Jurong Town Corp v Wishing Star Ltd: Misrepresentation & Contract Rescission in Construction Project

Jurong Town Corporation ("JTC") appealed a decision regarding its contract termination with Wishing Star Limited (“WSL”) for a construction project (Biopolis). JTC terminated the contract citing misrepresentation and breach of contract. WSL sued for wrongful termination. The Court of Appeal found that WSL had made fraudulent misrepresentations in its tender documents, which induced JTC to award the contract. The court allowed JTC's appeal, declared the contract validly terminated, and ordered WSL to pay damages to JTC.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Wishing Star made fraudulent misrepresentations in tender documents. The court found JTC was induced by these misrepresentations and validly terminated the contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Jurong Town CorpAppellantStatutory BoardAppeal AllowedWon
Wishing Star LtdRespondentCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealNo
Lai Kew ChaiJudgeNo
Woo Bih LiJudgeYes

4. Counsels

Counsel NameOrganization
Ho Chien MienAllen and Gledhill
J. SathiaseelanAllen and Gledhill
K ShanmugamAllen and Gledhill
Christopher ChuahWong Partnership
Lee Hwai BinWong Partnership
Toh Chen HanWong Partnership
Eugene TanDrew and Napier LLC
Tan Liam BengDrew and Napier LLC

4. Facts

  1. JTC was developing the Biopolis, a biomedical research complex, on a fast track.
  2. WSL submitted the lowest bid of $54m for the façade works.
  3. Samsung sought to dissuade JCPL from awarding WSL the subcontract.
  4. WSL made representations about its experience and facilities in its tender documents.
  5. JCPL discovered the representations were false during a visit to China.
  6. JCPL considered terminating WSL's contract but prioritized avoiding delays.
  7. JTC terminated the contract with WSL for misrepresentation and breach of contract.

5. Formal Citations

  1. Jurong Town Corp v Wishing Star Ltd (No 2), CA 111/2004, [2005] SGCA 25

6. Timeline

DateEvent
WSL submitted its tender for the façade works.
WSL replied point by point on its ability to meet the evaluation criteria.
JCPL requested further information of WSL's production capacity in a meeting.
WSL was to submit samples of spiders, frames and louvres.
Contract for the façade works was awarded to WSL.
JCPL's first visit to China to inspect WSL's facilities.
JCPL briefed JTC at a weekly meeting.
WSL was requested by JCPL to use a third-party supplier for extrusion, coating and fabrication all rolled together at a meeting.
JTC had a meeting with JCPL regarding Samsung’s letter.
JCPL's second trip to China to assess the facilities of various potential third-party suppliers.
Second co-ordination meeting in Singapore.
Third co-ordination meeting.
JTC instructed JCPL to prepare a paper setting out the basis for terminating WSL’s contract.
WSL wrote a letter directly to JTC and JCPL denying any misrepresentation.
Meeting between JTC and WSL in Singapore.
JTC inspected WSIP.
JTC conveyed to WSL the decision to terminate.
JTC applied for certain reliefs in respect of its avenue of appeal in Notice of Motion No 121 of 2004.
Judgment reserved.

7. Legal Issues

  1. Misrepresentation
    • Outcome: The court found that WSL made fraudulent misrepresentations that induced JTC to award the contract.
    • Category: Substantive
    • Sub-Issues:
      • Fraudulent misrepresentation
      • Inducement
      • Reliance
      • Affirmation
  2. Contract Rescission
    • Outcome: The court held that JTC's termination of the contract was valid due to WSL's failure to meet the condition of engaging third-party suppliers.
    • Category: Substantive
    • Sub-Issues:
      • Right to rescind
      • Election to affirm
      • Conditional election
  3. Inducement
    • Outcome: The court found that JTC was induced by WSL's misrepresentations to award the contract.
    • Category: Substantive
    • Sub-Issues:
      • Reliance on misrepresentations
      • Materiality of misrepresentations
  4. Election and Affirmation
    • Outcome: The court found that JTC made a conditional election to affirm the contract, which WSL failed to meet, allowing JTC to terminate the contract.
    • Category: Substantive
    • Sub-Issues:
      • Knowledge of misrepresentation
      • Conditional election to affirm
      • Re-emergence of right to terminate

8. Remedies Sought

  1. Damages for wrongful termination
  2. Rescission of contract

9. Cause of Actions

  • Misrepresentation
  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Construction Law

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Panatron Pte Ltd v Lee Cheow LeeCourt of AppealYes[2001] 3 SLR 405SingaporeCited for the principle that misrepresentations need not be the sole inducement, so long as they played a real and substantial part.
JEB Fasteners v Marks, Bloom & CoN/ANo[1983] 1 All ER 583N/ACited as instructive on the issue of inducement in misrepresentation claims.
Wishing Star Ltd v Jurong Town Corp (No 2)High CourtNo[2005] 1 SLR 339SingaporeThe trial judge's decision that was being appealed.
Attwood v SmallHouse of LordsNo[1835–1842] All ER Rep 258United KingdomCited by WSL for the proposition that if a party conducts its own investigation, it cannot claim reliance on misrepresentations. The court distinguished this case.
Redgrave v HurdCourt of AppealYes(1881) 20 Ch D 1United KingdomCited to disavow the proposition in Attwood v Small, holding that negligence in discovering a false statement is not a defense to rescission.
Lim Bio Hiong Roger v City Developments LtdN/AYes[1999] 4 SLR 451SingaporeCited for the principle that inducement may be inferred from entering into a contract unless the inducer proves knowledge of falsity or non-reliance.
Central Rly Co of Venezuela v KischHouse of LordsYes(1867) LR 2 HL 99United KingdomCited for the principle that once reliance on representations is proved, it is no defense that the victims acted incautiously.
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga)N/AYes[1990] l Lloyd’s Rep 391N/ACited for the principle that acting in a manner consistent only with treating a contract as alive implies affirmation.
Yukong Line Ltd of Korea v Rendsburg Investments Corporation of LiberiaN/AYes[1996] 2 Lloyd’s Rep 604N/ACited for principles on affirmation, including the need for clear communication and consistency with keeping the contract alive.
Tropical Traders Limited v GoonanHigh CourtYes(1964) 111 CLR 41AustraliaCited for the concept of conditional waiver and that an extension of time can be a qualified waiver.
Kilmer v British Columbia Orchard Lands LtdPrivy CouncilNo[1913] AC 319United KingdomCited in Tropical Traders Limited v Goonan.
Barclay v MessengerN/ANo(1874) 43 LJ Ch 449N/ACited in Tropical Traders Limited v Goonan.
Evans v Argus HealthcareOuter House of the Scottish Court of SessionYes[2001] SCLR 117ScotlandCited for the principle that waiver can be conditional and that a right can re-emerge if the condition is not met.
James Howden & Co Ltd v Taylor Woodrow Property Co LtdN/ANo[1998] SCLR 903ScotlandCited in Evans v Argus Healthcare.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2004 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Misrepresentation Act (Cap 390, 1994 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Façade works
  • Nominated subcontractor
  • Misrepresentation
  • Inducement
  • Election
  • Affirmation
  • Conditional election
  • Third-party suppliers
  • Shop drawings
  • Construction programme

15.2 Keywords

  • Misrepresentation
  • Contract
  • Construction
  • Singapore
  • Jurong Town Corporation
  • Wishing Star Limited
  • Termination
  • Inducement
  • Election
  • Affirmation

17. Areas of Law

Area NameRelevance Score
Misrepresentation95
Contract Law90
Construction Law60

16. Subjects

  • Contract Law
  • Construction Law
  • Misrepresentation