Lim Sze Eng v Lin Choo Mee: Contractual Interpretation, Settlement Agreement, and Reasonable Endeavours

Lim Sze Eng appealed against the High Court's decision in favor of Lin Choo Mee regarding breaches of a settlement agreement. The Court of Appeal found that Lim Sze Eng breached the reasonable endeavours term by refusing to lower the reserve price for the sale of a property and breached the agreement by failing to satisfy a costs order. The court dismissed the appeal in part, awarding costs to Lin Choo Mee.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal dismissed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding breach of settlement agreement. Court found a breach of reasonable endeavours term and failure to satisfy costs order.

1.7 Decision Date

29 November 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lim Sze Eng	Appellant	Individual	Appeal dismissed in part	Partial	Hui Choon Wai of Wee Swee Teow LLP Ho Si Hui of Wee Swee Teow LLP
Lin Choo Mee	Respondent	Individual	Judgment for Respondent	Won	Narayanan Sreenivasan of Straits Law Practice LLC Tan Kai Ning Claire of Straits Law Practice LLC

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Phang Boon Leong	Judge of Appeal	Yes
Belinda Ang Saw Ean	Judge	No
Quentin Loh	Judge	No

4. Counsels

Counsel Name	Organization
Hui Choon Wai	Wee Swee Teow LLP
Ho Si Hui	Wee Swee Teow LLP
Narayanan Sreenivasan	Straits Law Practice LLC
Tan Kai Ning Claire	Straits Law Practice LLC

4. Facts

Lim Sze Eng and Lin Choo Mee are brothers who entered into a settlement agreement to resolve disputes arising from winding up applications.
The settlement agreement involved the disposal of Lin Choo Mee's shares in three family-run companies.
The consideration for Lin Choo Mee's shares was to be determined based on the net tangible asset value of the companies and the sale price of a shop unit.
Lim Sze Eng failed to sell the shop unit and pay Lin Choo Mee the consideration within the stipulated timeframes.
Lin Choo Mee commenced a suit alleging breaches of the settlement agreement.
The High Court found in favor of Lin Choo Mee on several issues.
Lim Sze Eng appealed the High Court's decision.

5. Formal Citations

Lim Sze Eng v Lin Choo Mee, Civil Appeal No 204 of 2017, [2018] SGCA 84

6. Timeline

Date	Event
2014-11-13	Lin Choo Mee commenced the Winding Up Applications.
2015-04-13	Steven Chong J issued the Winding Up Judgment.
2015-05-23	Lim Sze Eng filed the Winding Up Appeals.
2015-06-05	Lim Sze Eng applied for a stay of the orders made in the Winding Up Applications.
2015-06-23	A stay of Chong J’s orders was granted.
2015-11-23	The Court of Appeal suggested that parties attend mediation to resolve their differences.
2015-12-28	The parties attended mediation and entered into the Settlement Agreement.
2016-01-04	Lim Sze Eng applied to withdraw the Winding Up Appeals by consent.
2016-01-26	Court granted the order to withdraw the Winding Up Appeals.
2016-02-29	Colliers completed the valuation of 25 and 27 Jalan Rimau.
2016-03-30	Lin Choo Mee and his family moved out of 27 Jalan Rimau.
2016-04-01	The FEP Unit was put up for auction for the months of April and May 2016 at the reserve price of S$2.2m.
2016-04-20	Auction conducted with no bids made.
2016-04-29	The Chinese Factory was valued at RMB6.5m.
2016-05-26	Auction conducted with no bids made.
2016-06-28	The six-month deadline provided for under cl 10(b) of the Settlement Agreement for the sale of the FEP Unit elapsed.
2016-07-05	Lin Choo Mee wrote to Lim Sze Eng, proposing options for the sale of the FEP Unit.
2016-07-08	Lim Sze Eng replied, stating that he did not agree with Lin Choo Mee’s proposals.
2016-07-01	Lim Sze Eng counter-proposed that the parties auction the FEP Unit in July 2016 at the slightly reduced reserve price of S$2.1m.
2016-09-01	A mediation session was originally fixed for 9 September 2016 but was cancelled.
2016-09-19	Lin Choo Mee wrote to Lim Sze Eng, requesting that Lim Sze Eng pay him the sum of S$1,104,072.05 in exchange for Lin Choo Mee’s shares in only TL Investment.
2016-09-22	Lim Sze Eng replied, rejecting the proposal.
2016-09-28	The nine-month long-stop deadline provided for under cl 10(c) of the Settlement Agreement for the payment of the Consideration to Lin Choo Mee elapsed.
2016-10-04	Lin Choo Mee wrote to Lim Sze Eng, demanding that Lim Sze Eng complete the transfer of Lin Choo Mee’s shares in TL Development and TL Investment for the sum of S$1,152,486.35.
2016-10-06	Lim Sze Eng replied, maintaining that he was not obliged to make part-payment of the Consideration.
2016-10-17	Lin Choo Mee commenced the Suit.
2016-10-27	Auction carried out at a reserve price of S$2.1m. No bids were received.
2016-11-24	Auction carried out at a reserve price of S$2.1m. No bids were received.
2016-12-15	Auction carried out at a reserve price of S$2.1m. No bids were received.
2016-12-23	Lin Choo Mee filed an application for partial summary judgment.
2017-01-09	A further mediation session was held before the Mediator. The session was unsuccessful.
2017-01-10	Lin Choo Mee wrote to Lim Sze Eng, proposing to lower the reserve price of the FEP Unit for the auction to S$1.5m.
2017-01-11	Lim Sze Eng replied, proposing to retain the reserve price at S$2.1m.
2017-01-19	The FEP Unit was auctioned at the reserve price of S$2.1m.
2017-01-20	An offer was made for the FEP Unit at the price of S$1m, which was increased to S$1.1m. But this offer was ultimately not accepted.
2017-02-03	Chong J heard and dismissed the Partial Summary Judgment Application.
2017-02-15	Lin Choo Mee wrote to Colliers requesting a fresh indicative valuation of the FEP Unit and a recommendation on a reserve price for the sale of the FEP Unit at an auction.
2017-02-16	Colliers replied, stating that the indicative valuation of the FEP Unit was S$2–2.2m, and recommending a reserve price of S$1.6m.
2017-02-17	Lin Choo Mee wrote to Colliers, instructing them to auction the FEP Unit at a reserve price of S$1.1m.
2017-02-17	Lim Sze Eng wrote to Colliers, objecting to Lin Choo Mee’s instructions and insisting that the FEP Unit be placed on auction at the reserve price of S$2.1m.
2017-02-22	The FEP Unit was auctioned at the reserve price of S$2.1m. No bids were received.
2017-04-06	Yet another further mediation session was held before the Mediator. The session was also unsuccessful.
2017-04-28	The FEP Unit was again auctioned at the reserve price of S$2.1m. Once again, no bids were received at all.
2017-05-25	The FEP Unit was again auctioned at the reserve price of S$2.1m. Once again, no bids were received at all.
2017-06-21	The FEP Unit was again auctioned at the reserve price of S$2.1m. Once again, no bids were received at all.
2017-07-27	The FEP Unit was again auctioned at the reserve price of S$2.1m. Once again, no bids were received at all.
2018-11-30	Judgment reserved.

7. Legal Issues

Breach of Contract
- Outcome: The court found that Lim Sze Eng breached the reasonable endeavours term and failed to satisfy the costs order, but did not breach the absolute obligation to sell the property and pay the consideration by the stipulated deadlines.
- Category: Substantive
- Sub-Issues:
  - Failure to complete sale of property
  - Failure to pay consideration
  - Failure to satisfy costs order
  - Breach of reasonable endeavours term
Contractual Interpretation
- Outcome: The court interpreted the settlement agreement and determined the obligations of the parties.
- Category: Substantive
- Sub-Issues:
  - Interpretation of settlement agreement
  - Implied terms
  - Absolute obligation
  - Reasonable price term
  - Reasonable endeavours term

8. Remedies Sought

Monetary Damages
Injunction

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Petroleum
Properties

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
CIFG Special Assets Capital I Ltd (formerly known as Diamond Kendall Ltd) v Ong Puay Koon and others and another appeal	Court of Appeal	Yes	[2018] 1 SLR 170	Singapore	Cited for the general principles in relation to contractual interpretation.
PT Bayan Resources TBK and another v BCBC Singapore Pte Ltd and another	Court of Appeal	Yes	[2018] SGCA(I) 6	Singapore	Cited for the general principles in relation to contractual interpretation.
Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) Ltd	Court of Appeal	Yes	[2016] 1 SLR 1069	Singapore	Cited for the principle that one looks to the text that the parties have used when interpreting a contract.
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 principle that it is permissible to have regard to the relevant context as long as the relevant contextual points are clear, obvious and known to both parties when interpreting a contract.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the principle that the court has regard to the relevant context because it places the court in the best possible position to ascertain the parties’ objective intentions by interpreting the expressions used by them in their proper context when interpreting a contract.
Yap Son On v Ding Pei Zhen	Court of Appeal	Yes	[2017] 1 SLR 219	Singapore	Cited for the principle that the meaning ascribed to the terms of the contract must be one which the expressions used by the parties can reasonably bear when interpreting a contract.
Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd	Court of Appeal	Yes	[2015] 5 SLR 1187	Singapore	Cited for the principle that the purpose of interpretation is to give effect to the objectively ascertained expressed intentions of the contracting parties as it emerges from the contextual meaning of the relevant contractual language.
KS Energy Services Ltd v BR Energy (M) Sdn Bhd	Court of Appeal	Yes	[2014] 2 SLR 905	Singapore	Cited for the interpretation of a “best endeavours” clause.
Travista Development Pte Ltd v Tan Kim Swee Augustine	Court of Appeal	Yes	[2008] 2 SLR(R) 474	Singapore	Cited for the interpretation of a “best endeavours” clause.
Lin Choo Mee v Lim Sze Eng	High Court	Yes	[2018] SGHC 7	Singapore	The High Court decision that was appealed in this case.
Lin Choo Mee v Tat Leong Development (Pte) Ltd and others and other matters	High Court	Yes	[2015] SGHC 99	Singapore	The Winding Up Judgment that led to the Settlement Agreement.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Settlement Agreement
Consideration
Net Tangible Asset Value
Reasonable Endeavours Term
Reasonable Price Term
Winding Up Applications
Costs Order
Far East Plaza Unit
Auction
Reserve Price

15.2 Keywords

contract
settlement agreement
breach
reasonable endeavours
costs order
appeal

17. Areas of Law

Area Name	Relevance Score
Contract Law	95
Breach of Contract	90
Interpretation of contractual terms	85
Performance of Contract	80
Settlement Agreement	75
Damages	50
Civil Procedure	30

16. Subjects

Contract Law
Settlement Agreement
Contractual Interpretation