Ong & Ong v Fairview Developments: Offer to Settle & Contract Law

Ong & Ong Pte Ltd, an architectural firm, appealed against the High Court's decision that a settlement agreement was validly formed with Fairview Developments Pte Ltd. The dispute arose after Fairview Developments terminated Ong & Ong's services, leading to a claim by Ong & Ong for $10,138,128.28 and a counterclaim by Fairview Developments for $23,410,000. Ong & Ong made an offer to settle, which Fairview Developments accepted after an appeal. The Court of Appeal dismissed Ong & Ong's appeal, holding that the settlement agreement was valid and enforceable.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed, holding that there was a valid acceptance of the offer to settle and the offer as accepted is enforceable.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding settlement agreement validity. Court held settlement was valid, dismissing appeal. Key issue: interpretation of offer to settle.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ong & Ong Pte LtdAppellantCorporationAppeal DismissedLost
Fairview Developments Pte LtdRespondentCorporationAppeal UpheldWon

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealYes
Andrew Phang Boon LeongJustice of the Court of AppealNo
Judith PrakashJudgeNo

4. Counsels

Counsel NameOrganization
Ang Wee JianMPillay
Mohan PillayMPillay
Yap Neng Boo JimmyJimmy Yap & Co
Hri Kumar NairDrew & Napier LLC
Shivani RetnamDrew & Napier LLC
Harsharan KaurDrew & Napier LLC

4. Facts

  1. Ong & Ong sued Fairview Developments for $10,138,128.28 for loss of prospective fees and fees due for architectural services.
  2. Fairview Developments counterclaimed for $23,410,000 for losses due to Ong & Ong's delay in furnishing a letter of release.
  3. Ong & Ong made an Offer to Settle (OTS) on 28 July 2011, offering to settle for $2,588,666.
  4. The High Court bifurcated the trial, first hearing liability.
  5. The High Court granted interlocutory judgment for Ong & Ong for fees already performed but dismissed the counterclaim.
  6. Fairview Developments accepted the OTS on 24 September 2013, after the Court of Appeal allowed Ong & Ong's appeal.
  7. Ong & Ong argued the OTS had lapsed because the counterclaim was dismissed.

5. Formal Citations

  1. Ong & Ong Pte Ltd v Fairview Developments Pte Ltd, Civil Appeal No 163 of 2013, [2015] SGCA 5
  2. Ong & Ong Pte Ltd v Fairview Developments Pte Ltd, , [2014] 2 SLR 1285
  3. Fairview Developments Pte Ltd v Ong & Ong Pte Ltd and another appeal, , [2014] 2 SLR 318

6. Timeline

DateEvent
Suit filed by Ong & Ong Pte Ltd against Fairview Developments Pte Ltd
Ong & Ong Pte Ltd served an Offer to Settle on Fairview Developments Pte Ltd
Court ordered bifurcation of the trial
Trial on liability was heard
Interlocutory judgment granted allowing Ong & Ong’s claim for fees for architectural works already performed, but dismissing the Respondent’s counterclaim
Fairview Developments Pte Ltd asked if Ong & Ong Pte Ltd was prepared to accept the outcome of the matter without taking the matter further to the Court of Appeal
Ong & Ong Pte Ltd stated that the Offer to Settle remained open for acceptance
Both parties appealed against the Interlocutory Judgment
Hearing on costs was fixed
MPillay informed the court that costs of the trial should be reserved until after the assessment of damages by the Registrar, due to the existence of an Offer to Settle
Court of Appeal heard the cross appeals. The Appellant’s appeal was allowed and the Respondent’s appeal dismissed
Fairview Developments Pte Ltd sent a Notice of Acceptance of Plaintiff’s Offer to Settle
MPillay replied to the Notice of Acceptance stating that the Offer to Settle was no longer capable of being accepted
Fairview Developments Pte Ltd instituted proceedings seeking a declaration from the court that its acceptance of the Offer to Settle was valid
Court of Appeal released its grounds of decision for the appeal
Judgment reserved

7. Legal Issues

  1. Validity of Settlement Agreement
    • Outcome: The Court of Appeal held that the settlement agreement was valid and enforceable.
    • Category: Substantive
    • Sub-Issues:
      • Lapse of Offer to Settle
      • Acceptance of Offer to Settle
      • Enforcement of Offer to Settle
    • Related Cases:
      • [2014] 2 SLR 1285
      • [1998] 3 SLR(R) 970
      • (1991) 85 DLR (4th) 392
      • (1992) 27 NSWLR 721
      • [2001] 3 SLR(R) 439
      • [2014] 2 SLR 318
      • [1962] 1 WLR 1184
      • [2009] 3 NZLR 160
      • [2012] 4 SLR 1096
      • [1992] OJ No 295
      • [2004] NSWSC 482
      • [2004] EWCA Civ 873
      • [2010] EWCA Civ 726
      • [2008] EWHC 2616 (TCC)
      • [2007] 1 WLR 2953
      • [2006] 2 SLR(R) 7
      • [2012] OJ No 5388
      • [2009] OJ No 2968
      • (1989) 18 NSWLR 528
      • [2010] 3 SLR 956
      • [2011] 4 SLR 617
      • [2004] EWCA Civ 1677
      • [2005] 1 SLR(R) 502
      • [2014] 1 SLR 475

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Quantum Meruit

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ong & Ong Pte Ltd v Fairview Developments Pte LtdHigh CourtYes[2014] 2 SLR 1285SingaporeThe decision from which this appeal arose.
The “Endurance 1”Court of AppealYes[1998] 3 SLR(R) 970SingaporeCited with approval from the Ontario Court of Appeal decision in Data General (Canada) Ltd v Molnar Systems Group Inc for the purpose of O 22A.
Data General (Canada) Ltd v Molnar Systems Group IncOntario Court of AppealYes(1991) 85 DLR (4th) 392CanadaCited for the purpose of encouraging the termination of litigation by agreement of the parties.
Maitland Hospital v Fisher (No 2)New South Wales Court of AppealYes(1992) 27 NSWLR 721AustraliaCited for the purpose of legislating cost consequences to facilitate the proper compromise of litigation by equal measures of “carrot” and “stick”.
Singapore Airlines Ltd v Tan Shwu LengCourt of AppealYes[2001] 3 SLR(R) 439SingaporeCited for the policy behind the O 22A regime.
Fairview Developments Pte Ltd v Ong & Ong Pte Ltd and another appealCourt of AppealYes[2014] 2 SLR 318SingaporeCourt of Appeal eventually released its grounds of decision for the appeal.
Financings Ltd v StimsonCourt of AppealYes[1962] 1 WLR 1184England and WalesCited for the principle of fundamental change in circumstances which caused the Offer to Settle to lapse.
Dysart Timbers Ltd v NielsenSupreme CourtYes[2009] 3 NZLR 160New ZealandCited for the principle of fundamental change in circumstances which caused the Offer to Settle to lapse.
Chia Kim Huay (litigation representative of the estate of Chua Chye Hee, deceased) v Saw Shu Mawa Min Min and anotherHigh CourtYes[2012] 4 SLR 1096SingaporeCited for the principle that common law contractual principles can be applied to the Offer to Settle regime insofar as they are not inconsistent with the express provisions in O 22A.
McDougall v McDougallOntario Court of JusticeYes[1992] OJ No 295CanadaAuthorities from other common law countries which have a regime similar to O 22A have also so held.
Mohamed v FarahSupreme Court of New South WalesYes[2004] NSWSC 482AustraliaAuthorities from other common law countries which have a regime similar to O 22A have also so held.
Flynn v ScougallEngland and Wales Court of Appeal (Civil Division)Yes[2004] EWCA Civ 873England and WalesAuthorities from other common law countries which have a regime similar to O 22A have also so held.
Gibbon v Manchester City CouncilEngland and Wales Court of Appeal (Civil Division)Yes[2010] EWCA Civ 726England and WalesAuthorities from other common law countries which have a regime similar to O 22A have also so held.
Sampla and others v Rushmoor Borough Council and anotherHigh Court of JusticeYes[2008] EWHC 2616 (TCC)England and WalesCoulson J rejected an argument from contract law principles that a Part 36 offer that has been rejected was thenceforth not open for acceptance.
Orton v Collins and othersHigh Court of JusticeYes[2007] 1 WLR 2953England and WalesPeter Prescott QC sitting as a deputy High Court judge had to decide the issue of whether a Part 36 offer that was accepted could later be impugned because it dealt with real property but did not comply with the formality requirements for contracts dealing with real property set out in the Law of Property (Miscellaneous Provisions) Act 1989.
S & E Tech Pte Ltd v Western Electric Pacific Pte Ltd and anotherHigh CourtYes[2006] 2 SLR(R) 7SingaporeThe High Court decisions of Chia Kim Huay and S & E Tech Pte Ltd v Western Electric Pacific Pte Ltd and another appear to answer the question in the affirmative unless a particular contractual principle was expressly excluded by O 22A.
Dofasco Inc v National Steel Car LimitedOntario Superior Court of JusticeYes[2012] OJ No 5388CanadaGoldstein J held that the discretion should be exercised on the basis that a settlement in the nature of an offer to settle should be regarded as a form of contract and be governed as such.
Blackwell v DixonOntario Superior Court of JusticeYes[2009] OJ No 2968CanadaThe court found that because the parties were mistaken about the settlement it would not be enforced.
Lewis v Combell Constructions Pty LtdSupreme Court of New South WalesYes(1989) 18 NSWLR 528AustraliaFinlay J ordered that judgment not be entered in terms of the offer of compromise and said that the overriding interests of justice and the Court’s concern over its own procedure may mean that the Court will not enforce a contract.
Norwest Holdings Pte Ltd (in liquidation) v Newport Mining LtdHigh CourtYes[2010] 3 SLR 956SingaporeThe High Court in Norwest Holdings Pte Ltd (in liquidation) v Newport Mining Ltd considered (in obiter) that the approach taken in both Financings v Stimson and Dysart Timbers should not be followed.
Norwest Holdings Pte Ltd (in liquidation) v Newport Mining Ltd and another appealCourt of AppealYes[2011] 4 SLR 617SingaporeThe Court of Appeal in Norwest Holdings Pte Ltd (in liquidation) v Newport Mining Ltd and another appeal dismissed the appeal, but declined to express an opinion on the views of the High Court.
Capital Bank plc v SticklandEngland and Wales Court of Appeal (Civil Division)Yes[2004] EWCA Civ 1677England and WalesThis doctrine was applied in the context of Part 36 of the English Civil Procedure Rules 1998 (SI 1998 No 3132) (UK) in Capital Bank plc v Stickland.
Chwee Kin Keong and others v Digilandmall.com Pte LtdCourt of AppealYes[2005] 1 SLR(R) 502SingaporeIn Chwee Kin Keong and others v Digilandmall.com Pte Ltd the Court of Appeal declined to enforce contracts for purchase of printers where there was “sharp practice” or “unconscionable conduct”.
Tanner Sheridan Wayne v NRG Engineering Pte LtdHigh CourtYes[2014] 1 SLR 475SingaporeUnder O 22A, the offeror needs to give one day’s notice before it may serve a notice of withdrawal in Form 34 on the offeree.

13. Applicable Rules

Rule Name
O 22A of the Rules of Court
Part 36 of the Civil Procedure Rules 1998 (SI 1998 No 3132) (UK)
Part 22 of the Supreme Court Rules 1970 (NSW)
rule 49.09 of the Rules of Civil Procedure (Ont)

14. Applicable Statutes

Statute NameJurisdiction
Rules of CourtSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Offer to Settle
  • Settlement Agreement
  • Bifurcation
  • Interlocutory Judgment
  • Indemnity Costs
  • Contra Proferentem
  • Fundamental Change in Circumstances
  • Notice of Acceptance
  • Lapse of Offer
  • Enforcement of Settlement

15.2 Keywords

  • offer to settle
  • contract law
  • settlement agreement
  • civil procedure
  • appeal
  • Singapore

17. Areas of Law

Area NameRelevance Score
Contract Law80
Offer to Settle75
Breach of Contract70
Costs60
Civil Procedure60
Damages50
Contra Proferentem Rule40
Fundamental Change of Circumstances35
Arbitration30
Estoppel20

16. Subjects

  • Contract Law
  • Civil Procedure
  • Settlement Agreements
  • Offer and Acceptance