Ooi Ching Ling v Just Gems Inc: Breach of Contract & Failure of Consideration

In Ooi Ching Ling v Just Gems Inc, the Singapore Court of Appeal heard an appeal against the High Court's decision in favor of Just Gems Inc. Just Gems sought the return of US$500,000 paid to Ooi Ching Ling for 22% of Pacific Rim Trading (PRT) shares, arguing a total failure of consideration, and US$50,000 paid by mistake. The Court of Appeal upheld the High Court's decision, finding Ooi personally liable and that a total failure of consideration had occurred, thus dismissing the appeal.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal: Just Gems sues Ooi Ching Ling for breach of contract and failure of consideration regarding a share purchase agreement. The court upheld the claim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ooi Ching LingAppellantIndividualAppeal DismissedLost
Just Gems IncRespondentCorporationJudgment for RespondentWon

3. Judges

Judge NameTitleDelivered Judgment
Yong Pung HowChief JusticeYes
Chao Hick TinJudge of AppealNo
Tan Lee MengJudgeNo

4. Counsels

Counsel NameOrganization
Kenneth TanArthur Loke Bernard Rada & Lee
Benjamin GohArthur Loke Bernard Rada & Lee
Molly LimPeter Low Tang & Belinda Ang
Mohamed GulPeter Low Tang & Belinda Ang
Grace ChakoPeter Low Tang & Belinda Ang

4. Facts

  1. Just Gems paid Ooi Ching Ling US$500,000 for 22% of the shares of Pacific Rim Trading (PRT).
  2. The agreement was that the shares would be transferred and registered in the name of Just Gems.
  3. Ooi Ching Ling mistakenly had the shares transferred to Jamilah personally instead of Just Gems.
  4. Just Gems did not receive the shares it paid for.
  5. Ooi sought an indemnity agreement from Just Gems before correcting the error.
  6. Just Gems also paid an excess sum of US$50,000 by mistake.

5. Formal Citations

  1. Ooi Ching Ling v Just Gems Inc (No 2), CA 15/2002, [2002] SGCA 43

6. Timeline

DateEvent
Agate Technologies Inc incorporated.
Ooi offered to sell Jamilah 750,000 shares in Agate for US$100,000.
Ooi offered Jamilah 22% of PRT shares for US$500,000.
Jamilah paid US$200,000 to Ooi.
Ooi handed over a draft memorandum to Jamilah.
Meeting held between Ooi, Khoo, and Jamilah.
Ooi sent Jamilah a Stock Purchase Agreement (SPA).
Jamilah paid US$250,000 to Ooi.
Jamilah paid US$100,000 to Ooi.
Jamilah faxed the signed SPA back to Ooi.
Ooi caused six transfer forms to be sent to Jamilah for execution.
Ooi stated that a mistake was made in having the 124,001 shares of PRT registered in the name of Jamilah.
Decision Date

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that Ooi Ching Ling breached the contract by failing to transfer and register the shares in the name of Just Gems Inc.
    • Category: Substantive
    • Sub-Issues:
      • Failure to transfer shares
      • Failure to register shares
  2. Total Failure of Consideration
    • Outcome: The court held that there was a total failure of consideration because Just Gems Inc did not receive the shares it paid for.
    • Category: Substantive
  3. Personal Liability
    • Outcome: The court found Ooi Ching Ling personally liable for the agreement relating to Just Gems’ investment in PRT.
    • Category: Substantive

8. Remedies Sought

  1. Refund of US$500,000
  2. Refund of US$50,000

9. Cause of Actions

  • Breach of Contract
  • Failure of Consideration
  • Money Had and Received

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Finance
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Schular AG v Wickman Machine Tool Sales LtdN/AYes[1974] AC 235N/ACited regarding the construction of contracts.
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbur LtdN/AYes[1943] AC 32N/ACited for the principle that failure of consideration occurs when one party has not enjoyed the benefit of any part of what it bargained for.
Rover International Ltd v Canon Film Sales Ltd (No. 3)N/AYes[1989] 1 WLR 912N/ACited for the test of whether a party claiming total failure of consideration has received any part of the benefit bargained for.
Whincup v HughesN/AYes(1871) LR 6 CP 78N/ACited to illustrate that when there is only a partial failure of consideration, neither the whole nor any part of the sum can be recovered.
Kwei Tek Chao v British Traders and Shippers LtdN/AYes[1954] 2 QB 459N/ACited for the principle that if goods are properly rejected and the price has been paid, the money can be recovered in an action for money paid on a consideration which had totally failed.
Rowland v DivallCourt of AppealYes[1923] 2KB 500N/ACited for the principle that there is a total failure of consideration when the buyer has not received any part of what they paid for.
Warman v Southern Counties Car Finance Corpn LtdN/AYes[1949] 2 KB 576N/ACited for extending the rationale of Rowland v Divall to hire purchase agreements.
Hunt v SilkN/AYes(1804) 5 East 449N/ACited to illustrate that if a contract has been partly performed, the consideration cannot be recovered.
Butterworth v Kingsway MotorN/AYes[1954] 1 WLR 1286N/ACited as an example where the plaintiff recovered the purchase price despite using the car for nearly a year.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Total Failure of Consideration
  • Stock Purchase Agreement
  • Pacific Rim Trading
  • Just Gems Inc
  • Share Transfer
  • Indemnity Agreement

15.2 Keywords

  • Contract
  • Breach
  • Consideration
  • Shares
  • Investment
  • Singapore
  • Court of Appeal

17. Areas of Law

Area NameRelevance Score
Total failure of consideration95
Breach of Contract90
Contract Law85
Personal Liability40
Agency Law30
Corporate Law30
Estoppel20

16. Subjects

  • Contract Law
  • Corporate Law
  • Investment Law