Eng Chiet Shoong v Cheong Soh Chin: Quantum Meruit & Implied Contracts Dispute
In Eng Chiet Shoong and others v Cheong Soh Chin and others, the Singapore Court of Appeal addressed claims for management fees in the absence of an express contract. The Engs and Wees, former family friends, had a financial fallout after attempting to establish a funds business concept. The Wees sued the Engs for the return of investments, and the Engs counterclaimed for management fees and expenses. The court allowed the Engs' appeal in part, entitling them to compensation for work on 'Project Plaza' but not for additional private equity funds. The court also allowed the Wees' appeal in part, limiting their obligation to pay management fees for the initial private equity funds until 8 July 2012.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal allowed in part. The Engs are entitled to compensation for work done with regard to Project Plaza but not with regard to the additional private equity funds. The Wees are obliged to pay management fees for the initial private equity funds until 8 July 2012.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal case concerning claims for management fees in the absence of an express contract, focusing on implied contracts and quantum meruit.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Cheong Soh Chin | Respondent, Appellant | Individual | Appeal allowed in part | Partial | |
| Wee Boo Kuan | Respondent, Appellant | Individual | Appeal allowed in part | Partial | |
| Wee Boo Tee | Respondent, Appellant | Individual | Appeal allowed in part | Partial | |
| Eng Chiet Shoong | Appellant, Respondent | Individual | Appeal allowed in part | Partial | |
| Lee Siew Yuen Sylvia | Appellant, Respondent | Individual | Appeal allowed in part | Partial | |
| C S Partners Pte Ltd | Appellant, Respondent | Corporation | Appeal allowed in part | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Andrew Phang Boon Leong | Judge of Appeal | Yes |
| Quentin Loh | Judge | No |
4. Counsels
4. Facts
- The Engs and Wees decided to combine their resources and expertise to bring to fruition a funds business concept, termed “the WWW concept”.
- The Wees were to provide the financial resources which the Engs would manage.
- ECS introduced five private equity funds to the Wees, who committed up to US$30m to these funds.
- The Wees committed another US$100m to ten private equity funds.
- The Wees also took stakes in five direct investments, which included a hotel project.
- Management fees calculated at 1.5% per annum on a US$30m commitment were set in respect of the initial private equity funds.
- There were no agreements with respect to management fees in relation to the additional private equity funds as well as Project Plaza.
5. Formal Citations
- Eng Chiet Shoong and others v Cheong Soh Chin and others and another appeal, , [2016] SGCA 45
- , Civil Appeal No 97 of 2014, Civil Appeal No 97 of 2014
- , Civil Appeal No 99 of 2014, Civil Appeal No 99 of 2014
- , Suit No 322 of 2012, Suit No 322 of 2012
6. Timeline
| Date | Event |
|---|---|
| CSC’s husband passed away | |
| ECS introduced to the Wees | |
| WWW concept mooted | |
| ECS introduced initial private equity funds to the Wees | |
| ECS introduced initial private equity funds to the Wees | |
| ECS left his former employer | |
| C S Partners Pte Ltd set up by Sylvia | |
| Esplanade Hotel purchased | |
| Esplanade Hotel purchased | |
| Esplanade Hotel demolished | |
| Project Plaza terminated by the Wees | |
| Sale of certain funds (the CVC funds and PEP funds) | |
| The Wees decided to wind down and divest all their holdings in all of the investments | |
| The Wees demanded that the Engs transfer to them all rights, title and interest in their investments | |
| The Wees demanded full accounting and reconciliation of their investments | |
| BKW wrote to Sylvia and ECS insisting that they immediately transfer to him all control, all rights and all interests in and through WPFOF | |
| BKW sent another e-mail to Sylvia stating that all the necessary paperwork for the transfer of control must be completed no later than the final deadline of 31 April 2012 | |
| The Wees commenced court action | |
| The Engs filed CA 97 to appeal the dismissal of their counterclaim. On the same day, the Wees filed CA 99 | |
| Hearing date | |
| Judgment reserved |
7. Legal Issues
- Quantum Meruit
- Outcome: The court found that the Engs were entitled to be paid a reasonable sum for the work done pursuant to Project Plaza on the basis of quantum meruit.
- Category: Substantive
- Implied Contract
- Outcome: The court found that it would be somewhat artificial to locate an implied contract between the parties with regard to Project Plaza.
- Category: Substantive
- Termination of Contract
- Outcome: The court found that the Wees were obliged to pay management fees for the initial private equity funds until 8 July 2012.
- Category: Substantive
8. Remedies Sought
- Management Fees
- Expenses
- Return of Investments
- Transfer of Ownership and Control of Investments
- Account of Money Entrusted
- Tracing Order
- Payment of Sums Found Due
9. Cause of Actions
- Breach of Contract
- Restitution
- Unjust Enrichment
10. Practice Areas
- Commercial Litigation
- Private Equity
- Fund Management
11. Industries
- Finance
- Investment Management
- Real Estate
- Hospitality
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Wee Chiaw Sek Anna v Ng Li-Ann Genevieve | Court of Appeal | Yes | [2013] 3 SLR 801 | Singapore | Cited to illustrate that the law of unjust enrichment is still developing and there remain many unresolved issues. |
| Cheong Soh Chin and others v Eng Chiet Shoong and others | High Court | Yes | [2015] SGHC 173 | Singapore | Refers to the High Court decision being appealed. |
| Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd | Court of Appeal | Yes | [2011] 2 SLR 63 | Singapore | Cited for the principle that an implied contract under which compensation for work done is recoverable will not be implied unless it is necessary to do so. |
| Ang Sin Hock v Khoo Eng Lim | Court of Appeal | Yes | [2010] 3 SLR 179 | Singapore | Cited for the principle that there is a danger of too much commercial uncertainty being generated when implying a collateral contract. |
| Lee Siong Kee v Beng Tiong Trading, Import and Export (1988) Pte Ltd | Court of Appeal | Yes | [2000] 3 SLR(R) 386 | Singapore | Cited for the principle that the court concerned might imply a term that a reasonable sum be paid by the defendant to the plaintiff. |
| MGA International Pte Ltd v Wajilam Exports (Singapore) Pte Ltd | High Court | Yes | [2010] SGHC 319 | Singapore | Cited for the principle that the court concerned might imply a term that a reasonable sum be paid by the defendant to the plaintiff. |
| Benedetti and another v Sawiris and others | UK Supreme Court | Yes | [2014] AC 938 | United Kingdom | Cited for the principle that the court concerned might imply a term that a reasonable sum be paid by the defendant to the plaintiff. |
| Gold Coin Ltd v Tay Kim Wee | N/A | Yes | [1985−1986] SLR(R) 575 | Singapore | Cited as a contrasting case where both an implied contract as well as implied terms are mentioned. |
| Foo Jong Peng and others v Phua Kiah Mai and another | Court of Appeal | Yes | [2012] 4 SLR 1267 | Singapore | Cited for the traditional “business efficacy” and “officious bystander” tests. |
| Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 193 | Singapore | Cited for the traditional “business efficacy” and “officious bystander” tests. |
| Sinclair v Brougham | N/A | Yes | [1914] AC 398 | N/A | Cited for the theory that all “quasi-contractual” claims rested on an implied contract between the parties. |
| Westdeutsche Landesbank Girozentrale v Islington LBC | N/A | Yes | [1996] AC 669 | N/A | Cited for the rejection of the implied contract theory. |
| Rabiah Bee bte Mohamed Ibrahim v Salem Ibrahim | High Court | Yes | [2007] 2 SLR(R) 655 | Singapore | Cited for the distinction between contractual quantum meruit and restitutionary quantum meruit. |
| Sim Kim Seng (trading as Kim Seng Ship Building) v New West Coast Shipyard Pte Ltd | High Court | Yes | [2016] SGHCR 2 | Singapore | Cited for the distinction between contractual quantum meruit and restitutionary quantum meruit. |
| British Steel Corp v Cleveland Bridge and Engineering Co Ltd | English High Court | Yes | [1984] 1 All ER 504 | England and Wales | Cited for different possible characterisations of the case. |
| Ng Giap Hon v Westcomb Securities Pte Ltd | Court of Appeal | Yes | [2009] 3 SLR(R) 518 | Singapore | Cited for the doctrine of breach of a duty of good faith and fair dealing. |
| The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd | Court of Appeal | Yes | [2015] 3 SLR 695 | Singapore | Cited for the doctrine of breach of a duty of good faith and fair dealing. |
| Hamsard 3147 Limited Trading as “Mini Mode Childrenswear”, J S Childrenswear Limited (in liquidation) v Boots UK Ltd | English High Court | Yes | [2013] EWHC 3251 (Pat) | England and Wales | Cited for the principle that where a contract is silent as to its manner of termination by the parties, a party may terminate the contract by giving reasonable notice to the other. |
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
- Quantum Meruit
- Implied Contract
- WWW Concept
- Private Equity Funds
- Management Fees
- Project Plaza
- Limited Partnership Agreement
- Seed Money
- Hotel Fund
- Reasonable Notice
15.2 Keywords
- Quantum Meruit
- Implied Contract
- Management Fees
- Private Equity
- Singapore
- Court of Appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Quantum meruit | 90 |
| Restitution | 80 |
| Unjust Enrichment | 75 |
| Implied contracts | 65 |
| Contract Law | 60 |
| Breach of Contract | 50 |
16. Subjects
- Contract Law
- Restitution
- Unjust Enrichment
- Financial Services
- Fund Management