Fairview v Ong & Ong: Architectural Services Dispute & Wrongful Termination

In Civil Appeals Nos 51 and 52 of 2013, the Court of Appeal of Singapore heard appeals by Fairview Developments Pte Ltd and Ong & Ong Pte Ltd (OOPL) concerning a dispute over architectural services provided by OOPL and its predecessor, Ong & Ong Architects (OOA), for the development of Lot 248. The court dismissed Fairview's appeal and allowed OOPL's appeal, finding that Fairview had wrongfully terminated the 1983 Agreement and that OOPL was entitled to fees for the Later Abortive Works calculated on a percentage basis.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Fairview's appeal dismissed; Ong & Ong's appeal allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Fairview Developments' appeal dismissed, Ong & Ong's appeal allowed. The case concerns a dispute over architectural services and wrongful termination.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ong & Ong Pte LtdRespondent, AppellantCorporationAppeal AllowedWon
Fairview Developments Pte LtdAppellant, RespondentCorporationAppeal DismissedLost

3. Judges

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

4. Counsels

Counsel NameOrganization
Ang Wee JianMPillay
Mohan Reviendran PillayMPillay
Joanna Seetoh Wai LinMPillay
Yap Neng Boo JimmyJimmy Yap & Co
Hri Kumar NairDrew & Napier LLC
Shivani RetnamDrew & Napier LLC
Harsharan Kaur BhullarDrew & Napier LLC

4. Facts

  1. Fairview engaged OOA in 1972 to develop Lot 248 as a condominium.
  2. In-principle approval was obtained in 1980.
  3. Fairview decided to develop Lot 248 in phases due to high development charges in 1981.
  4. OOPL claimed for loss of profits due to wrongful termination and fees for abortive works.
  5. Fairview terminated OOPL's services on 1 October 2009.
  6. OOA sent a letter to Fairview regarding OOPL’s succession of OOA.

5. Formal Citations

  1. Fairview Developments Pte Ltd v Ong & Ong Pte Ltd, Civil Appeals Nos 51 and 52 of 2013, [2014] SGCA 5

6. Timeline

DateEvent
Fairview engaged OOA to apply for planning approval to develop Lot 248.
In-principle approval for the development was obtained.
Fairview confirmed change of plans to OOA to develop Lot 248 in phases.
Fairview sent a letter to OOA regarding the reduction of fees.
OOA replied to Fairview regarding fees.
Phase 1 of the development was completed.
OSM wrote to Fairview regarding the agreement reached on fees for the site.
Mr. Ong Tze Boon joined OOA.
Phase 2 of the development was completed.
OOA wrote to Fairview regarding professional fees for the entire development site.
Fairview confirmed acceptance of the terms outlined in OOA's letter.
OTC and OTB sent a letter to Fairview regarding OOPL’s succession of OOA.
TTL and YLH replied on behalf of Fairview that it had no objection to OOA’s plan to let OOPL succeed OOA.
The main Phase 3 was completed.
Phase 3a was completed.
Phase 3b was completed.
Fairview wrote to OOPL to terminate its services.
Fairview replied declining to meet OOPL and reiterated its request for the LR.
Fairview repeated its requests for OOPL’s invoice as well as the LR.
Fairview repeated its requests for OOPL’s invoice as well as the LR.
Fairview sent a Letter of Demand to OOPL copied to the Board of Architects.
OOPL gave its commitment to submit its claims by end April 2010.
Fairview stated that it did not know that there were still outstanding fees.
OOPL estimated that Fairview owed it $6,512,158.80 in loss of profits and $9.888 million in professional fees.
Fairview denied that OOPL was entitled to claim for loss of profits.
The BOA wrote to the parties fixing the security at $3.3 million.
The BOA confirmed receipt of a banker’s guarantee for this sum.
OOPL issued the LR.
Suit No 369 of 2011 was filed.
Civil Appeal No 51 of 2013 and Civil Appeal No 52 of 2013 were brought.
The Court of Appeal dismissed Fairview’s appeal in CA 51 and allowed OOPL’s cross-appeal in CA 52.

7. Legal Issues

  1. Wrongful Termination
    • Outcome: The court found that Fairview wrongfully terminated the 1983 Agreement.
    • Category: Substantive
    • Sub-Issues:
      • Breach of contract
      • Failure to provide reasonable notice
  2. Novation
    • Outcome: The court found that the 1983 Agreement had been novated to OOPL.
    • Category: Substantive
  3. Quantum Meruit
    • Outcome: The court rejected the quantum meruit basis for calculating fees for the Later Abortive Works, instead opting for a percentage basis.
    • Category: Substantive
  4. Limitation of Actions
    • Outcome: The court found that the claim had not been time-barred.
    • Category: Procedural
    • Sub-Issues:
      • Acknowledgment of debt
      • Accrual of cause of action

8. Remedies Sought

  1. Loss of Profits
  2. Professional Fees

9. Cause of Actions

  • Breach of Contract
  • Wrongful Termination

10. Practice Areas

  • Commercial Litigation
  • Construction Law

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
PT Bakrie Investindo v Global Distressed Alpha Fund 1 Limited PartnershipCourt of AppealYes[2013] 4 SLR 1116SingaporeCited to contrast the clarity of the contract's text and context in this case with a case where they were unclear.
Chwee Kin Keong and others v Digilandmall.com Pte LtdHigh CourtYes[2004] 2 SLR(R) 594SingaporeCited for the principle that very little is required to find sufficient consideration in law.
Chwee Kin Keong and others v Digilandmall.com Pte LtdCourt of AppealYes[2005] 1 SLR(R) 502SingaporeAffirmed the High Court's decision regarding consideration, though without specific discussion of that point.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric (practising under the name and style of WP Architects)High CourtYes[2007] 1 SLR(R) 853SingaporeCited for the principle that very little is required to find sufficient consideration in law.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming EricCourt of AppealYes[2007] 3 SLR(R) 782SingaporeReversed the High Court's decision, but without discussion of the point regarding consideration.
Gay Choon Ing v Loh Sze Ti Terence Peter and another appealCourt of AppealYes[2009] 2 SLR(R) 332SingaporeCited for the principle that very little is required to find sufficient consideration in law.
Rainforest Trading Ltd and another v State Bank of India SingaporeCourt of AppealYes[2012] 2 SLR 713SingaporeCited for the principle that courts are reluctant to invalidate commercial transactions on technical bases like consideration.
Benjamin Scarf v Alfred George JardineHouse of LordsYes(1882) 7 App Cas 345United KingdomCited for the definition of novation and the nature of consideration in a novation agreement.
Chung Meng Soon and Others v Lee Kai Investment (Pte) LtdHigh CourtYes[1993] SGHC 26SingaporeCited by Fairview for the proposition that the standard conditions of the Singapore Institute of Architects apply to an employer's engagement of an architect.
Chuan & Company Pte Ltd v Ong Soon HuatCourt of AppealYes[2003] 2 SLR(R) 205SingaporeCited for the requirements to constitute a valid acknowledgment of debt under the Limitation Act.
Kim Eng Securities Pte Ltd v Tan Suan KheeHigh CourtYes[2007] 3 SLR(R) 195SingaporeCited for a summary of the legal principles governing what constitutes a valid acknowledgment within the meaning of s 26(2) of the Limitation Act.
Dwr Cymru (Welsh Water) v Carmarthenshire County CouncilEnglish High CourtYes[2004] EWHC 2991United KingdomCited by Fairview for the proposition that the restarting of the limitation clock was intended to apply only when the acknowledgment was made before the expiry of the limitation period.
In re Gee & Co (Woolwich) LtdEnglish CourtYes[1975] 1 Ch 52United KingdomEnglish decision that interpreted s 23(4) of the UK Limitation Act 1939 as permitting acknowledgments made both before and after the expiry of the limitation period to restart the limitation clock.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Limitation ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Abortive Works
  • Novation
  • Letter of Release
  • 1983 Agreement
  • Quantum Meruit
  • Limitation Act
  • Architectural Services
  • Succession Letter

15.2 Keywords

  • Contract
  • Construction
  • Architecture
  • Termination
  • Limitation
  • Singapore

17. Areas of Law

Area NameRelevance Score
Contract Law80
Breach of Contract75
Construction of Contract65
Interpretation of Contract60
Limitation60
Interpretation of Contracts60
Construction of Contracts60
Quantum meruit50
Novation50
Contractual Variation45
Variation45
Variation of Contract45
Commercial Disputes40
Consideration40
Intention of Parties40
Assignment35
Offer and Acceptance30
Estoppel30
Repudiation of contract25
Ground for termination of contract25
Repudiatory breach25
Formation20
Company Law20
Performance of Contract20
Incorporation of main contract terms20
Incorporation of Terms20
Contractual Remedies20
Breach20
Breach of condition20
Sufficiency of consideration20
Terms20
Construction of undertaking20
Construction Law15
Equity15
Inducing Breach of Contract10
Oral agreements10
Equity and limitation of actions10
Oral Variation of Contract10
Construction Contract10
Assignment of Contractual Rights10
Implied contracts10
Arbitration10
Contracts (Rights of Third Parties) Act10
Estoppel by Convention10
Contractual estoppel10
Agency Law10
Implied contract10
Communication of choice to affirm contract in clear and unequivocal terms5
Proper Law of Contract5
Trust Law5
Implied authority of agent5
Privity of contract5
Unilateral mistake5
Contracts of indemnity5
Vehicle Sales Agreement5
Indemnity5
Estoppel in defiance of statute5
Bars to rescission5
Mashed Potato Agreement5
Inducement5
Incorporation of companies5
Indian Contract Act5
Super priority5
Postal Rule5
Encumbrances5
Best Efforts Clause5
Formalities5
Good and Marketable Title5
Mistake5
Effect of counterclaim5
Implied Admission5
Separability Doctrine5
Licensing Regime5
Design and build contract5
Agency by estoppel5
Oral undertaking5
Pre-incorporation contracts5
Breach of Guarantee5
Hire-Purchase Agreement5
Condition Precedent5
Implied Retainer5
Benevolence Principle5
Allotment Agreement5
Scheme of Arrangement5
Testamentary Intentions5
Convertible Loan Agreements5
Cross-Default5
Exclusive Jurisdiction Agreement5
Joint Venture Agreement5
Impossibility of Performance5
Non-reliance clause5
Shareholder Liability5
Financing Agreement5
Employment Agreement5
Contra Proferentem Rule5
Fundamental Change of Circumstances5
Indemnification5
Option to Purchase5
Franchise Agreements5
No-Assignment Clause5
Non-Compete Clause5
Non-Solicitation Clause5
Confidentiality Clause5
Deed of Settlement5
Ostensible Authority5
Actual Authority5
Sham Transaction5
Deeds5
Part Performance5
Express trusts5
Constructive Trust5
Consent Judgement5
Interest5
Economic Duress5
Entire Agreement Clause5
Rectification5
Unfair Contract Terms Act5
Common Law Rectification5
Equitable Rectification5
Tortious Interference5
Landlord and Tenant Disputes5
Liquidated Sum5
Res Judicata5
Rectification of Contracts5
Bunker Supply Agreement5
Requirements for waiver by election5

16. Subjects

  • Contract Law
  • Construction Law
  • Architectural Services
  • Limitation of Actions