2,051
edits
Changes
From DMC
no edit summary
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 The Respondents argued that the SPA had been orally rescinded by mutual agreement, via a telephone call on or about 31 October 2014, between the first Appellant and first Respondent.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 enforcin(g 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The High Court accepted the respondents’ version of events and found that the SPA was indeed rescinded by mutual agreement.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.
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 fonotice to completer 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.
