Lin Choo Mee v Lim Sze Eng: Dispute over Settlement Agreement for Tat Leong Companies' Shares

In Lin Choo Mee v Lim Sze Eng, the High Court of Singapore addressed a dispute arising from a settlement agreement between two brothers, Lin Choo Mee (Plaintiff) and Lim Sze Eng (Defendant), concerning the purchase of the Plaintiff's shares in Tat Leong Investment Pte Ltd, Tat Leong Development (Pte) Ltd, and Tat Leong Petroleum Co (Pte) Ltd. The Plaintiff claimed the Defendant breached the settlement agreement by failing to complete the disposal of shares, failing to take reasonable steps to sell a property, improperly transferring funds, and failing to satisfy a costs order. The court found the Defendant breached the agreement by failing to sell the Far East Plaza Unit and pay the consideration, as well as failing to pay the costs order. The court entered judgment for the Plaintiff, with damages to be assessed, and awarded 90% of the costs of the proceedings to the Plaintiff.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for the plaintiff with damages to be assessed for the defendant’s breach of clauses 10(b) and 10(c) of the Settlement Agreement. Interlocutory judgment for breach of clause 13 of the Settlement Agreement.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Settlement agreement dispute over the sale of shares in Tat Leong companies. The court found the defendant breached obligations to sell property and pay consideration.

1.7 Decision Date

7 January 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lim Sze Eng	Defendant	Individual	Damages to be assessed	Lost	Hui Choon Wai of Wee Swee Teow LLP Ho Si Hui of Wee Swee Teow LLP
Lin Choo Mee	Plaintiff	Individual	Judgment for Plaintiff	Won	Narayanan Sreenivasan of Straits Law Practice LLC Tan Kai Ning Claire of Straits Law Practice LLC

3. Judges

Judge Name	Title	Delivered Judgment
Kannan Ramesh	Judge	Yes

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

The plaintiff and defendant are brothers and minority and majority shareholders, respectively, in Tat Leong Companies.
The parties entered into a Settlement Agreement on 28 December 2015, for the defendant to purchase the plaintiff’s shares in the Tat Leong Companies.
The Settlement Agreement stipulated a formula for determining the net tangible asset value (NTAV) of the Tat Leong Companies.
The Settlement Agreement provided for the sale of a property, the Far East Plaza Unit, to determine part of the NTAV.
The plaintiff moved out of 27 Jalan Rimau, their home of 25 years, in accordance with the Settlement Agreement.
The Far East Plaza Unit was marketed for sale and auctioned multiple times, but no bids were made at the reserve price of $2.1m.
The defendant refused to lower the reserve price for the Far East Plaza Unit despite recommendations from Colliers International.

5. Formal Citations

Lin Choo Mee v Lim Sze Eng, Suit No 1099 of 2016, [2018] SGHC 07

6. Timeline

Date	Event
2014-11-13	Plaintiff applied to the court for an order that the Tat Leong Companies be wound up.
2015-04-13	Court found a relationship of mutual trust and confidence was central to the existence of the Tat Leong Companies.
2015-06-23	A stay of court's orders was granted.
2015-11-23	Court of Appeal suggested that the parties attend mediation.
2015-12-28	Parties entered into the Settlement Agreement.
2016-03-30	Plaintiff and his family moved out of 27 Jalan Rimau.
2016-04-01	Parties agreed to auction the Far East Plaza Unit in April and May 2016 at a reserve price of $2.2m.
2016-04-20	Auction was held for the Far East Plaza Unit but was unsuccessful.
2016-05-26	Another auction was held for the Far East Plaza Unit but was unsuccessful.
2016-06-28	The six-month period for the completion of the sale of the Far East Plaza Unit stipulated in cl 10(b) of the Settlement Agreement expired.
2016-07-05	Plaintiff made several proposals to the defendant.
2016-07-08	Defendant’s solicitors replied stating that the defendant did not agree to the plaintiff’s proposals.
2016-07-12	Plaintiff’s solicitors wrote to the Mediator stating that a dispute between the parties had arisen from the implementation of the Settlement Agreement.
2016-09-09	A mediation session was fixed but was cancelled.
2016-09-19	Plaintiff requested the defendant to pay him the sum of $1,104,072.05, in exchange for the plaintiff’s shares in TLI.
2016-09-22	Defendant replied to the plaintiff’s letter stating that he did not agree to the plaintiff’s proposal.
2016-10-04	Plaintiff’s solicitors demanded that the defendant complete the transfer of the plaintiff’s shares in TLD and TLI for the sum of $1,152,486.35.
2016-10-06	Defendant maintained that he was not obliged to make part-payment of the Consideration.
2016-10-17	Plaintiff commenced this suit.
2016-10-27	The Far East Plaza Unit was auctioned at the reserve price of $2.1m.
2016-11-24	The Far East Plaza Unit was auctioned at the reserve price of $2.1m.
2016-12-15	The Far East Plaza Unit was auctioned at the reserve price of $2.1m.
2017-01-10	Plaintiff proposed lowering the reserve price for the Far East Plaza Unit at auction to $1.5m.
2017-01-11	Defendant rejected this proposal.
2017-01-19	The Far East Plaza Unit was again auctioned at the reserve price of $2.1m.
2017-01-20	An offer was made for the Far East Plaza Unit at the price of $1.1m.
2017-02-03	Court heard an application by the plaintiff for partial summary judgment.
2017-02-15	Plaintiff’s solicitors wrote to Colliers requesting, inter alia, a fresh indicative valuation of the Far East Plaza Unit and a recommendation on a reserve price for the sale of the property at auction.
2017-02-16	Colliers wrote to the defendant’s solicitors stating that the indicative valuation of the Far East Plaza Unit was $2–$2.2m, and recommended a reserve price of $1.6m.
2017-02-17	Plaintiff purported to instruct Colliers by letter to auction the Far East Plaza Unit at the reserve price of $1.1m.
2017-02-22	The property was placed for auction at the reserve price of $2.1m.
2017-02-23	Defendant’s solicitors forwarded Colliers' email to the plaintiff’s solicitors.
2017-04-27	The Far East Plaza Unit was again auctioned at the reserve price of $2.1m.
2017-05-02	A further valuation of the Far East Plaza Unit was obtained.
2017-05-25	The Far East Plaza Unit was again auctioned at the reserve price of $2.1m.
2017-06-21	The Far East Plaza Unit was again auctioned at the reserve price of $2.1m.
2017-07-27	The Far East Plaza Unit was again auctioned at the reserve price of $2.1m.
2017-08-17	Hearing date.
2017-08-18	Hearing date.
2017-08-22	Hearing date.
2017-09-29	Court allowed the plaintiff’s claim and delivered detailed oral grounds.
2018-01-08	Full grounds of decision delivered.

7. Legal Issues

Breach of Contract
- Outcome: The court found that the defendant breached the settlement agreement by failing to complete the sale of the Far East Plaza Unit and to pay the Consideration to the plaintiff by 28 September 2016, and by failing to pay the Costs Order.
- Category: Substantive
- Sub-Issues:
  - Failure to complete disposal of shares
  - Failure to take reasonable steps to conclude the sale of property
  - Failure to pay costs order
Interpretation of Contractual Terms
- Outcome: The court held that the Settlement Agreement provided for the Consideration to be paid in a single lump sum and that the defendant had an absolute obligation to sell the Far East Plaza Unit by 28 June 2016.
- Category: Substantive
- Sub-Issues:
  - Severability of consideration
  - Absolute vs. reasonable obligation

8. Remedies Sought

Order for the defendant to complete the disposal of shares
Damages to be assessed
Injunctions to restrain the defendant from dealing with the assets of the Tat Leong Companies
Payment of the Costs Order

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Real Estate

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Lin Choo Mee v Tat Leong Development (Pte) Ltd and Others and Other Matters	High Court	Yes	[2015] SGHC 99	Singapore	Cited for the background of the dispute and the plaintiff's argument that the relationship of mutual trust and confidence between himself and the defendant had broken down.
Sim Yong Kim v Evenstar Investments Pte Ltd	Court of Appeal	Yes	[2006] 3 SLR(R) 827	Singapore	Cited for the approach taken by the Court of Appeal in allowing parties to reach an amicable settlement.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	N/A	Yes	[2013] 4 SLR 193	Singapore	Cited for the principle that an implied term cannot contradict an express term of the contract.

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
Net Tangible Asset Value
Far East Plaza Unit
Consideration
Reasonable Endeavours Term
Reasonable Price Term
Costs Order

15.2 Keywords

Settlement Agreement
Shares
Tat Leong
Breach of Contract
Property Sale

17. Areas of Law

Area Name	Relevance Score
Contract Law	80
Breach of Contract	75
Contractual terms	70
Settlement Agreements	70
Commercial Disputes	60
Contractual Interpretation	60
Interpretation of contractual terms	50
Corporate Litigation	50
Damages	40
Company Law	40
Corporate Law	35
Consent Orders	30
Shareholders Agreement	30
Winding Up	30
Costs	30
Judgments and Orders	30
Civil Procedure	25
Insolvency Law	20
Liquidation	20
Minority Oppression	20
Corporate Governance	20
Summary Judgement	20
Contractual discretions	20
Estoppel	20
Variation	20
Performance of Contract	20
Offer	20
Formation of contract	20
Sale of Goods	20
Rules of construction	20
Interest	15
Apparent Authority	10
Promissory estoppel	10
Res Judicata	10
Frustration	10
Liquidated Damages	10
Burden of proof	10
Jurisdiction	10

16. Subjects

Contract Law
Company Law
Settlement Agreements