Lim Teng Siang v Hong Choon Hau: Oral Rescission & No Oral Modification Clause in Share Purchase Agreement
Charles Lim Teng Siang and Tay Mui Koon appealed a High Court decision to the Court of Appeal of the Republic of Singapore, regarding the alleged oral rescission of a share purchase agreement (SPA) with Hong Choon Hau and Tan Kim Hee. The appellants claimed damages for breach of contract, while the respondents argued the SPA was rescinded by mutual agreement. The Court of Appeal dismissed the appeal, finding that the SPA was indeed rescinded orally and that a 'no oral modification' clause did not apply to rescission. The court also found that the appellants would have been estopped from enforcing the SPA.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal held that an oral rescission of a share purchase agreement was valid, despite a no oral modification clause.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Charles Lim Teng Siang | Appellant, Plaintiff | Individual | Appeal dismissed | Lost | Lok Vi Ming, Qabir Sandhu, Law May Ning, Daryl Ong Hock Chye |
| Tay Mui Koon | Appellant, Plaintiff | Individual | Appeal dismissed | Lost | Lok Vi Ming, Qabir Sandhu, Law May Ning, Daryl Ong Hock Chye |
| Hong Choon Hau | Respondent, Defendant | Individual | Appeal dismissed | Won | Christopher Woo, Joel Ng, Sujesh Anandan |
| Tan Kim Hee | Respondent, Defendant | Individual | Appeal dismissed | Won | Christopher Woo, Joel Ng, Sujesh Anandan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| Judith Prakash | Justice of the Court of Appeal | No |
| Steven Chong | Justice of the Court of Appeal | Yes |
| Belinda Ang Saw Ean | Judge of the Appellate Division | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lok Vi Ming | LVM Law Chambers LLC |
| Qabir Sandhu | LVM Law Chambers LLC |
| Law May Ning | LVM Law Chambers LLC |
| Daryl Ong Hock Chye | LawCraft LLC |
| Christopher Woo | Quahe Woo & Palmer LLC |
| Joel Ng | Quahe Woo & Palmer LLC |
| Sujesh Anandan | Quahe Woo & Palmer LLC |
4. Facts
- Mr. Lim and Mdm Tay agreed to sell 35 million PSL shares to Mr. Hong and Mr. Tan for $10.5 million.
- The Sale and Purchase Agreement (SPA) included a 'no oral modification' clause.
- The completion date of the SPA was 17 October 2014.
- The share transaction was never completed.
- Mr. Hong claimed the SPA was orally rescinded on 31 October 2014 due to concerns about PSL share ownership.
- Mr. Lim denied the oral rescission.
- The appellants did not serve any notice to complete until May 2018.
5. Formal Citations
- Charles Lim Teng Siang and another v Hong Choon Hau and another, Civil Appeal No 49 of 2020, [2021] SGCA 43
6. Timeline
| Date | Event |
|---|---|
| Sale and Purchase Agreement signed | |
| Completion Date | |
| Alleged oral rescission of the Sale and Purchase Agreement | |
| Letter demanding compliance with the Sale and Purchase Agreement sent | |
| Writ of summons filed | |
| Judgment reserved | |
| Judgment delivered |
7. Legal Issues
- Oral Rescission of Contract
- Outcome: The court found that the SPA was rescinded by mutual oral agreement.
- Category: Substantive
- Sub-Issues:
- Mutual agreement to rescind
- Effect of no oral modification clause on rescission
- Related Cases:
- [2021] SGCA 43
- Interpretation of No Oral Modification Clause
- Outcome: The court held that the no oral modification clause did not apply to rescission.
- Category: Substantive
- Sub-Issues:
- Whether 'rescission' falls within the scope of 'variation, supplement, deletion or replacement'
- Legal effect of NOM clause on oral rescission
- Related Cases:
- [2018] 4 All ER 21
- [2018] 1 SLR 979
- Estoppel
- Outcome: The court found that the appellants would have been estopped from enforcing the SPA.
- Category: Substantive
- Sub-Issues:
- Reliance on oral representation
- Detriment caused by reliance
8. Remedies Sought
- Damages for breach of contract
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Appeals
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Grace Electrical Engineering Pte Ltd v Te Deum Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 76 | Singapore | Cited for the factors to consider when granting leave to raise a new argument on appeal. |
| Rock Advertising Limited v MWB Business Exchange Centres Limited | United Kingdom Supreme Court | Yes | [2018] 4 All ER 21 | United Kingdom | Extensively discussed regarding the legal effect of no oral modification clauses. |
| Comfort Management Pte Ltd v OGSP Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 979 | Singapore | Cited for the approach that a no oral modification clause merely raises a rebuttable presumption. |
| MWB Business Exchange Centres Ltd v Rock Advertising Ltd | English Court of Appeal | Yes | [2016] 3 WLR 1519 | England and Wales | Cited as the decision from which the Comfort Management approach was adopted, which was later reversed on appeal. |
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | High Court | Yes | [2018] 1 SLR 317 | Singapore | Cited for the recognition of equitable estoppel as an exception to no oral modification clauses. |
| Beatty v Guggenheim Exploration Co | New York Court of Appeals | Yes | [1919] 225 NY 380 | United States | Cited for the principle that parties who make a contract may unmake it. |
| GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd | Federal Court of Australia | Yes | (2003) 128 FCR 1 | Australia | Cited as an authority that adopted the views of Cardozo J in Beatty v Guggenheim Exploration Co. |
| Shelanu Inc v Print Three Franchising Corporation | Ontario Court of Appeal | Yes | 64 OR (3d) 533 | Canada | Cited as an authority that adopted the views of Cardozo J in Beatty v Guggenheim Exploration Co. |
| Mathews Capital Partners v Coal of Queensland Holdings | New South Wales Supreme Court | Yes | [2012] NSWSC 462 | Australia | Cited for the principle that a no oral modification clause is to be taken into account in interpreting the subsequent conduct of the parties. |
| Ng Sau Foong v Rhombus Food & Lifestyle Sdn Bhd & Anor | Malaysian High Court | Yes | [2020] 8 MLJ 155 | Malaysia | Cited for endorsing the Briggs approach to no oral modification clauses. |
| Alwie Handoyo v Tjong Very Sumito and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 308 | Singapore | Cited for the inherent difficulty of proving civil fraud. |
| Tan Chor Jin v Public Prosecutor | Court of Appeal | Yes | [2008] 4 SLR(R) 306 | Singapore | Cited for the principles governing appellate interference with a trial judge’s factual findings. |
| Lim Teng Siang Charles and another v Hong Choon Hau and another | High Court | Yes | [2020] SGHC 182 | Singapore | The High Court decision that was appealed in this case. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Sale and Purchase Agreement
- No Oral Modification Clause
- Rescission
- Share Transaction
- Completion Date
- Party Autonomy
- Estoppel
15.2 Keywords
- contract
- rescission
- oral agreement
- no oral modification clause
- share purchase agreement
- estoppel
16. Subjects
- Contract Law
- Commercial Law
- Civil Procedure
- Share Purchase Agreement
- Rescission
- No Oral Modification Clause
17. Areas of Law
- Contract Law
- Commercial Law
- Civil Procedure