S. Pacific Resources Ltd v Tomolugen Holdings Ltd: Put Option Validity & Contractual Consideration

In S. Pacific Resources Ltd v Tomolugen Holdings Ltd, the Singapore High Court heard an appeal regarding a default judgment. S. Pacific Resources Ltd had purchased shares from Tomolugen Holdings Ltd, with a put option to sell them back. The court, presided over by Chua Lee Ming JC, allowed the appeal, restoring the default judgment against Tomolugen Holdings Ltd, finding that the amendment to the option period was supported by consideration and the conditions precedent were met.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding a put option agreement. The court found the amendment to the option period was supported by consideration, restoring default judgment.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
S. Pacific Resources LtdPlaintiff, RespondentCorporationAppeal AllowedWon
Tomolugen Holdings LtdDefendant, AppellantCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chua Lee MingJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Yow Choon SengDavid Chong Law Corporation
Lee Weiming AndrewSelvam LLC
Ramachandran Doraisamy RaghunathSelvam LLC

4. Facts

  1. S. Pacific Resources Ltd purchased 2.9 million shares in Auzminerals Resource Group Limited from Tomolugen Holdings Ltd for S$12.5m.
  2. The Share Sale and Put Option Agreement was dated 16 September 2011.
  3. The purchase was completed in five tranches between 16 September 2011 and 13 November 2011.
  4. The defendant granted the plaintiff a put option to require the defendant to purchase the 2.9 million shares from the plaintiff at S$12.5m.
  5. The Put Option was exercisable only if certain events did not take place on or before 31 December 2012.
  6. The Option Period was amended to mean any date on or after the date falling twelve calendar months from the Sale Completion Date.
  7. On 5 August 2014, the plaintiff exercised the Put Option.

5. Formal Citations

  1. S. Pacific Resources Ltd v Tomolugen Holdings Ltd, Suit No 1076 of 2014 (Registrar’s Appeal No 150 of 2015), [2016] SGHC 88

6. Timeline

DateEvent
Share Sale and Put Option Agreement signed
First tranche of shares purchased
Fifth tranche of shares purchased
Amendment Agreement signed
Put Option exercised
Judgment in default of appearance entered against the defendant
Defendant applied to set aside the judgment
Assistant Registrar set aside the judgment
Appeal allowed and default judgment restored
Judgment issued

7. Legal Issues

  1. Consideration
    • Outcome: The court held that the Amendment Agreement was supported by consideration because the extension of the Option Period benefited the defendant by reducing the risk that the plaintiff would exercise the Put Option by 13 May 2013.
    • Category: Substantive
    • Sub-Issues:
      • Adequacy of consideration
      • Benefit to promisor
    • Related Cases:
      • [2009] 2 SLR(R) 332
      • [2014] 4 SLR 166
      • [1991] 1 QB 1
      • [2004] 2 SLR(R) 594
  2. Conditions Precedent
    • Outcome: The court held that clause 3A(b) applied to the completion of the plaintiff’s purchase of the Sale Shares, and that it was not intended to and did not apply to the completion of the defendant’s purchase of the Option Shares.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Mining
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Mercurine Pte Ltd v Canberra Development Pte LtdHigh CourtYes[2008] 4 SLR(R) 907SingaporeCited for the principle that the defendant must establish a prima facie defence by showing triable or arguable issues to set aside a regular default judgment.
Gay Choon Eng v Loh Sze Ti Terence Peter and another appealCourt of AppealNo[2009] 2 SLR(R) 332SingaporeCited to acknowledge that the doctrine of consideration remains an established part of the law in Singapore.
Woo Kah Wai and another v Chew Ai Hua Sandra and another appealCourt of AppealYes[2014] 4 SLR 166SingaporeCited for the modern approach in contract law where courts are more ready to find the existence of consideration.
Williams v Roffey Bros & Nicholls (Contractors) LtdCourt of AppealYes[1991] 1 QB 1England and WalesCited as support for the modern approach in contract law where courts are more ready to find the existence of consideration.
Chwee Kin Keong and others v Digilandmall.com Pte LtdHigh CourtYes[2004] 2 SLR(R) 594SingaporeCited as support for the modern approach in contract law where courts are more ready to find the existence of consideration.

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

  • Put Option
  • Option Period
  • Sale Shares
  • Option Shares
  • Trigger Events
  • Amendment Agreement
  • Consideration
  • Conditions Precedent
  • Default Judgment

15.2 Keywords

  • Contract Law
  • Put Option
  • Consideration
  • Share Sale
  • Singapore
  • High Court
  • Default Judgment

17. Areas of Law

Area NameRelevance Score
Contract Law95
Commercial Disputes70
Company Law40

16. Subjects

  • Contractual Terms
  • Consideration
  • Put Option
  • Share Sale Agreement