer and project coordinator. Any claim that the Appellants might have had against him for negligently causing damage to the sewer had therefore been compromised.

[12] The Appellants argued that the ambit and effect of the Compromise Letter was not a matter suitable for summary determination under O 14 r 12 of the Rules of Court because the factual matrix surrounding the letter was in dispute. The Appellants also argued that the Compromise Letter did not release the Respondent from liability apropos the damaged sewer. Instead, the Compromise Letter only compromised claims relating to the period when the Respondent concurrently held all three roles as architect, professional engineer and project coordinator (ie, the period between June and October 2009).

[13] It should also be noted that the Appellants did not raise the issue of mistake in the proceedings below, although they have now sought to raise this particular issue via an amendment of their pleadings.

[14] The Judge accepted that the factual context surrounding the signing of the Compromise Letter was relevant and in dispute. She noted that ordinarily, summary determination under O 14 r 12 was inappropriate if there were factual disputes affecting the point of construction. She pointed out that this proposition was, however, subject to two caveats: (a) there must be a genuine dispute of fact; and (b) the contract must be capable of bearing the meaning which the resisting party asserted.

[16] The Judge thus held that the Compromise Letter had effectively compromised the Appellants’ claims against the Respondent.

[17] The Appellants submit that a determination under O 14 r 12 should not be made because the factual context surrounding the signing of the Compromise Letter is in dispute. They take the position that their evidence is not so incredible that it should be rejected, and the Compromise Letter should not be construed to release the Respondent from liability for the damage to the sewer. In any event, the Appellants contend, the Compromise Letter is void or voidable on the ground of mistake.

[18] The Respondent, on the other hand, submits that the case is suitable for determination under O 14 r 12 because there are no genuine disputes of fact relating to the objective evidence. The Respondent contends that the Appellants’ evidence is incredible. The Compromise Letter was drafted clearly and unambiguously, and compromised all claims, including any claims pertaining to liability for the damaged sewer. The Compromise Letter, the Respondent submits, is also not void or voidable on the ground of mistake.

[19] The Appellants’ submissions on mistake are new, and were neither pleaded in their defence to the Respondent’s counterclaim nor raised at the two hearings below. This raises a few preliminary issues, one of which centres on Summons No 6101 of 2013 (“SUM 6101/2013”), which is the Appellants’ application for leave to amend their pleaded defence. These issues shall be explored first.

[20] The following preliminary issues are raised by the Appellants’ new submissions on mistake:

(c) If a defendant is so bound, should the Appellants nonetheless be allowed to amend their pleaded defence to the Respondent’s counterclaim?

[21] The starting point underlying the issue of whether a defendant can introduce new arguments in an appeal from an O 14 determination is the principle of finality in litigation. As Prof Jeffrey Pinsler SC has observed (in Singapore Court Practice 2009 (Jeffrey Pinsler gen ed) (LexisNexis, 2009) (“Singapore Court Practice 2009”) at para 57/13/10):

[22] As an O 14 determination is conducted on the basis of affidavit evidence, this court is in as advantageous a position as the court below to adjudicate on the Appellants’ new submissions on mistake. The general principle of finality in litigation does not apply; the Appellants were therefore allowed to argue their new point on mistake in the proceedings before this court (see also the decision of this court in Rainforest Trading Ltd and another v State Bank of India Singapore [2012] 2 SLR 713 at [27]–[28]).

[23] Turning to the issue of whether a defendant is bound by the four corners of his pleadings during an O 14 determination, there are in fact two lines of cases taking diametrically opposed views on this particular issue.

[24] The seminal decision in the first line of cases is that of the Malaysian High Court in Lin Securities (Pte) v Noone & Co Sdn Bhd (Klang Jaya Bahru Development Bhd, Third Party) [1989] 1 MLJ 321 (“Lin Securities”), in which V C George J held that a defendant was not bound by his pleadings in the context of O 14 proceedings. The learned judge observed thus (at 322):

[25] The above proposition (relied upon by the Appellants in the present proceedings) was in fact endorsed by this court in Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace) [2010] 1 SLR 1129 (“Poh Soon Kiat”), where the appellant, against whom summary judgment had been entered, applied to this court for leave to amend his defence as a prelude to his appeal. In this particular regard, the court observed as follows (at [15]):

[26] Although the court in Poh Soon Kiat did not cite Lin Securities directly, it did in fact cite that case in substance. To elaborate, the court referred (as we have seen) to a passage from Singapore Civil Procedure 2007 (G P Selvam ed-in-chief) (Sweet & Maxwell Asia, 2007) (“Singapore Civil Procedure 2007”) at para 14/2/12. It is important, in this regard, to note that the actual text of that particular passage reads as follows:

[27] The second line of cases – in which the courts concerned held that a defendant ought to be bound by his pleadings during an O 14 determination and could not therefore rely upon a fresh defence that was not pleaded unless the defence was amended or unless, in exceptional cases, the court concerned found that there were good reasons to permit such reliance (and which is relied upon by the Respondent in the present proceedings) – comprises a series of Singapore High Court decisions. Detailed reasons were proffered in these decisions, and we shall therefore set out the relevant analyses in extenso.

[28] The first decision is that of Woo Bih Li J in Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd [2008] 2 SLR(R) 786 (“Lim Leong Huat”), where the learned judge observed thus (at [22]–[25]):

[29] Woo J reaffirmed his views in the subsequent decision of HSBC Institutional Trust Services (Singapore) Ltd v Elchemi Assets Pte Ltd and another [2010] SGHC 67 (“HSBC Institutional Trust Services”), as follows (at [21]):

[30] Woo J, in fact, delivered his decision in Lim Leong Huat on 25 January 2008. Significantly, in our view, on 30 January 2008 (some five days later), Judith Prakash J in United States Trading Co Pte Ltd v Ting Boon Aun and another [2008] 2 SLR(R) 981 (“United States Trading”) expressed a similar view on the issue presently being considered. Given both the timing as well as the content of this particular judgment, it was clear that Prakash J arrived at this similar view in a parallel and independent manner. The learned judge observed thus (at [23]–[25]):

[31] Kan Ting Chiu J had – more recently – the opportunity to consider all the decisions hitherto referred to in Rankine Bernadette Adeline v Chenet Finance Ltd [2011] 3 SLR 756 (“Rankine Bernadette Adeline”). Indeed, he cited (as we have) the relevant passages in these decisions in extenso. In particular, the learned judge was impressed by the detailed reasoning rendered in both Lim Leong Huat as well as United States Trading. He observed (at [14]) that Woo J had (in Lim Leong Huat) “addressed the issue with admirable thoroughness” [emphasis added]. Kan J also noted (at [17]) that Prakash J (in United States Trading) “took care to explain” her reasons for arriving at the same conclusion as Woo J in Lim Leong Huat and HSBC Institutional Trust Services, and further observed (at [18]):

[32] Kan J then proceeded to cite (at [19]) Prof Pinsler’s seminal work Singapore Court Practice 2009, as follows:

[33] Kan J then concluded his analysis by noting (at [20]) that “[t]he latest decision on the question” was that of this court in Poh Soon Kiat. He noted, inter alia, that the decision in the case just mentioned had been delivered on 28 April 2009. The decision in Poh Soon Kiat was actually delivered on 8 December 2009 – this is significant inasmuch as the decisions in Lim Leong Huat and United States Trading had already been delivered by the time this court released its judgment in Poh Soon Kiat. Lim Leong Huat and United States Trading did not, however, appear to have been brought to this court’s attention. Neither were Prof Pinsler’s views (in Singapore Court Practice 2009 (quoted by Kan J in Rankine Bernadette Adeline; see above at [32])) cited to this court, although it is entirely conceivable that Singapore Court Practice 2009 could not have been cited because it was published almost contemporaneously with the release of the judgment in Poh Soon Kiat.

[34] Kan J, in Rankine Bernadette Adeline, noted (at [22]) that the court in Poh Soon Kiat had in fact cited the passage from Singapore Civil Procedure 2007 (quoted above at [26]), and that Singapore Civil Procedure 2007 “did not have the advantage of considering the reasoning in the decisions of Woo J and Prakash J and their views on the statement of law laid down in Lin Securities”. As counsel for the plaintiff in Rankine Bernadette Adeline was prepared to deal with the unpleaded defence, Kan J did not exclude that defence from his consideration and therefore did not have to arrive at a definitive conclusion on this particular issue. He nevertheless did observe thus (at [23]):

[35] Before proceeding to express our view as to which line of cases ought to be preferred, it would be apposite to note what the leading textbook commentaries on Singapore civil procedure have to say with respect to this particular issue.

[36] The first is Singapore Court Practice 2009, the relevant extract from which has already been quoted above (at [32]). Not surprisingly, as the decision in Poh Soon Kiat was presumably delivered after this particular work had gone to press (see also above at [33]), Prof Pinsler did not comment on the effect of that particular decision.

[37] We have also already noted the views expressed in Singapore Civil Procedure 2007 (which have been quoted above at [26]). Not surprisingly, these views were expressed prior to all the decisions considered above (with, of course, the exception of Lin Securities). Significantly, and in contrast, in the latest edition of this particular work, Singapore Civil Procedure 2013 (G P Selvam ed-in-chief) (Sweet & Maxwell Asia, 2013), the following views (which did take into account all the relevant decisions) were expressed (at vol 1, para 14/2/12):

[38] It is clear, in the circumstances, that this court ought to consider the observations made in Poh Soon Kiat (quoted above at [25]) in light of the various (and detailed) observations made by Woo J and Prakash J as set out above.

[39] The first port of call ought to be the precise facts, context as well as decision in Poh Soon Kiat. This particular case involved an attempt to recover a foreign gambling debt owed by the appellant. The respondent, an operator of a Las Vegas casino, sought to enforce a Californian judgment granted in 2001 against the appellant which set aside a fraudulent transfer of property, ordered the property to be sold and further ordered the proceeds thereof to be applied to satisfy judgment debts arising from an earlier judgment given by the same Californian court in 1999. At first instance, the Singapore High Court ruled in favour of the respondent and held that the 2001 Californian judgment was enforceable in Singapore. The central issue arising for this court’s consideration was whether the 2001 Californian judgment was a judgment for a definite sum of money (in short, “a money judgment”). This court allowed the appeal on the basis that the 2001 Californian judgment was not a money judgment and was therefore unenforceable under Singapore law (see Poh Soon Kiat at [33]–[34]).

[40] The observations that were made in Poh Soon Kiat on the issue that is presently being considered were obiter dicta. Counsel in Poh Soon Kiat did not fully argue the point, and did not appear to bring this court’s attention to Lim Leong Huat and United States Trading. Additionally, Poh Soon Kiat concerned the issue of whether the sought-to-be-enforced foreign judgment was a money judgment. A foreign judgment may only be enforced via a common law action for debt if and only if the judgment is for an ascertained sum of money (see, for example, the English decision of James Sadler v James Robins (1808) 1 Camp 253 at 257; 170 ER 948 at 949). This was a key threshold issue which struck at the heart of the court’s power to enforce the 2001 Californian judgment; stricto sensu, it would not have been necessary for the appellant in Poh Soon Kiat to apply for leave to amend his defence to plead that the 2001 Californian judgment was not a money judgment. This court would have considered the issue sua sponte and would have requested for submissions on the same even if the parties had not raised it in their pleadings.

[41] It is therefore open to this court to reconsider this particular issue based on logic, principle, common sense as well as (relevant) policy. In this regard, we find the reasoning of Woo J in Lim Leong Huat (at [22], and quoted above at [28]) persuasive – even when viewed prior to the amendments effected to the Rules of Court in 2006. As Woo J pointed out in the decision just cited, if a defendant is not bound by his pleadings in O 14 proceedings, it could lead to an absurd situation. A defendant could succeed in resisting O 14 proceedings on the basis of an unpleaded defence. If an amendment to the defence to include that unpleaded defence is subsequently disallowed, the defendant will not be able to rely on the unpleaded defence at trial, with the potential result that he would have no arguable defence. This paradoxically means that summary judgment should have been entered in the plaintiff’s favour in the first place. This would undermine the raison d’être of O 14, which is precisely the expeditious resolution of cases which do not require a full-blown trial.

[42] Further, as both Woo J (in Lim Leong Huat at [25]) and Prakash J (in United States Trading at [25]) have very cogently and persuasively pointed out, the arguments in favour of departing from Lin Securities (and holding, instead, that a defendant is bound by his pleadings in O 14 proceedings and cannot therefore rely upon a fresh defence not hitherto pleaded unless his defence is amended or unless the court holds that there are good reasons to permit such reliance) are even stronger in light of the amendments to the Rules of Court in 2006. In particular, the 2006 amendments to the Rules of Court – whereby an application under O 14 could only be made after the defence was filed – were meant to obviate the difficulties inherent in the previous procedure. Under the old regime, a plaintiff filing his O 14 application before the defence was filed could not pre-emptively rebut all of the defendant’s possible defences, and had to wait for the defendant’s affidavit in order to see what grounds the resisting defendant was relying on. Practically speaking, the plaintiff would always have to file and serve on the defendant a supplementary affidavit in order to reply to the resisting defendant’s affidavit. This would drag out the O 14 process, especially as leave was required for the parties to file further affidavits in response to the plaintiff’s reply affidavit. Under the new regime, an O 14 application is only allowed after the defence is filed. This means that at least one round of affidavits is dispensed with, as the plaintiff knows exactly what the defendant’s pleaded case is and is able to tailor his O 14 application to the defendant’s pleadings. If a defendant could rely on unpleaded defences in O 14 proceedings, the plaintiff would be unfairly taken by surprise and the efficiency of the new regime would be completely undermined.

[43] In summary, we agree with both Woo J and Prakash J (in particular, with their reasoning with respect to the position after the above-mentioned amendments to the Rules of Court), and therefore hold that a fresh defence that has not been pleaded cannot be relied on by the defendant in O 14 proceedings unless the defence is amended or unless the case is an exceptional one where the court concerned is of the view that there are good reasons to permit reliance on such a fresh defence (for instance, if the fresh defence strikes at the heart of the court’s powers, as was the case in Poh Soon Kiat). We therefore proceed – in the context of the present proceedings – to consider whether or not the Appellants ought to be allowed to amend their pleaded defence to the Respondent’s counterclaim.

[45] Lord Griffiths’ comments in the House of Lords decision of Ketteman and others v Hansel Properties Ltd and others [1987] 1 AC 189 are particularly pertinent (at 220): to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight based on an entirely different defence.

[47] The Appellants’ application in SUM 6101/2013 for leave to amend their pleaded defence to the Respondent’s counterclaim to include pleadings based on mistake was therefore allowed.

[48] The Respondent’s O 14 r 12 application proper raises two issues:

[49] The ambit of O 14 r 12 was considered by Chao Hick Tin J (as he then was) in the Singapore High Court decision of Payna Chettiar v Maimoon bte Ismail and others [1997] 1 SLR(R) 738, in which the following principles were laid down (at [35]):

[50] Choo Han Teck JC (as he then was), in the Singapore High Court decision of Barang Barang Pte Ltd v Boey Ng San and others [2002] 1 SLR(R) 949, observed (at [5]), as follows:

[51] A further caveat is that the invocation of O 14 r 12 is not appropriate where factual disputes would affect the point of construction (see, for example, the Singapore High Court decisions of Re CEP Instruments Pte Ltd (in liquidation) [2004] SGHC 206 at [39] and ANB v ANF [2011] 2 SLR 1 at [32]).

[52] On the facts of the present case, the construction of the Compromise Letter, if resolved in favour of the Respondent, will fully determine the issue of whether the Respondent is contractually released from liability arising from the damaged sewer. The language used in the Compromise Letter is, however, latently ambiguous and, in the circumstances, the court should not determine the issue of interpretation under O 14 r 12 on the sole basis of competing affidavit evidence. This point will be elaborated on below (at [54]–[60]).

[53] The issue of whether the Compromise Letter is void or voidable on the ground of mistake is likewise not suitable for an O 14 r 12 determination. Ex hypothesi, a plea of mistake necessarily entails the resisting party alleging that the contract is void or voidable because of facts not readily apparent from the face of the contract (these facts being actual knowledge of the resisting party’s mistake in the case of unilateral mistake, and a common (and fundamental) misapprehension between the parties in the case of common mistake). This point will also be elaborated upon below (at [61]–[72]).

[54] With regard to whether the Compromise Letter releases the Respondent from liability arising from the damaged sewer, the starting point is the seminal decision of this court in Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029. V K Rajah JA, delivering the judgment of the court, drew a sharp line between the use of extrinsic evidence to interpret a contract on the one hand, and to contradict or vary it on the other (at [122]; see also the decision of this court in Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal [2013] 4 SLR 193 at [45]):

[55] To reiterate, the plain language of the Compromise Letter (see above at [8]) states that there shall be “no claim from either party”. On the face of it, “no claim from either party” applies to all claims and is not restricted to claims arising from a particular time period or claims pertaining to a certain subject matter. Such qualifications would seemingly constitute contradictions or variations of the plain language of the contract.

[56] The Compromise Letter, however, explicitly refers to the Respondent’s role as “Qualified Person (Architectural and Structural) and project coordinator”. The Respondent was initially hired directly by the First Appellant as the professional engineer from May 2006 onwards, and only took on the additional roles of architect and project coordinator when hired by the new builder, HPC, from June 2009 onwards. From May 2006 to June 2009, the Respondent’s title was Qualified Person (Structural). Taken as a whole, the Compromise Letter is latently ambiguous: does the phrase “no claim from either party” only apply to the Respondent’s acts and omissions qua professional engineer, architect and project coordinator all at once, or does it also extend to the Respondent’s acts and omissions qua professional engineer alone? The former interpretation would mean that the Respondent is not released from liability for the damaged sewer because that liability arose when he was only the professional engineer. In contrast, the latter interpretation would mean that the Respondent is released from liability for the damaged sewer.

[57] The ambiguity lies in whether “Qualified Person (Architectural and Structural) and project coordinator” is to be interpreted conjunctively or disjunctively. On a conjunctive interpretation, the Respondent must have held all three roles concurrently at the material time before he can avail himself of the “no claim from either party” clause. On a disjunctive interpretation, it is sufficient for the Respondent to avail himself of that clause even if he held only the role of Qualified Person (Structural) at the material time.

[58] As both interpretations are plausible, there would be no variation or contradiction involved in choosing between one and the other. As such, extrinsic evidence is admissible in the interpretation of the Compromise Letter.

[59] The Appellants take the position that a conjunctive interpretation should be adopted, placing especial reliance on the assertion that the Respondent knew that they were holding him responsible for the damage to the sewer. This is also somewhat corroborated by the Respondent’s own evidence, who in his affidavit stated that:

Conspicuously, the Respondent did not refer to the damage inflicted on the sewer as a basis for resignation.

[60] In the circumstances, we held that an O 14 r 12 determination was inappropriate in so far as this particular issue was concerned.

[61] The doctrine of mistake in contract law is a complex one. Fortunately, it is unnecessary for the purposes of the present grounds of decision to delve into its various facets – still less into the substantive merits of the specific issues which the Appellants have sought to raise in the context of the present case. However, it would be of some assistance to set out – in the briefest possible manner – the applicable legal principles in so far as they illustrate why the relevant issues cannot be resolved on the basis of affidavit evidence alone, but can only, instead, be resolved at a trial.

[62] As has been observed (see “Mistake” in ch 10 of The Law of Contract in Singapore (Andrew Phang Boon Leong gen ed) (Academy Publishing, 2012) (“Mistake”) at para 10.026):

[63] There are in fact two broad categories of common mistake – common mistake at common law and common mistake in equity, respectively. As we shall very briefly touch on below, the latter category no longer exists under English law, but is still an existing category under Singapore law.

[64] In so far as the category of common mistake at common law is concerned, reference may be made to two leading English decisions (which also appear to represent the law in the Singapore context (see generally Mistake at paras 10.092–10.108)) – the English High Court decision of Associated Japanese Bank (International) Ltd v Credit du Nord SA [1989] 1 WLR 255 (“Associated Japanese Bank”) and the English Court of Appeal decision of Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679 (“Great Peace Shipping”).

[65] In so far as Associated Japanese Bank is concerned, Steyn J (as he then was) set out five important propositions (at 268–269) – a summary of which is as follows (see Mistake at para 10.052):

[66] In so far as Great Peace Shipping is concerned, Lord Phillips of Worth Matravers MR set out the following five elements which must be satisfied before the court concerned will find that there is a common mistake which is sufficient to avoid the contract in question at common law (at [76]):

[67] Although there is much overlap between the propositions set out in Associated Japanese Bank (see above at [65]) and those set out in Great Peace Shipping (see above at [66]), they are not identical. An attempt has been made to reconcile the propositions elsewhere (see generally Mistake at paras 10.067–10.090), with a proposed summary as follows (see Mistake at para 10.090):

[68] It will suffice for the purposes of the present appeal to note that whether or not there has been, on the facts of this case, a common mistake at common law turns on the factual question of whether the parties held a common mistaken view of the ambit of the Compromise Letter. This is an issue that cannot be resolved on the basis of affidavit evidence alone and can only be resolved at a trial. That it is also a viable issue for trial is clear from the existing facts to date (see above at [2]–[9] and, in particular, the fact that the Second Appellant was charged by the PUB only in March 2012, some two and a half years after the Compromise Letter was first signed). The substantive merits and outcome can only be determined after all the relevant evidence has been adduced at the trial itself.

[69] As alluded to at [63] above, there is no longer a doctrine of common mistake in equity under English law (which was traditionally traced to the statement of principle by Denning LJ (as he then was) in the English Court of Appeal decision of Solle v Butcher [1950] 1 KB 671 (“Solle”) at 692–693 (see also generally Mistake at paras 10.109–10.116)). This was clearly stated in Great Peace Shipping (see also Mistake at para 10.117). However, it has been argued (albeit in an extrajudicial sphere) that there are good reasons why Solle ought still to be followed and the doctrine of common mistake in equity upheld, notwithstanding the clear pronouncement to the contrary in Great Peace Shipping (see generally Mistake at paras 10.119–10.122). Indeed, it is now established in the local case law that there continues to be a doctrine of common mistake in equity, the leading decision being that of this court in Chwee Kin Keong and others v Digilandmall.com Pte Ltd [2005] 1 SLR(R) 502 (“Digilandmall”) (see also generally Mistake, especially at paras 10.130–10.133).

[70] Again, what is germane in so far as the present appeal is concerned are the considerations set out above (at [64]–[68]), which, given the close similarity in the tests for common mistake at common law and common mistake in equity (see also Mistake at paras 10.134–10.140), would apply equally to the application of the doctrine of common mistake in equity in the context of the present appeal. Put simply, whether or not there has been a mistake of this nature is an issue that cannot be resolved on the basis of affidavit evidence alone and can only be resolved at a trial.

[71] The Appellants now also seek to rely – in the alternative – on the doctrine of unilateral mistake. The focus in this particular regard is on the situation where one party is mistaken but the other party is (or ought to be) aware of the first party’s mistake. This is, of course, a simple statement of the general law, which is rather more nuanced in its specifics (see generally Mistake, especially at paras 10.141–10.175). What is important to emphasise at this juncture is that there is a doctrine of unilateral mistake in the Singapore context at both common law and in equity (see Mistake at paras 10.145–10.146), and the general principles of this doctrine are (for the most part at least) fairly well-established (see generally Mistake at paras 10.162–10.175). In particular, the following statement of principle by Chao Hick Tin JA, delivering the judgment of this court in Digilandmall (at [75]–[80]) (in respect of the doctrine of unilateral mistake in equity), may be usefully noted:

[72] What is of the first importance in so far as the present appeal is concerned is that whether or not the Appellants can successfully invoke the doctrine of unilateral mistake at common law and/or in equity depends very much on the relevant evidence adduced at the trial itself, and not on affidavit evidence alone. In particular, the resolution in this particular regard (assuming that the mistake as to the ambit of the Compromise Letter is a sufficiently fundamental mistake) turns on the factual questions of: (a) whether the Appellants were mistaken as to the ambit of the Compromise Letter; and (b) whether the Respondent had actual or constructive knowledge of the Appellants’ mistake and (if the Respondent had constructive knowledge) whether the Respondent acted unconscionably. In particular, the question of actual knowledge is one of pure fact that can only be sufficiently ascertained after full evidence has been given at the trial itself. The remaining issues of constructive knowledge and unconscionable conduct are mixed issues of law and fact which are also unsuitable for summary determination.

[73] For the reasons set out above, the appeal was allowed. The decision of the court below was set aside and Suit 762/2012 was remitted for trial.