Lim Kian Kiong v Tan Seng Teck: Contractual Term Construction & Repudiation

In Lim Kian Kiong and Low Peck Lian v Tan Seng Teck and Tan Seng Eng, the High Court of Singapore addressed a breach of contract claim concerning the sale of the plaintiffs' share in a partnership, 815 Eating House. The plaintiffs sued the defendants after a proposed sale to third parties fell through due to a failure to obtain Housing and Development Board (HDB) approval. The court, presided over by Justice Woo Bih Li, found the defendants liable for damages of $600,000 plus $90,900, determining that the defendants' conduct did not amount to repudiation of the agreement. The defendants' claim against the third parties was allowed with nominal damages of $1,000.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiffs’ claim allowed. Defendants’ claim against third parties allowed with nominal damages.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Plaintiffs sued defendants for breach of contract over a partnership share sale. Court found defendants liable and awarded damages, addressing repudiation.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lim Kian KiongPlaintiffIndividualClaim AllowedWonSean Lim, Tan Aik How
Low Peck LianPlaintiffIndividualClaim AllowedWonSean Lim, Tan Aik How
Tan Seng TeckDefendantIndividualClaim AllowedLostTan Hong Seng
Tan Seng EngDefendantIndividualClaim AllowedLostTan Hong Seng
Tan Say LaiThird PartyIndividualClaim Allowed with Nominal DamagesPartialKenny Yap
Tan Sai LiangThird PartyIndividualClaim Allowed with Nominal DamagesPartialKenny Yap
Tan Koon HuatThird PartyIndividualClaim Allowed with Nominal DamagesPartialKenny Yap

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudgeYes

4. Counsels

Counsel NameOrganization
Sean LimHin Tat Augustine and Partners
Tan Aik HowHin Tat Augustine and Partners
Tan Hong SengTan Lim and Wong
Kenny YapAllen and Gledhill

4. Facts

  1. Plaintiffs and defendants were partners in 815 Eating House.
  2. Plaintiffs and defendants decided to part company due to differences.
  3. Defendants introduced Tan Tong Pheng to buy the plaintiffs' share for $600,000.
  4. Agreement was reached for Tong Pheng to purchase the plaintiffs' share, subject to HDB approval.
  5. Defendants agreed to purchase the plaintiffs' share if HDB did not approve the sale to Tong Pheng.
  6. HDB approval required a supplemental agreement (SA) to be signed by all partners.
  7. First defendant failed to sign the SA on the appointed date.

5. Formal Citations

  1. Lim Kian Kiong and Another v Tan Seng Teck and Another (Tan Say Lai and Others, Third Parties), Suit 182/2003, [2005] SGHC 104

6. Timeline

DateEvent
Tenancy for the coffee shop and the licence for the ORA expired
HDB gave a final notice for the tenancy and licence to be renewed by 31 August 2002
TKQP sent a fax to HTP to state a final offer for the purchase of the plaintiffs’ share in the Partnership
HTP accepted the offer
Joint inspection of the coffee shop
Parties met at HDB Hub to submit an application for a change of partners of the Partnership
Plaintiffs, defendants and Tong Pheng signed a document to execute the necessary papers for the transfer of the plaintiffs’ share to Tong Pheng’s nominees by the end of the following week
Plaintiffs, the defendants and the third parties signed the requisite forms to substitute the third parties as the new partners of the Partnership in place of the plaintiffs
Forms were lodged with the then Registry of Companies and Businesses
Peter and the first third party’s husband began to operate the coffee shop with the defendants in shifts
TKQP submitted an application to HDB for the substitution of partners of the Partnership
815 Kopitiam Pte Ltd was incorporated
Defendants and the third parties signed the requisite forms to terminate the business of the Partnership with effect from 23 December 2002
Forms were lodged with ROCB
HDB wrote to the Partnership to say that HDB had approved, subject to certain conditions, the application for the change of partners
First appointment to sign the SA was fixed
TKQP wrote to HTP to say that the defendants would be unable to pay the $90,900 by the deadline
HTP replied stating the plaintiffs’ rejection of the request to pay in instalments
Third parties and Tong Pheng met up with the plaintiffs at the HDB Hub
All the other partners, including the outgoing partners, signed the SA first
TKQP sent a fax to HTP disputing the quantum of the deposit from which the $90,900 payment was derived
HTP replied to stress that the quantum of the deposit had been agreed
TKQP sent a fax to HTP requesting that the $90,900 be paid in instalments
HTP rejected the request to pay in instalments
TKQP sought D1’s instructions
Peter instructed Allen & Gledhill to act for the third parties in the place of TKQP
TKQP sent a fax to HTP stating that D1 would sign the SA “next week”
A&G sent a fax to HTP and TKQP
A&G sent another fax to HDB to revoke the consent of the third parties to the SA
TKQP sent a fax to HTP and to A&G to say that TKQP were no longer acting for the defendants
D1 went to the HDB Hub and signed the SA
HDB wrote to HTP, to A&G and to the defendants
Peter and Chee Kiak were refused entry to the Premises by the defendants
Plaintiffs commenced action against the defendants
Plaintiffs’ solicitors wrote to HDB to seek HDB’s clarification as to the status of its approval granted on 22 November 2002
HDB replied
Fresh tenancy of the Premises and a fresh licence for the ORA were eventually granted by HDB to a new partnership by the name of Eating House 815
Notes of Evidence
Decision Date

7. Legal Issues

  1. Construction of Contractual Term
    • Outcome: The court construed the term 'approval' in the context of the agreement, finding it to mean unconditional approval from HDB.
    • Category: Substantive
  2. Repudiation of Contract
    • Outcome: The court found that the first defendant's conduct, while reprehensible, did not amount to a repudiation of the contract that the third parties could accept.
    • Category: Substantive

8. Remedies Sought

  1. Damages
  2. Specific Performance

9. Cause of Actions

  • Breach of Contract
  • Specific Performance

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Food and Beverage

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Karangahape Road International Village Ltd v HollowayN/AYes[1989] 1 NZLR 83New ZealandCited regarding the consequences of a nomination in a contract.
JR Stevens Holdings Pty Ltd v Von BegenseyN/AYes1992 NSW LEXIS 7155New South WalesCited regarding the consequences of a nomination in a contract.
Salter v GilbertsonN/AYes(2003) 6 VR 466VictoriaCited regarding the consequences of a nomination in a contract.
Mahtani & Ors. v. Kiaw Aik Hang Lan Pte. Ltd.N/AYes[1995] 1 S.L.R. 168SingaporeCited regarding costs in cases with nominal damages.
Anglo-Cyprian Trade Agencies v. Paphos Wine IndustriesHigh CourtYes[1951] 1 All E.R. 873EnglandCited regarding costs in cases with nominal damages.
Alltrans Express Ltd. v. C.V.A. Holdings LtdCourt of AppealYes[1984] 1 All E.R. 685EnglandCited regarding costs in cases with nominal damages.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2004 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Partnership
  • Housing and Development Board (HDB)
  • Supplemental Agreement (SA)
  • Repudiation
  • Nomination
  • Approval

15.2 Keywords

  • contract
  • partnership
  • HDB
  • repudiation
  • Singapore
  • commercial
  • litigation

16. Subjects

  • Contract Law
  • Partnership
  • Sale of Business

17. Areas of Law

  • Contract Law
  • Partnership Law