The One Suites Pte Ltd v Pacific Motor Credit: Property Sale, HDB Approval & Contract Rescission

In The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd, the Court of Appeal of Singapore heard an appeal regarding the rescission of a property sale contract. The One Suites Pte Ltd (Appellant) sought to recover a deposit paid to Pacific Motor Credit (Pte) Ltd (Respondent) for a property purchase, arguing that the Housing and Development Board's (HDB) initial refusal to approve the sale triggered a rescission clause in their contract. The Court of Appeal allowed the appeal, holding that the HDB's initial refusal entitled the Appellant to rescind the contract and recover the deposit.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding property sale rescission due to HDB approval refusal. The court allowed the appeal, finding the contract rescinded upon HDB's initial refusal.

1.7 Decision Date

8 April 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
The One Suites Pte Ltd	Appellant	Corporation	Appeal Allowed	Won	Michael Palmer of Quahe Woo and Palmer LLC Chew Kiat Jinn of Quahe Woo and Palmer LLC Tan Gek Theng of Quahe Woo and Palmer LLC
Pacific Motor Credit (Pte) Ltd	Respondent	Corporation	Appeal Dismissed	Lost	Albert Balasubramaniam of Jing Quee & Chin Joo Chew Ching Ching of Ching Ching Pek Gan & Partners

3. Judges

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

4. Counsels

Counsel Name	Organization
Michael Palmer	Quahe Woo and Palmer LLC
Chew Kiat Jinn	Quahe Woo and Palmer LLC
Tan Gek Theng	Quahe Woo and Palmer LLC
Albert Balasubramaniam	Jing Quee & Chin Joo
Chew Ching Ching	Ching Ching Pek Gan & Partners

4. Facts

The Appellant exercised an option to purchase a property from the Respondent.
The property was leased from the Housing and Development Board (HDB).
The sale was subject to HDB approval.
The NEA initially refused to approve the Appellant's proposed use of the property.
The HDB initially refused to grant in-principle approval because the NEA's consent had not been obtained.
The Appellant purported to rescind the contract.
The NEA subsequently approved the sale after the Respondent made certain concessions.

5. Formal Citations

The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd, Civil Appeal No 134 of 2014, [2015] SGCA 21
The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd, , [2014] 4 SLR 806

6. Timeline

Date	Event
2012-07-27	Appellant exercised the option to purchase the property.
2012-08-16	HDB inquired about the proposed use of the property and requested a business plan.
2012-08-17	KW replied to HDB stating that the Appellant would be using the Property for the Seven Uses.
2012-08-21	NEA sought clarifications on a number of matters.
2012-08-27	URA replied stating that the Property was approved for workshop, office and showroom use.
2012-09-03	KW responded to the NEA’s letter of 21 August 2012.
2012-09-04	NEA requested KW to furnish the necessary information required in the letter.
2012-09-11	KW supplied the NEA with the Appellant’s responses to the queries raised in the NEA’s email of 21 August 2012.
2012-09-11	NEA notified the Appellant of the outcome of its application, stating it could not support the application.
2012-09-12	Appellant met with representatives from the HDB.
2012-09-21	KW wrote to inform HDB that the “NEA’s consent has not been obtained”.
2012-09-24	HDB informed KW that it was “unable to grant in-principle approval” because the “NEA’s consent has not been obtained”.
2012-09-25	KW wrote to CCPG stating that the transaction had been “rescinded”.
2012-10-01	CCPG responded, rejecting the purported notice of rescission.
2012-10-05	KW stated that the Property was sold “subject to existing approved use”, ie, the Seven Uses, and not sold subject to only the then existing use.
2012-10-08	CCPG replied to say that the Respondent was “checking on the matter with [the] NEA”.
2012-10-15	Respondent’s director met with two representatives from the NEA.
2012-10-19	CCPG wrote to KW to inform the Appellant that the NEA’s concern was with the fact that the Property was zoned for residential use.
2012-10-22	KW responded and reiterated its view that there were no reasonable grounds for the Appellant to appeal against the NEA’s non-approval of its application.
2012-11-01	KW issued a formal notice and demanded the return of the $1.68m deposit.
2012-11-06	CCPG responded stating that it would take instructions from the Respondent and that it would respond to the demand within the next seven days or so.
2012-11-08	Tan wrote to the NEA, urging it to review the matter and to reconsider its refusal to approve the Appellant’s application.
2012-11-23	NEA sent an email to inform Cheong that the NEA (together with the HDB and the URA) had jointly assessed his appeal and had decided to accede to it by approving the sale and purchase of the Property.
2012-11-28	KW wrote to the NEA to inform it that neither the Appellant nor KW had lodged any appeal with the NEA and to “reject the representations, unauthorized appeal and [the] NEA’s purported decision”.
2012-11-29	Tan sent a letter to the Appellant requesting the Appellant to, in light of the NEA’s approval, apply to the HDB for its approval of the sale and purchase of the Property.
2012-11-30	CCPG sent a similar letter to KW.
2012-12-11	KW replied and stated that the OTP had been terminated and could not be retrospectively revived by the NEA’s letter on 23 December 2012.
2014-01-01	High Court Judge's decision in The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd [2014] 4 SLR 806.
2015-04-09	Court of Appeal allowed the appeal.

7. Legal Issues

Contract Rescission
- Outcome: The court held that the contract was validly rescinded due to the HDB's initial refusal to approve the sale.
- Category: Substantive
- Sub-Issues:
  - Refusal of approval by authorities
  - Obligation to use reasonable endeavours
- Related Cases:
  - [2014] 4 SLR 806
  - [2013] 4 SLR 193
  - [2014] 2 SLR 905
  - [1997] 3 SLR(R) 257
Implied Terms
- Outcome: The court found that the express terms of the contract determined the scope of the implied term to use reasonable endeavours.
- Category: Substantive
- Sub-Issues:
  - Obligation to use reasonable endeavours
  - Cut-off date for approvals
- Related Cases:
  - [2013] 4 SLR 193
Duty to Cooperate
- Outcome: The court did not make a definitive ruling on the duty to cooperate.
- Category: Substantive
- Related Cases:
  - (1881) 6 App Cas 251
  - [2006] 1 SLR(R) 634

8. Remedies Sought

Return of Deposit
Rescission of Contract

9. Cause of Actions

Breach of Contract
Recovery of Deposit

10. Practice Areas

Commercial Litigation
Real Estate Transactions

11. Industries

Real Estate
Automotive

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd	High Court	Yes	[2014] 4 SLR 806	Singapore	The current appeal is against the decision of the High Court Judge in this case.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the three-step test for the implication of terms in fact.
KS Energy Services Ltd v BR Energy (M) Sdn Bhd	Court of Appeal	Yes	[2014] 2 SLR 905	Singapore	Cited for principles on “endeavours” clauses.
Tan Soo Leng David v Wee, Satku & Kumar Pte Ltd	High Court	Yes	[1997] 3 SLR(R) 257	Singapore	Cited regarding the duty to show that all reasonable steps were taken to obtain consent from a third party.
Tan Soo Leng David v Wee Satku & Kuamr Pte Ltd and another	Court of Appeal	Yes	[1994] 1 SLR(R) 426	Singapore	Cited regarding the duty to show that all reasonable steps were taken to obtain consent from a third party.
Brauer & Co (Great Britain), Ltd v James Clark (Brush Materials), Ltd	English Court of Appeal	Yes	[1952] 2 All ER 497	England	Cited regarding the need to show that all reasonable steps were taken to obtain a license.
Lipmans Wallpaper Ltd v Mason & Hodghton Ltd and another	English High Court	Yes	[1969] 1 Ch 20	England	Cited regarding the right to rescind the contract once consent has been refused.
Bickel and others v Courtenay Investments (Nominees) Ltd	English High Court	Yes	[1984] 1 All ER 657	England	Cited regarding the right to rescind the contract once consent has been refused.
Lehmann v McArthur	English Court of Appeal in Chancery	Yes	(1868) LR 3 Ch App 496	England	Cited regarding the right to rescind the contract once consent has been refused.
Hargreaves Transport Ltd v Lynch	English Court of Appeal	Yes	[1969] 1 WLR 215	England	Cited regarding the reasonableness of expecting a party to appeal against the refusal of a planning permission.
IBM United Kingdom Ltd v Rockware Glass Ltd	English Court of Appeal	Yes	[1980] FSR 335	England	Cited regarding the obligation to use reasonable endeavours extending to an appeal against the refusal to grant a planning permission.
Jolley v Carmel Ltd	English High Court	Yes	[2000] 2 EGLR 154	England	Cited regarding the obligation to use reasonable endeavours extending to an appeal against the refusal to grant a planning permission.
Group Exklusiv Pte Ltd v Diethelm Singapore Pte Ltd	Singapore High Court	Yes	[2003] 4 SLR(R) 582	Singapore	Discusses the sale and purchase of a property leased from the HDB and the obligation to obtain approval from the NEA.
Ong Khim Heng Daniel v Leonie Court Pte Ltd	Singapore High Court	Yes	[2000] 3 SLR(R) 670	Singapore	Discusses the sale of property en bloc and the approval of the Strata Titles Board.
McKay v Dick and another	House of Lords	Yes	(1881) 6 App Cas 251	England	Cited as the seminal decision regarding the duty of parties to cooperate.
Evergreat Construction Co Pte Ltd v Presscrete Engineering Pte Ltd	Singapore High Court	Yes	[2006] 1 SLR(R) 634	Singapore	Cited regarding the duty of parties to cooperate.
Ng Giap Hon v Westcomb Securities Pte Ltd and others	Court of Appeal	Yes	[2009] 3 SLR(R) 518	Singapore	Cited regarding the implied duty of good faith.
Yam Seng Pte Ltd v International Trade Corporation Ltd	English High Court	Yes	[2013] 1 Lloyd’s Rep 526	England	Cited regarding the doctrine of good faith.
Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest)	English Court of Appeal	Yes	[2013] EWCA Civ 200	England	Cited regarding the doctrine of good faith.
HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v Toshin Development Singapore Pte Ltd	Court of Appeal	Yes	[2012] 4 SLR 738	Singapore	Cited regarding the express term in the contract that the parties would negotiate in good faith.
Harish Bhasin v Larry Hrynew and Heritage Education Funds Inc	Supreme Court of Canada	Yes	[2014] SCC 71	Canada	Cited regarding the duty of honest performance.
Malik v Bank of Credit & Commerce International SA (in compulsory liquidation)	House of Lords	Yes	[1998] AC 20	England	Cited regarding the implied term of mutual trust and confidence in the employment context.
Commonwealth Bank of Australia v Barker	High Court of Australia	Yes	(2014) 88 ALJR 814	Australia	Cited regarding the implied term of mutual trust and confidence in the employment context.
Wee Kim San Lawrence Bernard v Robinson & Co (Singapore) Pte Ltd	Court of Appeal	Yes	[2014] 4 SLR 357	Singapore	Cited regarding the implied term of mutual trust and confidence in the employment context.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Option to Purchase
HDB Approval
NEA Approval
Rescission
Reasonable Endeavours
Seven Uses
Existing Approved Use
In-Principle Approval

15.2 Keywords

contract
rescission
property
HDB
approval
sale
deposit
reasonable endeavours

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Property Law	70
Civil Procedure	30

16. Subjects

Contract Law
Property Law
Real Estate
Sale of Land