Cherie Hearts v G8 Education: Specific Performance & Purchase Price Adjustments in Business Acquisition

In Cherie Hearts Group International Pte Ltd and others v G8 Education Ltd, the High Court of Singapore, presided over by Judith Prakash J, addressed disputes arising from a Business Acquisition Contract (BAC) between Cherie Hearts Group International Pte Ltd (CHG) and G8 Education Ltd (G8). The court had previously granted specific performance of the BAC to G8. This case concerned G8's appeal against orders made by the court regarding deductions from the purchase price at the time of completion. The court dismissed G8's appeal, upholding its prior orders concerning parents' deposit monies, rectification costs, missing motor vehicles, interest under the Loan Agreement, and expenses incurred by G8 after 1 March 2011.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal by G8 Education Ltd against orders related to deductions from the purchase price at the time of completion of the Business Acquisition Contract was dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Cherie Hearts Group International Pte Ltd v G8 Education Ltd concerns specific performance of a business acquisition contract and adjustments to the purchase price.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Cherie Hearts Group International Pte LtdPlaintiffCorporationOrders upheldLost
G8 Education LtdDefendantCorporationAppeal DismissedLost
Cherie Hearts Group International Pte Ltd and othersPlaintiffCorporationOrders upheldLost

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Vincent LeowAllen & Gledhill LLP
Michelle YapAllen & Gledhill LLP
Lionel ChanHarry Elias Partnership LLP
Vikneswari d/o MuthiahHarry Elias Partnership LLP

4. Facts

  1. G8 Education Ltd and Cherie Hearts Group International Pte Ltd entered into a Business Acquisition Contract (BAC).
  2. G8 sought specific performance of the BAC, which was initially granted by the court.
  3. Disputes arose regarding deductions from the purchase price at the time of completion.
  4. G8 appealed against the court's orders concerning these deductions.
  5. The disputed deductions related to parents' deposit monies, rectification costs, missing motor vehicles, interest under a loan agreement, and expenses incurred by G8.
  6. The court had previously ordered an assessment hearing to determine certain amounts payable by CHG to G8, to be deducted from the purchase price and placed in escrow.

5. Formal Citations

  1. Cherie Hearts Group International Pte Ltd and others v G8 Education Ltd, Suit No 211 of 2011, [2013] SGHC 116
  2. Cherie Hearts Group International Pte Ltd and others v G8 Education Ltd, , [2012] SGHC 70

6. Timeline

DateEvent
Loan Agreement between CHG and G8 was signed.
Date of the Business Acquisition Contract (BAC).
Contract dated between G8, CHG and others.
G8 received profits and bore expenses of the Businesses.
Motor vehicles allegedly handed over to G8.
Motor vehicles allegedly returned to CHG by G8.
Trial of the action took place.
Judgment was delivered granting specific performance to G8.
Court ordered Financial Close to take place three weeks after G8 lodged license applications.
Deadline for G8 to lodge license applications for most centers.
HEP sent A&G G8’s draft statement of account detailing the deductions to be made from the Purchase Price upon completion.
Latest date G8 could have put in applications to the HDB.
HDB was informed of the OBLS applications.
Financial Close was scheduled to take place.
Court was informed that Financial Close was scheduled to take place.
Hearing took place where HEP raised the issue of CHG’s failure to make payment of arrears of rent due for the Teeny Tiny Centre to HDB.
Interest under the Loan Agreement was ordered to stop accruing.
G8 informed CHG of its obligations regarding parents’ deposit monies.
HEP's letter to A&G regarding inspection of Teeny Tiny Centre.
CHG made payment of the arrears.
HEP replied stating that G8 would be providing CHG with details of the works that needed to be carried out on the centres.
OBLS approval for Teeny Tiny was obtained.
HEP sent A&G a “schedule setting out the rectification costs for the respective childcare centres”.
Hearing date where A&G stated CHG had only received $10,210 in respect of the Teeny Tiny Centre.
Orders made by the court regarding deductions from the purchase price.
Decision Date

7. Legal Issues

  1. Specific Performance of Contract
    • Outcome: The court previously granted specific performance of the Business Acquisition Contract to G8 Education Ltd.
    • Category: Substantive
  2. Purchase Price Adjustments
    • Outcome: The court upheld its prior orders concerning parents' deposit monies, rectification costs, missing motor vehicles, interest under the Loan Agreement, and expenses incurred by G8 after 1 March 2011.
    • Category: Substantive

8. Remedies Sought

  1. Specific Performance
  2. Monetary Compensation

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Education

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
No cited cases

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

  • Business Acquisition Contract
  • Financial Close
  • Purchase Price
  • Specific Performance
  • Parents’ Deposit Monies
  • Rectification Costs
  • Loan Agreement
  • Outgoings

15.2 Keywords

  • Business Acquisition
  • Specific Performance
  • Purchase Price Adjustment
  • Childcare Centres

17. Areas of Law

Area NameRelevance Score
Contract Law80
Breach of Contract70
Specific performance60
Civil Procedure50
Financial Close40
Summary Judgement30

16. Subjects

  • Contract Law
  • Corporate Law
  • Mergers and Acquisitions