Lim Beng Cheng v Lim Ngee Sing: Breach of Contract, Specific Performance, Moneylending Act

In Lim Beng Cheng v Lim Ngee Sing, the High Court of Singapore addressed a breach of contract claim. The plaintiff, Lim Beng Cheng, alleged that the defendant, Lim Ngee Sing, failed to transfer a 46.5% stake in a property (KG Avenue Unit) as per their agreement. The defendant argued the agreement was a non-binding proposal and contravened moneylending laws. The court found the agreement valid and enforceable, rejecting the defendant's claims. Judith Prakash J ruled in favor of the plaintiff, awarding damages to be assessed, determining that specific performance was not appropriate in this case.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff for damages to be assessed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

High Court case involving a breach of contract claim over a property investment agreement. The court found for the plaintiff, awarding damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
LIM BENG CHENGPlaintiffIndividualJudgment for PlaintiffWon
LIM NGEE SINGDefendantIndividualDamages to be assessedLost

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Peh Chong YeowAdvent Law Corporation
A RajandranM/S A. Rajandran

4. Facts

  1. Plaintiff and defendant entered into a series of agreements dating back to April 2008.
  2. The October 2010 Agreement involved the transfer of a 46.5% stake in a property (KG Avenue Unit) to the plaintiff.
  3. Defendant claimed the October 2010 Agreement was a non-binding proposal and lacked consideration.
  4. Defendant argued the underlying transaction was an illegal moneylending one.
  5. Plaintiff sought specific performance of the October 2010 Agreement or damages.
  6. The KG Avenue Unit was previously held by the defendant and NC Tan as tenants-in-common in equal shares.
  7. The defendant continued to make monthly payments of $3,896.51 after signing the October 2010 Agreement.

5. Formal Citations

  1. Lim Beng Cheng v Lim Ngee Sing, Suit No 416 of 2013, [2015] SGHC 282

6. Timeline

DateEvent
Parties met
Defendant purchased Unit 08 TC
Defendant approached plaintiff for a loan
April 2008 Option to Purchase Unit 08 TC signed
Plaintiff exercised the April 2008 Option
April 2008 Caveat lodged
July 2008 Joint Venture Agreement signed
August 2008 Agreement signed
November 2008 Deed signed
November 2008 Option to Purchase Unit 08 TC issued
Defendant bought a 2-year subscription for the software produced by the plaintiff’s company
Defendant paid the plaintiff $200 instead of $1,000
April 2009 Variation agreed
Defendant paid $3,753.54 per month for 12 months until March 2010
Defendant paid $3,896.51 per month
Defendant exercised an option to purchase the KG Avenue Unit
Outstanding balance of $279,352
October 2010 Agreement signed
Plaintiff authorised a firm of advocates and solicitors to withdraw his caveat over Unit 08 TC
Purchase of the KG Avenue Unit was completed
Defendant told the plaintiff that he would not be transferring the 46.5% share in the KG Avenue Unit to the plaintiff
Advent Law Corporation sent a letter to the defendant, demanding the transfer of a 46.5% interest in the KG Avenue Unit to the plaintiff
Plaintiff sent a letter to the defendant, accusing the latter of failing to transfer the 46.5% share in the KG Avenue Unit to him and demanding an unconditional return of $200,000 within seven days on the threat of legal action
Defendant sent the plaintiff an e-mail showing that he transferred $3,896.51 to the plaintiff’s bank account on 28 March 2013
Defendant paid $3,896.51 to the plaintiff
Defendant wrote to the plaintiff again, asking the plaintiff to verify that the outstanding principal sum was $195,757.65
Plaintiff replied on 11 April 2013, stating that the principal sum was $195,757.44
Defendant paid another $3,896.51
Plaintiff wrote to the defendant, stating that the monthly instalments were unacceptable and that he was entitled to a 46.5% share in the KG Avenue Unit under the October 2010 Agreement
Plaintiff commenced this action
Judgment reserved

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court held that the defendant breached the October 2010 Agreement by failing to transfer a 46.5% interest in the KG Avenue Unit to the plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Failure to transfer property interest
      • Repudiation of agreement
  2. Validity of Contract
    • Outcome: The court held that the October 2010 Agreement was valid and enforceable, finding that there was agreement, consideration, and no illegality or uncertainty.
    • Category: Substantive
    • Sub-Issues:
      • Agreement
      • Consideration
      • Illegality
      • Uncertainty
  3. Specific Performance
    • Outcome: The court declined to order specific performance, finding that damages were an adequate remedy and that specific performance would lead to a stalemate between hostile parties.
    • Category: Procedural
    • Sub-Issues:
      • Adequacy of damages
      • Clean hands
      • Delay
      • Prejudice to third parties
  4. Moneylending
    • Outcome: The court held that the April 2008 Option was not a loan and that the plaintiff did not carry on the business of moneylending. Accordingly, the Agreements between the plaintiff and the defendant would not, in any case, have been unenforceable by reason of illegality.
    • Category: Substantive
    • Sub-Issues:
      • Whether the plaintiff lent money to the defendant
      • Whether the plaintiff was an excluded moneylender
      • Whether the plaintiff carried on the business of moneylending

8. Remedies Sought

  1. Specific Performance
  2. Damages
  3. Account of Profits
  4. Sale of Property

9. Cause of Actions

  • Breach of Contract
  • Specific Performance

10. Practice Areas

  • Commercial Litigation
  • Contract Disputes
  • Property Disputes

11. Industries

  • Real Estate
  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Abdul Jalil bin Ahmad bin Talib v A Formation Construction Pte LtdCourt of AppealYes[2006] 4 SLR(R) 778SingaporeCited for the principle that forbearance to sue on a doubtful claim is good consideration if there are reasonable grounds for the claim and the promisor honestly believes he has a fair chance of success.
Sheagar s/o T M Veloo v Belfield International (Hong Kong) LtdCourt of AppealYes[2014] 3 SLR 524SingaporeCited for the principle that the alleged borrower bears the burden of proving that the alleged lender is not an excluded moneylender and for the court's approach to determining whether a transaction was a disguised moneylending transaction.
E C Investment Holding Pte Ltd v Ridout Residence Pte LtdCourt of AppealYes[2012] 1 SLR 32SingaporeCited for the proper approach in determining the true nature of a transaction, looking at the substance as opposed to the form, and for the principle that the form of the transaction generally reflects the substance of that transaction.
City Hardware Pte Ltd v Kenrich Electronics Pte LtdHigh CourtYes[2005] 1 SLR(R) 733SingaporeCited for the approach which should be taken in analysing whether a transaction was a disguised moneylending transaction or a genuine commercial transaction of a different nature.
Chow Yoong Hong v Choong Fah Rubber ManufactoryPrivy CouncilYes[1962] AC 209United KingdomCited for the principle that the court must look at the nature of the transaction which the parties have agreed and if in form it is not a loan, it is not to the point to say that its object was to raise money for one of them.
Olds Discount Co Ltd v John Playfair LtdHigh CourtYes[1938] 3 All ER 275United KingdomCited for the principle that unless there was evidence upon which it would be proper for the court to act that the parties had deliberately entered into those documents knowing that they did not represent what had been agreed between them, but that what had been agreed between them was something quite different, it seems to me that the proper course for the court to take is to accept the formal agreements between the parties, and to decide their rights according to those agreements.
E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd (Orion Oil Ltd and another, interveners)High CourtNo[2011] 2 SLR 232SingaporeCited for the High Court's decision that the transaction was in substance a secured loan, which was later overturned by the Court of Appeal.
Premor Ltd v Shaw Brothers (A Firm)English Court of AppealYes[1964] 1 WLR 978United KingdomCited for explaining the test that must be satisfied for a loan to be made "in the course of" a business and "for the purposes of" a business, in the context of excluded moneylenders.
Official Assignee of the Property of Koh Hor Khoon and others, bankrupts v Ek Liong Hin LtdPrivy CouncilYes[1960] 1 AC 178SingaporeCited for the principle that moneylending transactions undertaken in the course of and for the purpose of the business of rubber merchants and shippers were within the exception for excluded moneylenders.
Mak Chik Lun v Loh Kim HerHigh CourtYes[2003] 4 SLR(R) 338SingaporeCited for the test of whether there is a business of moneylending, which is whether there was a system and continuity in the transactions.
Bhagwandas Naraindas v Brooks Exim Pte LtdHigh CourtYes[1994] 1 SLR(R) 932SingaporeCited for the principle that a single transaction with a single person can amount to moneylending.
Gay Choon Ing v Loh Sze Ti Terence Peter and another appealCourt of AppealYes[2009] 2 SLR(R) 332SingaporeCited for the principle that what must be certain in a contract are its terms and not recitals of facts.
Good Property Land Development Pte Ltd v Société GénéraleHigh CourtYes[1989] 1 SLR(R) 97SingaporeCited for the view that in circumstances where the main object of owning land is not the personal enjoyment thereof but the profit derivable therefrom, it would be unrealistic to believe that damages would not be an adequate remedy to the owner for the loss of the mortgaged property.
Cathay Theatres Pte Ltd v LKM Investment Holdings Pte LtdHigh CourtYes[1999] SGHC 171SingaporeCited for approving the pronouncements in Good Property Land Development Pte Ltd v Société Générale.
Semelhago v ParamadevanSupreme Court of CanadaYes[1996] 2 SCR 415CanadaCited for the principle that specific performance should not be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available.
Lee Chee Wei v Tan Hor Peow VictorCourt of AppealYes[2007] 3 SLR(R) 537SingaporeCited for the principle that specific performance is a discretionary remedy and the court will order it only if it is just and equitable to do so.
Coastland Properties Pte Ltd v Lim Geok ChooHigh CourtYes[1993] 3 SLR(R) 890SingaporeCited for the principle that the court refused to specifically enforce a contract of sale in which the property was subject to a mortgage and although the sale price was lower than mortgage amount neither the buyer nor the seller wanted to pay the shortfall.
Wroth v TylerHigh CourtYes[1974] 2 WLR 405England and WalesCited for the opinion that damages to be awarded in lieu of specific performance should be assessed at the date of judgment to reflect the fact that specific performance is a continuing remedy.
Johnson v AgnewHouse of LordsYes[1980] AC 367United KingdomCited for the principle that if to follow the general rule that damages are assessed as at the time of breach would give rise to injustice, the court has the power to fix such other date as may be appropriate in the circumstances.
Tay Joo Sing v Ku Yu SangCourt of AppealYes[1994] 1 SLR(R) 765SingaporeCited for the principle that the key issue was whether the innocent party “ought to have mitigated his loss in the circumstances.”
Ho Kian Siang v Ong Cheng HooHigh CourtYes[2000] 2 SLR(R) 480SingaporeCited for the principle that assessing damages as at the date of the breach would place an innocent buyer in an invidious position.
Tay Ah Poon v Chionh Hai GuanCourt of AppealYes[1997] 1 SLR(R) 596SingaporeCited for the principle that the court’s discretion to grant specific performance cannot be fettered by any contractual agreement to the contrary.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Moneylenders Act (Cap 188, 2010 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • October 2010 Agreement
  • KG Avenue Unit
  • Unit 08 TC
  • Unit 18 TC
  • April 2008 Option
  • Moneylending
  • Specific Performance
  • Tenants-in-common
  • Buy Back Expiry Date
  • Excluded Moneylender

15.2 Keywords

  • breach of contract
  • specific performance
  • moneylending
  • property investment
  • Singapore
  • High Court
  • damages

17. Areas of Law

Area NameRelevance Score
Moneylenders Act80
Contract Law75
Specific performance40
Damages40
Real Estate30
Trust Law25

16. Subjects

  • Contract Law
  • Property Law
  • Moneylending
  • Commercial Litigation