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  • Speeches - 2010
    6 Oct 2010 Speech by Law Minister K Shanmugam at the Singapore International Arbitration Centre s India Prime Global Business Destination An Arbitral Perspective Conference Source Ministry of Law 8 Sep 2010 Speech by Law Minister K Shanmugam at the Singapore Legal Forum Source Ministry of Law 28 Aug 2010 SMS Assoc Prof Ho Peng Kee s Opening Address for the 4th China Singapore Intellectual Property Conference Source Ministry of Law 25 Aug 2010 Keynote Address by Law Minister K Shanmugam at the International Energy and Infrastructure Arbitration A Vietnam Perspective Conference Source Ministry of Law 30 Jul 2010 Speech by Law Minister K Shanmugam at the Arbitration for Indian Industry Conference jointly organised by the Singapore International Arbitration Centre and Confederation of Indian Industry Source Ministry of Law 20 Feb 2010 Speech by Law Minister K Shanmugam at the inaugural Singapore International Arbitration Forum Source Ministry of Law 21 Jan 2010 Speech by SM S Jayakumar at the grand opening of Maxwell Chambers Source Ministry of Law 21 Jan 2010 Speech by SMS Assoc Prof Ho Peng Kee at the Launch of the International Chamber of Commerce Regional Office Asia at Maxwell Chambers Source Ministry of Law 20 Jan

    Original URL path: http://www.singaporelaw.sg/sglaw/resources/press-releases-speeches/speeches/speeches-2010?tmpl=component&print=1&page= (2016-01-30)
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  • Fong Maun Yee and Another v Yoong Weng Ho Robert (practising under the name and style of Yoong & Co) [1997] 2 SLR 297; [1997] SGCA 62
    otherwise In the alternative they said that Yoong had negligently represented to them that Fontana wanted to sell the property and had appointed him as its solicitor The appellants had relied on this representation and had parted with 806 000 to Foo which they would not have but for the representation Yoong s defence was that he did not owe any solicitor client duties to either Soh or Fong He also denied liability for any negligent misrepresentation and finally that Soh and Fong had been contributorily negligent and had hence wholly or partly caused their own loss The learned judge dismissed the appellants claims against Yoong with costs The appellants now appeal 6 We should mention that at the commencement of the hearing of this appeal appellants counsel applied for the further amendment of the statement of claim by adding a new cause of action claiming a breach of warranty of authority namely that Yoong warranted to the appellants that he was authorised to represent Fontana in the purported sale of the property and in reliance of this warranty the appellants authorised Yoong to release the sum of 806 000 to Foo We allowed the further amendment as it was available on the existing evidence and would cause no prejudice to Yoong 7 The evidence given at trial did not raise any controversial issues of fact save in two aspects One is on what was discussed between Soh and Yoong privately in Yoong s office on 15 August 1994 before Fong as Soh s nominee exercised the option to purchase the property and the second is the conflicting opinions expressed by the expert witnesses namely Mr Lee Bon Leong called by the appellants and Mr TPB Menon called by Yoong on conveyancing practice and the standard of care expected of a conveyancing solicitor in Singapore We will address these issues as they arise in our narration of the facts 8 A few days before the end of July 1994 Soh received a telephone call from Foo who said that he could obtain a piece of land near Garlick Avenue for about 300 per sq ft and enquired whether Soh was interested Soh thought that 300 per sq ft was a good price for land in that area and confirmed his interest Then on 1 August 1994 Soh received a facsimile message from Foo concerning their earlier telephone conversation which appeared to have been sent from Bangkok the Bangkok fax The relevant parts of the Bangkok fax are as follows 1 Location 9 Ewart Park Lot 239 36 MK4 2 Tenure Freehold 3 Development Potential 3 bungalows The above property is owned by HK public company who bought it many years using a Singapore nominee company I am working closely with the HK director in charge of the property who has the power to instruct the nominee to sell the property and the Singapore lawyer acting for the HK company Please check the market price and confirm the best offer you

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/agency/1439-fong-maun-yee-and-another-v-yoong-weng-ho-robert-practising-under-the-name-and-style-of-yoong-amp-co-1997-2-slr-297-1997-sgca-62?tmpl=component&print=1&page= (2016-01-30)
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  • Sigma Cable Co (Pte) Ltd v NEI Parsons Ltd [1992] 2 SLR 1087; [1992] SGHC 196
    and the defendants name and Richard Kwan s name and photograph 19 It was not the defendants policy to collect equipment or materials purchased by them The defendants expected the seller to be responsible for safe transportation to the defendants site particularly to the Pulau Seraya site which was on an island 20 There was one occasion in April 1987 when Mr Johnson made arrangements for the purchase of cables from the plaintiffs and the purchase order PB1 pp 12 and 13 was issued by the defendants city office The cables were delivered by the plaintiffs on 30 April 1987 to Jurong Power Station which the defendants had built in 1972 1974 and carried on providing service 21 None of the authorized persons had any knowledge of the purchase orders exh P6 It was only when people from the plaintiffs visited the Pulau Seraya site office on 16 June 1987 that the defendants became aware of the purchase orders exh P6 Exhibit P6 did not bear labels of the defendants Singapore city office 22 Richard Kwan had taken sick leave before 16 June 1987 The matter was reported to the police and Richard Kwan was dismissed Findings of the court 23 The main question to be determined by the court is whether Richard Kwan had the authority to purchase the cables for and on behalf of the defendants 24 The plaintiffs can succeed in their claim only if they can establish either a that Richard Kwan had actual authority to purchase the cables on behalf of the defendants or b that Richard Kwan had apparent or ostensible authority to purchase the cables on behalf of the defendants 25 It is not the plaintiffs case that Richard Kwan had actually been authorized to make the purchases on behalf of the defendants What the plaintiffs contend is that the conduct of the defendants as a whole amounted to a representation that Richard Kwan had the necessary implied or apparent authority to purchase the nine lots of cables on behalf of the defendants It is submitted that the defendants had by their actions and acquiescence represented that Richard Kwan had the authority to purchase the cables on their behalf 26 The evidence adduced by the plaintiffs which they say supports their submissions is as follows a On seven occasions between 19 August 1986 to 5 June 1987 five faxes and two proforma invoices of the plaintiffs price quotations of the cables were sent to the defendants The five faxes were faxed to the defendants site office at Pulau Seraya and the two proforma invoices were mailed to the defendants city office b As no evidence was adduced by the defendants to the contrary the court is entitled to presume that these documents had been received by the defendants in the ordinary course of natural events c These documents were addressed to the defendants for the attention of Richard Kwan They bore the name of the plaintiffs which the defendants knew were suppliers of cables in Singapore and contained details of cables quoted and their prices Upon receipt of these documents the defendants did not at any time object to or deny Richard Kwan s authority to ask for quotations for cables or to purchase these cables By their acquiescence the defendants represented to the plaintiffs that Richard Kwan had the authority to ask for quotations for cables and accordingly the necessary or incidental authority to purchase the cables in relation to the quotations d The plaintiffs after the sale of the first two lots of cables on 28 May 1987 and 30 May 1987 sent to the defendants a statement of account for the period 31 May 1987 exh P7 showing these two sales and the amount owing by the defendants to the plaintiffs for these two sales The defendants on receipt of exh P7 on 5 June 1977 must know that there were two sales of cables to the defendants and that Richard Kwan was involved By not immediately objecting or denying Richard Kwan s authority after receipt of exh P7 the defendants again represented that Richard Kwan in fact had the authority to purchase the cables on their behalf This further induced the plaintiffs to continue to sell more cables to Richard Kwan e Richard Kwan wore a NEI PARSONS badge each time he visited the plaintiffs premises to confirm orders for the cables and to collect the cables On each occasion when he came he drove the defendants van to collect the cables during normal office hours f Richard Kwan was able to bring along the defendants purchase orders and the defendants official rubber stamp in the transactions with the plaintiffs g The defendants had conducted their business such that it was easy for Richard Kwan to leave the defendants office during normal office hours and to have access to the defendants van and rubber stamp and purchase order forms until 15 June 1987 h On 13 June 1987 Jackie Tan made a telephone call to the defendants site office at Pulau Seraya and she was told that Richard Kwan was the person who was in charge of purchase orders i The plaintiffs had made one sale of cables to the defendants in April 1987 The procedure adopted for that sale was similar to the procedure adopted in respect of the nine purchases made by the defendants through Richard Kwan the purchase order number was given by the defendants to the plaintiffs and the cables were delivered on the strength of the said purchase order number It was only at a much later date that the actual purchase order was delivered by the defendants In the previous sale the purchase order number was given by the defendants to the plaintiffs on 8 April 1987 the cables were delivered on 30 April 1987 and the actual purchase order PB1 pp 12 and 13 was only received by the plaintiffs from the defendants on 5 May 1987 27 Diplock LJ in Freeman Lockyer v Buckhurst Park Properties Mangal Ltd stated p 503 An apparent or ostensible authority on the other hand is a legal relationship between the principal and the contractor created by a representation made by the principal to the contractor intended to be and in fact acted upon by the contractor that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the apparent authority so as to render the principal liable to perform any obligations imposed upon him by such contract To the relationship so created the agent is a stranger He need not be although he generally is aware of the existence of the representation but he must not purport to make the agreement as principal himself The representation when acted upon by the contractor by entering into a contract with the agent operates as an estoppel preventing the principal from asserting that he is not bound by the contract It is irrelevant whether the agent had actual authority to enter into the contract In ordinary business dealings the contractor at the time of entering into the contract can in the nature of things hardly ever rely on the actual authority of the agent His information as to the authority must be derived either from the principal or from the agent or from both for they alone know what the agent s actual authority is All that the contractor can know is what they tell him which may or may not be true In the ultimate analysis he relies either upon the representation of the principal that is apparent authority or upon the representation of the agent that is warranty of authority The representation which creates apparent authority may take a variety of forms of which the commonest is representation by conduct that is by permitting the agent to act in some way in the conduct of the principal s business with other persons By so doing the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal s business has usually actual authority to enter into 28 In Ebeed v Soplex Wholesale Supplies Ltd the Court of Appeal held that in determining whether a principal had represented that his agent had authority to enter into a particular transaction the court had to consider the totality of the principal s conduct It was not right for the court to restrict its inquiries to an assessment of what was the normal or usual authority of the particular type of agent in question although this undoubtedly would be a relevant factor and on occasions it may be the only evidence available for determining the agent s apparent authority 29 Browne Wilkinson LJ in his judgment said p 411 It is important to bear in mind that the doctrine of holding out is a form of estoppel As such the starting point is that the principal must be shown to have made a representation which the third party could and did reasonably rely on that the agent had the necessary authority The relevant inquiry therefore in all cases is whether the acts of the principal constitute a representation that the agent had a particular authority and were reasonably so understood by the third party This requires the court to consider the principal s conduct as a whole In many cases the holding out or representation by the company consists solely of the fact that the company has invested the agent with a particular office eg managing director or secretary For example in a case such as British Bank of the Middle East v Sun Life Assurance Co of Canada UK Ltd 1983 2 Lloyd s Rep 9 1983 BCLC 73 the only holding out by the defendants to the third party was to invest someone with the title branch manager which enabled him so to describe himself in correspondence relied on by the third party in such a case the only representation which the third party can reasonably rely on is the representation that that person has the powers normally or usually enjoyed by a branch manager Therefore in such a case the only relevant inquiry is as to the powers normally enjoyed by branch managers in general But where as in the present case the holding out is alleged to consist of a course of conduct wider than merely describing the agent as holding a particular office although the authority normally found in the holder of such an office is very material it must be looked at as part and parcel of the whole course of the principal s conduct in order to decide whether the totality of the principal s actions constitute a holding out of the agent as possessing the necessary authority I therefore cannot accept either of the ways in which counsel for Refson put his case It is not right in this case simply to inquire what is the normal authority of documentary credit managers in general Nor is it right to start by seeking to establish the normal authority of documentary credit managers in general and then looking to see whether there are any additional factors which alter the position The only correct approach is the one adopted by the judge which is to consider the whole of Refson s conduct to determine whether it amounted to a holding out by Refson of Mr Booth as having the necessary authority 30 In the present case there was never any representation by the defendants to the plaintiffs as regards the authority of Richard Kwan Prior to 16 June 1987 the plaintiffs were told that Richard Kwan was an engineer employed by the defendants only by Richard Kwan himself The plaintiffs cannot rely on the representation of Richard Kwan as to his actual authority per Diplock LJ in Freeman Lockyer v Buckhurst Park Properties Mangal Ltd at p 505 31 In any case even if the defendants had represented to the plaintiffs before any of the purchases were made by Richard Kwan that Richard Kwan was their engineer the plaintiffs could only succeed if they can establish that the purchases made by Richard Kwan were within the scope of authority of an engineer The mere representation by the defendants that Richard Kwan was their engineer did not of itself amount to a representation that Richard Kwan had authority to make the purchases on behalf of the defendants per Diplock LJ in Freeman Lockyer v Buckhurst Park Properties Mangal Ltd at p 508 32 It is clear from the evidence adduced by the plaintiffs that Jackie Tan and Low Lean Siew relied on the position held by Richard Kwan in the defendants and had considered that the position of engineer carried with it the authority to make the purchases which Richard Kwan purportedly made on behalf of the defendants 33 It is for the plaintiffs to establish that the purchases made by Richard Kwan were within the scope of authority of an engineer see Kreditbank Cassel v Schenkers GmbH v Schenkers This the plaintiffs have failed to do 34 The duties normally associated with an engineer do not include the purchase of materials or goods although an engineer may advise on the type of materials required The decision to purchase from suppliers and the price to be paid are matters within the scope of the duties of the manager or other persons specially authorized by the management of the company 35 The plaintiffs cannot establish the authority of engineers to make purchases on behalf of their employers by merely relying on the evidence of Jackie Tan and Low Lean Siew that engineers were known to them to make purchases from the plaintiffs nor was their evidence sufficient to establish that engineers have by customs and usages in Singapore implied authority to make purchases of materials or goods on behalf of their employers 36 Richard Kwan was employed by the defendants as a making alive engineer His duties were to check the completeness and safety of the equipment before making it alive by switching on power to the equipment He was not involved in the design or construction of electrical devices Clearly it was no part of his duty to purchase materials or goods on behalf of the defendants or even advise the defendants on the type of materials required 37 I now come to deal with the other matters relied on by the plaintiffs Do they constitute a representation by the defendants that Richard Kwan had authority to make the purchases on behalf of the defendants 38 The plaintiffs cannot assume from the absence of any response from the defendants to their faxes and proforma invoices that Richard Kwan had authority to purchase or transact business for the defendants The most the plaintiffs can assume was that Richard Kwan had been requested by the management of the defendants to obtain price quotations The authority to request for price quotations cannot be construed as authority to make purchases or a representation of authority to make purchases The task of making enquiries or obtaining quotations is commonly assigned to very junior employees 39 Neither a badge which identifies a person as an employee of a company nor the use of the company s vehicle can conceivably be understood as a representation that that person has authority to conclude contracts or make purchases on behalf of the company If the plaintiffs are right then any employee can bind the company by wearing the company s badge and using the company s vehicle The wearing of a company s badge and the use of the company s vehicle are common everyday occurrences 40 The fact that Richard Kwan made use of the defendants purchase order forms and rubber stamp cannot be a representation unless the defendants knew and allowed Richard Kwan to use them This has not been established by the evidence adduced In fact the evidence was that it was not part of Richard Kwan s duty to keep the purchase order forms and he was not issued with the defendants rubber stamp 41 Even if the defendants purchase order forms and rubber stamp were kept by Richard Kwan that would not amount to a representation or holding out that Richard Kwan had the authority to use them and bind the defendants It cannot be said that it was wrong of the defendants to let Richard Kwan keep the rubber stamp see The Mayor Constables Company of Merchants of the Staple of England v The Governor Company of the Bank of England at p 167 There is no reason why purchase order forms should be treated differently from other stationery bearing a company s letterhead Both purchase order forms and stationery bearing the company s letterhead are capable of being used to order goods when properly completed or typed up In fact stationery bearing the company s letterhead are capable of serving other important functions when they are typed up Yet these documents and the company s rubber stamp are commonly kept by clerical or secretarial staff and are used everyday It cannot be that those clerical or secretarial staff could bind the company if they made use of the purchase order forms or the stationery bearing the company s letterhead and the rubber stamp 42 The fact that a company may have allowed its employee to retain possession of documents which would enable the employee to perpetrate or which would facilitate the perpetration of a fraud on a third party does not entitle the third party to claim against the company see Farquharson Brothers Co v C King Co 43 In Tham Seow Hing v Chop Kwong Fatt Cheong 6 the court held that the branch manager of the defendant firm did not have authority

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/agency/1438-sigma-cable-co-pte-ltd-v-nei-parsons-ltd-1992-2-slr-1087-1992-sghc-196?tmpl=component&print=1&page= (2016-01-30)
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  • Upcoming Events
    Cases in Articles Free Law Arbitration Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Events Calendar May 2015 June 2015 July 2015 August 2015 September 2015 October 2015 November 2015 December 2015 January 2016 February 2016

    Original URL path: http://www.singaporelaw.sg/sglaw/links/upcoming-events/month.calendar/2015/11/30/- (2016-01-30)
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  • Upcoming Events
    International Arbitration Centre Singapore International Mediation Centre Singapore Mediation Centre Singapore Chamber of Maritime Arbitration ADR Publications Laws of Singapore Overview Commercial Law Case Law Cases in Articles Free Law Arbitration Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013

    Original URL path: http://www.singaporelaw.sg/sglaw/links/upcoming-events/day.listevents/2015/12/28/- (2016-01-30)
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  • Ch.16 Singapore Company Law
    Centre Singapore International Mediation Centre Singapore Mediation Centre Singapore Chamber of Maritime Arbitration ADR Publications Laws of Singapore Overview Commercial Law Case Law Cases in Articles Free Law Arbitration Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Laws of Singapore Commercial Law Ch 16 Singapore Company Law Case Law Case Law Subcategories Arbitration Cases Cases in Articles Free Law Commercial Law Ch 08 The Law of Contract Ch 09 Domestic Sale of Goods Ch 10 International Sale of Goods Ch 11 The Law of Credit and Security Ch 12 Intellectual Property Law Ch 13 Intellectual Property Licensing Ch 14 Forms of Business Organisations Ch 15 Law of Agency Ch 16 Singapore Company Law 01 Introduction 02 Incorporation and its Consequences 03 Corporate Governance 04 Enforcement of Corporate Rights 05 Shareholder Remedies 06 Shares 07 Debentures and Charges 08 Companies in Distress 09 Winding up Ch 17 Corporate Finance and Securities Regulation Ch 18 Equity and Trusts Ch 19 Restitution Ch 20 The Law of Negligence Ch

    Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-16/17-case-law (2016-01-30)
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  • Ch.16 Singapore Company Law
    for sale which came to an end in 1973 and b a subsidiary activity of letting out flats The Comptroller however argued that the surplus arising from the sale of the six flats was a trading receipt since ME was carrying on the business of property development and that the flats were constructed in the course of such business The appeal before the Board was dismissed and ME appealed against the Boardà â â s decision Held dismissing the appeal ME could only succeed if it could show that the Board either misdirected themselves on the law or proceeded without sufficient evidence in law to justify their conclusion On the evidence there was sufficient evidence for the Board to reach the conclusion they did Case s referred to ABC v Comptroller of Income Tax 1959 MLJ 162 refd Bowie v Reg Dunn Builders 49 TC 469 refd Bradshaw v Blunden 36 TC 397 refd CBH v Comptroller of Income Tax 1982 1 MLJ 112 refd CIR v Reinhold 34 TC 389 refd Commissioners of Inland Revenue v Hyndland Investment Co Ltd 14 TC 694 refd Edwards v Bairstow 1955 36 TC 207 refd Gloucester Railway Carriage and Wagon Co v CIR 12 TC 720 refd Granville Building Co v Oxby 35 TC 245 refd Gray Gillitt v Tiley 26 TC 80 refd Harvey v Caulcott 33 TC 159 refd International Investments v Comptroller General of Inland Revenue 1975 2 MLJ 208 FC 1979 1 MLJ 4 refd James Hobson Sons v Newall 37 TC 609 refd Oliver v Farnsworth 37 TC 51 refd Orchard Parks v Pogson 1964 42 TC 442 refd Seaward v Varty 40 TC 523 refd Shadford v H Fairweather Co 43 TC 291 refd Simmons v IRC 1980 2 All ER 798 refd STU v Comptroller of Income Tax 1962 MLJ 220 refd Turner v Last 42 TC 517 refd West v Phillips 38 TC 203 refd WM Robb v Page 47 TC 465 refd Please note that this case has not been edited in accordance with the current Singapore Law Reports house style Chan Sek Keong JC 1 This is an appeal against the decision of the Income Tax Board of Review the Board dismissing the appeal of the appellant against the additional assessment made by the Comptroller of Income Tax the Comptroller for the year of assessment 1981 on the surplus resulting from the disposal of six flats which were together with 53 other flats developed by the appellants during 1971 1973 The surplus was 2 093 387 and the additional tax assessed was 857 770 2 Before the Board the following facts were agreed between the parties 1 The appellant was incorporated on 8 July 1970 2 The appellant on 28 September 1970 resolved to ratify a purchase of a piece of land known as 26 27 Mount Elizabeth the property for 852 006 3 By 31 December 1970 the purchase had been completed with funds substantially from its share capital 4 The appellant immediately proceeded to develop a block of high rise apartments on the property known as à â ËoeHighpointà â â 5 The sale of the flats commenced in 1971 6 The paid up capital of the appellant was increased to 1 5m in 1971 7 The development of Highpoint was financed largely by shareholdersà â â funds loans from a related company and progress payments from purchasers 8 Of the 50 apartments constructed 51 were sold between 1971 and 1973 and eight were retained by the appellant 9 Six of the retained flats were sold in 1980 10 In 1973 the appellant made two further purchases of land a land at Draycott Drive Lot 12 103 for 1 771 974 88 and b land at Farrer Holland Road for 5 111 106 00 11 Development expenditure was incurred in respect of these two sites and planning approval was obtained for the construction of 23 units of luxurious apartments on the Draycott site 12 In 1980 the appellant sold the Farrer Holland Road property The profit from the sale was subject to tax 3 In addition to the agreed facts the following facts which are relevant to this appeal are disclosed in the agreed bundle of documents submitted to the Board 4 These facts are as follows a The relevant objects of the appellant as set out in its memorandum of association are 3 1 To acquire by purchase lease exchange hire or otherwise lands and property of any tenure or any interest in the same in Singapore 2 To erect and construct houses buildings or works of every description on any land of the company or upon any other lands or property à â  and generally to deal with and improve the property of the company 13 To develop and turn to account any land acquired or in which the company is interested and in particular by laying out and preparing the same for building purposes constructing decorating maintaining furnishing fitting up improving altering pulling down and re erecting or reconstructing buildings and by planting paving draining farming cultivating letting on building lease or building agreement and by advancing money to and entering into contracts and arrangements of an kinds with buildings tenants and others 27 a To carry on all or any of the businesses of proprietors of flats maisonettes dwelling houses shops offices and clubs and for these purposes to purchase take on lease or otherwise acquire and hold any lands or buildings of any tenure or description wherever situate or rights or interests thereon or connected therewithà â  b The financial year of the appellant ended on 31 December of each year The directorsà â â report the directorsà â â report to the audited accounts of the appellant for the financial year 1970 stated inter alia that à â ËoeThe company is engaged in the construction of a block of luxury flats which is expected to be completed and ready for occupation in 1973 à â â In the accompanying balance sheet the property was classified as and under the item à â ËoeDevelopment Projectà â â c Each of the directorsà â â reports for the financial years 1971 to 1973 stated inter alia that the appellantà â â s à â Ëoeprincipal activity is the development and construction of luxury apartments for sale There has been no change in the nature of this activity during the yearà â â In the relative balance sheets the freehold land was classified as and under the item à â ËoeDevelopment Projectà â â d In each of the directorsà â â report for the financial years 1974 and 1975 the description of the companyà â â s activity was the same as for 1971 to 1973 except for the omission of the word principal but in the related balance sheets a new item appeared under the classification à â ËoeFixed Assetsà â â It is common ground that the fixed assets referred to were the eight Highpoint flats which were retained by the appellant e In each of the directorsà â â reports for the financial years 1976 to 1981 the description of the activities of the company was à â Ëoeproperty development and the holding of property for rentalà â â It further stated that à â Ëoeduring the year the company did not undertake any property development but rented out its apartments held for investment There have been no changes in the nature of these activities during the yearà â â The eight flats continued to be classified in each of the relative balance sheets as à â ËoeFixed Assetsà â â f By a letter dated 24 May 1974 the appellantà â â s solicitors informed the Controller of Housing that all the flats in Highpoint had been sold except for eight flats which the appellant was not selling à â Ëoeas they would like to let out these flatsà â â By a letter dated 18 February 1975 the appellant informed the Controller of Housing that it had deliberately withheld the sale of some apartments which à â Ëoewe intend to retain for investment purposesà â â By a letter dated 23 August 1975 the appellant again informed the Controller of Housing that eight flats were being retained by it but this letter did not offer the additional information that the eight flats were retained for the purpose of investment g On 27 November 1981 the Comptroller made an additional assessment for the year of assessment 1981 against the appellant in respect of the profits derived from the sale of six of the eight Highpoint flats On 4 November 1981 the appellant through its solicitors wrote to the Comptroller and objected to the additional assessment the ground that the amount of 2 093 387 being the surplus from the sale of six flats was a capital receipt and liable to tax The ground of objection as set out in para 3 of the letter reads as follows It is not denied that our clients were in fact a developer However that does not make every property that it owns a current asset The accounts bear this out If you would look at the balance sheet and accounts for the period ending 31 December 1974 and onwards you would quite clearly notice the two holdings are separately reflected by our clients in the accounts Since 1974 these properties were always reflected as fixed assets In support of this objection copies of the appellantà â â s correspondence with and returns made to the Controller of Housing were enclosed in the said letter h By a letter dated 15 December 1981 the Comptroller requested the appellant to state the reasons for the sale of the six Highpoint flats when it had claimed that the six flats were retained for investment By a letter dated 22 December 1981 the solicitors for the appellant replied that every investment had to be reviewed occasionally as to whether or not the continued holding of it was still relevant in terms of the investment objective and that in 1980 the appellant felt that the sudden upsurge in the prices of its investment did not justify its continued retention and hence decided to sell the six flats i By a letter dated 3 April 1982 the appellantà â â s solicitors furnished to the Comptroller particulars of the rental history of the six flats which showed that three flats had been rented out continuously from 1974 to 1980 and three flats had been rented out continuously from 1975 to 1980 j The income derived from the letting of the eight flats for each of the relevant years had been assessed to tax under s 10 1 a of the Income Tax Act on the basis that it was part of trading profits and not investment income and no objection was raised by the appellant to each of the said assessments 5 At the hearing of the appeal to the Board the appellant called Mr Lim Chor Pee AW1 an advocate and solicitor who was also a director of the appellant from 1970 to 1978 to testify His evidence was as follows a In 1970 he was instructed by an Indonesian businessman Jauw Hin Liang Jan Darmadi Darmadi to act for him in the purchase of the property on which he wanted to build a block of apartments for sale and investment AW1 advised Darmadi to form a limited liability company to carry out his objective and so the appellant was incorporated on 8 July 1970 for that purpose Darmadi was in effect the owner of the appellant The completion of the purchase in December 1970 was substantially financed from shareholdersà â â funds Construction commenced in 1971 and the sales of the flats commenced in 1971 after the appellant obtained a developerà â â s licence AW1 also said that à â ËoeShortly after Darmadi bought the property for Mt Elizabeth he told me he did not want to sell all the flats He specifically instructed me to keep the two penthouses for himself and to retain eight apartments à â â The Highpoint development was largely self financed Darmadi was not worried about additional funding even though all the flats were not sold in 1971 Part of the funding came from progress payments As at 31 February 1972 the appellant had repaid its small bank overdraft and any shortfall in funding the development if any was financed by borrowings from a related company There was at that stage no external borrowing The Farrer Road and Draycott Drive projects which were purchased in 1973 were financed by loans from a related company The appellant did not have a proper sales office until the show room in Highpoint was built The sales office was closed in 1973 The appellant stopped selling the Highpoint flats after mid 1973 The total profit before tax or the sale of 51 Highpoint flats amounted to 982 826 Darmadi himself purchased the two penthouses when the flats were ready for occupation The temporary occupation licence for Highpoint was issued in 1974 AW1 arranged for the eight flats to be furnished for letting but eventually seven were let out fully furnished and one was let out unfurnished The appellant spent a considerable sum of money in furnishing the seven flats AW1 maintained that this was in keeping with the appellantà â â s intention to keep them No attempt was made to sell the eight flats until 1980 when six were sold The six flats were sold in 1980 because in 1980 Darmadi made a business decision to sell off all or most of his assets in Singapore Pursuant to that he also sold the Farrer Road property in 1980 and the Draycott Drive property in 1981 The properties then retained by the appellant were two flats in Highpoint and the house in Brizay Park b In cross examination AW1 said the Brizay Park house was not sold in 1980 because a director of the appellant one Eddy Dharma was living in it the property having been purchased for that purpose When asked why Darmadi did not purchase the eight flats in addition to the two penthouses AW1 said that the penthouses were for Darmadià â â s personal use he had no intention to let them out or sell them the eight flats were for earning a rental income and as far as Darmadi was concerned he looked upon the appellant as his personal company AW1 also said that the eight flats were chosen at random that he did not know why eight and not ten were chosen He agreed that flats 30D E and F would fetch a slightly lower price because of their poor location but denied that they were retained because the appellant could not sell them He said that flats 30A B and C which had the worst views had been sold and that after the sales office was closed there were people badgering the appellant to sell When asked whether if the appellant had wanted to retain the flats for rental it would have made more sense to choose the better flats AW1 replied No it does not because the rental difference between an apartment with a better than poorer view is very small a couple of hundred dollars at most Since Darmadi did not specify whether he wanted to retain the apartments with the best views and left the discretion to me I was of the view that we should sell off the most expensive flats in order to make a bigger profit for the company AW1 denied a suggestion that the eight flats were not retained for long term investment but were let out pending the time they could fetch better prices He insisted that his instructions were not to sell the eight flats at all He went on to say The profits at that time were not very great from this development Darmadi was at that time making a lot of money in Indonesia and he was not interested in making a few thousand dollars here and there In fact the profits he made from this development he never draw at all He instead pumped more money into the company AW1 admitted that neither the appellant nor its directors had pasted any corporate resolution to retain the eight flats or to sell them He admitted that the appellant had used a sales brochure in the marketing of the Highpoint flats He admitted that he understood the directorsà â â reports before he signed them and when asked whether the statements therein were accurate statements of the appellantà â â s intention and activities at that time AW1 said the directorsà â â reports could not set out every intention of the appellant and that ideally and theoretically a directorsà â â report should have been more comprehensive AW1 also said that the expression à â Ëoefor investment purposesà â â meant to let out and earn a rental income for an unspecified period of time and in this case Darmadi had wanted to keep the flats forever 6 Before the Board counsel for the appellant contended that the surplus on the sale of the six flats was a capital accretion on the ground that the appellantà â â s intention from the start was to develop some flats for sale and to retain some flats for investment and that the appellant was carrying on two activities 1 the principal activity of property development for sale which came to an end in 1973 and 2 a subsidiary activity of letting out flats It was contended that the appellantà â â s intention was borne out by the following facts a the appellant had little external borrowing and therefore was under no financial pressure to sell b the appellant did not have any trading activity from 1973 to 1980 and even though many subsales of the other flats were transacted during this period c the categorical statements consistently made to the Controller of Housing that the eight flats were being retained as investment long before any tax ramifications arose d the appellant had furnished the flats at considerable cost e the flats were consistently treated as à â Ëoefixed assetsà â â in the audited accounts of the appellant since 1974 and taxed as such 7 The following cases were cited by counsel for the appellant to the Board CIR v Reinhold 34 TC 389 Bradshaw v Blunder 36 TC 397 Harvey v Caulcott 33 TC 159 West v Phillips 38 TC 203 Seaward v Varty 40 TC 523 International Investments v Controller General of Inland Revenue 1975 2 MLJ 208 1979 1MLJ 4 8 Counsel for the Comptroller contended that the surplus arising from the sale of the six flats was a trading receipt on the ground that the appellant was carrying on business of property development that property development meant property development for sale and that the Highpoint flats were constructed in the course of such business She contended that such a conclusion was supported by the following facts a the appellant by a letter dated 4 January 1971 informed the Comptroller that the business conducted by the appellant was property development b each of the directorsà â â reports from 1971 to 1974 stated that the development and construction of luxury apartments for sale was either its principal activity or sole activity c there was no corporate resolution to retain the eight flats as investment d during the construction of the flats no distinction was made in the appellantà â â s accounts between those units to be sold and those to be retained e the eight flats were builderà â â s remainders as they could not be sold on account of their poor location or alternatively the appellantà â â s intention was to sell them at a later but more favourable opportunity f the classification of the eight flats as à â Ëoefixed assetsà â â in the appellantà â â s balance sheets as from 1974 was not conclusive against the Comptroller and was selfserving g the letting of the flats for six years before sale was irrelevant in the case of a property developer and did not change their character as trading stock h the Comptroller had always treated the rents as part of trading receipts of property development without any objection from the appellant 9 Counsel also contended that the onus of proof was on the appellant to show that the profits arising from the sale of the flats were profits from the sale of investments and that such onus was greater on a company than on an individual 10 The following cases were cited by counsel for the Comptroller to the Board Harvey v Caulcott 33 TC 159 Granville Building Co v Oxby 35 TC 245 James Hobson Sons v Newall 37 TC 609 Shadford v H Fairweather Co 43 TC 291 Bowie v Reg Dunn Builders 49 TC 469 Gray Gillitt v Tiley 26 TC 80 Turner v Last 42 TC 517 Oliver v Farnsworth 37 TC 51 WM Robb v Page 47 TC 465 Orchard Parks v Pogson 1964 42 TC 442 Gloucester Railway Carriage and Wagon Co v CIR 12 TC 720 11 After receiving written submissions from both counsel on the cases cited by each of them the Board delivered its written judgment on 8 April 1985 The Board found that the appellant was carrying on the business of property development for sale and that the Highpoint flats were constructed for sale in the course of such business The grounds on which the Board supported its finding were a the appellant had been incorporated solely for the purpose of purchasing the property at Mount Elizabeth and developing the flats thereon in question b the absence of any resolution regarding the retention of the flats in question c Darmadi had intended to retain the eight flats until such time as they could fetch a better price the grounds for this finding being that i AW1 had said that the profits from the development were not very great and that Darmadi was making a lot of money in Indonesia and was not interested in making a few thousand dollars here and there and ii otherwise Darmadi would have purchased the eight flats in the same way as he had purchased the two penthouses d the appellantà â â s acceptance of the Comptrollerà â â s treatment of its rental income as trading profits and all the other evidence showed that the treatment by the appellant of the eight flats as fixed assets from 1974 onwards and the retention of and letting out of the flats for six years did not indicate the true nature of their retention e all the circumstances surrounding the development of the Highpoint flats 12 The Board was of the view that the appellant had not discharged the onus of proving that the profits in question arose from the sale of an investment and not from trading stock Accordingly the Board dismissed the appeal 13 The appellant now appeals against the decision of the Board on the ground that the Board was wrong in law and in fact in holding that the six retained flats were trading stock and that the surplus derived on their disposal was part of the trading profits of the appellant Counsel for the appellant submitted that the Boardà â â s finding was made without any or adequate evidence to support it or if there was evidence the finding was an inference from primary facts and as such an appellate court could in an appropriate case draw a contrary inference and he urged me to do so It was said that the primary facts relied on which the Board were equally capable of supporting a finding of and the Board should have found a dual or composite intention on the part of the appellant He referred to the locus classicus on this point of law ie the judgment of Lord Radcliffe in Edwards v Bairstow Harrison 1955 36 TC 207 and also the judgment of Lord Wilberforce in Simmons v IRC 1982 1 MLJ 112 Counsel also said that the Board had also failed to deal specifically with other relevant facts before them which were favourable to the appellantà â â s case 14 It was contended that the Board failed to give any or inadequate consideration or insufficient weight to or draw the correct inferences from the facts set out in para 6 of this judgment and from the following facts a the expression à â ËoeProperty Developmentà â â used to describe the appellantà â â s business in its letter dated 14 April 1971 was neutral as the purpose of development could be for sale or for investment or for both likewise the expression à â Ëoethe construction of a block of luxury flatsà â â as used in the directorsà â â report for the financial year 1970 b also the use of the adjective à â Ëoeprincipalà â â to qualify the activity of the appellant in the directorsà â â report for the financial years 1971 to 1973 implied or was not inconsistent with the appellant carrying on a subsidiary activity of holding property for investment c that it was neither realistic nor practicable for the appellant to specifically distinguish in its audited accounts those flats for sale and those for investment until the flats had been completed whereupon the appellant had aptly classified them as fixed assets and that the expression à â ËoeDevelopment Projectà â â a neutral expression was also an apt description of the development at that stage d that the classification of the eight flats as fixed assets in the balance sheets from 1974 onwards negatived any adverse inference that could be drawn from the absence of any corporate resolution regarding their retention e that the appellantà â â s omission to object to the assessments of rental income as part of its trading receipts might have been due firstly to the futility of so doing since the Comptroller was not under the law required to specify the sources of income in his notice of assessment à â âEUR see ABC v The Comptroller of Income Tax 1959 MLJ 162 or secondly to the superfluity of so doing since the rate of tax for investment income and trading income was the same 15 It was further contended that the Boardà â â s omnibus reference to à â Ëoecircumstances surrounding the developmentà â â was clear and therefore unsatisfactory that their finding that if Darmadi had intended to retain the flats as investment he would have purchased them from the appellant was an incorrect hypothesis and that the Boardà â â s finding that à â Ëoethe flats had been retained until such time when they could fetch a better price since according to Lim à â Å the property market started to move after 1974à â  à â â made no sense because if I understood the argument correctly it was not possible to say what a better price was and what such time in the future was for determining such better price 16 Finally counsel contended that as the evidence adduced by the appellant was not seriously challenged or controverted by the Comptroller the appellant had discharged the onus which he conceded was higher on it than on an individual of proving that the profit in question was a capital receipt 17 In the context of Lord Radcliffeà â â s speech in Edwards v Bairstow Harrison 1955 36 TC 207 and the Court of Appealà â â s decision in CBH v Comptroller of Income Tax 1982 1 MLJ 112 CA as to the test an appellate body must apply in hearing an appeal of this nature the submissions of counsel for the applicant can be distilled and encapsulated into one contention and that is the Board erred in law in that no reasonable body of members constituting an Income Tax Review Board could have reached the findings reached by the Board in this instance When the appellantà â â s appeal is reduced to this dimension it becomes apparent that in this appeal the appellant has a heavy burden to discharge before achieving lift off Clearly the Board had ample evidence before them to make the findings they did Although in their written judgment the Board might not have addressed each of the appellantà â â s submissions they have dealt specifically with the main points and pointedly said they had taken into account all the other circumstances Whilst counsel for the appellant may justifiably criticise the Boardà â â s faulty reasoning that if Darmadi had intended to retain the eight flats as an investment he would have purchased them in his own name it could not be said that the finding itself ie of Darmadià â â s intention was wrong as it was supported by an alternative but valid ground ie Darmadià â â s disinterest in making small money from the development which ground the Board in fact also relied upon Again the Board might not have made a microscopic appraisal of AWlà â â s evidence on the original intention of Darmadi but their primary finding was an implicit rejection of AW1à â â s evidence on this point 18 What was the tenor of the undisputed facts relied on by the appellant Except for the oral evidence of AW1 on Darmadià â â s intention substantially all the other material facts that were garnered in aid of the appellantà â â s case were colourless facts There facts were 1 the retention of eight flats for six years à â âEUR see Oliver v Farnsworth 37 TC 51 sale proceeds of house built by builder in 1929 and sold in 1953 held to be trading receipt James Hobson Sons v Newall where houses built by company were not saleable and let for almost 24 years held that houses were part of trading stock 2 the statements to the Controller of Housing that eight flats were retained as investments and the classification of eight flats as à â ËoeFixed Assetsà â â in balance sheets of appellant from 1974 to 1981 à â âEUR see Shadford v Fairweather Co 43 TC 291 land purchased in 1958 by company and described as fixed asset in its accounts sold in 1960 held a trading transaction Bowie HM Taxes v Reg Dunn Builders 49 TC 469 property held by company a builder since date of purchase in 1958 as a fixed asset in its accounts until 1966 when it was sold held a trading asset WM Robb v Page 47 TC 465 property shown in accounts as a fixed asset for the years 1952 to 1962 held a trading asset 3 the statements in directorsà â â reports for the financial years 1976 to 1981 that the appellantà â â s activities were property development and the holding of property for rental à â âEUR see authorities referred to in 2 above 4 the memorandum of association had as one of its objects the business of proprietors of flats à â âEUR see WM Robb v Page where there was a similar object clause and Commissioners of Inland Revenue v Hyndland Investment Co 14 TC 694 where Lord President Clyde said in relation to a memorandum of association which had as one of its objects the acquisition of land and the holding of the same as an investment that the question was not what business the taxpayer professed to carry on but what business he actually carried on 5 the furnishing of the seven flats at considerable expense for letting à â âEUR see West v Phillips 38 TC 203 207 where Wynn Parry J said at p 214 in relation to houses built for investment that redecoration making ready for sale and advertising for sale were colourless facts in that they do not change the character of such houses to stock in trade 6 the appellant did not have external borrowings for the Highpoint development and therefore was under no financial pressure to sell the eight flats 19 In contrast there was a considerable body of evidence before the Board which pointed in the direction of the appellant being a property developer for sale ie 1 the incorporation of a company to purchase the property for development of luxury flats and the appellant applying for a developerà â â s licence for sale 2 the appellant describing its business as property development itself as a property developer and describing its principal activity from 1971 to 1973 and its only activity from 1974 to 1975 as being the development and construction of luxury apartments for sale 3 the omission of the appellant to document in its records as soon as practicable its alleged intention to retain part of the Highpoint development for investment 4 the omission of the appellant to distinguish in its accounts or its sales brochure between the flats to be sold and the eight flats to be retained for investment until after the other 51 units had already been sold 5 the omission of the appellant to object to rental income of the eight flats being assessed as part of its trading profits 20 These facts were prima facie in favour of the Comptrollerà â â s case and it is not surprising that the Board found against the appellant in reliance primarily on them and at the same time regarded the neutral facts referred to earlier as being wholly consistent with the appellantà â â s intention to carry on the business of property development for sale and no other 21 Counsel for the appellant referred me to a passage in the judgment of Tan Ah Tah J in STU v Comptroller of Income Tax 1962 MLJ 220 which he said was applicable to the appellantà â â s circumstances Mr Tan J at p 221 said In this case certain explanations given by the appellant to the officers of the Income Tax Department were rejected on the ground that there was no documentary evidence to support them No doubt documentary evidence can in many cases be very cogent and convincing The lack of it however should not invariably be a reason for rejecting an explanation Not every transaction is accompanied or supported by documentary evidence Much depends on the facts and circumstances of the case but if the person who is giving the explanation appears to be worthy of credit does not reveal any inconsistency and there is nothing improbable in the explanation it can in my view be accepted 22 I need to say no more than that the explanations of the appellant had been considered and rejected both by the Comptroller and the Board 23 I have so far not touched upon the arguments of counsel for the Comptroller advanced before me not out of any disrespect to her but because they were substantially the same as those advanced before the Board I need only take note of her additional argument that the appellant could only succeed in its appeal by showing that the Board had either misdirected themselves on the law or had proceeded without sufficient evidence in law to justify their conclusion see CBH v Comptroller of Income Tax 1982 1 MLJ 112 24 I have carefully considered the Boardà â â s decision and the criticisms made against it by counsel for the appellant In my view not only was there sufficient evidence for the Board to reach the conclusion it did there was also other evidence which the Board could have relied upon or drawn inferences therefrom

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  • ECRC Land Pte Ltd v Ho Wing On Christopher and Others[2004] 1 SLR 105; [2003] SGHC 298
    ATP in block B This would involve raising the floor slab of the second storey to increase the height of the ground floor and raising the roof of the second storey correspondingly However the seafood restaurant Jumbo Garden occupying the second storey also agreed to stay on at the premises at the increased rent and signed part of the agreement on 22 July 1995 The plans had to be changed again 15 From September 1995 onwards the plans were to build a new block D which would be linked to the second storey of block A In April 1996 the authorities disapproved of such plans An appeal was lodged and other options were explored In July 1996 the authorities informed the plaintiff the 22m height clearance was not approved for the new block which had to be of the same height as the existing ones The plaintiff then sought to make modifications to the attractions to fit the decreased height but that proved impossible The attractions could not be housed in block B because the authorities in all probability would not approve the increased height needed for that purpose 16 The plaintiff considered housing the ATP on the first and second floors of block A excluding that portion of the ground floor occupied by McDonald s restaurant and building a giant staircase as the main entrance from the ground floor However McDonald s objected to the staircase as it would affect the frontage of its restaurant 17 The plans then switched to having the ATP on the ground floor of block B through to the squash courts at block C This alternative would involve a scaled down version of the ATP with only two major rides An application was made in July 1996 to convert the squash courts to house one of the attractions In October 1996 the authorities did not approve the conversion of the squash courts 18 From late 1996 to early 1997 the plaintiff tried its best to work with Sega s engineers to modify the large attractions so that they could be housed at the ground floor of block B Eventually that plan was abandoned as it was not feasible due to the ceiling height of the ground floor 19 After exhausting all available options the plaintiff had no choice but to run the centre as a family entertainment centre that included an amusement arcade and Q Zar laser games at the ground floor of block B 20 The plaintiff relied heavily on funds from the joint venture parties George Wuu made it clear from the outset he was not going to provide funds for the plaintiff By late 1995 SAFE stated it had no wish to fund the plaintiff s operations It was therefore up to Grande to provide the funds and Grande made substantial contributions periodically By the middle of 1998 the plaintiff owed some 4m to the Grande group When the plaintiff was ordered to be wound up in March 1999 the level of indebtedness did not change much 21 In the second half of 1997 the plaintiff marketed the centre extensively in an effort to turn the centre s financial situation around Potential tenants began to show interest in the centre However these efforts could not save the plaintiff as it was unable to keep up with its payment obligations to OCBC Bank which then terminated the facilities granted to the plaintiff In January 1999 the Court of Appeal ruled against the plaintiff in its attempts in another action to recover 1 5m from ECRC In February 1999 the plaintiff was ordered to pay more than 2m and costs to ECRC Soon thereafter the plaintiff went into liquidation 22 It was alleged that the first to fourth defendants completely lost sight of the fact that the plaintiff was a separate legal entity and that the Grande group treated the plaintiff as if it were one of its subsidiaries The plaintiff alleged that the first to fourth defendants evicted existing tenants who had been paying rent faithfully and entered into questionable tenancy arrangements with the seventh to tenth defendants It was also alleged that the plaintiff was made to pay for renovations and upgrading works for these tenants benefit The plaintiff also complained that various payments were charged to its account The gist of the plaintiff s complaints was that the transactions entered into with the seventh to tenth defendants had no valid commercial justification whatsoever 23 The other joint venture partners were made aware of the transactions complained of SAFE and George Wuu attended all board and shareholders meetings They also received the reports and the accounts George Wuu maintained an office at the centre and was updated by the second defendant who met him frequently on site of the developments He knew that the first to fourth defendants were directors in the other defendants and that the companies were related to the Grande group 24 The centre was already 15 years old in 1995 and large portions of it were in disrepair There was leaking caused by severely corroded roof gutters The second storey of block A had an uneven floor level because a ballet studio used to occupy part of it There was spalling concrete The public toilets had to be upgraded too To achieve the status intended for the centre as a show case ATP redevelopment and renovation works obviously had to be undertaken The evidence showed that there were plans to do upgrading works from the early stages of the joint venture There was a directors resolution in October 1995 approving a 11m construction loan facility from OCBC Bank The loan was stated to be for retrofitting the existing buildings and the construction of a new building The infrastructure works undertaken involved the roofing and the ceiling works the provision of adequate electrical supply for the attractions air conditioning and plumbing 25 When the seventh defendant agreed to commence operations of its amusement arcade on the second floor of block A in December 1995 there were only three main tenants left at the centre It agreed to do so at the plaintiff s request as the centre was undergoing major re development and renovation works and there was a need to inject life into the centre so that it would not be forgotten by the public Once the public s interest in the centre waned it would be much more difficult to revive it The plaintiff had to keep the centre breathing and not let it lapse into a coma of oblivion 26 As the seventh defendant depended heavily on walk in customers and human traffic at the centre was adversely affected it was to be expected that the seventh defendant would need some incentive to start its operations It was never its intention to run a stand alone amusement arcade without the ATP Moreover access to the second floor of block A was far from adequate Therefore although tenants were usually expected to pay for their own fitting out works the plaintiff as landlord made a contribution of about 1m towards the seventh defendant s fitting out works and gave it a preferential rental rate It also accorded the seventh defendant a longer period of three months for fitting out works and a longer period of rent rebate 27 In late 1996 the seventh defendant had to think seriously of moving its operations out of the centre altogether as it became apparent that the original ATP conceptualised might not come to pass The link between the second floor of block A and the new block D was not going to materialise despite the architects advice to the plaintiff that the chances of rejection of the plans for block D were remote By June 1996 the major attractions from Sega had arrived and it was concerned about product obsolescence Sega was not willing to continue waiting and had issued an ultimatum for the purchase order for the large attractions to be issued The plaintiff had to assist the seventh defendant in storing the Sega attraction on site as its plans for the ATP had been delayed The plaintiff and the seventh defendant therefore agreed that the latter shift its operations to the ground floor of block B which was then unoccupied while the plaintiff explored other options to implement the ATP after July 1996 In this way the plaintiff would benefit from having an anchor tenant to attract the crowds and in turn attract better tenants to the site For this reason the plaintiff agreed to undertake the upgrading and renovation works for the ground floor of block B as well Block B was in serious need of repair in any event Similarly the plaintiff allowed the seventh defendant to terminate its tenancy agreement for block A without penalty 28 It was the same situation that led to the eighth defendant operating a seafood restaurant on the second level of block B After Jumbo Garden left because it was not able to meet the vastly increased rental payments there was no serious offer for those premises and practically the entire block B was unoccupied Potential tenants were interested to take up space at the centre only after the ATP was in operation The first defendant had to resort to persuading the famous floating restaurant in Hong Kong to open a restaurant in the vacated premises but was unsuccessful The Hong Kong restaurant was prepared nonetheless to send its chefs and managers to assist if a restaurant was set up at the centre The eighth defendant was also accorded a period of rental rebate Although the rent charged was only a fraction of that payable by Jumbo Garden after the 5 6 times increase it was a realistic one as a similar rent for the premises was offered by an established seafood restaurant operator Palm Beach which lost interest in the centre subsequently 29 It was argued by the plaintiff that the terms of the tenancy agreements between the plaintiff and the seventh and the eighth defendants suggested that renovation costs would be borne by the tenants However the bulk of the works undertaken by the plaintiff was infrastructural in nature The tenancy agreements were also signed well after the respective works had been completed and paid for It was the evidence of the legal department of the Grande group that it overlooked the arrangements in those cases by mistakenly using standard form tenancy agreements The tenancy agreement with the seventh defendant was signed only in October 1996 although it had been occupying the premises since January 1996 because Grande s legal department was chasing both parties to formalise the agreement 30 It was also contended that some invoices for the works on the second floor of block A were addressed to the seventh defendant and should not therefore have been paid by the plaintiff The evidence showed that many of the invoices or quotations for the works were in fact made out to wrong parties This was caused in part by the different calling cards handed out to the contractors by various persons from the Grande group involved in the works Some of the payments were made by the seventh defendant on the plaintiff s behalf as the latter was experiencing cash flow problems These problems were caused by the dispute between ECRC and the plaintiff which resulted in the plaintiff not being able to execute a legal mortgage for OCBC Bank in order to drawdown on the construction loan Once the funds became available the plaintiff reimbursed the seventh defendant and paid for the remaining works The situation was the same in the case of the eighth defendant paying for some of the works first 31 Such arrangements were not unique to companies related to the Grande group In May 1997 the plaintiff also contemplated undertaking 1m worth of works to try to attract Europa Holdings to take up a tenancy in block A Unfortunately the application for a change of use to discotheque karaoke lounge and a wine bar food shop was not approved by the authorities 32 Similar indulgences regarding rent rent free period and rent rebate was granted to the ninth and ten defendants for operating at the centre for the reason that the plaintiff wanted to keep the centre alive The ninth defendant was occupying the unwalled premises vacated by a previous tenant which could not keep up with its rent payments and went into liquidation subsequently The understanding with the ninth defendant was that it would be required to vacate the premises should a better paying tenant be found In the latter half of 1998 the plaintiff s marketing efforts paid off and a better paying tenant Four Amigos was found Pursuant to the said understanding the ninth defendant was given short notice to vacate the premises and it did so 33 The tenth defendant occupied a small take out counter at the ground level of block B The plaintiff hoped that by having a food counter there to draw in beach goers the amusement arcade would benefit An outdoor seating area was constructed next to the take out counter but it was used by members of the public and customers of McDonald s as well It was not for the exclusive use of the tenth defendant Like the case of the ninth defendant the arrangement was that the tenth defendant would vacate at short notice should an alternative tenant offering a higher rent be found When a better paying tenant was found the tenth defendant did vacate the counter at short notice The plaintiff purchased its inventory without depreciation because the new tenant wanted the use of it Subsequent to this tenant the plaintiff was able to rent out the furnished counter at an even higher rent 34 Some tenants were asked to leave the centre because their activities such as operating a massage parlour were incongruent with the original intention to have a family oriented ATP Others like the Pondok Gurame restaurant and Jumbo Garden had to leave because of arrears in rent Some tenants chose to leave because they were not willing to accept the corresponding 5 6 times increase in rent The existing tenants were not made to leave for ulterior motives such as the seventh defendant needing space to store the Sega attractions 35 The plaintiff s other claims concerned alleged wrongful charges which it was made to bear These charges included the fifth defendant s consultancy fee the sixth defendant s operational staff charges and legal administrative and secretarial charges the interest charges the foreign exchange entries in the plaintiff s accounts and payments to third parties 36 Like the consultancy fee due to ECRC the consultancy fee due to the fifth defendant was provided for in the shareholders agreement 37 As stated earlier the understanding among the joint venture parties was that Grande and SAFE would provide the necessary finance accounting and operational services and support for the plaintiff which had nothing more than a centre manager and some workers in charge of the general upkeep of the centre Grande and SAFE agreed between themselves that the plaintiff would be charged for all the services and support rendered by them The two partners also agreed between themselves that interest would be charged on loans extended to the plaintiff 38 From as early as March 1995 one of Grande s employees was seconded to the plaintiff for clerical and secretarial support George Wuu signed a letter in April 1995 informing ECRC s former company secretary that the sixth defendant would take over all corporate secretarial matters from the company secretary George Wuu was informed by June 1995 that where there were areas of duplication some staff costs would be apportioned to the plaintiff so as to minimise the costs to both entities The plaintiff agreed that the existing staff employed by ECRC was not capable of transforming the centre into an ATP The plaintiff was not disputing that it should bear the charges for such services and support Instead it took the stand that such charges must be reasonable in amount 39 The plaintiff s audited accounts for the financial years ending on 31 December 1995 and 31 December 1996 referred expressly to the fifth defendant s consultancy fee as a provision the allocation of office operating expenses and salaries the interest charges on loans from related parties and the fact that the loans from the sixth defendant were unsecured denominated in US Dollar and that interest was payable at US Dollar prime rate plus 1 These accounts were approved by a majority of the shareholders 40 The seconded staff looked after the redevelopment of the centre and attended to the day to day matters as well The sixth defendant paid the salaries of the seconded staff until September 1995 after which the plaintiff paid the salaries of the said staff directly The sixth defendant claimed reimbursement for these salaries for the period between January and September 1995 The method of computation used was to charge the plaintiff 50 of the actual total salaries of these seconded staff although they were practically working for the plaintiff full time during the period in question 41 In addition to the above the sixth defendant also provided legal administrative and corporate secretarial support and services to the plaintiff There were various legal matters to take care of such as loan documentation lease documentation recovery of rent arrears and liaising with the authorities In addition the plaintiff was involved in many legal actions There was work done for directors and shareholders meetings The sixth defendant also had to provide administrative support for the payroll and staff matters The proportion of all such costs attributed to the plaintiff was 33 33 between January 1995 and May 1998 20 between June 1998 and December 1998 and 12 5 for January 1999 This was decided by the first defendant 42 The seconded staff

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