Charles Lim Teng Siang v Hong Choon Hau

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Charles Lim Teng Siang and another v Hong Choon Hau and another [2021] SGCA 43

In the Court of Appeal of the Republic of Singapore: Civil Appeal No 49 of 2020 in the matter of Suit 920 of 2018

Decision of the Court of Appeal (delivered by Steven Chong JCA), 1 March 2021: Sundaresh Menon CJ, Judith Prakash JCA, Belinda Ang Saw Ean JAD, Andrew Phang Boon Leong JCA, Steven Chong JCA

Lok Vi Ming SC, Qabir Sandhu, Law May Ning instructed by LVM Law Chambers LLC, Daryl Ong Hock Chye instructed by Law Craft LLC, for the appellants

Christopher Woo, Joel Ng and Sujesh Anandan instructed by Quahe Woo & Palmer LLC for the respondents



This appeal arose from a decision of the High Court which held that an agreement for the sale and purchase of shares (“SPA”) in a public-listed company had been orally rescinded by mutual agreement. Upon further analysis of the issues of the appeal, the Singapore Court of Appeal found that a no-oral modification (“NOM clause”) in the SPA did not apply to an oral rescission of the SPA itself but instead, the NOM clause only prevented the “variation, supplement, deletion or replacement” of any term of the SPA unless made in writing and signed by or on behalf of all parties. The appeal was dismissed.

This Case Note is contributed by Sri Azali BB (Human Resource Management & Business Law), Paralegal at Penningtons Manches Cooper LLP Singapore


The first appellant, Charles Lim Teng Siang (“Mr Lim”), was a relationship manager with United Overseas Bank (“UOB”) and was the beneficial owner of approximately 15.49 million shares in a public-listed company known as PSL Holdings Ltd (“PSL”). Of these, 9.755 million shares were held by his mother Tay Mui Koon (“the second Appellant”), on behalf of Mr Lim.

Sometime in 2014, Mr Lim was introduced to a wealthy businessman Tedy Teow (“Mr Teow”) who had informed Mr Lim that he would purchase 35 million PSL shares for SGD10.5 million at 30 cents per share, through his associates, the Respondents, Hong Choon Hau and Tan Kim Hee. The Appellants entered into a Sale and Purchase Agreement (“SPA”) to sell shares to the Respondents. The Completion Date passed but the transaction was never completed. More than 3.5 years after the Completion Date had passed, the Appellants brought a suit against the Respondents to claim damages for breach of the SPA. The Respondents argued that the SPA had been orally rescinded by mutual agreement, via a telephone call on or about 31 October 2014, between the first Appellant and first Respondent. They argued that the appellants were estopped from enforcing the SPA. The appellants denied that there was a rescission via a telephone call, or that they were estopped from enforcing the SPA.

The High Court accepted the respondents’ version of events and found that the SPA was indeed rescinded by mutual agreement. However, the High Court did not make any findings on estoppel. The appellants appealed. On appeal, they raised a new point concerning a NOM clause (clause 8.1) of the SPA which prevented variation, supplement, deletion, or replacement of or from the agreement unless made in writing and signed by or on behalf of both parties. They argued that even if there had been an oral rescission, this was invalid by virtue of the NOM clause. In the respondents’ view, the NOM clause did not apply to rescission as it only concerned the variation of terms in the SPA and hence, the appellants were estopped from enforcing the SPA.

The two issues of Law

The introduction of this new point gave rise to two interesting issues on appeal:

(i) Does a clause which prohibits “variation, supplement, deletion or replacement of or from this Agreement or any of its terms unless made in writing and signed by or on behalf of each Party” apply to rescission?

(ii) Assuming that the oral variation of an agreement has been proved, can the other party rely on such a clause to invalidate the oral variation?

Addressing these questions required an examination of the principle of party autonomy in contract law, its ramifications, and its limits. Furthermore, it also required consideration of the difficulties in giving effect to an oral variation in the face of such a clause.

Decision of the Court of Appeal

The Court of Appeal found that on the particular wording of the NOM clause in this case, the NOM clause only prevented an oral “variation, supplement, deletion or replacement” of any term in the SPA and did not apply to a rescission. Factually, a “rescission” was to be treated separately from a modification of the SPA. The Court of Appeal went on to make several obiter provisional observations about the legal effect of a NOM clause following three schools of thought.

First, there was the “Sumption Approach”, that is, the majority decision in Rock Advertising Limited v MWB Business Exchange Centres Limited [2018] 4 All ER 21 (“Rock Advertising UKSC”) (where the majority judgment was delivered by Lord Sumption), that a NOM clause would be given full effect such that any subsequent modification to the contract would be deemed to be invalid unless it complied with the formalities stipulated in the NOM clause. The Court of Appeal expressed reservations on this approach, as it conflated a contracting party’s individual autonomy with the parties’ collective autonomy, which led to the erroneous conclusion that once parties had agreed to a certain set of rules, they could not together agree to change those rules. While the Sumption approach seemed to be concerned with contractual certainty, this should be resolved by evidential principles and not contractual principles.

Second, there was the approach developed by Lord Briggs in Rock Advertising UKSC, which was similar to the Sumption approach, save that where parties orally agreed to depart from a NOM clause, such agreement would be treated as valid (“the Briggs approach”). Under this approach, an oral agreement to depart from a NOM clause could be express or by necessary implication but should not be lightly inferred in a situation where parties merely agreed to an oral variation without express reference to the NOM clause. A strict test should be applied before the court found that the parties had, by necessary implication, agreed to depart from the NOM clause.

The court opined that the Briggs approach accorded with their view as it respected and upheld the parties’ collective autonomy to depart from NOM clauses if they decided to do so either by: (a) express agreement; or (b) necessary implication. However, the Briggs approach suffered from one drawback; these situations will be very rare with the result that a NOM clause will practically never be done away with. Under the Briggs approach, a necessary implication might only be made in circumstances where performance of the modified obligations had been urgent (not allowing time for the modification to be put in writing), but these circumstances would in most cases also give rise to an estoppel. The Briggs approach might thus not meaningfully add much to the requirements under the doctrine of estoppel, in practical terms.

The court preferred a wider test as to when it could be necessarily implied that the parties had intended to depart from a NOM clause - namely, whether at the point when parties agreed on the oral variation, they would necessarily have agreed to depart from the NOM clause had they addressed their mind to the question, regardless of whether they had actually considered the question or not.

Third and ultimately, the Court of Appeal expressed its preference for the approach endorsed in Comfort Management Pte Ltd v OGSP Engineering Pte Ltd [2018] 1 SLR 979 (“Comfort Management”), namely, that a NOM clause merely raises a rebuttable presumption that in the absence of an agreement in writing, there would be no variation. Parties could depart from a NOM clause via an oral agreement if they had expressly or impliedly intended to depart from it.

On the facts of the case, the Court of Appeal found that there had been an oral rescission via a telephone call between the first Appellant and the first Respondent for the following reasons:

(a) The Completion Date had passed without the SPA being completed, and for more than 3.5 years thereafter, the appellants did not serve notice to complete on the respondents. There was no satisfactory explanation for the appellants’ complete inaction over the 3.5 years nor was there any valid evidence to support the appellants’ claim that they had continuously attempted to persuade the respondents to complete the transaction.

(b) The first appellant’s contemporaneous conduct in or around 31 October 2014 (the date of the alleged oral rescission) supported the oral rescission.

(c) One of the respondents confronted one of the appellants on the date of the alleged oral rescission concerning certain announcements which made the respondents doubtful about the share transaction.

While the Judge at first instance had erred on two points, this did not displace the other more damaging findings made against the appellants’ case. The Court observed for completeness that, even if the oral rescission was deemed invalid by operation of the NOM clause, the appellants would have been estopped from enforcing the SPA. The oral agreement to rescind the SPA constituted a clear representation by the appellants that they would not enforce the SPA.


This case provides clarity on the legal effect and limitations of the NOM clause, as well as confirming that the NOM clause is directed to the terms of the contract and is distinct from a rescission of a contract as whole. Furthermore, parties to a contract can be assured that they can depart from a NOM clause via an oral agreement if they had expressly or impliedly intended to depart from it.