Van Der Horst Engineering v Rotol: Breach of Contract & Warranty in Share Subscription Agreement
Van Der Horst Engineering Pte Ltd (VDH) sued Rotol Singapore Ltd (Rotol) in the High Court of Singapore, alleging breach of contract and warranty under a Subscription and Option Agreement (SOA). VDH claimed Rotol failed to disclose material information, including claims involving its subsidiary Altech, a claim by BP, and overdue receivables from Dex. Andrew Ang J ruled in favor of VDH, declaring VDH released from its obligations under the SOA and ordering Rotol to refund the earnest money and pay special damages. Rotol's counterclaim was dismissed.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Van Der Horst Engineering sued Rotol for breach of contract and warranty in a share subscription agreement. The court ruled in favor of Van Der Horst.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Van Der Horst Engineering Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | Arthur Quay, Jamilah bte Ibrahim |
| Rotol Singapore Ltd | Defendant | Corporation | Counterclaim Dismissed | Lost | Thio Shen Yi, Adrian Tan, Angela Thiang |
| Kwan Chee Seng | Second Defendant | Individual | Counterclaim Dismissed | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Arthur Quay | Dominion LLC |
| Jamilah bte Ibrahim | Dominion LLC |
| Thio Shen Yi | TSMP Law Corporation |
| Adrian Tan | TSMP Law Corporation |
| Angela Thiang | TSMP Law Corporation |
4. Facts
- VDH and Rotol entered into a Subscription and Option Agreement (SOA) on 30 April 2004.
- VDH agreed to subscribe for 110m new shares in Rotol at 11.5¢ per share, with an option for another 110m shares.
- VDH paid $100,000 as earnest money upon execution of the SOA.
- VDH learned of undisclosed claims against Rotol and its subsidiary Altech after the SOA was signed.
- Rotol failed to disclose a claim by BP for breach of contract.
- Rotol failed to disclose overdue receivables from Dex and the default of Lim's guarantee.
- Rotol's own witnesses admitted that the undisclosed claims would have a material adverse effect on Rotol's financial position.
5. Formal Citations
- Van Der Horst Engineering Pte Ltd v Rotol Singapore Ltd, Suit 770/2004, [2006] SGHC 53
6. Timeline
| Date | Event |
|---|---|
| Rotol entered into an agreement with BP to purchase LPG exclusively from BP for five years. | |
| Rotol entered into an agreement with Sembcorp Gas to purchase LNG. | |
| Rotol issued a writ against Dex for $118,196.41. | |
| Rotol obtained final judgment against Dex. | |
| BP-Wearnes Gas claimed compensation of $145,000 from Rotol for breach of the BP Agreement. | |
| Rotol agreed to allow Dex to pay its judgment debt by installments, secured by a guarantee from Lim. | |
| Dex defaulted on installment payments to Rotol. | |
| BP's lawyers sent a formal letter of demand to Rotol. | |
| Loo & Chong advised Rotol that it breached the BP Agreement. | |
| Rotol issued a writ against Lim on his personal guarantee. | |
| Van Der Horst Engineering Pte Ltd and Rotol Singapore Ltd entered into a Subscription and Option Agreement. | |
| Altech issued a statutory demand against Inbuilt claiming $447,773.07. | |
| VDH learned of Altech's claim against Inbuilt and Inbuilt's suit against Altech. | |
| Rotol obtained final judgment against Lim for $115,826.92. | |
| VDH sought refund of the earnest money, as well as special and general damages. | |
| Judgment issued in favor of VDH. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Rotol breached the Subscription and Option Agreement by failing to disclose material information and breaching warranties.
- Category: Substantive
- Sub-Issues:
- Failure to disclose material information
- Breach of warranty
- Breach of Warranty
- Outcome: The court found that Rotol breached the warranty that its accounts gave a true and fair view of its financial position and that there was no threatened litigation.
- Category: Substantive
- Sub-Issues:
- Accounts not giving a true and fair view
- Failure to disclose threatened litigation
- Measure of Damages
- Outcome: The court held that damages for breach of contract could include wasted pre-contract expenditure.
- Category: Substantive
- Sub-Issues:
- Wasted pre-contract expenditure
8. Remedies Sought
- Refund of earnest money
- Special damages
- General damages
9. Cause of Actions
- Breach of Contract
- Breach of Warranty
10. Practice Areas
- Commercial Litigation
11. Industries
- Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Arab Monetary Fund v Hashim (No 4) | Unknown | Yes | [1992] 1 WLR 1176 | England and Wales | Cited to define 'pending' litigation. |
| Anglia Television Ltd v Reed | Queen's Bench | Yes | [1972] 1 QB 60 | England and Wales | Cited regarding the recovery of wasted expenditure as damages for breach of contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Subscription and Option Agreement
- SOA
- Warranty
- Material adverse effect
- Earnest money
- Due diligence
- Threatened litigation
- Contingent liability
- Receivables
- Guarantor
15.2 Keywords
- breach of contract
- warranty
- share subscription
- due diligence
- material adverse effect
- Rotol
- Van Der Horst
16. Subjects
- Contract Law
- Corporate Law
- Securities Law
17. Areas of Law
- Contract Law
- Breach of Contract
- Warranty Law
- Damages