EC Investment v Ridout Residence: Specific Performance & Property Sale Dispute

E C Investment Holding Pte Ltd (ECI) appealed against the High Court's decision to dismiss its application for specific performance of an agreement for the sale of a property at 39A Ridout Road to it by Ridout Residence Pte Ltd (Ridout). Ridout cross-appealed against the Judge’s refusal to award damages for consequential losses. The Court of Appeal found that a valid agreement for sale existed, but dismissed ECI's appeal, denying specific performance and ordering an assessment of damages. Ridout's appeal was also dismissed. Other parties involved were Hong Leong Finance Limited, Orion Oil Limited, and Mr. Thomas Chan Ho Lam.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal concerning specific performance of a property sale agreement. Court found a valid agreement but denied specific performance, ordering damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ridout Residence Pte LtdRespondent, AppellantCorporationAppeal dismissedWon
E C Investment Holding Pte LtdAppellant, RespondentCorporationAppeal dismissedLost
Hong Leong Finance LimitedRespondentCorporationNeutralNeutral
Orion Oil LimitedRespondentCorporationNeutralNeutral
Thomas Chan Ho LamRespondentIndividualNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealYes
Andrew Phang Boon LeongJustice of the Court of AppealNo
V K RajahJustice of the Court of AppealNo

4. Counsels

Counsel NameOrganization
Tan Cheng HanRobert Wang & Woo LLC
P BalachandranRobert Wang & Woo LLC
Kenneth SeeRobert Wang & Woo LLC
Lee Eng BengRajah & Tann LLP
Disa SimRajah & Tann LLP
Jonathan LeeRajah & Tann LLP
Phua Siow ChoonMichael BB Ong & Co
Daniel TanWongPartnership LLP
Alvin YeoWongPartnership LLP
Chan Xiao WeiWongPartnership LLP
Melvin LumWongPartnership LLP

4. Facts

  1. ECI sought specific performance of an agreement to purchase property from Ridout for $20m.
  2. Ridout had the right to cancel the option within 60 days by paying $1.68m to ECI.
  3. Ridout failed to cancel the option within the stipulated 60-day period.
  4. ECI exercised the option to purchase the property.
  5. Ridout granted a second option to Thomas Chan to purchase the property for $37m.
  6. ECI and Ridout engaged in settlement negotiations, but no agreement was reached.
  7. The property was eventually transferred to Thomas Chan.

5. Formal Citations

  1. E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd and others and another appeal, Civil Appeals Nos 177 and 184 of 2010, [2011] SGCA 50
  2. E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd and another (Orion Oil Ltd and another, interveners), , [2011] 2 SLR 232

6. Timeline

DateEvent
Ridout purchased the property for $28m.
Anwar obtained a $10m loan from Orion secured by a charge.
HLF pressed Anwar for loan repayment.
Colliers Report valued the property at $29m (open market) and $23.2m (forced sale).
HLF sought further repayment from Anwar.
YS Low sent CS Lee an e-mail regarding the sale and purchase of Ridout Road.
CS Lee responded enclosing a draft option to purchase and a draft deed of settlement.
YS Low responded with comments on the drafts.
Meeting held at TLP's office; First Option granted to ECI for $1.5m option fee.
ECI lodged a caveat against the property.
Deed of Settlement executed (post-dated).
Parties agreed that the 60-day period to cancel the First Option would end on 6 August 2009.
NCH sent TLP a Maybank cheque for $1.68m to cancel the First Option.
TLP rejected Ridout's purported cancellation of the First Option.
ECI exercised the First Option and lodged a second caveat.
Anwar sent SMS messages alleging illegal moneylending.
Anwar lodged a police report.
Alleged September 2009 Settlement reached.
Ridout requested the release of $1m.
Thomas Chan learned the property was for sale.
Thomas Chan viewed the property and was granted the Second Option.
Thomas Chan paid $1m for the Second Option.
Thomas Chan was informed of ECI's caveats.
Thomas Chan lodged a caveat against the property.
ECI discovered Thomas Chan's caveat.
ECI raised its objection to the Second Option.
Thomas Chan exercised the Second Option and lodged a further caveat.
November 2009 Settlement reached between Ridout and ECI.
TLP sent JLC a draft notice of withdrawal of caveat.
JLC asked for a postponement to 18 November 2009 for Ridout to make the $5m payment.
ECI filed OS 1357.
Property transferred to Thomas Chan following the judgment of the court below.
Joint Record of Appeal dated.
Supplemental Bundle of Documents dated.
Decision Date

7. Legal Issues

  1. Specific Performance
    • Outcome: Specific performance was denied.
    • Category: Substantive
  2. Breach of Contract
    • Outcome: Breach of contract found; damages to be assessed.
    • Category: Substantive
  3. True Nature of Transaction
    • Outcome: The court determined the transaction was a genuine agreement for sale, not a secured loan.
    • Category: Substantive
  4. Estoppel by Acquiescence
    • Outcome: The court found that estoppel by acquiescence applied.
    • Category: Substantive

8. Remedies Sought

  1. Specific Performance
  2. Damages

9. Cause of Actions

  • Breach of Contract
  • Specific Performance

10. Practice Areas

  • Commercial Litigation
  • Real Estate Litigation
  • Contract Disputes
  • Property Disputes

11. Industries

  • Real Estate
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lim Hwee Meng v Citadel Investment Pte LtdCourt of AppealYes[1998] 3 SLR(R) 101SingaporeCited regarding the appellate court's approach to overturning a trial judge's findings of fact.
Peh Eng Leng v Pek Eng LeongCourt of AppealYes[1996] 1 SLR(R) 939SingaporeCited regarding the appellate court's ability to evaluate and draw inferences from primary facts.
Thai Chee Ken and others (Liquidators of Pan-Electric Industries Ltd) v Banque ParibasHigh CourtNo[1993] 1 SLR(R) 871SingaporeCited regarding the approach to characterizing a transaction based on documents and the threshold for proving a sham transaction.
Snook v London and West Riding Investments LtdEnglish Court of AppealYes[1967] 2 QB 786EnglandCited regarding the requirement of a common intention to deceive for a transaction to be considered a sham.
TKM (Singapore) Pte Ltd v Export Credit Insurance Corp of Singapore LtdHigh CourtYes[1992] 2 SLR(R) 858SingaporeCited regarding the requirement of a common intention to deceive for a transaction to be considered a sham.
Gurfinkel and another v Bentley Proprietary LimitedHigh Court of AustraliaYes(1966) 116 CLR 98AustraliaCited regarding the principle that the true intent of parties, not the form of the document, prevails if the form is adopted as a disguise.
City Hardware Pte Ltd v Kenrich Electronics Pte LtdHigh CourtYes[2005] 1 SLR(R) 733SingaporeCited regarding the approach to analyzing whether a transaction is a disguised moneylending transaction or a genuine commercial transaction.
Beckkett Pte Ltd v Deutsche Bank AG and another and another appealCourt of AppealYes[2009] 3 SLR(R) 452SingaporeCited regarding the principle that a prospective purchaser is expected to drive a hard bargain to force the price down.
Ng Chee Chuan v Ng Ai Tee (administratrix of the estate of Yap Yoon Moi, deceased)Court of AppealYes[2009] 2 SLR(R) 918SingaporeCited regarding the principle that greater emphasis should be placed on objective contemporaneous documentary evidence.
Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SACourt of AppealYes[2003] 1 SLR(R) 157SingaporeCited regarding the limited grounds on which an appellate court will interfere with a first instance judge's exercise of discretion.
The Vishva ApurvaCourt of AppealYes[1992] 1 SLR(R) 912SingaporeCited regarding the limited grounds on which an appellate court will interfere with a first instance judge's exercise of discretion.
Federal Computer Services Sdn Bhd v Ang Jee Hai EricCourt of AppealYes[1991] 2 SLR(R) 427SingaporeCited regarding the limited grounds on which an appellate court will interfere with a first instance judge's exercise of discretion.
Sinnadurai Paramadevan and Blossom Paramadevan v Bernard SemelhagoSupreme CourtNo[1996] 2 SCR 415CanadaCited regarding the proposition that specific performance should not be granted as a matter of course for land contracts, absent evidence that the property concerned is unique.
Wong Chee Siong and another v Tan Boon Hwa and anotherHigh CourtYes[2010] SGHC 222SingaporeCited regarding the orthodox position that land is deemed to be unique and no substitute is adequate.
Excelsior Hotel Pte Ltd v Hiap Bee (Singapore) Pte Ltd (OCBC Finance (Singapore) Ltd, intervener)High CourtYes[1989] 2 SLR(R) 322SingaporeCited regarding the principle that damages are considered inadequate even when the interest in question is a mere commercial lease for a short term.
Good Property Land Development Pte Ltd v Société GénéraleHigh CourtNo[1989] 2 SLR(R) 97SingaporeCited regarding the principle that where the main object of owning land is not the personal enjoyment thereof but the profit derivable therefrom, damages may be an adequate remedy.
Coastland Properties Pte Ltd v Lin Geok ChooHigh CourtYes[1993] 3 SLR(R) 890SingaporeCited regarding the principle that damages may still be considered adequate notwithstanding that land is generally deemed to be unique.
Ong Hien Yeow and another v Central Chambers LLC and anotherHigh CourtYes[2011] 1 SLR 1186SingaporeCited regarding the inherent difficulty of assessing damages for land contracts.
Landco Albany Ltd v Fu Hao Construction LtdNew Zealand Court of AppealNo[2006] 2 NZLR 174New ZealandCited regarding the denial of specific performance when the party seeking it only had a commercial interest in the property.
Loan Investment Corporation of Australasia v BonnerPrivy CouncilNo[1970] NZLR 724New ZealandCited regarding the denial of specific performance when the agreement was predominantly a commercial bargain.
Lam Chi Kin David v Deutsche Bank AGCourt of AppealYes[2010] 2 SLR 896SingaporeCited regarding the principle of acquiescence.
In re George Inglefield, LimitedChancery DivisionYes[1933] Ch 1EnglandCited to differentiate between a sale and a mortgage or charge.
Mitz v Wiseman et al; Strathalian Beach Association, Third PartyUnknownYes(1971) 22 DLR (3d) 513CanadaCited regarding hardship to a third party as a reason to refuse specific performance.
Wroth and Another v TylerChancery DivisionYes[1974] Ch 30EnglandCited regarding hardship to a third party as a reason to refuse specific performance, specifically the impact on family.
Clark and another v Lucas Solicitors LLPUnknownYes[2010] 2 All ER 955EnglandCited as applying the principles from Wroth and Another v Tyler.
Dowsett v ReidHigh Court of AustraliaYes(1912) 15 CLR 695AustraliaCited regarding hardship to one of the parties to a land contract as a ground for refusing specific performance.
Domowicz et al v Orsa Investments LtdUnknownYes(1993) 15 OR (3d) 661CanadaCited regarding the restrictive approach towards the grant of specific performance for land contracts.
Heron Bay Investments Ltd v Peel-Elder Developments LtdOntario High CourtYes(1976) 2 CPC 338CanadaCited regarding the restrictive approach towards the grant of specific performance for land contracts.
Chaulk v Fairview Construction LimitedUnknownYes(1977) 33 APR 13CanadaCited regarding the restrictive approach towards the grant of specific performance for land contracts.
Neretlis v MeadeUnknownYes[2005] OJ 638CanadaCited regarding the restrictive approach towards the grant of specific performance for land contracts.

13. Applicable Rules

Rule Name
Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
Moneylenders Act 2008Singapore
Bankruptcy ActSingapore
Supreme Court of Judicature ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Specific Performance
  • Option to Purchase
  • Deed of Settlement
  • Caveat
  • Settlement Agreement
  • Estoppel by Acquiescence
  • Mortgagee Sale
  • Forced Sale Value
  • Option Fee
  • Compensation Fee

15.2 Keywords

  • Specific Performance
  • Property Sale
  • Contract Dispute
  • Singapore Law
  • Real Estate Litigation
  • Option Agreement
  • Breach of Contract
  • Damages
  • Equity
  • Land
  • Settlement
  • Appeal

17. Areas of Law

Area NameRelevance Score
Specific performance85
Breach of Contract75
Contract Law70
Property Law65
Damages60
Estoppel40

16. Subjects

  • Contract Law
  • Property Law
  • Real Estate
  • Civil Procedure
  • Equity