Nomura Regionalisation Venture Fund Ltd v Ethical Investments Ltd: Relief Against Forfeiture of Shares
In Nomura Regionalisation Venture Fund Ltd v Ethical Investments Ltd, the Singapore High Court heard an appeal by Ethical Investments Ltd against the decision to dismiss their application for relief against forfeiture of their shares in Nomura Regionalisation Venture Fund Ltd due to non-payment of the second installment. The High Court allowed the appeal, ordering Nomura to proceed with assessing damages and directing Ethical Investments to re-tender the outstanding sum. The court found that Nomura's notice of forfeiture was inadequate and that Ethical Investments should be granted relief against forfeiture.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal allowed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case concerning Ethical Investments' appeal for relief against forfeiture of shares in Nomura's fund due to non-payment.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Nomura Regionalisation Venture Fund Ltd | Plaintiff, Respondent | Corporation | Appeal allowed | Lost | |
| Ethical Investments Ltd | Defendant, Appellant | Corporation | Appeal allowed | Won | Choi Yok Hung of as counsel |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ang Cheng Hock | Allen & Gledhill |
| K Shanmugam | Allen & Gledhill |
| Choi Yok Hung | as counsel |
| Terence Teo | Chee & Teo |
4. Facts
- The defendants subscribed to the plaintiffs’ fund for US$5m.
- The defendants paid a first instalment of US$2.5m.
- The defendants failed to pay the second instalment of US$2m by the due date.
- The plaintiffs commenced proceedings for specific performance and damages.
- The plaintiffs obtained summary judgment for specific performance, but the defendants did not comply.
- The plaintiffs discharged the order for specific performance and proceeded with assessment of damages.
- The plaintiffs forfeited the defendants’ shares after the defendants failed to pay the outstanding sum.
5. Formal Citations
- Nomura Regionalisation Venture Fund Ltd v Ethical Investments Ltd, Suit 623/1998, [2001] SGHC 121
6. Timeline
| Date | Event |
|---|---|
| Defendants applied to purchase 50 units in the plaintiffs’ fund. | |
| Defendants were allotted the 50 shares and paid the first instalment of US$2.5m. | |
| Plaintiffs gave written notice to the defendants to pay the second instalment by 2 June 1997. | |
| Plaintiffs made a second request for payment. | |
| Defendants made partial payment of US$500,000. | |
| Plaintiffs’ solicitors demanded payment of the balance of US$2m. | |
| Defendants asked for more time to make payment. | |
| Plaintiffs’ solicitors inquired when payment would be made. | |
| Plaintiffs commenced proceedings claiming specific performance and damages. | |
| Summary judgment was granted to the plaintiffs. | |
| Defendants' appeal against the summary judgment was dismissed. | |
| Order for specific performance was discharged. | |
| Plaintiffs gave a deadline of 22 April 1999 for payment. | |
| Defendants’ shares were forfeited and cancelled. | |
| Economic Development Board was informed of the forfeiture. | |
| Filing of Form 11 with the Registry of Companies relating to the cancellation of the defendants’ shares. | |
| Defendants filed the application praying for relief against forfeiture of the shares. | |
| Application was dismissed. | |
| Plaintiffs filed their notice of appeal for Civil Appeal No. 12 of 2000. | |
| Appeal was adjourned pending the outcome of Civil Appeal No. 12 of 2000. | |
| Plaintiffs conducted a redemption exercise. | |
| Civil Appeal No. 12 of 2000 was dismissed. | |
| Defendants tendered the sum of US$2m and costs of S$6,700. | |
| Decision Date |
7. Legal Issues
- Relief against forfeiture
- Outcome: The court granted relief against forfeiture, finding the notice of forfeiture inadequate and considering the circumstances of the case.
- Category: Substantive
- Sub-Issues:
- Inadequate notice of forfeiture
- Forfeiture as a penalty
- Election of remedies
- Related Cases:
- [2000] 4 SLR 46
- [1973] AC 691
- [1989] 1 AER 621
8. Remedies Sought
- Relief against forfeiture
- Specific Performance
- Damages
9. Cause of Actions
- Breach of Contract
- Specific Performance
10. Practice Areas
- Commercial Litigation
- Appeals
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Nomura Regionalisation Venture Fund Ltd v Ethical Investments Ltd | High Court | Yes | [2000] 2 SLR 686 | Singapore | Cited as a previous appeal between the same parties regarding an extension of time for serving notice of appeal. |
| Nomura Regionalisation Venture Fund Ltd v Ethical Investments Ltd | Court of Appeal | Yes | [2000] 4 SLR 46 | Singapore | Cited as the dismissal of the plaintiffs' appeal in Civil Appeal No. 12 of 2000, and for the modern law on relief against forfeiture as laid down in Shiloh Spinners Ltd v Harding. |
| Jobson v Johnson | Court of Appeal | Yes | [1989] 1 AER 621 | England and Wales | Cited for the principle that a retransfer agreement was intended to provide the plaintiff with security for the unpaid installments, with repossession as an alternative remedy. |
| Shiloh Spinners Ltd v Harding | House of Lords | Yes | [1973] AC 691 | England and Wales | Cited for the modern law on relief against forfeiture and the jurisdiction of courts of equity to grant relief where the primary object of the bargain is to secure a stated result. |
| Else (1982) Ltd v Parkland Holdings Ltd | Court of Appeal | Yes | [1994] 1 BCLC 130 | England and Wales | Cited as a case touching on the sale of shares in a football club that came to a different conclusion, but distinguished because it involved a settlement agreement. |
| Central Provident Fund v Ho Bock Kee | N/A | Yes | [1981] 2 MLJ 162 | N/A | Cited for the submission that strict compliance was called for in relation to notices of forfeiture. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Income Tax Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Forfeiture
- Shares
- Venture fund
- Specific performance
- Relief against forfeiture
- Notice of forfeiture
- Penalty
- Election of remedies
15.2 Keywords
- forfeiture
- shares
- venture fund
- specific performance
- contract law
- equity
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Relief Against Forfeiture | 80 |
| Share Forfeiture | 75 |
| Company Law | 70 |
| Contract Law | 60 |
| Breach of Contract | 50 |
| Damages | 40 |
| Specific performance | 40 |
| Bankruptcy | 30 |
| Estoppel | 30 |
16. Subjects
- Equity
- Contract Law
- Company Law
- Venture Capital