Singapore Court of Appeal Rules on Affirmation and Election in Claims for Specific Performance

3 March, 2022

In a reserved written judgment issued on 2 March 2022, the Court of Appeal of the Republic of Singapore (Andrew Phang Boon Leong JCA, Steven Chong JCA, Beverly McLachlin IJ) (SGCA) unanimously dismissed the appeal brought by CSDS Aircraft Sales & Leasing Inc (CSDS) against the judgment of Sir Jeremy Cooke IJ in the Singapore International Commercial Court (SICC) in Singapore Airlines Limited v. CSDS Aircraft Sales & Leasing Inc [2021] SGHC (I) 3.

The dispute concerns the termination of a contract for the sale of a Boeing 777 by the claimant/respondent airline (SIA) to CSDS in late 2018.  The sale contract was governed by English law. Amongst other things, CSDS alleged that SIA had affirmed or waived or elected not to treat CSDS’s accrued non-payment of the purchase balance as terminating the sale contract due to the fact the SIA had initially commenced proceedings in the Singapore High Court seeking specific performance or damages to be assessed.  This line of defence was based on the decision of the Court of Appeal in The Public Trustee v. Pearlberg [1940] 2 KB 1.  The trial judge rejected such defence and all others, finding that SIA lawfully terminated the sale contract both at common law and pursuant to a contractual termination provision: see summary.

The SGCA’s decision in CSDS Aircraft Sales & Leasing Inc v. Singapore Airlines Limited [2022] SGCA (I) 3 is essentially two-fold:

  1. SIA’s original writ and statement of claim was not an unequivocal abandonment of its common law or contractual rights to terminate, because (a) the alternative claim for damages for breach of contract was more than merely ancillary to the claim for specific performance as a matter of substance and when construed in its proper context, (b) SIA was entitled to keep “its options open” at least to that pleaded extent, (c) SIA’s subsequent amendment to remove specific performance and plead acceptance of CSDS’s repudiatory breach removed whatever ambiguity there may have been in the original claim, and (therefore) (d) SIA was free to accept CSDS’s accrued and accruing repudiation and/or give notice of contractual termination as occurred shortly after service of the original pleaded claim: see [24]-[33]; and
  2. in any event, albeit expressed by way of “preliminary view” in light of the primary basis for dismissing the appeal: (a) even where a claim is made solely for specific performance that does not necessarily constitute an irrevocable election to affirm the relevant contract or waive an accrued repudiation as a matter of English law as this will always depend on the facts and circumstances of the case; (b) since Pearlberg itself concerned the validity of a contractual notice of rescission sent whilst a claim for specific performance remained (unamended and not withdrawn) on the court file, it does not necessitate an irrevocable abandonment of an accrued right to terminate at common law or waiver of an accrued repudiation as distinct from “further, fresh or continuing” repudiation(s), and (c) the circumstances of the present case, including serial default by CSDS and its inability to obtain appropriate financing, fell short of what would be needed to establish an affirmation or waiver in the relevant sense: see [1]-[3], [34]-[49].

The SGCA also dealt with other contingent arguments for good measure, rejecting the position advanced on behalf of CSDS on all points (see [50]-[54]).

A copy of the judgment is available here.

Stephen Houseman QC represented the claimant (SIA) at trial in the SICC and as respondent in the SGCA, instructed by Kelvin Tan of Drew & Napier LLC in Singapore.