Gateway 21 Consultants Pte Ltd v Gateway 21 Pte Ltd: Breach of Contract & Guaranteed Annual Turnover
In Gateway 21 Consultants Pte Ltd v Gateway 21 Pte Ltd, the High Court of Singapore heard an appeal regarding a dispute over the sale of a business. Gateway 21 Consultants Pte Ltd (the vendor) sued Gateway 21 Pte Ltd (the purchaser) for $110,000 in unpaid purchase price. The purchaser counterclaimed for refunds and damages, alleging breach of contract due to shortfalls in the Guaranteed Annual Turnover (GAT) and breach of non-compete clauses. The District Judge allowed the vendor's claim in part and disallowed most of the purchaser's counterclaim. Kan Ting Chiu J dismissed the purchaser's appeal with costs, affirming the lower court's decision regarding the GAT and other claims.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal Dismissed with Costs
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding a breach of contract claim over the sale of a business. The court addressed issues related to guaranteed annual turnover and non-compete clauses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Gateway 21 Consultants Pte Ltd | Respondent, Plaintiff | Corporation | Judgment for Plaintiff | Won | Solomon Richard |
| Gateway 21 Pte Ltd | Appellant, Defendant | Corporation | Appeal Dismissed | Lost | Lim Joo Toon |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kan Ting Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lim Joo Toon | Joo Toon & Co |
| Solomon Richard | Solomon Richard & Co |
4. Facts
- The respondent sold a business to the appellant under an agreement dated 5 October 2004.
- The consideration for the sale was $200,000, with the transfer date set for 1 January 2005.
- The purchase price was to be paid in installments, with the last installment due on 31 December 2006.
- The agreement included a Guaranteed Annual Turnover (GAT) clause for the years 2005 and 2006.
- The appellant claimed shortfalls in the GAT for both 2005 and 2006.
- The appellant suspended payments, claiming a right to set off the GAT shortfall against the purchase price.
- The respondent sued for the unpaid purchase price of $110,000.
5. Formal Citations
- Gateway 21 Consultants Pte Ltd v Gateway 21 Pte Ltd, District Court Appeal No 7 of 2010, [2010] SGHC 289
6. Timeline
| Date | Event |
|---|---|
| Sale agreement signed | |
| Business transfer date set | |
| Appellant sent letter regarding estimated annual turnovers and shortfalls | |
| Respondent commenced action for full payment | |
| Appellant claimed GAT shortfall | |
| Last installment payment due | |
| Judgment issued |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the appellant's complaint and claim over the Guaranteed Annual Turnover is misconceived and unproven. The court did not explicitly rule on the non-compete clause.
- Category: Substantive
- Sub-Issues:
- Failure to meet Guaranteed Annual Turnover
- Breach of non-compete clause
8. Remedies Sought
- Monetary Damages
- Refund
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Corporate Secretariat
- Business Advisory
- Courier Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| No cited cases | |||||
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
- Guaranteed Annual Turnover
- Sale Agreement
- Purchase Price
- Transfer Date
- Shortfall
- Non-Compete Clause
15.2 Keywords
- breach of contract
- guaranteed annual turnover
- sale of business
- singapore
- high court
- commercial dispute
16. Subjects
- Contract Dispute
- Commercial Law
17. Areas of Law
- Contract Law
- Sale of Business