Park Regis v British Malayan Trustees: Conspiracy to Induce Breach of Contract & Release Rule

Park Regis Hospitality Management Sdn Bhd, a hotel management company, sued British Malayan Trustees Limited, Allco Funds Management (Singapore) Limited, and Allco FMS Investments Pte Ltd in the High Court of Singapore, alleging conspiracy to induce Taragon Capital Malaysia Sdn Bhd to breach an Operating Agreement (OA). The High Court, presided over by George Wei JC, dismissed Park Regis's appeals against the Assistant Registrar's decision to strike out the action, finding no merit in the claim and holding that the 'Release Rule' potentially applied. The court also found no breach of the OA by Taragon, and therefore no basis for a claim of conspiracy to induce a breach.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeals dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Hotel management company Park Regis sued for conspiracy to induce breach of contract. The court considered the 'Release Rule' and found no breach.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Park Regis Hospitality Management Sdn BhdPlaintiff, AppellantCorporationAppeal DismissedLost
British Malayan Trustees LimitedDefendant, RespondentCorporationClaim DismissedWon
Allco Funds Management (Singapore) LimitedDefendant, RespondentCorporationClaim DismissedWon
Allco FMS Investments Pte LtdDefendant, RespondentCorporationClaim DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
George WeiJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Michelle LeeWong & Leow LLC
Cheah Yew KuinWong & Leow LLC
Lee Eng BengRajah & Tann LLP
Matthew TeoRajah & Tann LLP

4. Facts

  1. Park Regis, a hotel management company, entered into an Operating Agreement (OA) with Taragon.
  2. Taragon subsequently entered into an agreement to sell the hotel to Grace Hub Sdn Bhd.
  3. The sale agreement contained a clause stating it would be rescinded if the OA wasn't terminated within 30 days.
  4. Taragon served a notice of termination of the OA on Park Regis, which Park Regis rejected.
  5. Park Regis sued Taragon in Malaysia for breach of the OA and applied for an injunction.
  6. Park Regis commenced a suit in Singapore against Furama, Grace, and Allco Funds for conspiracy to induce a breach of contract.
  7. Park Regis and Taragon entered into a Resolution Agreement (RA) whereby Park Regis was to receive RM7.5m.

5. Formal Citations

  1. Park Regis Hospitality Management Sdn Bhd v British Malayan Trustees Limited & Ors, Suit No 201 of 2011 (Registrar's Appeals Nos 98 of 2013 and 99 of 2013, Summons No 2366 of 2013), [2013] SGHC 268

6. Timeline

DateEvent
BMT invested in Taragon.
BMT invested in Taragon.
Operating Agreement signed between Park Regis and Taragon.
Taragon entered into an agreement to sell the hotel to Grace Hub Sdn Bhd.
Taragon served a notice of termination of the OA on Park Regis.
Park Regis rejected the notice of termination.
Park Regis sued Taragon in Malaysia for breach of the OA.
Park Regis applied for an injunction to restrain the sale of the hotel to Grace.
Park Regis commenced Suit No 201 of 2011 in Singapore.
Interim injunction granted in Malaysia.
Park Regis and Taragon entered into a Resolution Agreement.
Injunction hearing date in Malaysia.
Park Regis discontinued the action against Furama and Grace.
Park Regis amended the claim to include BMT and Allco FMS as defendants.
Park Regis took out Summons No 2800 of 2012 to amend the statement of claim.
Respondents took out Summons No 3728 of 2012 to strike out the Park Regis claim.
Summonses heard by the AR.
Further hearing before the AR.
Second draft of the 1st Draft SOC-2.
AR found in favour of the Respondents and struck out the claim.
Park Regis took out Summons No 2366 of 2013.
Judgment reserved.

7. Legal Issues

  1. Conspiracy to Induce Breach of Contract
    • Outcome: The court found no breach of contract, therefore the claim for conspiracy to induce a breach failed.
    • Category: Substantive
  2. Release Rule
    • Outcome: The court considered the applicability of the Release Rule in Singapore, but did not make a definitive ruling.
    • Category: Substantive
  3. Breach of Operating Agreement
    • Outcome: The court found no breach of the Operating Agreement by Taragon.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Injunction

9. Cause of Actions

  • Breach of Contract
  • Conspiracy to Induce Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Hospitality

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ladd v MarshallNot specifiedYes[1954] 1 WLR 1489England and WalesCited for the three conditions that must be satisfied before the court will grant leave to adduce evidence on an appeal.
Lian Soon Construction Pte Ltd v Guan Qian Realty Pte LtdCourt of AppealYes[1999] 1 SLR(R) 1053SingaporeCited to clarify that the Ladd v Marshall Test serves only as a guide, and does not apply strictly, when it was an appeal from a registrar to a judge in chambers.
Lassiter Ann Masters v To Keng LamCourt of AppealYes[2004] 2 SLR(R) 392SingaporeCited for the concern that if the Ladd v Marshall Test did not apply, a liberal use of a wide discretion to admit fresh evidence could defeat the very rationale underlying the delegation of matters to the Registrar.
WBG Network (S) Pte Ltd v Sunny Daisy LtdCourt of AppealYes[2007] 1 SLR(R) 1133SingaporeCited to recognise a distinction between the standard to be applied in appeals where there had been the characteristics of a full trial or where oral evidence had been recorded and those that were interlocutory in nature.
Gabriel Peter & Partners v Wee Chong JinCourt of AppealYes[1997] 3 SLR (R) 649SingaporeCited for the principle that the power to strike out should only be exercised in plain and obvious cases.
Ng Chee Weng v Lim Jit Ming BryanNot specifiedYes[2012] 1 SLR 457SingaporeCited for the principle that the power of the court to strike out a claim at the interlocutory stage can only be exercised if it is patently clear that there is no reasonable cause of action on the face of the pleadings.
Tan Eng Khiam v Ultra Realty Pte LtdNot specifiedYes[1991] 1 SLR (R) 844SingaporeCited to support the principle that where the striking out application is based on limb (a) no affidavit can be filed in support because it is essentially a question of law and the pleaded facts are presumed to be true in favour of the claimant.
Nigel Watts Count Nikolai Tolstoy-Miloslavaski v The Right Honourable Toby Lowe and othersEnglish Court of AppealYes[1989] L & TR 578England and WalesCited for the principle that an objective approach had to be taken as to whether the words used amounted to a reservation of rights.
Duck v MayeuNot specifiedYes[1892] 2 QB 511England and WalesCited to reflect the Release Rule.
Bryanston Finance Ltd v De VriesNot specifiedYes[1975] QB 703England and WalesCited for the effect of s 6(1)(a) of the Law Reform (Married Women and Tortfeasors) Act 1935 (c 30) (UK) was to abolish the old common law rule that a cause of action against two or more joint tortfeasors merged in the first judgment recovered against any one of them even though that judgment remained unsatisfied.
Clayton v KynastonNot specifiedYes(1701) 2 Salk 573England and WalesCited for the principle that a mere covenant not to sue one joint tortfeasor did not effect a release of any other joint tortfeasor.
North v WakefieldNot specifiedYes(1849) 13 QB 536England and WalesCited for the principle that where a deed of release contained an express clause that it should not operate to discharge anyone jointly liable with the person so discharged, it did not so operate.
XL Petroleum v CaltexHigh CourtYes(1985) 155 CLR 448AustraliaCited for the view that the whole rule that there is only one cause of action against joint tortfeasors was gone and that the statutory provision was not just about abolishing the doctrine of merger.
Thompson v Australian Capital Television Pty LimitedHigh CourtYes[1996] 186 CLR 574AustraliaCited for the principle that where there was a joint tort there could only be one action and one judgment was the basis for both the merger rule and the release rule.
Wah Tat Bank Ltd v ChanPrivy CouncilYes[1975] AC 507SingaporeCited for the principle that it was an established canon of construction that a statute should not be construed as altering the common law any further than it does so expressly or by necessary implication.
Industrial and Commercial Bank Ltd v Li Soon Development Pte LtdHigh CourtYes[1993] 3 SLR(R) 518SingaporeCited for the principle that if liability of guarantors is joint or joint and several that the release of one without the consent of others will discharge all the guarantors unless there is a sufficient reservation of the creditor’s rights against the other guarantors.
Econ Piling Pte Ltd v Sambo E&C Pte LtdHigh CourtYes[2010] SGHC 120SingaporeCited for the principle that where a joint debtor’s liability was released by operation of law, there was no need for the creditor to reserve its rights to proceed against the other joint debtors.
Bunga Melati 5Court of AppealYes[2012] 4 SLR 546SingaporeCited for the test on whether the action is “plainly or obviously unsustainable” and that the generality of the test of sustainability is “precisely what enables a court to do justice based on the facts before it.”

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law ActSingapore
Order 18 r 19(1) of the Rules of CourtSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Operating Agreement
  • Resolution Agreement
  • Release Rule
  • Conspiracy to Induce Breach
  • Condition Precedent
  • Notice of Termination
  • Global Settlement

15.2 Keywords

  • breach of contract
  • conspiracy
  • release rule
  • hotel management
  • operating agreement

17. Areas of Law

Area NameRelevance Score
Inducement of Breach of Contract80
Breach of Contract75
Conspiracy by Unlawful Means75
Contract Law70
Resolution Agreement65
Civil Procedure40
Company Law30
Hotel Management25

16. Subjects

  • Contract Law
  • Tort Law
  • Civil Procedure
  • Hotel Management