Ng Swee Hua v Auston International: Breach of Contract & Damages for Failure to Issue Conversion Shares

In Ng Swee Hua v Auston International Group Ltd and another, the High Court of Singapore heard an appeal by the defendants against the assessment of damages for breach of contract. The plaintiff, Ng Swee Hua, claimed damages for the defendants' failure to issue conversion shares. Tay Yong Kwang J dismissed the appeal, ordering the defendants to pay costs. The court upheld the Assistant Registrar's decision to include the period for obtaining shareholders' approval in the damages assessment, finding the defendants liable for the loss incurred by the plaintiff due to their breach.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Breach of contract case regarding failure to issue conversion shares. The court assessed damages based on the market price of shares.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
AnotherDefendant, AppellantOtherAppeal dismissedLost
Ng Swee HuaPlaintiffIndividualAppeal dismissedWon
Auston International Group LtdDefendant, AppellantCorporationAppeal dismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Tay Yong KwangJudgeYes

4. Counsels

Counsel NameOrganization
Valerie AngStraits Law Practice LLC
N SreenivasanStraits Law Practice LLC
Francis XavierRajah & Tann LLP
Alina ChiaRajah & Tann LLP

4. Facts

  1. Plaintiff was a director of both defendants and managing director of the second defendant.
  2. An investment agreement was made between the plaintiff and the defendants.
  3. The plaintiff was to subscribe for Convertible Bonds of an aggregate principal of $200,000.
  4. The plaintiff issued a conversion notice to convert the loan into shares.
  5. The first defendant did not act on the conversion notice.
  6. The plaintiff resigned from his directorship in both companies.
  7. The plaintiff commenced an action claiming specific performance or damages.

5. Formal Citations

  1. Ng Swee Hua v Auston International Group Ltd and another, Suit No 129 of 2007 (Registrar's Appeal No 309 of 2010), [2010] SGHC 362

6. Timeline

DateEvent
Investment agreement signed.
Plaintiff became managing director of the second defendant.
Plaintiff became a director of both defendants.
Supplemental investment agreement signed.
Plaintiff ceased being managing director of the second defendant.
Plaintiff issued conversion notice.
Plaintiff granted defendants an indulgence.
Plaintiff resigned from directorship in both companies.
Plaintiff demanded the shares to be issued by 15 January 2007.
Action commenced claiming specific performance or damages.
Court of Appeal dismissed the defendant's appeal.
Assistant Registrar ruled on assessment of damages.
Appeal dismissed.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court held that the defendants were in breach of the investment agreement.
    • Category: Substantive
    • Sub-Issues:
      • Failure to issue conversion shares
    • Related Cases:
      • [2009] 4 SLR(R) 628
  2. Assessment of Damages
    • Outcome: The court upheld the AR's decision to include the projected period for obtaining shareholders' approval in the damages assessment.
    • Category: Procedural
    • Sub-Issues:
      • Relevant date for assessing damages
      • Inclusion of time for shareholders' approval
    • Related Cases:
      • [2007] 4 SLR 460
      • [1995] 1 WLR 1602
  3. Contractual Interest
    • Outcome: The court addressed the issue of contractual interest payable on the convertible bonds.
    • Category: Substantive
  4. Pre-judgment and Post-judgment Interest
    • Outcome: The court addressed the applicable rates for pre-judgment and post-judgment interest.
    • Category: Procedural

8. Remedies Sought

  1. Specific Performance
  2. Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Auston International Group Ltd and anor v Ng Swee HuaCourt of AppealYes[2009] 4 SLR(R) 628SingaporeThe Court of Appeal dismissed the defendant's appeal and directed that damages be assessed before the registrar.
JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm)Court of AppealYes[2007] 4 SLR 460SingaporeRevisited the doctrine of loss of chance.
Allied Maples Group Ltd v Simmons & SimmonsN/AYes[1995] 1 WLR 1602N/APrinciples laid down were re-endorsed in JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm).
Wilson v London and Globe Finance CorpN/AYes(1897) 14 TLR 15N/ACited regarding the postponement of the date of breach if the seller sought more time to issue the shares and the buyer was willing to grant such indulgence.
Nirumalan v Kanapathi Pillay v Teo Eng ChuanN/AYes[2003] 3 SLR 601SingaporeCited for the proposition that the basis of an award of interest is that the defendant has kept the plaintiff out of his money and has had the use of the money himself.
Russell et al v K2 Energy CorpAlberta Court of Queen’s Bench, Judicial District of CalgaryYes[2002] ABQB 118CanadaDecision of the Alberta Court of Queen’s Bench, Judicial District of Calgary, where courts in other jurisdictions have used this method to value shares.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law Act (Cap 43)Singapore
Rules of Court (Cap 322, R5 - 2006 Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Convertible Bonds
  • Conversion Shares
  • Investment Agreement
  • Shareholders' Approval
  • Indulgence
  • Volume Weighted Average Price

15.2 Keywords

  • breach of contract
  • conversion shares
  • damages
  • investment agreement
  • shareholders approval

17. Areas of Law

Area NameRelevance Score
Breach of Contract90
Damages80
Contract Law70
Convertible Bonds70
Investment Agreement60
Company Law50
Share Valuation40

16. Subjects

  • Contract Law
  • Company Law
  • Damages Assessment