Ma Hongjin v SCP Holdings: Loan Agreement Dispute over Consideration for Supplemental Agreement
In a suit before the High Court of Singapore, Ma Hongjin sued SCP Holdings Pte Ltd and Biomax Technologies Pte Ltd for breach of contract. Ma Hongjin sought to enforce a supplemental agreement to a loan agreement, claiming SCP Holdings failed to pay a facility fee. The court, presided over by Justice Vinodh Coomaraswamy, dismissed the claim, holding that the supplemental agreement lacked consideration. The court found that SCP Holdings received no benefit and Ma Hongjin suffered no detriment in exchange for the additional obligation imposed by the supplemental agreement. The claim against Biomax Technologies Pte Ltd was heard separately.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Claim Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Plaintiff's claim to enforce a supplemental agreement for a loan was dismissed due to lack of consideration. The court found no benefit to the defendant.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ma Hongjin | Plaintiff | Individual | Claim Dismissed | Lost | Derek Kang, Kathy Chu |
| SCP Holdings Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won | Alvin Tan |
| Biomax Technologies Pte Ltd | Defendant | Corporation | Other | Stayed | Alvin Tan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Derek Kang | Cairnhill Law LLC |
| Kathy Chu | Cairnhill Law LLC |
| Alvin Tan | Wong Thomas & Leong |
4. Facts
- The plaintiff lent the first defendant $5 million under a loan agreement.
- The parties entered into a supplemental agreement that sought to vary the loan agreement by imposing additional obligations on the first defendant.
- The supplemental agreement increased the Biomax Holdings shares which the plaintiff had the option to call for in January 2017 from 15% to 20%.
- The supplemental agreement increased the first defendant’s payment obligation in January 2016 from $500,000 to $750,000.
- The first defendant failed to pay the plaintiff the $250,000 facility fee.
- The first defendant abandoned all of the defences save one: that the SA is unsupported by consideration and is therefore unenforceable.
5. Formal Citations
- Ma Hongjin v SCP Holdings Pte Ltd and another, Suit No 765 of 2016, [2019] SGHC 277
6. Timeline
| Date | Event |
|---|---|
| Convertible Loan Agreement signed | |
| Plaintiff disbursed $2.5m | |
| Plaintiff disbursed $1m | |
| Plaintiff disbursed $1.5m | |
| Supplemental Agreement signed | |
| First defendant was obliged to pay the plaintiff $500,000 | |
| Action commenced by plaintiff | |
| Second defendant was obliged to repay to the plaintiff the $5m principal with a payment of a further $500,000 in interest | |
| Trial began | |
| Trial concluded | |
| Judgment issued |
7. Legal Issues
- Consideration
- Outcome: The court held that the supplemental agreement was unsupported by consideration.
- Category: Substantive
- Sub-Issues:
- Failure of consideration
- Past consideration
- Practical benefit
- Related Cases:
- [2019] SGHC 277
- [1991] 1 QB 1
- (1875) LR 10 Exch 153
- Contract Variation
- Outcome: The court held that the supplemental agreement was an unenforceable one-sided variation.
- Category: Substantive
- Submission of No Case to Answer
- Outcome: The court outlined the law on a submission of no case to answer.
- Category: Procedural
- Related Cases:
- [2018] 2 SLR 333
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Investment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ho Yew Kong v Sakae Holdings Ltd | Court of Appeal | Yes | [2018] 2 SLR 333 | Singapore | Cited for the rule that a court in Singapore will not entertain a submission of no case to answer in a civil action unless the submission is accompanied by an election not to call evidence if the submission failed. |
| Viet Hai Petroleum Corporation v Ng Jun Quan | High Court | Yes | [2016] SGHC 81 | Singapore | Cited by the plaintiff for the proposition that she only had to establish a prima facie case as opposed to proving her case on a balance of probabilities. |
| Boyce v Wyatt Engineering | England and Wales Court of Appeal (Civil Division) | Yes | [2001] EWCA Civ 692 | England and Wales | Cited for the principle that where a defendant is put to his election, that is the end of the matter as regards evidence. |
| Miller (t/a Waterloo Plant) v Margaret Cawley | England and Wales Court of Appeal (Civil Division) | Yes | [2002] EWCA Civ 1100 | England and Wales | Cited for the principle that after an election to call no evidence, the issue is whether the claimant has established his or her case by the evidence called on the balance of probabilities. |
| Lloyd v John Lewis Partnership | England and Wales Court of Appeal (Civil Division) | Yes | [2001] EWCA Civ 1529 | England and Wales | Cited for the principle that in England, putting the defendant to an election is a general rule rather than an invariable one. |
| Benham Ltd v Kythira Investments Ltd | England and Wales Court of Appeal (Civil Division) | Yes | [2003] EWCA Civ 1794 | England and Wales | Cited for the principle that it is only when the judge does not put the defendant to his election that it becomes necessary to consider the difficulties arising from a submission of no case to answer. |
| Haw Tua Tau and others v Public Prosecutor | Court of Criminal Appeal | Yes | [1981–1982] SLR(R) 133 | Singapore | Cited for the test to be applied in a criminal trial when the accused makes a submission of no case to answer without electing to call no evidence if the submission fails. |
| Central Bank of India v Bansal Hemant Govinprasad and others and other actions | High Court | Yes | [2002] 1 SLR(R) 22 | Singapore | Cited for the language of the 'prima facie case' in relation to a submission of no case to answer. |
| Tribune Investment Trust Inc v Soosan Trading Co Ltd | High Court | Yes | [2000] 2 SLR(R) 407 | Singapore | Cited for the principle that a court cannot use an adverse inference to find a fact proven on the balance of probabilities unless the party on whom the burden lies to prove that fact has first adduced prima facie evidence of the fact. |
| Koh Bee Choo v Choo Chai Huah | Court of Appeal | Yes | [2007] SGCA 21 | Singapore | Cited for the principle that a court cannot use an adverse inference to find a fact proven on the balance of probabilities unless the party on whom the burden lies to prove that fact has first adduced prima facie evidence of the fact. |
| Sudha Natrajan v The Bank of East Asia Ltd | Court of Appeal | Yes | [2017] 1 SLR 141 | Singapore | Cited for the principles regarding the circumstances in which an adverse inference can be drawn. |
| Tan Juay Pah v Kimly Construction Pte Ltd and others | Court of Appeal | Yes | [2012] 2 SLR 549 | Singapore | Cited CBI as authority for the proposition that a plaintiff need establish only a prima facie case against the defendant and need not prove her case on the balance of probabilities. |
| Lena Leowardi v Yeap Cheen Soo | Court of Appeal | Yes | [2015] 1 SLR 581 | Singapore | Cited Tan Juay Pah as authority for the proposition that a plaintiff need establish only a prima facie case against the defendant and need not prove her case on the balance of probabilities. |
| Lim Eng Hock Peter v Lin Jian Wei and another | High Court | Yes | [2009] 2 SLR(R) 1004 | Singapore | Cited for the test of whether there is no case to answer. |
| Currie v Misa | Court of Exchequer | Yes | (1875) LR 10 Exch 153 | England and Wales | Cited for the classic statement of what amounts to consideration. |
| Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal | Court of Appeal | Yes | [2009] 2 SLR(R) 332 | Singapore | Cited for the principle that consideration signifies a return recognised in law which is given in exchange for the promise sought to be enforced. |
| Williams v Roffey Bros & Nicholls (Contractors) Ltd | England and Wales Court of Appeal (Civil Division) | Yes | [1991] 1 QB 1 | England and Wales | Cited for the modern view that consideration need not be a legal benefit to the counterparty but can be a factual or practical benefit. |
| Sea-Land Service Inc v Cheong Fook Chee Vincent | Court of Appeal | Yes | [1994] 3 SLR(R) 250 | Singapore | Cited for the principle that the work which a redundant employee does during his notice period is, virtually by definition, of minimal value to his employer. |
| Teo Seng Kee Bob v Arianecorp Ltd | High Court | Yes | [2008] 3 SLR(R) 1114 | Singapore | Cited for finding a practical benefit to be consideration. |
| Sim Tony v Lim Ah Ghee (trading as Phil Real Estate & Building Services) | High Court | Yes | [1995] 1 SLR(R) 886 | Singapore | Cited for the principle that the past consideration rule does not simply look at chronology. |
| Lampleigh v Braithwait | Court of King's Bench | Yes | (1615) Hob 105; 80 ER 255 | England and Wales | Cited for the principle that what looks at first blush like past consideration will still pass legal muster if there is, in effect, a single (contemporaneous) transaction. |
| Pao On v Lau Yiu Long | Privy Council | Yes | [1980] AC 614 | Hong Kong | Cited for the principle that an act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise. |
| S Pacific Resources Ltd v Tomolugen Holdings Ltd | High Court | Yes | [2016] 3 SLR 1049 | Singapore | Cited for the principle that absence of consideration will render the variation unenforceable. |
| Tullio Planeta v Maoro Andrea G | High Court | Yes | [1994] 2 SLR(R) 501 | Singapore | Cited for the general rule that costs should follow the event. |
| Re Elgindata Ltd (No 2) | England and Wales High Court (Chancery Division) | Yes | [1992] 1 WLR 1207 | England and Wales | Cited for the principle that where a successful party has raised issues or made allegations improperly or unreasonably, the court may not only deprive him of his costs but may also order him to pay the whole or part of the unsuccessful party’s costs. |
| Benlen Pte Ltd v Authentic Builder Pte Ltd | High Court | Yes | [2018] SGHC 61 | Singapore | Cited by the plaintiff for the proposition that a clause made it possible to vary the contract even if no additional consideration was provided. |
| Rainforest Trading Ltd and another v State Bank of India Singapore | Court of Appeal | Yes | [2012] 2 SLR 713 | Singapore | Cited by the plaintiff for the argument that there was a common understanding between the parties that the compensation for the plaintiff’s performance of her obligations under the CLA would be the first defendant’s additional obligations under the SA. |
| Ma Hongjin v SCP Holdings Pte Ltd | High Court | Yes | [2018] 4 SLR 1276 | Singapore | Cited for procedural history. |
| Anton Trawlings Co Ltd v Smith | Court of Appeal | Yes | [2003] 2 NZLR 23 | New Zealand | Cited for the principle that the New Zealand Court of Appeal has gone so far as to open the door to abandoning consideration altogether as a requirement for a contractual variation to be binding, with reliance sufficing in itself. |
| Teat v Willcocks | Court of Appeal | Yes | [2014] 3 NZLR 129 | New Zealand | Cited for the principle that the New Zealand Court of Appeal has gone so far as to open the door to abandoning consideration altogether as a requirement for a contractual variation to be binding, with reliance sufficing in itself. |
| Re Robinson’s Settlement, Gant v Hobbs | England and Wales High Court (Chancery Division) | Yes | [1912] 1 Ch 717 | England and Wales | Cited for the function of pleadings, which is to ensure that the opposing party has reasonable notice of what his opponent is coming to the court to prove. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 35 r 4(4) |
| Rules of Court O 35 r 4(3) |
| Rules of Court O 40A r 6(2) |
| Rules of Court O 18 r 8(1) |
| Rules of Court O 18 r 7 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
| Moneylenders Act (Cap 188, 2010 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Convertible Loan Agreement
- Supplemental Agreement
- Consideration
- Facility Fee
- Practical Benefit
- Past Consideration
- Submission of No Case to Answer
- One-Sided Variation
15.2 Keywords
- loan agreement
- consideration
- contract variation
- supplemental agreement
- facility fee
16. Subjects
- Contract Law
- Commercial Law
17. Areas of Law
- Contract Law
- Consideration