Tan Wee Fong v Denieru Tatsu: Security for Costs Application in Franchise Dispute
Tan Wee Fong, Ng Seng Guan, and Heng Boon Thai, the plaintiffs, sued Denieru Tatsu F&B Holdings (S) Pte Ltd in the High Court of Singapore, seeking damages for wrongful repudiation of a franchise agreement. The defendant counterclaimed for liquidated damages. Lee Seiu Kin J dismissed the defendant's application for security for costs, finding that the plaintiffs had a bona fide claim with a reasonable prospect of success and considering the exclusive jurisdiction clause in the agreement.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding security for costs in a franchise dispute. The court dismissed the defendant's application, considering the plaintiffs' bona fide claim and exclusive jurisdiction clause.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tan Wee Fong | Plaintiff | Individual | Appeal dismissed | Won | |
| Ng Seng Guan | Plaintiff | Individual | Appeal dismissed | Won | |
| Heng Boon Thai | Plaintiff | Individual | Appeal dismissed | Won | |
| Denieru Tatsu F&B Holdings (S) Pte Ltd | Defendant, Respondent | Corporation | Application for security of costs dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ramesh Bharani | Straits Law Practice LLC |
| Lawrence Lim Cheng Hock | Matthew Chiong Partnership |
4. Facts
- The plaintiffs are Malaysian residents.
- The defendant is a Singapore-incorporated company.
- Plaintiffs paid US$100,000 and US$105,000 to the defendant.
- Plaintiffs incurred $45,000 in expenses preparing to launch the business.
- Defendant allegedly repudiated the franchise agreement.
- Plaintiffs seek $321,120.15 in damages for wrongful repudiation.
- Plaintiffs seek $5m in lost profits.
- Plaintiffs seek a refund of $77,541.60 for undelivered goods.
5. Formal Citations
- Tan Wee Fong and Others v Denieru Tatsu F&B Holdings (S) Pte Ltd, Suit 461/2008, RA 361/2008, [2008] SGHC 238
6. Timeline
| Date | Event |
|---|---|
| Tan and Heng became single unit franchisees of Shihlin Taiwan Street Snacks in Johor Bahru. | |
| Negotiations commenced for the plaintiffs to purchase the right to operate the Franchise in Malaysia. | |
| Plaintiffs paid US$100,000 partnership fee and US$105,000 outlet fee. | |
| Plaintiffs paid $77,541.60 for stocks of food and packaging products. | |
| Defendant's solicitors sent a letter construed as a repudiation of the Agreement. | |
| Plaintiffs' solicitors accepted the repudiation and terminated the Agreement. | |
| Plaintiffs entered into an agreement to purchase the right to operate the Franchise in Malaysia. | |
| Plaintiffs incurred expenses amounting to about $45,000 in preparation for the launch of the business. | |
| Plaintiffs filed suit for damages amounting to $321,120.15 for wrongful repudiation. | |
| Decision Date |
7. Legal Issues
- Security for Costs
- Outcome: The court dismissed the defendant's application for security for costs.
- Category: Procedural
- Related Cases:
- [1999] 1 SLR 600
- Wrongful Repudiation
- Outcome: The court considered the plaintiffs' claim for wrongful repudiation as a factor in dismissing the security for costs application.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Loss of Profits
- Refund
9. Cause of Actions
- Breach of Contract
- Wrongful Repudiation
10. Practice Areas
- Commercial Litigation
11. Industries
- Food and Beverage
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Creative Elegance (M) Sdn Bhd v Puay Kim Seng and Another | Court of Appeal | Yes | [1999] 1 SLR 600 | Singapore | Cited for the principle that the court must examine all circumstances of the case before ordering security for costs and that the plaintiff's residence outside the jurisdiction does not automatically warrant such an order. |
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
- Security for Costs
- Franchise Agreement
- Repudiation
- Liquidated Damages
- Bona Fide Claim
- Exclusive Jurisdiction
15.2 Keywords
- security for costs
- franchise
- repudiation
- singapore
- malaysia
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Civil Practice | 90 |
| Security for Costs | 70 |
| Contract Law | 60 |
| Jurisdiction | 50 |
| Costs | 40 |
16. Subjects
- Civil Procedure
- Contract Law
- Franchise Law