Yap Son On v Ding Pei Zhen: Contractual Interpretation and Share Allotment Dispute

In Yap Son On v Ding Pei Zhen, the Singapore Court of Appeal addressed a dispute over the interpretation of a share allotment agreement. Yap Son On and Ding Pei Zhen collaborated to list a Chinese company on the Frankfurt Stock Exchange. After the listing, a dispute arose regarding the distribution of shares. The High Court ruled in favor of Ding Pei Zhen, but the Court of Appeal allowed Yap Son On's appeal in part, adjusting the damages owed to Ding Pei Zhen and modifying the counterclaim regarding unpaid expenses. The court emphasized the importance of conceptual clarity and evidentiary discipline in contractual interpretation.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed in part regarding the main claim and the counterclaim.

1.3 Case Type

Civil

1.4 Judgment Type

Written Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal case concerning contractual interpretation of a share allotment agreement and the distribution of shares after a company listing.

1.7 Decision Date

18 December 2016

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Yap Son On	Appellant	Individual	Appeal allowed in part	Partial	Devinder K Rai of ACIES Law Corporation Tan Wei Jie Joel of ACIES Law Corporation
Ding Pei Zhen	Respondent	Individual	Judgment varied	Partial	Lin Chunlong of Harry Elias Partnership LLP Lee Hui Min of Harry Elias Partnership LLP Hee Theng Fong of Harry Elias Partnership LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	Yes
Andrew Phang Boon Leong	Judge of Appeal	No
Chan Sek Keong	Senior Judge	No

4. Counsels

Counsel Name	Organization
Devinder K Rai	ACIES Law Corporation
Tan Wei Jie Joel	ACIES Law Corporation
Lin Chunlong	Harry Elias Partnership LLP
Lee Hui Min	Harry Elias Partnership LLP
Hee Theng Fong	Harry Elias Partnership LLP

4. Facts

Yap Son On and Ding Pei Zhen agreed to list a Chinese company on the Frankfurt Stock Exchange.
The parties agreed to bear the listing expenses in exchange for share capital.
Goldrooster AG was listed with an initial share capital of 20 million shares.
The Yap Companies held 5.5 million shares in Goldrooster AG, representing 27.5% of the issued share capital.
The Allotment Agreement was concluded to distribute the shares between the parties.
A dispute arose over the interpretation of the term 'Total 19%' in the Allotment Agreement.
The Appellant transferred shares and funds to the Respondent and Mr. Xie.

5. Formal Citations

Yap Son On v Ding Pei Zhen, Civil Appeal No 194 of 2015, [2016] SGCA 68
Ding Pei Zhen v Yap Son On, , [2015] SGHC 246

6. Timeline

Date	Event
2010-07-01	Listing Agreement signed between Mr. Li and One Capital Group Investment Limited.
2012-05-18	Goldrooster AG listed on the Frankfurt Stock Exchange.
2012-06-15	Allotment Agreement concluded during the June Meeting.
2012-06-27	Yap Son On transferred ownership of Xanti to Ding Pei Zhen.
2013-03-01	Yap Son On sold Goldrooster AG shares held by Fortune and remitted funds to Mr. Xie.
2013-05-01	Ding Pei Zhen commenced Suit No 558 of 2013.
2015-04-02	Respondent amended statement of claim.
2015-01-01	Supreme Court Practice Directions released.
2016-08-22	Judgment reserved.
2016-12-19	Judgment delivered.

7. Legal Issues

Contractual Interpretation
- Outcome: The Court of Appeal held that the High Court erred in its interpretation of the Allotment Agreement, finding that the term 'Total 19%' referred to 19% of the post-listing shares in Goldrooster AG.
- Category: Substantive
- Sub-Issues:
  - Admissibility of extrinsic evidence
  - Objective vs. subjective intention
  - Rectification of contract
Burden of Proof
- Outcome: The Court of Appeal held that the burden of proof rested on the Appellant to account for how the sum of RMB 2.6m had been used, as he was the accounting party.
- Category: Procedural
- Sub-Issues:
  - Accounting party
  - Positive defence
  - Facts within the knowledge of a party

8. Remedies Sought

Transfer of shares
Monetary Damages

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Contractual Disputes
Appeals

11. Industries

Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
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 importance of conceptual clarity, evidentiary discipline, and procedural rigour in contractual interpretation and the limits of extrinsic evidence.
Ding Pei Zhen v Yap Son On	High Court	Yes	[2015] SGHC 246	Singapore	The High Court decision that was appealed in this case.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the two-step process of contractual interpretation: admissibility of extrinsic evidence and the task of interpretation itself.
Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd	Court of Appeal	Yes	[2015] 5 SLR 1187	Singapore	Cited for the principles of contractual interpretation, including considering text and context, objective intentions, and the importance of the text.
Citicorp Investment Bank (Singapore) Ltd v Wee Ah Kee	Court of Appeal	Yes	[1997] 2 SLR(R) 1	Singapore	Cited to emphasize that the meaning imputed by the court must be one which the words are reasonably adequate to convey.
Investors Compensation Scheme Ltd v West Bromwich Building Society	House of Lords	Yes	[1998] 1 WLR 896	England and Wales	Cited for the principle that the meaning of a word should not be confused with the meaning conveyed by its use in a document.
Arnold v Britton and others	Supreme Court of the United Kingdom	Yes	[2015] 2 WLR 1593	United Kingdom	Cited for the principle that the language of a provision is the most obvious source of its meaning.
Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) Ltd	Court of Appeal	Yes	[2016] 1 SLR 1069	Singapore	Cited for the principle that a contract cannot be constructed out of context alone.
Chartbrook Ltd and another v Persimmon Homes Ltd and another	House of Lords	Yes	[2009] 4 All ER 677	England and Wales	Cited for recognizing the continued existence of rectification as a safety net.
Xia Zhengyan v Geng Changqing	Court of Appeal	Yes	[2015] 3 SLR 732	Singapore	Clarifies the application of a 'common sense approach' to contractual interpretation, particularly when dealing with laypersons and non-native English speakers.
In re Robinson’s Settlement; Gant v Hobbs	English Court of Appeal	Yes	[1912] 1 Ch 717	England and Wales	Cited for the principle that a party must tell his opponent what he is coming to court to prove.
Abdul Latif bin Mohammed Tahiar (trading as Canary Agencies) v Saeed Husain s/o Hakim Gulam Mohiudin (trading as United Limousine)	High Court	Yes	[2003] 2 SLR(R) 61	Singapore	Cited for the principle that defects in pleadings cannot be cured by averments in affidavits.
Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart	High Court	Yes	[2012] 4 SLR 308	Singapore	Cited for the requirement that evidence relates to a clear or obvious context.
SCT Technologies v Western Copper Co Ltd	Court of Appeal	Yes	[2016] 1 SLR 1471	Singapore	Cited for the principle that the first port of call for determining the incidence of the legal burden of proof is the pleadings.
Surender Singh s/o Jagdish Singh and another (administrators of the estate of Narindar Kaur d/o Sarwan Singh, deceased) v Li Man Kay and others	High Court	Yes	[2010] 1 SLR 428	Singapore	Cited for the principles related to Section 108 of the Evidence Act regarding facts especially within the knowledge of a person.
Rhesa Shipping Co SA v Edmunds	House of Lords	Yes	[1985] 1 WLR 948	United Kingdom	Cited for the principle that a judge may decide cases on the burden of proof if the evidence is unsatisfactory.
Agip SpA v Navigazione Alta Italia (The “Nai Genova” and “Nai Superba”)	Court of Appeal	Yes	[1984] 1 Lloyd’s Rep 353	England and Wales	Cited for the definition of rectification as correcting a written instrument that does not accurately reflect the parties' true agreement.
McMeel	N/A	Yes	[2011]	N/A	Cited for the definition of rectification and the admissibility of evidence in rectification actions.
Goh Yihan	N/A	Yes	[2015]	N/A	Cited for the clarification of rectification in Singapore.
Richard Buxton	N/A	Yes	[2010]	N/A	Cited for the suggestion that rectification was in danger of being subsumed under the broader umbrella of the contextual approach towards interpretation.
Marley v Rawlings and another	Supreme Court of the United Kingdom	Yes	[2014] 2 WLR 213	United Kingdom	Cited for the court's discretion to refuse rectification on the usual grounds on which equitable relief may be denied.
Industrial & Commercial Bank Ltd v PD International Pte Ltd	High Court	Yes	[2003] 1 SLR(R) 382	Singapore	Cited for the definition of common mistake and unilateral mistake rectification.
Swainland Builders Ltd v Freehold Properties Ltd	English Court of Appeal	Yes	[2002] 2 EGLR 71	England and Wales	Cited for the requirements to show for equitable rectification.
Ku Yu Sang v Tay Joo Sing and another	High Court	Yes	[1993] 3 SLR(R) 226	Singapore	Cited for the principle that the remedy of equitable rectification might be available even if not pleaded.
Butler v Mountview Estates Ltd	English High Court	Yes	[1951] 1 All ER 693	England and Wales	Cited for the principle that equitable rectification might be available even if not pleaded, if the result which would otherwise be achieved is one which is plainly contrary to the parties’ agreement.
Etablissements Georges Et Paul Levy v Adderley Navigation Co Panama SA (The “Olympic Pride”)	N/A	Yes	[1980] 2 Lloyd’s Rep 67	N/A	Cited for the two broad situations where equitable rectification is available.
Bank of Credit and Commerce International SA v Ali and others	House of Lords	Yes	[2002] 1 AC 251	United Kingdom	Cited for the principle that evidence is relevant if it would affect the way in which the language of the document would have been understood by a reasonable man.
Sundaresh Menon	N/A	Yes	[2014]	N/A	Cited for the 'cards-up approach' towards commercial litigation.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Allotment Agreement
Listing Expenses
Post-listing shares
Greenshoe Option
Yap Companies
Goldrooster AG
Extrinsic evidence
Contractual interpretation
Rectification

15.2 Keywords

contractual interpretation
share allotment
listing agreement
Singapore Court of Appeal
extrinsic evidence

17. Areas of Law

Area Name	Relevance Score
Contract Law	95
Interpretation of contractual terms	80
Breach of Contract	70
Contractual Interpretation	60
Evidence Law	40
Civil Procedure	30

16. Subjects

Contract Law
Share Allotment
Commercial Litigation