Ong Chay Tong & Sons v Ong Hoo Eng: Variation of Contract & Caveatable Interest for Right of Pre-emption

In Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng, the Court of Appeal of Singapore heard an appeal regarding the dismissal of the appellant's application to maintain a caveat lodged against the respondent's property. The appellant, a family company, based the caveat on a right of pre-emption outlined in a sale and purchase agreement. The court considered whether a board resolution could vary the existing agreement and whether the right of pre-emption constituted a caveatable interest under the Land Titles Act. The court dismissed the appeal, holding that while a right of pre-emption is a caveatable interest, the caveat was based on the original agreement and not the varied one.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Dismissed. The court held that a right of pre-emption constitutes a caveatable interest, but the caveat was based on the original agreement, not the varied one.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding a caveat lodged against property based on a right of pre-emption. The court considered contract variation and whether the right constituted a caveatable interest.

1.7 Decision Date

23 October 2008

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Ong Chay Tong & Sons (Pte) Ltd	Appellant	Corporation	Appeal Dismissed	Lost	Lee Eng Beng of Rajah & Tann LLP Ryan Loh of Rajah & Tann LLP Sundaresh Menon of Rajah & Tann LLP
Ong Hoo Eng	Respondent	Individual	Appeal Dismissed	Won	Michael Hwang of Michael Hwang Albert Teo of PKWA Law Practice LLC Katie Chung of Michael Hwang Charis Tan of Michael Hwang

3. Judges

Judge Name	Title	Delivered Judgment
Chan Sek Keong	Chief Justice	No
Chao Hick Tin	Justice of the Court of Appeal	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	No

4. Counsels

Counsel Name	Organization
Lee Eng Beng	Rajah & Tann LLP
Ryan Loh	Rajah & Tann LLP
Sundaresh Menon	Rajah & Tann LLP
Michael Hwang	Michael Hwang
Albert Teo	PKWA Law Practice LLC
Katie Chung	Michael Hwang
Charis Tan	Michael Hwang

4. Facts

Ong Chay Tong & Sons (Pte) Ltd is a family company incorporated in 1976.
The company's articles restrict membership to Ong Chay Tong, his wives, and male lineal descendants.
The company held a three-story residential development at 17 Nallur Road.
In 1979, the company authorized the sale of units to Ong Chay Tong's six sons at a discounted price.
The sale agreements contained a special condition (SC3) restricting resale except to the company.
In 1998, the board resolved to delete and substitute conditions of the First Resolution.
In 2006, the board resolved to rescind the Second Resolution and lodge caveats against the units.
A caveat was lodged against Ong Hoo Eng's property based on the original SC3.

5. Formal Citations

Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng, CA 141/2007, [2008] SGCA 42

6. Timeline

Date	Event
1976-03-09	Ong Chay Tong & Sons (Pte) Ltd incorporated.
1976-12-07	Shares in Ong Chay Tong & Sons (Pte) Ltd issued.
1979-01-04	First Resolution passed authorizing sale of units at discounted price.
1982-03-26	Units in Ong Mansions sold to founder's six sons.
1993-01-01	Ong Chay Tong passed away.
1998-05-07	Second Resolution passed deleting and substituting conditions of First Resolution.
1998-06-15	Minutes of board meeting handed to Ong Hoo Eng, who signed them.
2006-03-28	Certified public accountant valued the appellant’s worth at $30 a share.
2006-06-12	Ong Hoo Eng agreed to sell his shares in the appellant at $24 per share.
2006-08-14	Third Resolution passed to rescind the Second Resolution and lodge caveats.
2006-08-14	Caveat lodged against Ong Hoo Eng’s property.
2008-10-24	Judgment reserved.

7. Legal Issues

Variation of Contract
- Outcome: The court found that the Second Resolution constituted a valid offer to vary SC3, which the respondent accepted by signing the minutes.
- Category: Substantive
- Sub-Issues:
  - Offer and acceptance by conduct
  - Consideration for variation
- Related Cases:
  - [1996] 2 SLR 109
Caveatable Interest
- Outcome: The court held that a right of pre-emption should be recognized as an interest in land for the purpose of lodging a caveat under s 115 of the Land Titles Act.
- Category: Substantive
- Sub-Issues:
  - Right of pre-emption as an interest in land
  - Purpose and function of a caveat
- Related Cases:
  - [2006] 2 SLR 742
  - [1980] Ch 338
Condition Subsequent
- Outcome: The court held that the new SC3 was not a condition subsequent and did not constitute a restraint on alienation.
- Category: Substantive
- Sub-Issues:
  - Restraint on alienation
  - Right of re-entry and forfeiture
- Related Cases:
  - [1998] 2 SLR 83

8. Remedies Sought

Order that Caveat Remain on Land Register

9. Cause of Actions

Breach of Contract
Challenge to Caveat

10. Practice Areas

Commercial Litigation
Real Estate Law

11. Industries

Real Estate

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng	High Court	Yes	[2008] 1 SLR 262	Singapore	The High Court decision that was appealed against in the current judgment.
Ladd v Marshall	Not Available	Yes	[1954] 1 WLR 1489	England and Wales	Cited for the three conditions that must be cumulatively fulfilled to justify the reception of fresh evidence at the appellate stage.
Sandar Aung v Parkway Hospitals Singapore Pte Ltd	Not Available	Yes	[2007] 2 SLR 891	Singapore	Cited as an example where the contextual approach was applied to determine the meaning of words in a document.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Not Available	Yes	[2008] 3 SLR 1029	Singapore	Cited as an example where the contextual approach was applied to determine the meaning of words in a document.
Carter v Carter	Not Available	Yes	[1896] 1 Ch 62	England and Wales	Cited for the wide meaning of the word 'dispose'.
Goh Kim Hai Edward v Pacific Can Investment Holdings Ltd	Not Available	Yes	[1996] 2 SLR 109	Singapore	Cited to determine whether a board resolution of a company is capable of varying an existing contract to which the company is a party.
Christopher Richard Oakley v Osiris Trustees Limited	Privy Council	Yes	[2008] UKPC 2	United Kingdom	Cited as an example of a category of resolutions which have an immediate legal effect.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric	Not Available	Yes	[2007] 1 SLR 853	Singapore	Cited for the principle that a factual benefit or detriment is sufficient consideration.
Banning v Wright	Not Available	Yes	[1972] 1 WLR 972	England and Wales	Cited for the definition of 'waiver' as the abandonment of a right.
Tan Soo Leng David v Wee Satku & Kumar Pte Ltd	Not Available	Yes	[1998] 2 SLR 83	Singapore	Cited as a case where a similar point was raised and where the circumstances were somewhat similar to the present case regarding condition subsequent.
Caldy Manor Estate Ltd v Farrell	Not Available	Yes	[1974] 1 WLR 1303	England and Wales	Cited as authority for the view that certain restraints on alienation are valid.
Neo Hock Pheng v Teo Siew Peng	Not Available	Yes	[1999] 2 SLR 45	Singapore	Cited for the application of Caldy Manor and the rule on the restraint on alienation.
Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd	English Court of Appeal	Yes	[2004] 2 P & CR 10	England and Wales	Cited for the principle that the sale of a lease in contravention of a party’s first right of refusal would entitle that party to an equitable interest.
Pritchard v Briggs	Not Available	Yes	[1980] Ch 338	England and Wales	Cited as the most important case on the issue of whether a right of pre-emption became an equitable interest in land.
Ho Seek Yueng Novel v J & V Development Pte Ltd	High Court	Yes	[2006] 2 SLR 742	Singapore	Cited for the view that it was eminently fair, logical and commonsensical to allow a caveat to be lodged at any time by the holder of a valid and enforceable right of first refusal or right of pre-emption.
Eudunda Farmers Co-operative Society Limited v Mattiske	Not Available	Yes	[1920] SALR 309	Australia	Cited as a case that seemed to hold that a right of first refusal could not constitute an interest in land sufficient to lodge a caveat.
Mackay v Wilson	Not Available	Yes	(1947) 47 SR (NSW) 315	New South Wales, Australia	Cited as a case that seemed to hold that a right of first refusal could not constitute an interest in land sufficient to lodge a caveat.
Re Bosca Land Pty Ltd’s Caveat	Not Available	Yes	[1976] Qd R 119	Queensland, Australia	Cited as a case that seemed to hold that a right of first refusal could not constitute an interest in land sufficient to lodge a caveat.
Re Rutherford	Not Available	Yes	[1977] 1 NZLR 504	New Zealand	Cited as a case that seemed to hold that a right of first refusal could not constitute an interest in land sufficient to lodge a caveat.
Kling v Keston Properties Ltd	Not Available	Yes	(1983) 49 P & CR 212	England and Wales	Cited as a case that followed the approach propounded by the majority in Pritchard v Brigg.
Bircham & Co, Nominees (2) Ltd v Worrell Holdings Ltd	Not Available	Yes	(2001) 82 P & CR 34	England and Wales	Cited as a case that followed the approach propounded by the majority in Pritchard v Brigg.
Sahade v BP Australia Pty Ltd	Not Available	Yes	(2004) 12 BPR 22,149	Australia	Cited as a case that followed the approach propounded by the majority in Pritchard v Brigg.
Kopec v Pyret	Not Available	Yes	(1983) 146 DLR (3d) 242	Canada	Cited as a case that followed the approach propounded by the majority in Pritchard v Brigg.
Dear v Reeves	Not Available	Yes	[2002] Ch 1	England and Wales	Cited as a case where Mummery LJ remarked that the reasoning in the judgments in Pritchard v Briggs may require reconsideration.
Jessica Holdings Pty Ltd v Anglican Property Trust Diocese of Sydney	Not Available	Yes	(1992) 27 NSWLR 140	New South Wales, Australia	Cited for the view that if relief by way of an injunction was available to a caveator, then that might be a sufficient basis to maintain a caveat.
Re C M Group Pty Ltd’s Caveat	Not Available	Yes	[1986] 1 Qd R 381	Queensland, Australia	Cited for the unease with Bosca and the meaning to be attributed to the expression “estate or interest”.
Re Pile’s Caveats	Not Available	Yes	[1981] Qd R 81	Queensland, Australia	Cited in Re C M Group.
Legione v Hateley	High Court of Australia	Yes	(1983) 152 CLR 406	Australia	Cited in Re C M Group.
McWilliam v McWilliams Wines Pty Limited	High Court of Australia	Yes	(1964) 114 CLR 656	Australia	Cited in Re C M Group.
Brown v Heffer	High Court of Australia	Yes	(1967) 116 CLR 344	Australia	Cited in Re C M Group.
Ovenden v Palyaris Construction Pty. Ltd.	Not Available	Yes	(1974) 11 S.A.S.R. 65	South Australia, Australia	Cited in Re C M Group.
Burns Philp Trustee Co Ltd v Viney	Not Available	Yes	[1981] 2 NSWLR 216	New South Wales, Australia	Cited in Jessica Holdings.
Stern v McArthur	High Court of Australia	Yes	(1988) 165 CLR 489	Australia	Cited in Jessica Holdings.
Alrich Development Pte Ltd v Rafiq Jumabhoy	Not Available	Yes	[1993] 2 SLR 446	Singapore	Cited for the description of a caveat and the purpose of a caveat.
Leros Proprietary Limited v Terara Proprietary Limited	High Court of Australia	Yes	(1992) 174 CLR 407	Australia	Cited for the purpose of a caveat against dealings.
Chi Liung Holdings Sdn Bhd v AG	Not Available	Yes	[1994] 2 SLR 354	Singapore	Cited for the interpretation of the term “interest” in relation to land.
Chief Assessor v First DCS Pte Ltd	Not Available	Yes	[2008] 2 SLR 724	Singapore	Cited for the principle that a statutory provision should be given a purposive interpretation.
Manchester Ship Canal Company v Manchester Racecourse Company	Not Available	Yes	[1900] 2 Ch 352	England and Wales	Cited for the early case holding that the right of first refusal created an interest in land.
Octra Nominees Pty Ltd v Chipper	Federal Court of Australia	Yes	[2007] FCAFC 92	Australia	Cited for the caution needed when converting a contractual promise into a property right.
University of East London Higher Education Corpn v Barking and Dagenham London Borough Council	Not Available	Yes	[2005] Ch 354	England and Wales	Cited for the view that a restrictive covenant is concerned with restricting the use of land, and not with restraints on alienation.
Re Premier Freehold Pty Ltd’s Caveat	Not Available	Yes	[1981] Qd R 547	Queensland, Australia	Cited in Jessica Holdings.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Land Titles Act (Cap 157, 2004 Rev Ed)	Singapore
Section 115 Land Titles Act (Cap 157, 2004 Rev Ed)	Singapore
Intestate Succession Act (Cap 146, 1985 Rev Ed)	Singapore
Interpretation Act (Cap 1, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Caveat
Right of Pre-emption
Condition Subsequent
Restraint on Alienation
Board Resolution
Variation of Contract
Family Company
Land Titles Act
Caveatable Interest

15.2 Keywords

contract
caveat
land
pre-emption
singapore

17. Areas of Law

Area Name	Relevance Score
Right of Pre-emption	90
Caveatable Interest	85
Land Law	80
Property Law	75
Contract Law	70

16. Subjects

Contract Law
Property Law
Real Estate
Civil Procedure