Lee Seng Cheong v Seah Bak Seng: Breach of Contract for Fotronics Shares

In Lee Seng Cheong and Others v Seah Bak Seng, the High Court of Singapore addressed a breach of contract claim concerning the sale and purchase of Fotronics shares. The plaintiffs, including Lee Seng Cheong, alleged that the defendant, Seah Bak Seng, failed to deliver the shares in a timely manner. The court found an implied term that time was of the essence and ruled in favor of the plaintiffs, ordering restitution of the purchase price but disallowing the claim for loss of profits. The defendant's counterclaim was dismissed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiffs in part; Defendant's counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

High Court case involving breach of contract for Fotronics shares. Court found implied term for timely delivery, ordering restitution.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lee Seng CheongPlaintiffIndividualClaim allowed in partPartial
Chia Wang NorPlaintiffIndividualClaim allowed in partPartial
Tan Kian Heng @ Khen TanPlaintiffIndividualClaim allowed in partPartial
Cheong Yin YuenPlaintiffIndividualClaim allowed in partPartial
Ramasamy SomasundaramPlaintiffIndividualClaim allowed in partPartial
Sim Eng Chee (Shen Yongzhi)PlaintiffIndividualClaim allowed in partPartial
Lee Sea KianPlaintiffIndividualClaim allowed in partPartial
Loo Yuh HueyPlaintiffIndividualClaim allowed in partPartial
Seah Bak SengDefendantIndividualCounterclaim dismissedDismissed

3. Judges

Judge NameTitleDelivered Judgment
Chan Seng OnnJYes

4. Counsels

Counsel NameOrganization
Cheong Yuen HeeJ S Yeh & Co
Sherain TanJ S Yeh & Co
Anthony LeeBih Li & Lee
Tan Yin TzeBih Li & Lee

4. Facts

  1. Plaintiffs entered into agreements with the defendant to purchase Fotronics shares.
  2. The plaintiffs intended to sell the shares for a quick profit after listing.
  3. The defendant delayed the delivery of shares beyond the listing date.
  4. The market price of the shares fluctuated after listing.
  5. The plaintiffs claimed for loss of profits due to the delayed delivery.
  6. The defendant transferred 2,050,000 shares to Lee’s share account on 13 April 2005.
  7. The plaintiffs terminated the contract due to the late delivery of shares.

5. Formal Citations

  1. Lee Seng Cheong and Others v Seah Bak Seng, Suit 19/2007, [2008] SGHC 1

6. Timeline

DateEvent
Fotronics obtained approvals to list shares in the Malaysian MESDAQ market.
Written agreements entered into for purchase of Fotronics shares.
Fotronics shares listed on the Malaysian MESDAQ market.
Share price fell below RM 1.40 per share.
Lee entered into another oral agreement with the defendant to purchase 400,000 shares.
Lee issued a cheque to pay for share purchases.
Lee issued a cheque to pay for share purchases.
Defendant transferred 2,050,000 Fotronics shares into Lee’s share account.
Lim Puan Chew and Lee met the defendant and his brother.
Amended Statement of Claim dated.
Lee's affidavit dated.
Defendant's affidavit dated.
Court allowed the plaintiffs’ claim in part and dismissed the defendant’s counterclaim.
Decision Date.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant breached the contracts by failing to deliver the shares in a timely manner.
    • Category: Substantive
    • Sub-Issues:
      • Failure to deliver shares on time
  2. Implied Term
    • Outcome: The court found an implied term that time was of the essence in the contracts for the sale and purchase of shares.
    • Category: Substantive
    • Sub-Issues:
      • Time is of the essence
  3. Measure of Damages
    • Outcome: The court awarded restitutionary damages, ordering the return of the purchase price, but disallowed the claim for loss of profits.
    • Category: Substantive

8. Remedies Sought

  1. Return of purchase price
  2. Loss of profits

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re SchwabcherN/AYes(1908) 98 LT 127N/ACited for the principle that time is of the essence in contracts for the sale and purchase of securities.
Hare v NicollN/AYes[1966] 2 QB 130N/ACited for the principle that time is of the essence in contracts for the sale and purchase of securities traded in a securities exchange.
Huang Chang Hsun Francis v Hwang & Yusoff Securities Sdn BhdN/AYes[1992] 2 MLJ 305N/ACited for the principle that time is of the essence in contracts for the sale and purchase of securities traded in a securities exchange.
British and Commonwealth Holdings plc v Quadrex Holdings IncN/AYes[1989] 1 QB 842N/ACited for the principle that time may impliedly be of the essence of the contract where the circumstances of the case or the subject matter of the contract indicate that the time for completion is of the essence.
Grant v Lapid Developments LtdN/AYes[1996] BCC 410N/ACited for the principle that time is of the essence where the shares were of a highly speculative nature and liable to considerable fluctuations in value.

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

  • Fotronics
  • MESDAQ
  • Listing date
  • Pre-Listing Shares
  • Implied term
  • Time of the essence
  • Restitutionary damages

15.2 Keywords

  • Contract
  • Shares
  • Breach
  • Fotronics
  • MESDAQ
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Contract Law90
Sale of Shares80
Breach of Contract75
Shares70
Commercial Disputes60
Damages50
Corporate Law40

16. Subjects

  • Contract Law
  • Securities
  • Breach of Contract