Simpson Marine v Jiaravanon: Restitution for Failure of Consideration in Yacht Purchase Deposit

Simpson Marine (SEA) Pte Ltd appealed against the High Court's decision to grant Jiacipto Jiaravanon (deceased, represented by his administratrix) restitution of the remaining €500,000 of a €1 million deposit paid for securing two yachts. The Court of Appeal allowed the appeal, finding that the deposit was intended to secure the yachts until Jiaravanon made a decision, not contingent on an actual purchase. Since the yachts were secured as agreed, there was no failure of consideration, and Jiaravanon was not entitled to restitution. The case involved a claim for restitution of a pre-contract deposit.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding restitution of a deposit for yacht purchase. Court held deposit was to secure yachts, not contingent on purchase, thus no failure of consideration.

1.7 Decision Date

22 January 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Simpson Marine (SEA) Pte Ltd	Appellant	Corporation	Appeal Allowed	Won	Prem Gurbani, Bazul Ashhab bin Abdul Kader, Chan Cong Yen Lionel, Liao Ruiyi, Beatrice Mathilda Yeo Li Hui
Jiacipto Jiaravanon	Respondent	Individual	Appeal Dismissed	Lost	Oei Ai Hoea Anna, Deannie Yap

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Phang Boon Leong	Judge of Appeal	Yes
Judith Prakash	Judge of Appeal	No
Tay Yong Kwang	Judge of Appeal	No

4. Counsels

Counsel Name	Organization
Prem Gurbani	Gurbani & Co LLC
Bazul Ashhab bin Abdul Kader	Oon & Bazul LLP
Chan Cong Yen Lionel	Oon & Bazul LLP
Liao Ruiyi	Oon & Bazul LLP
Beatrice Mathilda Yeo Li Hui	Oon & Bazul LLP
Oei Ai Hoea Anna	Tan, Oei & Oei LLC
Deannie Yap	Tan, Oei & Oei LLC

4. Facts

Jiaravanon negotiated with Simpson Marine to purchase one or two yachts from Azimut.
Jiaravanon signed an invoice agreeing to pay a €1m deposit to secure two specific yachts until 15 May 2013.
One of the yachts was sold to another buyer before Jiaravanon paid the deposit.
Jiaravanon met with Simpson Marine representatives and viewed a yacht in Hong Kong.
Jiaravanon eventually refused to purchase an Azimut yacht in the 100-ft series.
A compromise was reached to apply half the deposit to another yacht Jiaravanon had purchased.
Jiaravanon demanded the return of the remaining €500,000 deposit.

5. Formal Citations

Simpson Marine (SEA) Pte Ltd v Jiacipto Jiaravanon, Civil Appeal No 233 of 2017, [2019] SGCA 7

6. Timeline

Date	Event
2013-01-01	Jiaravanon and Taslim met Mison to discuss purchasing a yacht.
2013-02-28	Jiaravanon informed Mison he was considering a yacht in Azimut’s 100-ft range.
2013-04-11	Mison informed Jiaravanon about two available yachts and suggested a deposit.
2013-04-26	Jiaravanon signed an invoice agreeing to pay a deposit of €1m.
2013-04-29	Jiaravanon transferred the Deposit to the appellant.
2013-04-30	Mison informed Jiaravanon that Azimut had already sold the 100G #12.
2013-05-04	Jiaravanon instructed Mison not to send the Deposit to Azimut.
2013-05-06	Mison emailed Jiaravanon about the deposit and viewing yachts in Hong Kong.
2013-05-08	Jiaravanon met Grange and Pellacani in Hong Kong and viewed an Azimut 100L yacht.
2013-05-09	The appellant forwarded the Deposit to Azimut.
2013-05-27	Mison sent Jiaravanon an email urging him to obtain an Italian visa.
2013-05-29	Mison informed Jiaravanon that Azimut had agreed to hold the two Azimut 100’s until the 31st.
2013-05-31	Mison wrote to Jiaravanon about choosing one of the yachts.
2013-07-07	Jiaravanon sent Mison a text message stating that he no longer wished to purchase a 100-ft yacht.
2013-07-31	Jiaravanon and Mison reached a compromise regarding the Deposit.
2013-08-11	Jiaravanon demanded the return of the Remainder in an email.
2013-08-12	Jiaravanon reiterated that he wanted his deposit back.
2013-08-13	Jiaravanon met with the appellant’s representatives in Hong Kong to view a 100G-model yacht.
2013-08-28	Jiaravanon demanded that the Remainder be returned.
2013-08-30	Mison informed Jiaravanon that he had forwarded Jiaravanon’s request for the return of the Remainder.
2013-09-03	Grange responded to Jiaravanon, explaining that his deposit was forwarded to Azimut.
2013-09-09	Mison explained the situation concerning the deposit to Taslim.
2013-11-01	Further discussions between Jiaravanon and the appellant’s representatives.
2014-08-15	Jiaravanon commenced the suit below to seek, among other things, the restitution of the Remainder.
2015-01-01	Jiaravanon passed away.
2018-09-24	Court hearing.
2019-01-23	Judgment reserved.

7. Legal Issues

Failure of Consideration
- Outcome: The court held that there was no failure of consideration because the deposit was used to secure the yachts as agreed.
- Category: Substantive
- Sub-Issues:
  - Failure to materialize the state of affairs contemplated as the basis for payment
- Related Cases:
  - [2018] 1 SLR 239
  - [2003] 1 SLR(R) 791
  - [2013] Ch 23
Pre-contract Deposits
- Outcome: The court determined the conditions under which a pre-contract deposit is recoverable.
- Category: Substantive
- Related Cases:
  - [2018] 1 SLR 239
  - [2003] 1 SLR(R) 791
  - [2013] Ch 23

8. Remedies Sought

Restitution of Deposit

9. Cause of Actions

Restitution
Unjust Enrichment

10. Practice Areas

Commercial Litigation

11. Industries

Maritime
Luxury Goods

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Benzline Auto Pte Ltd v Supercars Lorinser Pte Ltd and another	Court of Appeal	Yes	[2018] 1 SLR 239	Singapore	Cited for the inquiry into the unjust factor of failure of consideration or basis, and the objective determination of the basis of the transfer.
United Artists Singapore Theatres Pte Ltd and another v Parkway Properties Pte Ltd and another	High Court	Yes	[2003] 1 SLR(R) 791	Singapore	Cited as an example of how courts have approached identifying the basis for a payment characterized as a deposit.
Sharma and another v Simposh Ltd	English Court of Appeal	Yes	[2013] Ch 23	England	Cited as an example of a case with similar facts, where the court found no unjust enrichment because the claimants received what they paid for.
Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd	Court of Appeal	Yes	[2009] 4 SLR(R) 1101	Singapore	Cited regarding the power of review as an appellate court.
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 the admissibility and relevance of subsequent conduct in the formation and interpretation of contracts.
Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd	Singapore	Yes	[2015] 5 SLR 1187	Singapore	Cited regarding evidence of subsequent conduct in interpreting a contract.
Goh Yihan, “Towards a Consistent Use of Subsequent Conduct in Singapore Contract Law”	N/A	Yes	[2017] JBL 387	Singapore	Cited regarding evidence of subsequent conduct in interpreting a contract.
D W McLauchlan, “Contract Formation, Contract Interpretation, and Subsequent Conduct”	N/A	Yes	(2006) 25 UQLJ 77	N/A	Cited regarding evidence of subsequent conduct in interpreting a contract.
Jiacipto Jiaravanon v Simpson Marine (SEA) Pte Ltd	High Court	Yes	[2017] SGHC 288	Singapore	The judgment being appealed.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Deposit
Restitution
Failure of Consideration
Yacht
Holding Deposit
Azimut
Pre-contract Deposit

15.2 Keywords

Restitution
Deposit
Yacht
Contract
Singapore
Commercial
Appeal

16. Subjects

Contract Law
Restitution
Commercial Dispute

17. Areas of Law

Restitution
Contract Law
Unjust Enrichment