Forest Fibers Inc v K K Asia Environmental Pte Ltd: Breach of Contract and Share Sale Agreement Dispute
In a consolidated case before the High Court of Singapore, Forest Fibers Inc and R.G.A. Holdings International Inc (collectively, "the plaintiffs") sued K K Asia Environmental Pte Ltd and Loh Choon Phing Robin and Loh Yin Kuan (collectively, "the defendants") for breach of contract and a Share Sale Agreement (SSA). Forest Fibers claimed for waste materials supplied, while RGA sought rectification of the SSA and repayment of loans. The court found in favor of the plaintiffs, awarding damages and declaring the validity of Robin's guarantee. The defendants' counterclaims were dismissed.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiffs
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court judgment on breach of contract and SSA, involving Forest Fibers, KK Asia, and the Lohs. The court ruled in favor of Forest Fibers.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Forest Fibers Inc | Plaintiff | Corporation | Judgment for Plaintiff, Judgment for Plaintiff, Judgment for Plaintiff, Interlocutory judgment for Plaintiff | Won, Won, Won, Partial | K Murali Pany, Ng Lip Kai |
| K K Asia Environmental Pte Ltd | Defendant | Corporation | Judgment for Plaintiff, Judgment for Plaintiff, Judgment for Plaintiff, Interlocutory judgment for Plaintiff | Lost, Lost, Lost, Partial | Loh Choon Phing Robin |
| Loh Choon Phing Robin | Defendant | Individual | Guarantee Enforced, Interlocutory judgment for Plaintiff | Lost, Partial | Loh Choon Phing Robin |
| RGA Holdings International Inc | Plaintiff | Corporation | Judgment for Plaintiff, Judgment for Plaintiff | Won, Won | K Murali Pany, Ng Lip Kai |
| Loh Yin Kuan | Defendant | Individual | Judgment for Plaintiff, Judgment for Plaintiff | Lost, Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Senior Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| K Murali Pany | Joseph Tan Jude Benny LLP |
| Ng Lip Kai | Joseph Tan Jude Benny LLP |
| Loh Choon Phing Robin | Independent Practitioner |
4. Facts
- Forest Fibers supplied raw waste materials to KK Asia.
- KK Asia was to process the raw materials into finished products.
- The Lohs provided personal guarantees for KK Asia's obligations.
- KK Asia failed to deliver finished products or pay for raw materials.
- RGA entered into a Share Sale Agreement with the Lohs to purchase 50% of KK Asia.
- The Lohs sold a property despite an undertaking not to do so in the SSA.
- Teguh Jaya acted as KK Asia's agent for clearing and processing materials.
5. Formal Citations
- Forest Fibers Inc v K K Asia Environmental Pte Ltd and another and another suit, Suit No 1159 of 2015 and 226 of 2016, [2018] SGHC 195
6. Timeline
| Date | Event |
|---|---|
| Business relationship between plaintiffs and defendants began | |
| KK Asia informed Forest Fibers of factory shift to Malaysia | |
| Purchasing Finance Agreement entered between Forest Fibers and KK Asia | |
| Revised purchasing financing agreement signed | |
| Share Sale Agreement (SSA) came into being | |
| RGA remitted US$30,000.00 to KK Asia as agreed loan under clause 3.4 of the SSA | |
| Domenico arranged for Luis Pernett Rojas to run KK Asia’s Malaysian factory | |
| Domenico wrote to Teguh Jaya informing of change in ownership | |
| Peter informed Domenico he would no longer be putting money into KK Asia | |
| Caveats lodged on the Properties on behalf of RGA | |
| Forest Fibers' solicitors demanded payment of US$188,038.89 from KK Asia | |
| Malaysian lawyers commenced proceedings against Teguh Jaya | |
| Forest Fibers commenced first suit against KK Asia and Robin | |
| RGA’s lawyers demanded US$74,789.02 from the Lohs pursuant to clause 3.5 of the SSA | |
| Singapore Land Authority notified RGA of application to cancel Caveats | |
| Plaintiffs filed the second suit | |
| Plaintiffs filed Summons No. 1255 of 2016 | |
| Injunction obtained against Teguh Jaya | |
| Loh granted an option to sell No. 246 | |
| Summons 1255 dismissed | |
| RGA filed Summons No. 2494 of 2016 | |
| Court of Appeal granted an interim injunction to restrain the Lohs from selling No. 248 | |
| Hearing commenced | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that KK Asia breached its obligations under the revised PFA.
- Category: Substantive
- Sub-Issues:
- Failure to pay for raw materials
- Failure to deliver finished goods
- Breach of Share Sale Agreement
- Outcome: The court found that the Lohs breached clauses 3.5, 3.6 and 3.7 of the SSA.
- Category: Substantive
- Sub-Issues:
- Failure to repay loans
- Sale of property in violation of undertaking
- Validity of Guarantee
- Outcome: The court declared that Robin's guarantee under clause 16 of the revised PFA was valid and enforceable.
- Category: Substantive
- Agency
- Outcome: The court found that Teguh Jaya was KK Asia's agent/subcontractor.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Declaration of Validity of Guarantee
- Rectification of Share Sale Agreement
- Injunction
9. Cause of Actions
- Breach of Contract
- Breach of Share Sale Agreement
- Enforcement of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Recycling
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| RGA Holdings International Inc v Loh Choon Phing Robin and another | Court of Appeal | Yes | [2017] 2 SLR 997 | Singapore | Cited regarding the lodging of caveats on the properties. |
| Forest Fibers Inc and another v KK Asia Environmental Pte Ltd and others | High Court | Yes | [2017] 3 SLR 823 | Singapore | Cited regarding the dismissal of Summons 2494. |
| Guy Neale v Nine Squares Pty Ltd | Court of Appeal | Yes | [2015] 1 SLR 1097 | Singapore | Cited for the requirements of a valid trust. |
| Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 1029 | Singapore | Cited regarding when extrinsic evidence should be admitted to affect written contracts. |
| The “Asia Star” | N/A | Yes | [2010] 2 SLR 1154 | Singapore | Cited for the principle that an aggrieved party who takes reasonable steps to mitigate its loss is entitled to recover expenses reasonably incurred in the course of taking such mitigating measures. |
| Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal | N/A | Yes | [2013] 4 SLR 193 | Singapore | Cited to submit that a term must be implied that the plaintiffs’ loans were repayable on demand as a matter of business efficacy. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Purchasing Finance Agreement
- Share Sale Agreement
- Raw Waste Materials
- Finished Products
- Personal Guarantee
- Teguh Jaya
- Import Duties
- Rolling Account
- Caveats
- Processing Fee
15.2 Keywords
- breach of contract
- share sale agreement
- waste materials
- guarantee
- singapore
- high court
16. Subjects
- Contract Dispute
- Shareholder Dispute
- Commercial Law
17. Areas of Law
- Contract Law
- Share Sale Agreement
- Agency Law