Forest Fibers Inc v K K Asia Environmental Pte Ltd: Injunctions & Civil Procedure
Forest Fibers Inc and RGA Holdings International Inc (Plaintiffs) sued K K Asia Environmental Pte Ltd, Loh Choon Phing Robin, and Loh Yin Kuan (Defendants) in the High Court of Singapore. The plaintiffs sought an injunction to restrain the defendants from disposing of certain properties, based on a breach of a share sale agreement. The court dismissed the application, finding that the plaintiffs did not have a sufficient interest in the properties to justify the injunction. The judgment was delivered by Senior Judge Lai Siu Chiu on 27 December 2016.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Application dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
In a dispute over a share sale agreement, the High Court dismissed an injunction application to prevent disposal of properties.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| FOREST FIBERS INC | Plaintiff | Corporation | Application dismissed | Lost | K Muralitherapany, Ng Lip Kai |
| RGA HOLDINGS INTERNATIONAL INC | Plaintiff | Corporation | Application dismissed | Lost | K Muralitherapany, Ng Lip Kai |
| K K ASIA ENVIRONMENTAL PTE LTD | Defendant | Corporation | Application dismissed | Won | |
| LOH CHOON PHING ROBIN | Defendant | Individual | Application dismissed | Won | |
| LOH YIN KUAN | Defendant | Individual | Application dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Senior Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| K Muralitherapany | Joseph Tan Jude Benny LLP |
| Ng Lip Kai | Joseph Tan Jude Benny LLP |
4. Facts
- Forest Fibers Inc and RGA Holdings International Inc are in the business of buying, selling, and recycling waste material.
- KK Asia Environmental Pte Ltd is in the same business as the plaintiffs.
- The second plaintiff agreed to purchase 50% of the shares in the Company from the defendants for US$200,000.
- The Share Sale Agreement contained a clause where the defendants undertook not to sell their properties.
- The third defendant sold No 246 Carpmael Road despite the undertaking.
- The plaintiffs claimed repayment of loans and advances made to the Company.
- The second plaintiff sought an injunction to restrain the defendants from disposing of the Properties.
5. Formal Citations
- Forest Fibers Inc and another v K K Asia Environmental Pte Ltd and others, Suit No 226 of 2016(Summons No 2494 of 2016), [2016] SGHC 282
6. Timeline
| Date | Event |
|---|---|
| Purchasing Finance Agreement made between the first plaintiff and KK Asia Malaysia. | |
| Purchasing Finance Agreement made between the Company and the first plaintiff. | |
| Share Sale Agreement executed with the defendants as the vendors. | |
| First plaintiff disbursed US$11,461.56 to the Company. | |
| First plaintiff disbursed US$14,462.00 to Genox Recycling Tech Co Ltd. | |
| Company informed subcontractors it would be closing its factory temporarily. | |
| Third defendant informed the second plaintiff he would no longer be putting money into the Company. | |
| First plaintiff disbursed US$19,913.83 to Forte International (M) Sdn Bhd. | |
| First plaintiff disbursed US$3,950.99 to Luis Pernet Rojas. | |
| First plaintiff disbursed US$9,700.00 to Teguh Jaya Polymer Sdn Bhd. | |
| First plaintiff obtained interlocutory judgment in default of appearance against the Company in the 2015 Suit. | |
| First plaintiff demanded repayment of US$59,488.38 from the Company. | |
| Singapore Land Authority notified the second plaintiff that the registered proprietors of Nos 246 and 248 had applied to cancel the Caveats. | |
| Plaintiffs filed the Suit. | |
| Second plaintiff filed Summons No 1255 of 2016. | |
| No 246 was sold. | |
| Summons 1255 was heard by Aedit Abdullah JC and was dismissed. | |
| Second plaintiff filed the application. | |
| Hearing date. | |
| Default judgment was set aside and leave was granted to the Company to enter an appearance to the Writ of Summons. | |
| Leave granted by the Court of Appeal. | |
| Judgment date. |
7. Legal Issues
- Breach of Contract
- Outcome: The court did not find a deliberate breach of a negative covenant.
- Category: Substantive
- Sub-Issues:
- Breach of negative covenant
- Injunction
- Outcome: The court dismissed the application for an injunction.
- Category: Procedural
- Caveatable Interest
- Outcome: The court found that the plaintiffs did not have a caveatable interest in the properties.
- Category: Substantive
8. Remedies Sought
- Injunction
- Specific Performance
- Declaration of validity of charges
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Recycling
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Hampstead & Suburban Properties Ltd v Diomedous | N/A | Yes | [1969] Ch 248 | N/A | Cited as authority for the proposition that it was unnecessary to apply the “balance of convenience” test for injunctions when there is a clear breach of a negative covenant. |
| American Cyanamid Co v Ethicon Ltd | N/A | Yes | [1975] AC 396 | N/A | Cited regarding the “balance of convenience” test for injunctions. |
| Rajaram v Ganesh (trading as Golden Harvest Trading Corp) and others | N/A | Yes | [1994] 3 SLR(R) 79 | Singapore | Cited as following Hampstead’s case regarding clear breach of contract. |
| Richard Wheeler Doherty v James Clagston Allman and W C Dowden | N/A | Yes | (1878) 3 App Cas 709 | N/A | Cited regarding specific performance of a negative bargain. |
| Murphy v Wright | Supreme Court of New South Wales | Yes | (1992) 5 BPR 11,734 | Australia | Cited by the defendants to argue that the right given to the second plaintiff under cl 3.7 of the Share Sale Agreement was not equivalent to providing the latter with the right to attach any outstanding amounts over the Properties. |
| The Asiatic Enterprises (Pte) Ltd v United Overseas Bank Ltd | Court of Appeal | Yes | [1999] 3 SLR(R) 976 | Singapore | Cited to show that Murphy v Wright did not find favor with our Court of Appeal. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court | Singapore |
| Land Titles Act (Cap 157, 2004 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Share Sale Agreement
- Purchasing Finance Agreement
- Negative Covenant
- Caveatable Interest
- Injunction
15.2 Keywords
- injunction
- share sale agreement
- caveat
- contract
- property
16. Subjects
- Civil Procedure
- Injunctions
- Contract Law
17. Areas of Law
- Civil Procedure
- Injunctions
- Contract Law
- Share Sale Agreement