United Artists v Parkway Properties: Recovery of Pre-Contract Payments for Cineplex Development

United Artists Singapore Theatres Pte Ltd and Pacific Media PLC sued Parkway Properties Pte Ltd and Management Corporation Strata Title Plan no. 1008 in the High Court of Singapore, seeking repayment of $1,846,900 paid during negotiations for a cineplex development at Parkway Parade. The negotiations, which were subject to contract, ultimately failed when Parkway Properties sold its interest in Parkway Parade. Belinda Ang Saw Ean JC ruled in favor of United Artists, finding that the payments were pre-contract deposits and ordering the defendants to repay the sum with interest, dismissing the defendant's counterclaim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for the Plaintiffs

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

United Artists sought repayment of pre-contract payments for a cineplex development after negotiations failed. The court ruled in favor of United Artists, ordering repayment.

1.7 Decision Date

19 August 2002

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Parkway Properties Pte Ltd	Defendant	Corporation	Counterclaim Dismissed	Lost	Sean Tan of Tan Kok Quan Partnership Joseph Ang of Tan Kok Quan Partnership
Management Corporation Strata Title Plan No. 1008	Defendant	Corporation	Judgment Against	Lost	Sean Tan of Tan Kok Quan Partnership Joseph Ang of Tan Kok Quan Partnership
United Artists Singapore Theatres Pte Ltd	Plaintiff	Corporation	Judgment for the Plaintiff	Won	Stephen Christopher Soh of Arthur Loke Bernard Rada & Lee Wong Chiao Shan of Arthur Loke Bernard Rada & Lee
Pacific Media PLC	Plaintiff	Corporation	Judgment for the Plaintiff	Won	Stephen Christopher Soh of Arthur Loke Bernard Rada & Lee Wong Chiao Shan of Arthur Loke Bernard Rada & Lee

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Sean Tan	Tan Kok Quan Partnership
Joseph Ang	Tan Kok Quan Partnership
Stephen Christopher Soh	Arthur Loke Bernard Rada & Lee
Wong Chiao Shan	Arthur Loke Bernard Rada & Lee

4. Facts

Plaintiffs and Defendants negotiated a cineplex development at Parkway Parade from 1994.
Initial plan involved Plaintiffs constructing and leasing the cineplex from Defendants.
Revised plan in 1999 had Defendants developing the shell and Plaintiffs leasing the cineplex.
Negotiations ended with the sale of the 1st Defendants’ interest in Parkway Parade in February 2000.
Plaintiffs claimed $1,846,900 as money had and received by the Defendants.
Defendants argued the money was Plaintiffs’ share of non-refundable differential premium (DP).
Payments were made during negotiations that were 'subject to contract'.

5. Formal Citations

United Artists Singapore Theatres Pte Ltd & Another v Parkway Properties Pte Ltd & Another, Suit No 755 of 2001, [2002] SGHC 185

6. Timeline

Date	Event
1994-01-01	Discussions began for the development of a cineplex at Parkway Parade.
1995-11-15	Jones Lang Wootton put together the outcome of initial discussions in a document entitled 'Principal Heads of Terms'.
1995-12-04	First drafts of the Conditional Agreement and Lease Agreement were prepared.
1996-02-06	URA refused the initial planning application for the cineplex.
1996-04-01	A fresh application was submitted.
1996-05-24	The application was again rejected.
1996-06-01	An appeal was lodged.
1996-08-16	A re-submission of the planning application was made.
1996-11-15	Provisional permission was finally given.
1997-03-06	The DP amount initially assessed by the Land Office was $17.644m excluding GST.
1998-02-19	CPP sending revised drafts of the documents to ALP.
1998-04-16	Tan wrote first to bind the Plaintiffs to this contribution.
1998-04-22	PPPL’s lawyers M/s Tan & Tan enclosing a Deed Of Undertaking and a Deed of Assignment for the Plaintiffs’ attention.
1999-01-14	Pacific Media remitted $346,900 to PPPL.
1999-03-14	UAST proposed a 'straight lease deal'.
1999-03-23	The Plaintiffs proposed depositing a sum of $1m with the Defendants.
1999-03-26	The proposals were rejected and the Plaintiffs were told to hand over the project to Parkway.
1999-03-29	Pacific Media replied to Parkway.
1999-03-30	The Plaintiffs revised their last rental proposal so as to include $3,046,900 for DP.
1999-04-08	Parkway paid the second deposit of 10% in the sum of $906,331.50 inclusive of GST and late interest payment.
1999-05-05	The Plaintiffs were informed that its offer for the operation of the proposed multiplex will be considered a new undertaking.
1999-05-07	MCST requested UAST to put forward their 'last best offer.'
1999-05-09	UAST responded to MCST.
1999-05-13	UAST again confirmed to MCST that they would no longer be able to continue as the developer of the cinema project.
1999-05-19	The Plaintiffs wrote to the Chief Planner, URA, and the consultants.
1999-05-20	CPP wrote to ALP.
1999-05-21	PPPL wrote separately to UAST.
1999-06-09	DPM had sent to Council Members the offers from both UAST and Cathay.
1999-06-16	Council Members met.
1999-06-21	Parkway responded to the Plaintiffs’ offer of 9 May 1999.
1999-06-25	The Plaintiffs instead proposed other means of security.
1999-07-13	Pacific Media told Parkway that they were confident of their financial ability to complete the project.
1999-07-20	Pacific Media increased the amount of the 'additional' good faith deposit from $500,000 to $600,000.
1999-07-23	This time the Plaintiffs proposed a corporate guarantee from Pacific Media to secure the performance of the lease by UAST.
1999-07-26	Pacific Media wrote to Tan of PPPL.
1999-07-28	Elizabeth writing on behalf of 'our' Tan Kai Seng asked for various undertakings from Pacific Media to 'confirm the offer'.
1999-07-28	Pacific Media gave the undertakings requested on 28 July 1999 to Parkway.
1999-07-30	The good faith deposit of $600,000 was remitted and received by PPPL.
1999-08-03	DPM requested UAST to confirm the items, which UAST will provide, based on current negotiations and outstanding legal issues pertaining to previous draft lease terms not acceptable to the Plaintiffs.
1999-08-04	UAST forwarded a revised rental proposal.
1999-08-06	DPM wrote.
1999-08-09	Pacific Media on 9 August 1999 wrote to Parkway to confirm the provision of the corporate guarantee and of the terms under which it is given.
1999-08-24	Parkway reminded Pacific Media of the due payment of DP in the sum of $450,000 on 9 September 1999.
1999-09-03	A reminder was sent.
1999-09-07	Parkway had on 7 September 1999 asked the Land Office for waiver of interest.
1999-09-09	Pacific Media confirmed that the money would be sent by 9 September. The money was remitted on 9 September 1999. Parkway paid the remaining 80% of DP plus GST.
1999-12-15	The next payment of $450,000 was remitted.
1999-12-31	The Defendants paid interest.
2000-02-01	The 1st Defendants sold their interest in Parkway Parade.
2000-03-01	The Plaintiffs were told of the sale.
2000-07-01	The Plaintiffs indicated to the new owners their decision to withdraw from the cineplex project.
2002-08-20	Judgment Date

7. Legal Issues

Formation of Contract
- Outcome: The court held that no binding agreement was concluded under either the original or revised plan because negotiations were 'subject to contract'.
- Category: Substantive
- Sub-Issues:
  - Agreement 'subject to contract'
  - Incomplete agreement
Restitution for Failure of Consideration
- Outcome: The court ruled that the payments made by the Plaintiffs were pre-contract deposits and were recoverable due to the total failure of consideration, as the intended lease agreement did not materialize.
- Category: Substantive
- Sub-Issues:
  - Total failure of consideration
  - Recovery of money paid during negotiations
Restitution for Money Had and Received
- Outcome: The court found that the payments were made in anticipation of a lease and were not intended as outright payments, thus entitling the Plaintiffs to recover the money.
- Category: Substantive
- Sub-Issues:
  - Recovery of money paid in course of negotiations
  - Contract not materialising

8. Remedies Sought

Repayment of monies
Damages

9. Cause of Actions

Restitution
Money Had and Received

10. Practice Areas

Commercial Litigation

11. Industries

Real Estate
Entertainment

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Harmony Shipping Co. S.A. v Saudi –Europe Line Ltd	N/A	Yes	[1981] 1 Lloyd’s Rep. 337	N/A	Cited regarding the irrelevance of individual intentions and beliefs in construing documents, except to the extent they form part of the factual setting.
Winn v Bull	N/A	Yes	(1887) 7 Ch 29	N/A	Cited for the principle that the phrase 'subject to contract' indicates that the parties do not intend to be contractually bound until a contract is signed.
Spottiswoode, Ballantyne & Co Ltd v Doreen Appliances Ltd	N/A	Yes	[1942] 2 KB 32	N/A	Cited for the principle that the phrase 'subject to contract' indicates that the parties do not intend to be contractually bound until a contract is signed.
Chillingworth v Esche	Court of Appeal	Yes	[1924] 1 Ch 97	N/A	Cited as a key authority on the recoverability of pre-contract deposits when a prospective contract does not materialize. The court emphasized that money paid on deposit is prima facie recoverable when no contract was entered into.
Derby & Co Limited v ITC Pensions Trust Limited	N/A	Yes	[1977] 2 AER 890	N/A	Cited for the principle that the phrase 'subject to contract' indicates that the parties do not intend to be contractually bound until a contract is signed.
Potters v Loppert	N/A	Yes	[1973] Ch 399	N/A	Cited to explain the difference between a pre-contract deposit and a deposit paid upon or after entry into a binding contract.
Howe v Smith	N/A	Yes	[1881] 27 Ch 89	N/A	Cited to establish the nature of a contract deposit in English law, highlighting its dual purpose as an earnest to bind the bargain and as part payment of the purchase price.
Guinness Mahon & Co Ltd v Kensington LBC	N/A	Yes	[1998] 3WLR 829	N/A	Cited for the principle that an advance payment made when a supposed contract is void or an expected contract is never concluded is not a gift.
Midland Bank Trust Co Ltd v Green	N/A	Yes	[1981] AC 513	N/A	Cited to define the primary meaning of 'consideration' as the advantage conferred or detriment suffered.
Fibrosa Spolka Ackyjna v Fairbairn Lawson Comber Barbour Ltd	N/A	Yes	[1943] AC 32	N/A	Cited to clarify that in the context of failure of consideration, it is generally the performance of the promise, not the promise itself, that is referred to as the consideration.
Gribbon v Lutton	N/A	Yes	[2002] 2 WLR 842	N/A	Cited in the context of a 'total failure of consideration' where the contract never materializes, the pre-contract payment is recoverable as the consideration for that payment has failed.
Guardian Ocean Cargoes Ltd & Others v Banco Do Brasil S.A.	N/A	Yes	[1991] 2 Lloyd’s Rep 68	N/A	Cited for the principle that it is proper to look beyond payment instructions sent to Pacific Media’s bankers and to examine the surrounding circumstances, oral evidence and contemporaneous documents and correspondence to consider the purpose, intent and nature of the payments.
Sydney Harbour Casino Holdings v NMBE Pty Ltd	N/A	Yes	(1999) 9 BPR 16,679	N/A	Cited for the principle that a pre-contract deposit is prima facie recoverable if the prospective contract it is connected with does not come into existence.
Courtney and Fairbairn Ltd v Tolaini Bros (Hotels) Ltd	N/A	Yes	[1975] 1 WLR 297	N/A	Cited for the principle that an arrangement or agreement whereby the parties agree to negotiate in the future will not be enforced on the ground that the agreement is incomplete, uncertain or is not supported by consideration.
Mallozzi v Carapelli SpA	N/A	Yes	(1976) 1 Lloyd’s Rep 407	N/A	Cited for the principle that an arrangement or agreement whereby the parties agree to negotiate in the future will not be enforced on the ground that the agreement is incomplete, uncertain or is not supported by consideration.
Walford v Miles	N/A	Yes	[1992] AC 128	N/A	Cited for the principle that an arrangement or agreement whereby the parties agree to negotiate in the future will not be enforced on the ground that the agreement is incomplete, uncertain or is not supported by consideration.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Land Titles (Strata) Act	Singapore
Land Titles Act	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Cineplex
Differential premium
Pre-contract deposit
Subject to contract
Lease agreement
Shell structure
Good faith deposit

15.2 Keywords

cineplex development
pre-contract payments
restitution
subject to contract
failure of consideration

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Restitution	85
Pre-contract deposits	70
Chancery and Equity	60
Civil Litigation	50

16. Subjects

Contract Law
Restitution
Agency
Commercial Dispute