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Grounds publishedDecided 6 Aug 2015
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High Court

Yeo Boong Hua and others v Turf Club Auto Emporium Pte Ltd and others

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[2015] SGHC 207Case no. Suit No 27 of 2009

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Grounds of decision

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  1. Woo Bih Li J:

  2. Introduction

  3. [1] This case concerns a number of parties. The three plaintiffs (“the Plaintiffs”) are:

  4. (a) Yeo Boong Hua, also known as “Johnny Yeo”;

  5. (b) Lim Ah Poh, also known as “Michael Lim”; and

  6. (c) Teo Tian Seng, also known as “Raymond Teo”.

  7. [2] The 1st defendant, Turf Club Auto Emporium Pte Ltd (“TCAE”) and the 4th defendant, Turf City Pte Ltd (“TCPL”), are nominal defendants. The other defendants are:

  8. (a) the 2nd defendant, Singapore Agro Agricultural Pte Ltd (“SAA”);

  9. (b) the 3rd defendant, Koh Khong Meng (“Roger Koh”);

  10. (c) the 5th defendant, Tan Huat Chye (“Tan Senior”);

  11. (d) the 6th defendant, Ng Chye Samuel (“Samuel Ng”);

  12. (e) the 7th defendant, Tan Chee Beng (“Tan CB”) who is the son of Tan Senior; and

  13. (f) the 8th defendant, Ong Cher Keong (“Ong CK”).

  14. I will refer to these eight defendants collectively as “the Defendants”.

  15. [3] This action may be described as the latest saga in a longstanding dispute between two business groups of a joint venture. The two groups have been engaged in legal tussles with each other for more than 12 years. The Plaintiffs make up one group. The five individual defendants viz, Roger Koh, Tan Senior, Samuel Ng, Tan CB, and Ong CK make up the other faction along with SAA which is a company. However, Samuel Ng has not taken any substantive role in the present action. I will refer to these five individual defendants collectively as the “SAA Group”. TCAE and TCPL are companies incorporated under the joint venture. More will be said later on the background of these two groups as well as TCAE and TCPL, but suffice to say for now, these two companies are the subject of the dispute between the two groups.

  16. [4] The Plaintiffs’ primary relief is to set aside a consent order which they had entered into with the 1st to 6th defendants (“the Consent Order”) on 22 February 2006. The Consent Order was meant to settle the minority oppression actions brought by the Plaintiffs for various reliefs including an account of profits of the joint venture. As it turned out, disputes arose over the implementation of the Consent Order, and these disputes have brought the parties into the courtroom on a number of occasions. In the present action, the Plaintiffs’ goal is to set aside the Consent Order. If they succeed, they intend to reinstate the minority oppression actions.

  17. Background facts

  18. The formation of the joint venture

  19. [5] The joint venture between the two groups concerned the development and operation of a site known as Parcel A of the former Bukit Timah Turf Club (“the Site”). The Site was a large plot of land (roughly 557,000 m) located in Bukit Timah.

  20. [6] On 5 January 2001, the Singapore Land Authority (“SLA”), which was then known as the Singapore Land Office, invited tenders for the lease of the Site. An advertisement of the tender invitation was published in the Straits Times on 5 January 2001 and in the Lian He Zao Bao on 9 January 2001. Amongst other information, the following was stated in the advertisement:

  21. [7] To facilitate the tender exercise, SLA also put up a Tender Notice which contained general information of the tender. In the Tender Notice, the “duration of period contract” was stated to be “(From) 1 September 2001 … (To) 30 August 2010 …”. Under a section called “General Information”, the tenure was described to be “3+3+3 years”. The “Guide Rent” was $380,000 per month. The “3+3+3 years” tenure was repeated under a section called “Property Description”.

  22. [8] When the tender exercise closed on 2 March 2001, SLA received only two bids. The first bid was submitted by the Plaintiffs through their own joint venture vehicle named Bukit Timah Carmart Pte Ltd (“BTC”). All of them are businessmen who at the material time were in the used car trading business. They had their own businesses but the three also had experience working with each other before. For instance, on 15 March 2000, they incorporated Leng Kee Carmart Pte Ltd, a used car centre which sublets spaces to car dealers. Today, they are still in this trade.

  23. [9] The SAA Group used SAA to submit a second bid, pursuant to a joint venture between the five individuals in the SAA Group.

  24. [10] SAA had previously developed a farm-style mall known as “Farmart Centre” located near Sungei Tengah. Tan CB and Ong CK were directors and shareholders of SAA. Tan Senior, who is the father of Tan CB, used to be a shareholder and director of SAA until he sold his shareholding to Tan CB and ceased to be a director on 23 February 2001. Tan Senior and Ong CK had been business partners for over ten years. The other two individuals, Roger Koh and Samuel Ng, were neither directors nor shareholders of SAA. However, they were business partners with Tan Senior in a separate company called Kallang Auto Centre Pte Ltd (“Kallang Auto”) which sublets spaces to car dealers.

  25. [11] The SAA Group’s initial plan was to rely on their internal expertise in developing the Site. Architects Group Associates Pte Ltd (“AGA”), an architectural consultancy firm, would be in charge of the architectural aspects. Ong CK was an architect. He was a shareholder and principal director of AGA. Goodland Development Pte Ltd (“Goodland”), a construction and property development company in which Tan CB was a director and shareholder, would be in charge of the construction works. Tan CB was previously working as a civil engineer at the Housing and Development Board.

  26. [12] The two bids were both submitted on the tender closing date of 2 March 2001. The Plaintiffs submitted a bid of $260,000 rent per month while the SAA Group submitted a bid of $390,000 rent per month. The submissions were to take place at the SLA office which was formerly located at 8 Shenton Way, #24-01 Temasek Tower, Singapore 068811. There, the Plaintiffs bumped into Tan Senior, Roger Koh and Tan CB. Tan Senior and Roger Koh had been acquainted with Raymond Teo previously through the car trading industry. It was during this encounter that each group came to know that the other group had placed or was planning to place a bid for the Site. The two groups commenced discussions about jointly developing and operating the Site, although there was some disagreement as to whether the discussions commenced before or after the bids were submitted.

  27. [13] A consensus was reached that the two groups would enter into a joint venture to develop and operate the Site (“the Joint Venture”). A Memorandum of Understanding (“MOU”) was signed on 8 March 2001 by the Plaintiffs and the SAA Group (“the Eight Individuals”). It is common ground that before the MOU was signed, SLA had already released information on the identity of the bidders and the bid amounts but SLA had not yet awarded the tender to either bidder. Even though the Eight Individuals signed the MOU, parties disputed as to whether Tan CB and Ong CK signed the MOU in their personal capacity or whether they entered into the MOU using SAA.

  28. [14] The salient terms of the MOU may be summarised as follows:

  29. (a) a new joint venture company (“New Company”) would be incorporated to develop and operate the Site;

  30. (b) Johnny Yeo, Michael Lim and Raymond Teo would hold 37.5% of the shareholding of the New Company, and the remaining 62.5% shareholding would be collectively held by the other group;

  31. (c) only shareholders are deemed to be directors of the New Company; and

  32. (d) the development of the Site would be jointly headed by AGA and Goodland.

  33. [15] The Plaintiffs’ case was that the terms of the Joint Venture were not exhaustively contained in the MOU. Apart from the MOU, they alleged that there were two separate oral agreements between the Eight Individuals. The first was entered into on 2 March 2001 before the signing of the MOU at a Starbucks Café located on the ground floor of Temasek Towers and later at Tung Lok Restaurant located at East Coast Recreation Centre (“OA1”). The second was entered into after the signing of the MOU, either on 8 March 2001 or sometime in April 2001 (8 March 2001 being the Plaintiffs’ latest position) at Punggol Marina (“OA2”). A summary of the salient terms allegedly contained in OA1 and OA2 are as follows:

  34. (a) The Eight Individuals who were party to the Joint Venture would jointly exploit the lease of the Site in equal shares of 12.5% each.

  35. (b) The lease of the Site would be held beneficially by the Eight Individuals jointly so long as SLA continued to grant leases to either the Plaintiffs or SAA.

  36. (c) Instead of the New Company, two newly incorporated Joint Venture companies, TCAE and TCPL (“the JV Companies”), would develop the Site. The previous name of TCAE was Turf Club Auto Megamart Pte Ltd. The JV Companies would sublease the Site from either BTC or SAA on identical terms as the lease between BTC/SAA and SLA.

  37. (d) The monthly rent of the sub-tenancies between SAA and the JV Companies would be fixed at 3% above the tender rate payable by SAA to SLA.

  38. [16] It was the Plaintiffs’ case that flowing from the alleged oral agreements and the MOU, there was an understanding that so long as a head lease was in place between SAA/BTC and SLA, the JV Companies would be granted sub-tenancies on identical terms (“the Back-to-Back Arrangement”). The Defendants disputed the existence of the two oral agreements and the existence of the Back-to-Back Arrangement, but they agreed that subsequent to the MOU there was an oral agreement to form two joint venture companies instead of one. The parties spent a significant part of the trial arguing about the existence of the Back-to-Back Arrangement although the outcome of the present action does not turn on whether this arrangement did in fact exist before the Consent Order was recorded.

  39. [18] On 25 April 2001, SLA wrote to inform SAA that its bid was accepted. The acceptance letter stated that the term of tenancy would be three years with an option to renew for a three-year term plus a further option for a three-year term. The grant of the options was stated to be at the absolute discretion of the Collector of Land Revenue.

  40. [19] On 10 July 2001, SLA and SAA formally entered into a tenancy agreement (“the 2001 Head Lease”). A Draft Tenancy Agreement previously attached to the Tender Notice dated 5 January 2001 was adopted for the 2001 Head Lease. The tenure of the 2001 Head Lease was stipulated in two clauses. Clause 1(1) of the 2001 Head Lease stated that the lease period was three years starting from 1 September 2001 at a monthly rent of $390,000. Clause 1(3) stated that “[t]he Landlord may at his absolute discretion grant a fresh tenancy for a further term of 3 years subject to new terms and conditions and revision of rental upon the expiration of the term hereby created.”

  41. [20] With the successful procurement of the head lease, SAA entered into separate sub-tenancy agreements with TCAE and TCPL on the same day for a period of three years less one day from 1 September 2001 to 30 August 2004 (“the 2001 STAs”). In line with the business model outlined at [17], the multi-story carpark at 720 Dunearn Road, Singapore was subleased to TCAE (under its previous name viz, Turf Club Auto Megamart Pte Ltd) to be developed into a used car centre while the Main and North Grandstands were subleased to TCPL to be developed into a shopping mall. TCAE and TCPL would each pay a gross monthly rent of $195,000 to SAA (making a total of $390,000 rent per month) plus 3% of its gross rent or license fee per month (instead of 3% of the rent payable by SAA to SLA). Notably, the 2001 STAs contained an “Option to Renew” clause (found in paragraph 7 of Schedule 1) which purportedly granted the JV Companies two options to renew the three-year tenancy for a period of three years each.

  42. [21] In the meantime, renovation works began shortly after SAA was notified that it was the successful bidder. In accordance with the MOU, Goodland and AGA were appointed to be in charge of the construction and architectural aspects of the Project respectively. On 14 June 2001, 26 October 2001 and 26 November 2001, TCPL purportedly awarded Goodland contracts for $5m, $6.1m and $1.85m respectively for Phases 1, 2 and 3 of the renovation works.

  43. [22] On 25 June 2001, the Eight Individuals were appointed as directors of TCPL. As for TCAE, Tan Senior and Ong CK were the directors since its incorporation and Raymond Teo also became a director on 23 October 2001. Tan CB was appointed a director of TCAE on 9 February 2002. Roger Koh was subsequently made a director of TCAE on 28 February 2004.

  44. Minority Oppression Actions

  45. [23] As the renovation works were being carried out, disagreements arose between the Plaintiffs and the SAA Group. The Plaintiffs raised concerns over the accounts and finances of the JV Companies. On 17 April 2002, the Plaintiffs appointed PricewaterhouseCoopers LLP (“PwC”) to review the accounts of the JV Companies to check whether there was any irregularity. On 26 April 2002, Johnny Yeo made a formal request to Ong CK by way of letter to inspect documents and accounting records of the JV Companies. A similar request was made to Tan CB on 23 May 2002. According to the Plaintiffs, the Defendants put up many obstacles to prevent them from carrying out a proper review of the JV Companies’ accounts and finances. Several other disputes arose between the parties.

  46. [24] The disputes culminated in the commencement of two minority oppression actions after the Plaintiffs were not re-elected to TCPL’s Board of Directors on 16 August 2002. Raymond Teo was, however, still a director of TCAE. On 15 November 2002, Johnny Yeo and Michael Lim commenced Originating Summons No. 1634 of 2002/D (“OS 1634/02”) for various reliefs including an order to restrain TCPL from amending its Articles of Association. TCPL, SAA, Tan Senior, Samuel Ng and Roger Koh were named defendants in OS 1634/02. Raymond Teo was originally a defendant in OS 1634/02 but was added as a plaintiff on 28 May 2004.

  47. [25] On or about 25 August 2004, the Plaintiffs commenced Suit No. 703 of 2004/S (“S 703/04”) for various reliefs including an account of profits involving TCAE. TCAE, SAA and Roger Koh were named defendants in S 703/04. OS 1634/02 and S 703/04 were consolidated on 28 January 2005 (“the Consolidated Suits”). Tan CB and Ong CK were not sued by the Plaintiffs in the Consolidated Suits.

  48. [26] While the Consolidated Suits were ongoing, Samuel Ng, Tan Senior and Ong CK were adjudged bankrupts on 25 April 2003, 29 August 2003 and 5 March 2004 respectively. Due to their bankruptcy the three individuals could no longer hold onto their directorships in the JV Companies, leaving Tan CB and Roger Koh as the ones formally in charge of the operations of the JV Companies from 2004 onwards (save that Raymond Teo was a director of TCAE until 15 November 2006 when he did not get re-elected). Following the bankruptcy of Tan Senior, the Plaintiffs did not apply for leave to continue the Consolidated Suits against him. This went on until 2009 when the Plaintiffs decided to reinitiate legal action against him by naming him as one of the defendants in the present suit. As for Ong CK, he was never named as a defendant in the Consolidated Suits to begin with since the commencement of proceedings in 2002. It was only in the present suit that he was named a defendant.

  49. Leases entered into in 2004

  50. [27] While the court proceedings were pending, the 2001 Head Lease and the 2001 STAs expired. On 10 September 2004, SLA granted SAA another lease of the Site for a period of three years from 1 September 2004 (“the 2004 Head Lease”). The rent payable by SAA was reduced to $260,000 per month because of poor economic conditions during the renewal. The 2004 Head Lease contained a “Renewal of Tenancy” clause as follows:

  51. Clause 2.1 is in pari materia with clause 1(3) found in the 2001 Head Lease (refer to [19] above).

  52. [28] On the same day of 10 September 2004, SAA entered into sub-tenancy agreements with TCAE and TCPL respectively for a period of three years less one day from 1 September 2004 to 30 August 2007 (“2004 STAs”). The 2004 STAs involved the same areas as the 2001 STAs. The monthly rent payable by TCAE and TCPL was $130,000 each (making a total of $260,000 per month) plus 3% of each JV Company’s gross monthly rental/license fee income. However, unlike the 2001 STAs, the 2004 STAs did not include an “Option to Renew” clause. Raymond Teo – who was still a director of TCAE then (until his removal on 15 November 2006) – was not consulted on the terms of TCAE’s 2004 STA. The Plaintiffs further alleged that they were not shown the 2004 Head Lease and 2004 STAs because by then they were no longer directors of TCPL although Raymond Teo was still a director of TCAE.

  53. [29] The parties managed to reach a settlement before the Consolidated Suits proceeded to trial. The terms of the settlement were encapsulated in the Consent Order dated 22 February 2006 made before Justice Choo Han Teck (“Choo J”). Negotiations leading up to the Consent Order were conducted by the solicitors representing each side. AsiaLegal LLC (“AsiaLegal”) represented the plaintiffs and Rajah & Tann LLP (“Rajah & Tann”) represented the defendants. The parties to the Consent Order (“Consent Order Parties”) were:

  54. (a) the Plaintiffs;

  55. (b) TCPL;

  56. (c) SAA;

  57. (d) Tan Senior;

  58. (e) Samuel Ng;

  59. (f) Roger Koh; and

  60. (g) TCAE.

  61. I will refer to parties (b) to (g) as the “Defendants (CO)” instead of the “Defendants” because Tan CB and Ong CK were neither defendants in the Consolidated Suits nor parties to the Consent Order.

  62. [31] At the end of the bidding exercise, the higher bidder would purchase the respective shares of the lower bidder (clause 9(d)). The lower bidder would also resign from their directorship positions in the JV Companies (clause 9(f)). An important clause, which I shall elaborate more upon later, was that if the higher bidder were the Plaintiffs, the Defendants (CO), in particular SAA, were to use their best endeavours to transfer SAA’s head lease with SLA to the JV Companies (clause 9(g)).

  63. [32] Two entities were appointed to implement the Consent Order. KPMG Business Advisory Pte Ltd (“KPMG BA”) was in charge of the investigation aspect while KPMG Corporate Finance Pte Ltd (“KPMG CF”) was in charge of the valuation aspect. KPMG CF was also to supervise the bidding exercise.

  64. [33] The Consent Order contained certain timelines. Both the investigation and the valuation exercises were to be completed within 60 days of the date of appointment of KPMG BA (“the IV Date”) unless parties agreed in writing to a different time period (clause 2). Within one week from the IV Date, all decisions, findings and conclusions as determined by KPMG CF in the conduct of the valuation exercise were to be contained in a written report (“Valuation Report”) to be submitted to the Consent Order Parties. Within 28 working days of the receipt of the Valuation Report, the bidding exercise was to be carried out (clause 9). The bidding exercise would be completed within two working days of receipt of each party’s bid (if any) (clause 9(b)).

  65. [34] Clauses 4, 6 and 11 were put in place to facilitate a fair implementation of the Consent Order.

  66. (a) Clause 4 stated that the parties “may refer any and all matters which they deem relevant to the Independent Valuer for his consideration and review”.

  67. (b) Clause 6 placed an obligation on both parties to provide KPMG BA and KPMG CF “full access” to certain documents that they “may require”. It also stated that KPMG CF was at liberty to engage an independent Quantity Surveyor (“QS”) as it deemed necessary or appropriate for the purposes of the Investigation and Valuation Exercises.

  68. (c) Clause 11 imposed an obligation on both parties to preserve the value of the JV Companies when the Consent Order was still in operation. Both parties undertook not to do anything that would affect the assets and ongoing liabilities of the JV Companies, including anything which would “affect, vary and/or alter the status quo” of the JV Companies, “including but not limited to doing anything to affect the head lease between [SAA and SLA] and sub leases presently entered into between [SAA and the JV Companies].”

  69. [35] On 25 April 2006, both KPMG entities were formally appointed by the Consent Order Parties to perform the tasks stipulated under the Consent Order. Based on the timelines envisaged in the Consent Order, the IV Date was supposed to be 25 June 2006. Consequently, the Valuation Report was to be submitted to the Consent Order Parties by 2 July 2006. However, the investigation and valuation exercises were delayed as parties were unable to agree on the fees of appointing a second QS to replace the first QS who was no longer prepared to be involved in the investigation exercise. The deadlock culminated in KPMG BA writing to inform the Consent Order Parties on 3 August 2007 as follows:

  70. KPMG CF proceeded to issue the Valuation Reports for TCPL and TCAE on 10 August 2007. This was more than 13 months after the deadline envisaged under the Consent Order. In both reports, TCAE and TCPL were valued as at 31 May 2006.

  71. [36] In the meantime, unknown to both KPMG entities and the Plaintiffs, SAA had procured an in-principal renewal of the 2004 Head Lease with SLA as early as 8 September 2006. SAA then formally entered into a tenancy agreement with SLA on 22 May 2007 for the Site for a term of 3 years from 1 September 2007 (“2007 Head Lease”). The monthly rent was $260,000. This time round, SAA did not grant corresponding sub-tenancies to the JV Companies. The 2007 Head Lease was not disclosed by the Defendants (CO) to the KPMG entities or the Plaintiffs.

  72. [37] As a result of the above non-disclosure, the Valuation Reports did not take into account any head lease or sub-tenancies for the period between 1 September 2007 and 31 August 2010. Both Valuation Reports stated at para 5.6 that “[a]s at [10 August 2007], [KPMG] have not received any confirmation from [TCPL and TCAE] that the said lease would be extended for another term of three years”.

  73. [38] On 17 August 2007, AsiaLegal wrote to KPMG BA expressing shock over para 5.6 of the Valuation Reports as they had come to understand that the head lease between SAA and SLA had actually been renewed prior to the issuance of the Valuation Reports. They called for the Valuation Reports to be reissued to take into account the renewal.

  74. [39] It was not until 23 August 2007 that Rajah & Tann disclosed to KPMG BA and the Plaintiffs about the existence of the 2007 Head Lease and SAA’s non-renewal of the sub-tenancies with the JV Companies. By way of a letter, Rajah & Tann stated as follows, at paragraph 2:

  75. [40] Claiming that the non-renewal of the sub-tenancies constituted a breach of clause 11 of the Consent Order, AsiaLegal wrote to KPMG BA on 25 August 2007 seeking a confirmation from Rajah & Tann by 27 August 2007 that SAA would renew the sub-tenancies. Rajah & Tann replied to AsiaLegal on 29 August 2007, rejecting their request. They disagreed that “the Consent Order extends to the renewal of the Principal Tenancy Agreement”. They also disagreed that the Consent Order had placed an obligation on SAA to renew the sub-tenancies with the JV Companies. Rajah & Tann were against the reissuance of the Valuation Reports and pressed for the bidding exercise to be conducted.

  76. [41] KPMG BA also responded to the disclosure made by Rajah & Tann on 23 August 2007. In a letter dated 29 August 2007, it recommended that the Valuation Reports be revised as the Valuation Reports were done on the basis that the 2004 Head Lease might not be renewed. However, in the light of the reluctance of the Defendant (CO) for the Valuation Reports to be revised, it wrote to the parties again on 12 September 2007 to clarify that parties remained bound by the Valuation Reports until they were able to reach an agreement for a new report to be issued.

  77. [42] By September 2007 it became clear that SAA would not be granting corresponding sub-tenancies to the JV Companies. On 13 September 2007 the Plaintiffs filed Summons 4117 of 2007/X (“SUM 4117”) to apply for, inter alia, an order that the Valuation Reports dated 10 August 2007 be revised and/or reissued by KPMG CF taking into account the 2007 Head Lease. SUM 4117 was heard by Justice Chan Seng Onn on 19 and 22 November 2007. Chan J granted leave to the Plaintiffs to amend the application.

  78. [43] The amended SUM 4117 (“SUM 4117 (amended)”) was filed on 25 January 2008. The Plaintiffs asked for an order that the Consent Order be clarified and/or varied. In particular, it asked for clause 9(g) to be amended to expressly provide that SAA would assign the 2007 Head Lease to the JV Companies should the Plaintiffs win the bidding exercise. In the event that SLA was not agreeable to the transfer, SAA was to grant sub-tenancies to the JV Companies on identical terms as the 2007 Head Lease and it was also to transfer all sub-tenancies and/or licenses between SAA and the ultimate tenants to the JV Companies. It asked for a revaluation exercise to be conducted based on these terms.

  79. [44] Choo J heard SUM 4117 (amended). On 23 June 2008, Choo J delivered a written judgment dismissing the Plaintiffs’ application (Yeo Boong Hua and others v Turf City Pte Ltd and others and another suit [2008] 4 SLR(R) 245). He was of the view that a preliminary issue was whether the court had jurisdiction to hear the application and that any allegation of a breach of the Consent Order ought to have been brought in a separate claim.

  80. [45] The Plaintiffs’ failure in overcoming the jurisdiction issue would have been sufficient grounds to dismiss the appeal. Nevertheless, Choo J also discussed the allegations of breach of the Consent Order and held that “upon a proper construction of the Consent Order … [the] allegations are unfounded because no such obligations existed on the part of the defendants” (at [11]). This holding relating to the construction of the Consent Order (at [16]–[26]) features strongly in the defence of Tan CB, Roger Koh and SAA in the present action. These defendants argued that the Plaintiffs are precluded from re-litigating issues that had previously been argued before and decided by Choo J.

  81. [46] The Plaintiffs did not appeal against Choo J’s decision in SUM 4117 (amended).

  82. Defendants applied to court to fix bidding date

  83. [47] Following Choo J’s dismissal of SUM 4117 (amended), the Defendants (CO) filed Summons 4848 of 2008/P (“SUM 4848”) on 3 November 2008 for an order that the bidding exercise be held on 15 December 2008. The Plaintiffs resisted by filing Summons 5373 of 2008/J (“SUM 5373”) on 5 December 2008 for an order that the bidding exercise cannot be proceeded with.

  84. [48] Both applications came before Choo J. On 12 January 2009, Choo J dismissed the Plaintiffs’ application and ordered the bidding exercise to proceed. In his grounds of decision delivered on 12 February 2009 (Yeo Boong Hua and Others v Turf City Pte Ltd and Others and Another suit [2009] SGHC 34), Choo J explained that he was not persuaded by the reason given by the Plaintiffs to substantiate why the bidding exercise could not be proceeded with. The Plaintiffs’ reason was that they had commenced a fresh suit against the Defendants. Choo J concluded that the Plaintiffs’ new cause of action “should proceed independently” (at [2]).

  85. [49] The Plaintiffs appealed against Choo J’s decision of 12 January 2009 by way of Civil Appeal No. 6 of 2009/Z (“CA 6/2009”). The appeal was allowed on 7 July 2009. The Court of Appeal rescinded the bidding exercise which was supposed to be held on 9 February 2009.

  86. Commencement of the present action

  87. Defendants applied to strike out the action

  88. [50] As alluded to above, before SUM 4848 and SUM 5373 were heard by Choo J, the Plaintiffs separately commenced the present action on 8 January 2009 to set aside the Consent Order on the grounds of repudiatory breach, frustration and mistake. The inspiration for this move came perhaps from Choo J’s earlier decision concerning SUM 4117 (amended), where he mentioned that “[a]ny allegation of breach of the Consent Order ought to be brought in a separate action” (at [11]) (see also [44] above). In addition, the Plaintiffs claimed breach of fiduciary duties. The Plaintiffs also claimed conspiracy and knowing assistance in depriving the Plaintiffs of the benefit of the 2007 Head Lease.

  89. [51] The Defendants applied to strike out the action on the grounds that, inter alia, it disclosed no reasonable cause of action. On 19 November 2009, AR Then Ling (“AR Then”) struck out all of the Plaintiffs’ claims except the claim based on frustration. The Plaintiffs filed an appeal against AR Then’s decision.

  90. [52] The appeal was heard by Choo J and it was dismissed on 7 April 2010. For the second time, the Plaintiffs appealed against Choo J’s decision. This was by way of Civil Appeal No. 71 of 2010 (“CA 71/2010”).

  91. [53] By the time CA 71/2010 was ready to be heard, the Plaintiffs’ newly appointed solicitors Central Chambers Law Corporation (“CCLC”) wrote to the Registrar on 19 November 2010 to seek leave from the Court of Appeal to use a revised version of the Statement of Claim (Amendment No. 2) (“Revised SOC”). On 11 February 2011, after hearing the parties, the Court of Appeal granted the Plaintiffs leave to file and serve the Revised SOC. In other words, the Plaintiffs’ appeal was effectively allowed.

  92. Summary dismissal of the action

  93. [54] The present suit was originally set down for a 15-day trial before Choo J. However, during a hearing held on 17 October 2012, Choo J gave the following directions:

  94. [55] The Plaintiffs filed their written submissions on 23 October 2012 and the Defendants filed theirs on 30 October 2012. On 2 November 2012, Choo J dismissed the Plaintiffs’ claim (refer to his grounds of decision delivered on 12 November 2012 (Yeo Boong Hua and others v Turf Club Auto Emporium Pte Ltd and others [2012] SGHC 227) for more details).

  95. [56] For the third time, the Plaintiffs filed an appeal against Choo J’s decision by way of Civil Appeal No. 156 of 2012 (“CA 156/2012”). The Court of Appeal allowed the appeal on 3 July 2013, directing the matter back to the High Court for trial before a different judge. The Court of Appeal also said that “[p]arties are not precluded, in the course of the trial, from raising res judicata as one of the issues for the final determination of the new judge.” No written grounds were issued by the Court of Appeal. It was on this note that the parties came before me to have the present action tried.

  96. The parties’ claims

  97. [57] The Plaintiffs’ main claim in the present action is that the Consent Order should be set aside. The following grounds were pleaded:

  98. (a) the Defendants (CO) had committed a repudiatory breach of the Consent Order;

  99. (b) the Plaintiffs’ claims in the Consolidated Suits have not been compromised;

  100. (c) the Consent Order had been frustrated; and/or

  101. (d) the Plaintiffs entered into the Consent Order operating under a mistake of fact.

  102. [58] From the Plaintiffs’ closing submissions, it appears that they are no longer pursuing ground (d) – that the Plaintiffs were operating under a mistake of fact. Their submissions also did not specifically cover ground (c), the issue of frustration.

  103. [59] Should the Consent Order be set aside, the Plaintiffs also asked for the court to order that that they be at liberty to proceed with the Consolidated Suits, with such directions as may be appropriate (“the Consequential Orders”).

  104. [60] In the event that the Consent Order is not set aside, the Plaintiffs alternatively argued that the five individuals in the SAA Group (namely, Tan CB, Roger Koh, Samuel Ng, Tan Senior and Ong CK) and SAA are liable to account to the Plaintiffs for the profits made in breach of their fiduciary duties owed.

  105. [61] The substantive defendants (ie, excluding the JV Companies and Samuel Ng) are represented by three different sets of lawyers. SAA, Tan CB and Roger Koh are represented by Rajah & Tann and the lead counsel is Mr Kelvin Poon (“Mr Poon”). I will refer to this group of defendants collectively as “the R&T Defendants”. Tan Senior is represented by Mr Sim Chong (“Mr Chong”) of JLC Advisors LLP. Ong CK is represented by Mr Khor Wee Siong (“Mr Khor”) of Khor Thiam Beng & Partners. From the discussions that follow, it will be apparent that the arguments put forth by these three groups of defendants are quite different, although the existence of the Back-to-Back Arrangement and the alleged oral agreements were unanimously denied by all of them. Significantly, the R&T Defendants have also advanced a counterclaim against the Plaintiffs, asking for an order that the bidding exercise be proceeded with.

  106. [62] As a preliminary matter, it should be noted that the dispute over the setting aside of the Consent Order is mainly between the Plaintiffs and the R&T Defendants. The main defence of Tan Senior and Ong CK to the grounds advanced by the Plaintiffs to set aside the Consent Order is straightforward – that they were not proper parties to the Consent Order to begin with. For Tan Senior, even though he was originally named as a party in the action leading to the Consent Order, he contended that he did not participate in the negotiations leading to the Consent Order. His participation was not required as after he became a bankrupt in 2003, the Plaintiffs did not seek leave to continue proceedings against him in the Consolidated Suits. Ong CK argued that he was never a party to the Consolidated Suits or to the Consent Order.

  107. [63] I proceed now to detail the arguments raised by the parties with respect to the various claims and counterclaim.

  108. The Plaintiffs’ case

  109. [64] According to the Plaintiffs, several repudiatory breaches had been committed.

  110. [65] First, it was contended that SAA’s refusal to grant a renewal of the sub-tenancies in 2007 despite having secured the 2007 Head Lease from SLA amounted to a breach of clause 11 of the Consent Order. Clause 11 prohibited parties from doing anything to alter the “status quo” of the JV Companies. Even though SAA’s purported obligation to renew the sub-tenancies was not expressly provided for in clause 11, the Plaintiffs argued that this obligation nevertheless came within the phrase “status quo” on the basis of, amongst other things, the purported oral agreement between the parties. This Back-to-Back Arrangement continued to be the status quo at the time the Consent Order was entered into and SAA was required to preserve the status quo by continuing to grant sub-tenancies to the JV Companies. When it failed to do so, SAA had disrupted the “status quo”.

  111. [66] The Plaintiffs also made the related argument that SAA had further disrupted the “status quo” by misappropriating the JV Companies’ “assets and/or benefits”. It had done so by transferring to itself some of the sub-sub-tenancy agreements that the JV Companies had with the ultimate tenants. The ultimate tenants’ cash deposits held by the JV Companies were also transferred to SAA. In addition, it took over the JV Companies’ renovation structures. SAA received these benefits without paying the JV Companies anything for them. Not only did these developments affect the “assets and/or benefits” of the JV Companies, they denuded the JV Companies’ of any value. This amounted to a breach of clause 11 of the Consent Order. This argument is also contingent upon a finding that a Back-to-Back Arrangement falls within the ambit of clause 11.

  112. [67] Alternatively, the Plaintiffs averred that by securing the 2007 Head Lease from SLA and failing to grant the renewal of the sub-tenancies to the JV Companies, the Defendants had appropriated the benefit of the 2007 Head Lease. This was in breach of an implied term of the Consent Order. It was illogical for SAA to insist that it would need to transfer the 2004 Head Lease only, but not the 2007 Head Lease, if the Plaintiffs won the bidding exercise since TCPL and TCAE already held the 2004 STAs. There was therefore nothing of value to transfer in relation to the 2004 Head Lease. If the winner of the bidding exercise was not meant to have the benefit of the 2007 Head Lease, there would have been no need for clause 9(g) of the Consent Order.

  113. [68] The Plaintiffs also claimed that clause 5 of the Consent Order was breached when the Defendants allegedly hid material facts from the KPMG entities. Clause 5 stated that the parties “undertake not to … do anything to … hinder [KPMG CF]’s discharge of [its] duties in respect of the Valuation Exercise”. Clause 5 imposed an obligation on the parties not to hide material facts from the KPMG entities as doing so would hinder KPMG CF’s conduct of the Valuation Exercise. The failure and/or refusal to disclose the 2007 Head Lease had materially affected the valuation of the JV Companies since the Valuation Reports were prepared on the basis that there was no confirmation on the renewal of the 2004 Head Lease.

  114. [69] Lastly, the Plaintiffs argued that clause 6 of the Consent Order was breached when the Defendants (CO) did not provide KPMG BA “full access” to all the documents that it may require for the Valuation Exercise. KPMG BA was supposed to investigate contracts between the JV Companies and Goodland as well as services performed by AGA. The Defendants (CO) failed to give KPMG BA “full access” to the contracts and architectural drawings required to conduct a proper investigation and valuation exercise. For instance, a number of QSes approached by KPMG BA were unable to verify the works done as the available information was insufficient. As a result, the investigation exercise in relation to the Plaintiffs’ allegations in the Consolidated Suits was not properly carried out. In addition, they also claimed that the Defendants (CO) obstructed the KPMG entities’ efforts in appointing a QS by unreasonably refusing to pay their share of the additional fees quoted by a replacement QS.

  115. The R&T Defendants’ case

  116. [70] With respect to the allegation that SAA had breached the Consent Order in failing to renew the JV Companies’ sub-tenancies in 2007, the R&T Defendants argued that the Consent Order did not impose such an obligation on SAA. The existence of the “Back-to-Back Arrangement” was strenuously disputed. They argued that there was no oral agreement save that parties agreed to incorporate two joint venture companies instead of one. There was an agreement to jointly develop and operate the Site, but such an agreement did not extend to sharing the beneficial ownership of the head lease between SLA and SAA. The R&T Defendants argued that SAA had the discretion to decide whether to renew the JV Companies’ sub-tenancies after the initial three-year term. SAA also retained proprietary ownership of its head lease with SLA at all times.

  117. [71] As for the argument that SAA had further disrupted the “status quo” by misappropriating the JV Companies’ “assets and/or benefits” without providing valuable consideration for them, the R&T Defendants argued that this allegation was not even pleaded. In any case, they argued that the JV Companies would no longer have any more ultimate tenants once the 2004 STAs had expired. The JV Companies could not complain of conversion when the assets SAA took did not belong to them in the first place.

  118. [72] With respect to the point that an implied term of the Consent Order had been breached, the R&T Defendants argued that it was always contemplated that the entire bidding process under the Consent Order would be completed well before the 2004 Head Lease expired. At the time the Consent Order was entered into, there were no guarantees that the Government would grant the 2007 Head Lease and therefore clause 9(g) of the Consent Order was never meant to enable the winner of the bidding exercise to have the benefit of a renewed term of the Head Lease. The R&T Defendants also averred that there was no gap that needed to be filled through the implication of a term. Clauses 9(g) and 11 were clear in that they were meant to only refer to the 2004 Head Lease. This was therefore not a case of implication of terms but one of interpretation. The R&T Defendants further submitted that even if there was a gap, no term should be implied as the Consent Order retains its efficacy and the officious bystander test would fail.

  119. [73] With respect to the Plaintiffs’ point that clause 5 of the Consent Order had been breached, the R&T Defendants argued that there was nothing in the Consent Order that required SAA to disclose the 2007 Head Lease to anyone. In addition, reliance was placed on Choo J’s judgment in SUM 4117 (amended) in that this issue had already been decided in favour of the Defendants (at [24]) and therefore, the Plaintiffs were precluded from rearguing this point.

  120. Claims in the Consolidated Suit have not been compromised

  121. The Plaintiffs’ case

  122. [75] The Plaintiffs contended that KPMG BA and KPMG CF did not meet the standard required under the Consent Order in conducting the investigation and valuation exercise. Based on the disclaimers and cursory write-up in the Valuation Reports, it was evident that KPMG CF simply relied on figures provided by the Defendants instead of conducting an independent investigation into the JV Companies’ finances and accounts. Their pleaded case was that a proper investigation of the Plaintiffs’ claims in the Consolidated Suits was the main consideration the Plaintiffs were supposed to derive from having entered into the Consent Order. As KPMG BA did not carry out a full investigation, their claims were not fully compromised.

  123. [76] Another allegation was that KPMG BA should have appointed a QS to assist it in determining whether the contracts awarded to Goodland and AGA were of fair value. KPMG BA could not have been able to do this by itself without a QS.

  124. [77] The Plaintiffs also claimed that it was inappropriate for KPMG CF to have adopted the Net Asset Valuation (“NAV”) methodology to value the JV Companies’ shares. The valuation figures provided were inaccurate. KPMG CF should have used the “pro-forma revenue” method instead that can be found in a report submitted by the Plaintiffs’ expert witness, Timothy James Reid.

  125. [78] Related to the above argument on methodology is the point that KPMG CF should have taken into account the revenue receivable by the JV Companies from the period of September 2007 to September 2010. But because of SAA’s failure to disclose the 2007 Head Lease, it was unable to do so. This materially affected the valuation of the JV Companies since their potential to earn revenue was directly related to whether there was a head lease.

  126. [79] Further, although it was initially pleaded as a claim of “frustration”, the Plaintiffs in their closing submissions appeared to have re-characterised the 13.5-month delay in the issuance of the Valuation Reports as evidencing that the claims in the Consolidated Suit had not been compromised.

  127. The R&T Defendants’ case

  128. [80] The R&T Defendants argued that the Plaintiffs did not plead with sufficient clarity the claim of there being no independent investigation conducted by the KPMG entities. Even if it were pleaded, they argued that the Plaintiffs had failed to discharge their burden of proving that the investigation conducted by the KPMG entities was inadequate. In any event, they argued that KPMG CF enjoyed “unfettered and absolute discretion” in conducting the investigation and valuation exercise (clause 5).

  129. [81] As for the alleged deficiencies in the valuation exercise, the R&T Defendants argued that they were not properly pleaded. In any event, the R&T Defendants averred that since KPMG CF would have unfettered and absolute discretion in the valuation exercise, there was no basis for the Plaintiffs to argue that the valuation exercise was deficient.

  130. Consequential Orders

  131. [82] If the Plaintiffs succeed in setting aside the Consent Order, they argued that they should be allowed to bring the minority oppression claim against Tan CB and Ong CK in their personal capacity. In this regard, they argued that both Tan CB and Ong CK were parties to the Joint Venture in their personal capacity and not through SAA.

  132. [83] Tan CB and Ong CK both disputed this claim. They argued that SAA was the vehicle they had used to enter into the Joint Venture and therefore SAA should be named as defendants, not them.

  133. [84] Ong CK additionally raised the defence of laches and estoppel by conduct. He claimed that he had never been a party to the Consolidated Suits since 2002. He was only joined as a defendant to the present suit in 2009. The delay of seven years has prejudiced him.

  134. [85] As for Tan Senior, he argued that the doctrines of abuse of process, estoppel by conduct and waiver precluded the Plaintiffs from suing him again in 2009 in the present action. After he became bankrupt in 2003, the Plaintiffs did not seek leave to continue the Consolidated Suits against him. In fact, the Plaintiffs stopped or abandoned all litigation against him since his bankruptcy until they commenced the present action in 2009.

  135. Counterclaim by the R&T Defendants: whether the bidding exercise should be proceeded with

  136. [86] The R&T Defendants filed a counterclaim against the Plaintiffs for an order that the bidding exercise be proceeded with. The Plaintiffs’ main defence to the counterclaim are the same as those canvassed in their claim. Further and in the alternative, the Plaintiffs argued that the Valuation Reports dated way back in 31 May 2006 (or even 10 August 2007) could no longer serve its purpose of informing the bidding exercise. In addition, the JV Companies were practically worthless today and therefore it would be pointless to bid for them.

  137. Plaintiffs’ residual claim: breach of fiduciary duties and conspiracy

  138. [87] In the event the Plaintiffs do not succeed in setting aside the Consent Order, they argued that in the alternative, the five individuals from the SAA Group (namely, Tan CB, Roger Koh, Samuel Ng, Tan Senior and Ong CK) and SAA are liable to account to the Plaintiffs for the profits made including but not limited to the 2007 Head Lease. They are relying on the same Back-to-Back Arrangement to say that these Defendants owed them fiduciary duties under the Joint Venture. In not renewing the sub-tenancies to the Joint Venture Companies in 2007, they had breached their fiduciary duties. Further and in the alternative, they had conspired with each other to breach the fiduciary duties.

  139. [88] However, when SAA did not renew the JV Companies’ sub-tenancies in 2007, both Tan Senior and Ong CK were no longer directors of SAA and the JV Companies. Tan Senior and Ong CK claimed that they were no longer involved in the management of SAA and the JV Companies upon the cessation of their respective directorships. Nevertheless, the Plaintiffs’ basis for proceeding against these two individuals was that they had masterminded the scheme to deprive the Plaintiffs of the benefits under the 2007 Head Lease (“Mastermind Allegation”).

  140. [89] In their defence, Tan CB, Roger Koh, Samuel Ng, Tan Senior, Ong CK and SAA all argued that there had been no oral agreement that the parties would share the beneficial interest of the head lease between SLA and SAA. Therefore, there were no fiduciary duties owed by them to the Plaintiffs.

  141. [90] Tan Senior claimed that the Mastermind Allegation was fabricated by the Plaintiffs in order to drag him back into litigation. Until the present suit commenced in 2009, the Plaintiffs had abandoned all proceedings against him after he became a bankrupt in 2003. They did not seek leave to continue OS 1634/02 against him. They also did not sue him in S 703/04.

  142. [91] Ong CK raised the defence of laches against these claims.

  143. [92] I would also add that with respect to these residual claims, the Plaintiffs have indicated that they would subsume these claims under the Consolidated Suits, should the Consent Order be set aside and the Consolidated Suits be reinstated.

  144. Issues

  145. [93] The broad overarching issue that arose in the present dispute was whether the Consent Order should be set aside. This raised the following questions in respect of the Consent Order:

  146. (a) Whether the Consent Order imposed an obligation on SAA to pass on the benefit of the 2007 Head Lease to the JV Companies by way of the granting of sub-tenancies (“the Non-Renewal Issue”).

  147. (b) Whether the Consent Order imposed an obligation on SAA to disclose the procurement of the 2007 Head Lease to the KPMG entities (“the Non-Disclosure Issue”).

  148. (c) Whether the investigation and valuation exercises required of the KPMG entities were properly carried out (“the Investigation and Valuation Issue”).

  149. (d) Whether the Defendants obstructed efforts to appoint a QS and whether the failure to appoint a QS enables the Plaintiffs to set aside the Consent Order (“the QS Issue”).

  150. [94] Should the Consent Order be set aside, the Consequential Orders requested for by the Plaintiffs raise two questions:

  151. (a) Whether Tan CB and Ong CK were proper parties to the Joint Venture.

  152. (b) Whether Tan Senior and Ong CK could rely on the Plaintiffs’ delay in bringing them back into litigation to avoid being named as defendants in the reinstated Consolidated Suits.

  153. My decision

  154. Preliminary considerations

  155. [95] Before I proceed to assess the merits of the various claims, I address two logically anterior questions which deserve some discussion. First, I consider the principles which should be applied in interpreting the Consent Order and secondly, I consider whether Choo J’s previous decision in Yeo Boong Hua and others v Turf City Pte Ltd and others and another suit [2008] 4 SLR(R) 245 (“Choo J’s Decision”) gives rise to issue estoppel.

  156. [96] There are two types of consent orders. In determining whether a consent order may be set aside or varied, the court would, as a preliminary matter, examine the type of consent order in question. This was discussed by MPH Rubin J in CSR South East Asia Pte Ltd (formerly known as CSR Bradford Insulation (S) Pte Ltd) v Sunrise Insulation Pte Ltd [2002] 1 SLR(R) 1079 (“Sunrise Insulation”) at [8]:

  157. [97] It is common ground that the Consent Order in the present case falls under the first category referred to in Sunrise Insulation. It is a contract between the parties and it is undisputed that the Consent Order may only be set aside on the same grounds as would apply to an ordinary contract. I therefore approach the question of whether the Consent Order may be set aside with reference to prevailing contractual principles.

  158. Issue estoppel

  159. [98] With respect to the question of issue estoppel, I note that the Non-Renewal Issue and the Non-Disclosure Issue had previously been discussed in Choo J’s Decision. This raises the question of whether I am thereby precluded from revisiting the same issues in this judgment. It is the R&T Defendants’ case that I am not allowed to do so because the views expressed in Choo J’s Decision allow the invocation of the doctrine of issue estoppel.

  160. [99] To examine whether the R&T Defendants are entitled to raise the doctrine of issue estoppel, it is necessary to discuss whether the requirements of issue estoppel have been met. The requirements of issue estoppel are as follows (see Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan 301 [2005] 3 SLR(R) 157 (“Lee Tat”)):

  161. (a) There must be a final and conclusive judgment on the merits.

  162. (b) The previous judgment must be of a court of competent jurisdiction.

  163. (c) There must be identity between the parties to the two actions that are being compared.

  164. (d) There must be an identity of subject matter in the two proceedings.

  165. [100] The fourth requirement was subsequently expounded on by Menon JC (as he then was) in the oft-cited local case of Goh Nellie v Goh Lian Teck and others [2007] 1 SLR(R) 453 (“Goh v Goh”) to encapsulate three further sub-requirements:

  166. (a) The issues in the prior decision must traverse the same ground as the subsequent proceedings and the facts and circumstances giving rise to the earlier decision must not have changed.

  167. (b) The previous determination in question must have been fundamental and not merely collateral to the previous decision so that the previous decision could not stand without that determination.

  168. (c) The issue in question should be shown in fact to have been raised and argued.

  169. [101] There is no disagreement between the parties that requirements (b) and (c) in Lee Tat have been satisfied in respect of Choo J’s decision. The bone of contention centres on requirements (a) and (d) in Lee Tat, viz, whether Choo J’s holding with respect to the allegations of breach of the Consent Order was “final and conclusive” and whether there was an identity of subject matter in the two proceedings. The Plaintiffs’ arguments, in this regard, are that Choo J did not intend to preclude subsequent proceedings and that his decision does not give rise to issue estoppel because his observations made with respect to the proper construction of the Consent Order were collateral findings which were not fundamental to his decision.

  170. [102] Before examining the validity of the arguments raised by the parties, it is worth understanding the background of the matter before Choo J. As I have alluded to earlier, SUM 4117 (amended) concerned the Plaintiffs’ application to vary the Consent Order. The application was filed pursuant to the Plaintiffs’ belated discovery that SAA had failed to pass on the benefit of the 2007 Head Lease to the JV Companies and as a result the benefit was not properly taken into account in the valuation reports issued by KPMG CF. Consequently, the Plaintiffs applied to court for an order that a fresh valuation exercise be conducted on the basis that the 2007 Head Lease should be taken into account as an asset of the JV Companies which would then fall within the pool of assets that the parties would be bidding for.

  171. [103] The Plaintiffs’ application was dismissed by Choo J. He held that the court’s jurisdiction to hear the application was not invoked insofar as it was asked to make further substantive orders to vary the Consent Order. He was of the view that the circumstances under which a court may interfere with a Consent Order were exceptional, and the arguments raised by the Plaintiffs in relation to the non-renewal of the sub-tenancies and the failure to disclose the procurement of the 2007 Head Lease did not fall squarely within the “exceptional circumstances” that would ordinarily warrant the making of further substantive orders.

  172. [104] It must be borne in mind that the order sought by the Plaintiffs was for the Consent Order to be varied and for the purposes of making this determination, allegations that the Consent Order had been breached were irrelevant. The failure on the part of the Plaintiffs to satisfy the stringent criteria required to invoke the court’s jurisdiction for the purposes of varying a Consent Order would have been sufficient for Choo J to dispose of the matter.

  173. [105] Nevertheless, as the R&T Defendants have argued, Choo J went on to examine the merits of several allegations of breach made by the Plaintiffs on the assumption that the proper cause of action, ie, breach of Consent Order, had been pleaded, and he held that there was no breach.

  174. [106] I am of the view that while there is some merit in the R&T Defendants’ reliance on Choo J’s holdings as a basis for arguing issue estoppel, there is no issue estoppel.

  175. [107] With respect to requirement (a) of the Lee Tat test, I am of the view that this requirement has not been made out – Choo J’s holding on the proper construction of the Consent Order was not meant to be final and conclusive. It was observed in Goh v Goh at [28], “whether the decision in question is a final and conclusive judgment on the merits may be ascertained from the intention of the judge”. In Alliance Entertainment Singapore Pte Ltd v Sim Kay Teck [2006] 3 SLR(R) 712, Andrew Ang J noted (at [23]) that:

  176. [108] I turn now to consider if Choo J intended for his judgment to be final and conclusive on the merits when he rendered his decision. At [11] of Choo J’s Decision, he stated that:

  177. It was not clear from [11] of Choo J’s Decision whether the views he expressed in relation to the Plaintiffs’ allegations of breaches of the Consent Order were obiter. It may be that they were obiter in that he wanted to show the Plaintiffs that there would be no purpose in commencing a fresh action based on the allegation of breaches which were bound to fail. Conversely, he could have intended his views to be final and conclusive in that he was prepared to make a binding decision even though the Plaintiffs’ allegations of breach ought to have been brought in a separate action.

  178. [109] Interestingly, the R&T Defendants appear to have accepted that his views were obiter. In [368] of their closing submissions, they said:

  179. The R&T Defendants therefore appear to affirm the position that Choo J had declined to vary the Consent Order because he was of the view that allegations of breach should have been ventilated in a separate action. This would mean that his observations with respect to the construction of the Consent Order were obiter.

  180. [110] There is another point in favour of the contention that Choo J did not intend his views to be final and binding. It will be recalled that subsequent to his decision in SUM 4117 (amended), the R&T Defendants had applied in SUM 4848 for the bidding to be held on 15 December 2008. This was met by the Plaintiffs’ application in SUM 5373 for an order that the bidding cannot be held by reason of non-compliance with the Consent Order. Choo J granted the application for the bidding to proceed and dismissed the opposing application. In Choo J’s grounds of decision for both these summonses (see Yeo Boong Hua and Others v Turf City Pte Ltd and Others and Another suit [2009] SGHC 34), he said:

  181. [111] Before I continue, I should mention a number of clarifications. In respect of [2] of Choo J’s grounds of decision, I assume that his reference to the Plaintiffs’ application to set aside the Consent Order was to SUM 4117 (amended). However, as elaborated above (see [102]), the Plaintiffs' application was not actually to set aside the Consent Order, but was instead for a variation of the terms of the Consent Order.

  182. [112] Secondly, the Plaintiffs did not appeal against Choo J’s decision to dismiss SUM 4117 (amended).

  183. [113] Thirdly, as regards Choo J’s reference to the Plaintiffs’ application for a stay, this would presumably be a reference to SUM 5373 which was not couched in terms of a stay but rather for an order that the bidding exercise cannot be held. Choo J may have construed that application as a stay because he was informed during arguments on 12 January 2009 that the Plaintiffs had issued a fresh writ of summons in Suit 27 of 2009 (ie, the present action).

  184. [114] I now come to why I am of the view that Choo J did not intend for his decision in SUM 4117 (amended) to be final and binding. As quoted above, Choo J said that the alleged new cause action (ie, the present action) should proceed independently even though the R&T Defendants argued that it covered the same substance as SUM 4848. There was no qualification by Choo J that the Plaintiffs’ continuation of that action was subject to the decision he had already rendered in SUM 4117 (amended).

  185. [115] Choo J’s unqualified statement that the Plaintiffs’ new cause of action should proceed independently reinforced the Plaintiffs’ contention that there was no res judicata, in particular, that he did not intend the views he expressed in SUM 4117 (amended) on the Plaintiffs’ allegations of breaches to be final and conclusive.

  186. [116] The burden of proof ultimately rests on the R&T Defendants to establish issue estoppel and I am of the view that they had not discharged this burden.

  187. [117] Having decided that requirement (a) of the Lee Tat test has not been fulfilled, it is not necessary for me to consider whether requirement (d) has been made out. However, for completeness, I would state that in the light of my above conclusion that Choo J’s Decision vis-à-vis the Plaintiffs’ allegations of breach was not final and conclusive, requirement (d) is similarly not fulfilled.

  188. [118] In Goh v Goh, it was observed that for there to be an identity of subject-matter, one key consideration is whether the previous determination in question was fundamental to the previous determination:

  189. [119] As I have concluded above, Choo J’s decision to reject the Plaintiffs’ application in SUM 4117 (amended) ultimately rested on his lack of jurisdiction. His observations with respect to the Plaintiffs’ allegations of breach of the Consent Order were not fundamental to his decision.

  190. [120] I therefore reject the R&T Defendants’ defence of issue estoppel and will proceed to construe the Consent Order afresh. This is not to say, however, that Choo J’s observations with respect to whether there was a breach of the Consent Order are irrelevant. In the course of reaching my own conclusion, as and when applicable, I will refer to Choo J’s observations.

  191. The Non-Renewal Issue: whether a repudiatory breach arose from SAA’s failure to grant the JV Companies sub-tenancies arising out of the 2007 Head Lease

  192. [121] The issue of whether the Defendants were obliged to grant sub-tenancies which arose out of the 2007 Head Lease to the JV Companies (“the Renewal Obligation”) turns on two separate questions.

  193. [122] The first question is the proper construction of clause 11 of the Consent Order, which is the provision which the Plaintiffs relied on, and whether its wording captures the Renewal Obligation.

  194. [123] According to the Plaintiffs, clause 11 captures the Renewal Obligation. Clause 11 states as follows:

  195. [124] The Plaintiffs averred that the Back-to-Back Arrangement formed part of the “status quo” of the JV Companies which the Defendants were prohibited from altering or disrupting.

  196. [125] The R&T Defendants, on the other hand, argued that there was no Back-to-Back Arrangement and therefore the Renewal Obligation was not captured by the terms of the Consent Order.

  197. [126] The second question is if clause 11 does not capture the Renewal Obligation, whether such an obligation arises from an implied term of the Consent Order.

  198. [127] Both parties’ arguments on clause 11 of the Consent Order centre on the existence of the Back-to-Back Arrangement. A significant time at trial was spent on proving this fact. However, as alluded to earlier (at [16]), the construction of clause 11 does not turn on this fact. I am of the view that whether or not a Back-to-Back Arrangement did exist prior to the entering of the Consent Order is not determinative in concluding what the parties intended when they used the phrase “status quo” in clause 11 of the Consent Order. This conclusion is supported by the context in which the Consent Order was entered into.

  199. [128] When parties entered into the Consent Order, it was with a view to settling the disputes which arose in the Consolidated Suits. One of the issues raised in the dispute was that the 2004 sub-tenancies granted to the JV Companies were on terms which were inconsistent with the 2004 Head Lease between SAA and SLA in that the 2004 sub-tenancies did not have an option to renew clause. As highlighted by the R&T Defendants, the very existence of the Back-to-Back Arrangement was already hotly contested in the Consolidated Suits that engendered the Consent Order. I note that in Choo J’s Decision at [18], Choo J placed great emphasis on the fact that the exact words used in clause 11 was that parties would not affect the status quo in terms of “benefits which the Companies presently enjoy” (emphasis added). The word “presently” formed the basis on which he concluded, albeit obiter, that clause 11 did not impose an obligation on the Defendants to pro-actively renew the sublease upon its expiry. In other words, Choo J was of the view that clause 11 applied only to the 2004 sub-tenancies and not to future sub-tenancies. Even if the Back-to-Back Arrangement existed, this would only kick in again in 2007 and was not a right which the JV Companies enjoyed at the time which the Consent Order was entered into.

  200. [129] The Plaintiffs’ reliance on clause 11 was premised on the existence of the Back-to-Back Arrangement before the Consent Order was entered into and that this arrangement was encapsulated within the words “status quo” and “presently enjoy”. As mentioned, the existence of such an arrangement was hotly contested before the Consent Order was entered into. When the Consent Order was entered into, it was open to the parties to agree either to include or to exclude the Back-to-Back Arrangement as part of the resolution of their dispute. Therefore, even if there was a Back-to-Back arrangement before the Consent Order, the parties could have agreed to exclude it from the Consent Order. Conversely, even if there was no such arrangement before the Consent Order, the parties could have agreed to include it as part of the Consent Order. Accordingly, a finding that there was such an arrangement before the Consent Order was entered into would not necessarily mean that clause 11 encapsulates the Back-to-Back Arrangement.

  201. [130] Since it will not assist in the interpretation of clause 11, I make no conclusion as to the existence of a Back-to-Back Arrangement before the Consent Order was entered into.

  202. [131] However, it is regrettable that although the Back-to-Back Arrangement was such a contested subject before the Consent Order was entered into, the lawyers who drafted the Consent Order did not address this arrangement specifically one way or the other in the Consent Order itself. Consequently, parties were left to argue whether the Consent Order did or did not contain the Back-to-Back Arrangement.

  203. [132] In the meantime, notwithstanding my above views, since both the Plaintiffs and the Defendants (CO) expended much effort to establish or deny the existence of the Back-to-Back Arrangement prior to the entering of the Consent Order and since the evidence they rely on is not entirely irrelevant to the issues I have to grapple with and may also become relevant in other proceedings, I will set out the various pieces of evidence relied upon by them.

  204. Evidence supporting the existence of the Back-to-Back Arrangement

  205. [133] The source of the Back-to-Back Arrangement, as argued by the Plaintiffs, was OA1 and OA2 (see above at [15]).

  206. [134] Apart from OA1 and OA2, the Plaintiffs relied on several other alleged facts to establish the existence of the Back-to-Back Arrangement.

  207. (a) The parties had the commercial expectation that the lease from SLA to SAA would be for “3+3+3” years. According to the Plaintiffs, this was evident from several pieces of evidence:

  208. (i) The advertisement published by SLA in the Straits Times and in the Lian He Zao Bao stated that a lease of the Site was available for tender for a “3+3+3 years Tenure”.

  209. (ii) Under a section called called “General Information” in the Tender Notice, the tenure was described to be “3+3+3 years” and the “duration of period contract” was stated to be “(From) 1 September 2001 … (To) 30 August 2010 …”.

  210. (iii) Under a section called “Tendered items” in the Tender Notice, it is stated that the tenure was for a “3+3+3 years Tenancy”.

  211. (iv) Clause 2.1 of the “Particulars and Conditions of Tender” provided for a three year tenancy with an option to renew another three year term subject to the terms and conditions contained therein as well as those contained in the Draft Tenancy Agreement

  212. (v) Tan CB admitted during his testimony in court that from an objective standpoint, the marketing materials would give the impression that the Site would be leased to the prospective tenderer for “3+3+3 years”

  213. (vi) In Ong CK’s business plan dated 8 March 2001, he stated that the “site is leased from Land Office for Commercial Use for a period of 3 years + 3 years + 3 years with effect from April 2001”.

  214. (b) The Defendants agreed to pass on the benefit of the “3+3+3” years Head Lease tenure to the JV Companies through the grant of corresponding sub-tenancies. Apart from OA1 and OA2, the Plaintiffs averred that there was other objective evidence to support this conclusion:

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