Broadley Construction v Alacran Design: Contract Dispute over Fraudulent Misrepresentation and Unilateral Mistake

In a civil appeal before the Court of Appeal of Singapore, Broadley Construction Pte Ltd appealed against the decision in favor of Alacran Design Pte Ltd regarding a contract dispute. The case centered on whether Broadley was liable to pay Alacran the outstanding sum of $423,407.34 for equipment supplied. Alacran claimed fraudulent misrepresentation and unilateral mistake regarding an undertaking letter. The Court of Appeal allowed Broadley's appeal, finding that neither fraudulent misrepresentation nor unilateral mistake had been established, reversing the lower court's decision.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal case involving Broadley Construction and Alacran Design. The court addressed fraudulent misrepresentation and unilateral mistake in a contract dispute.

1.7 Decision Date

15 May 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Broadley Construction Pte Ltd	Appellant	Corporation	Appeal Allowed	Won	Eugene Thuraisingam of Eugene Thuraisingam LLP Syazana Binte Yahya of Eugene Thuraisingam LLP
Alacran Design Pte Ltd	Respondent	Corporation	Appeal Dismissed	Lost	Ng Hweelon of Veritas Law Corporation Ibsen Low of Veritas Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Judge of Appeal	No
Steven Chong	Judge of Appeal	Yes
Quentin Loh	Judge	No

4. Counsels

Counsel Name	Organization
Eugene Thuraisingam	Eugene Thuraisingam LLP
Syazana Binte Yahya	Eugene Thuraisingam LLP
Ng Hweelon	Veritas Law Corporation
Ibsen Low	Veritas Law Corporation

4. Facts

Broadley contracted with Alacran to supply equipment for a residential project.
Broadley defaulted on payments to Alacran due to Singbuild's non-payment to Broadley.
Mr. Lin and Mr. Govin met to discuss Broadley's outstanding payment of $423,407.34.
Broadley issued post-dated cheques to Alacran, to be encashed after Singbuild paid Broadley.
A dispute arose regarding the terms of an undertaking letter authorizing Singbuild to pay Alacran directly.
Alacran claimed Mr. Govin's silence implied Broadley remained liable if Singbuild defaulted.
Broadley argued the undertaking absolved them of liability, assigning the debt to Singbuild.

5. Formal Citations

Broadley Construction Pte Ltd v Alacran Design Pte Ltd, Civil Appeal No 139 of 2017, [2018] SGCA 25
Alacran Design Pte Ltd v Broadley Construction Pte Ltd, , [2017] SGHC 162

6. Timeline

Date	Event
2013-07-01	Broadley and Alacran entered into a contract.
2015-01-01	Broadley began defaulting on payments to Alacran.
2015-08-01	First Meeting between Mr. Lin and Mr. Govin.
2015-09-01	Broadley issued post-dated cheques to Alacran.
2015-11-01	Second Meeting between Mr. Lin and Mr. Govin.
2015-11-06	Broadley sent a draft of the undertaking to Mr. Lin.
2017-01-01	Alacran Design Pte Ltd v Broadley Construction Pte Ltd [2017] SGHC 162 was published.
2017-01-01	Civil Appeal No 139 of 2017 filed.
2018-03-20	Judgment reserved.
2018-05-16	Judgment delivered.

7. Legal Issues

Fraudulent Misrepresentation
- Outcome: The court held that Mr. Govin's silence did not amount to a fraudulent misrepresentation.
- Category: Substantive
- Sub-Issues:
  - Silence as representation
  - Intention to induce reliance
  - Correction of misrepresentation
- Related Cases:
  - [2001] 2 SLR(R) 435
  - [2015] 1 SLR 521
  - [2018] 1 SLR 317
  - [2013] 3 SLR 801
  - [2003] Lloyd’s Rep IR 131
  - [2006] 2 Lloyd’s Law Rep 511
  - (1881) 20 Ch D 1
  - [1951] 1 KB 805
  - [1993] 2 FLR 97
Unilateral Mistake
- Outcome: The court held that Mr. Govin did not have actual knowledge of Mr. Lin's mistake, and therefore unilateral mistake was not established.
- Category: Substantive
- Sub-Issues:
  - Knowledge of mistake
  - Fundamental mistake
  - Equitable unilateral mistake
- Related Cases:
  - [2005] 1 SLR(R) 502

8. Remedies Sought

Payment of Outstanding Sum
Rescission of Undertaking

9. Cause of Actions

Breach of Contract
Fraudulent Misrepresentation
Unilateral Mistake

10. Practice Areas

Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Gimpex Ltd v Unity Holdings Business Ltd	Singapore Court of Appeal	Yes	[2015] 2 SLR 686	Singapore	Cited for the principle that a finding of fraud requires strong and cogent evidence.
R1 International Pte Ltd v Lonstroff AG	Singapore Court of Appeal	Yes	[2015] 1 SLR 521	Singapore	Cited regarding the legal significance of silence as acceptance of terms in a contract.
Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd	Singapore Court of Appeal	Yes	[2018] 1 SLR 317	Singapore	Cited regarding the legal significance of silence as waiver of rights and in cases of misrepresentation.
Wee Chiaw Sek Anna v Ng Li-Ann Genevieve	Singapore Court of Appeal	Yes	[2013] 3 SLR 801	Singapore	Cited regarding misrepresentation by silence.
Panatron Pte Ltd and another v Lee Cheow Lee and another	Singapore Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the elements of fraudulent misrepresentation.
Chwee Kin Keong and others v Digilandmall.com Pte Ltd	Singapore High Court	Yes	[2005] 1 SLR(R) 502	Singapore	Cited for the requirements for a successful claim of unilateral mistake.
Assicurazioni Generali SpA v Arab Insurance Group (BSC)	England and Wales Court of Appeal (Civil Division)	Yes	[2003] Lloyd’s Rep IR 131	England and Wales	Cited regarding the effect of a representor’s correction of his earlier misrepresentation.
Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd	England and Wales Court of Appeal (Civil Division)	Yes	[2006] 2 Lloyd’s Law Rep 511	England and Wales	Cited regarding inducement in misrepresentation claims and the effect of express contractual terms.
Redgrave v Hurd	England and Wales Court of Appeal	Yes	1881) 20 Ch D 1	England and Wales	Cited for the principle that it is not a defence to misrepresentation that the representee could have discovered the truth through reasonable endeavours.
Jurong Shipyard Pte Ltd v BNP Paribas	Singapore High Court	Yes	[2008] 4 SLR(R) 33	Singapore	Cited for its observation on the Peekay case regarding the absence of misrepresentation.
Curtis v Chemical Cleaning and Dyeing Co Ltd	England and Wales Court of Appeal	Yes	[1951] 1 KB 805	England and Wales	Cited regarding a representation made as to the effect and contents of the contractual document.
Lloyds Bank plc v Waterhouse	England and Wales Court of Appeal	Yes	[1993] 2 FLR 97	England and Wales	Cited regarding the defendant being induced to sign a guarantee for a loan by the bank’s misrepresentation as regards the scope and content of the guarantee.

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

Undertaking
Outstanding Sum
Fraudulent Misrepresentation
Unilateral Mistake
Indemnity Clause
Assignment of Debt
Silence as Representation

15.2 Keywords

contract
misrepresentation
unilateral mistake
construction
singapore
court of appeal

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Misrepresentation	80
Breach of Contract	75
Unilateral mistake	70
Fraudulent	70
Mistake	60

16. Subjects

Contract Law
Misrepresentation
Commercial Dispute