Ma Hongjin v SCP Holdings: Contract Consideration & Variation Dispute

In Ma Hongjin v SCP Holdings Pte Ltd, the Court of Appeal of Singapore heard an appeal regarding the necessity of consideration for contractual variations. Ma Hongjin, the appellant, disputed the High Court's decision that a supplemental agreement (SA) to a convertible loan agreement (CLA) was unenforceable due to lack of consideration. The court dismissed the appeal, reaffirming the requirement for consideration in contractual variations and upholding the High Court's decision.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal on contract consideration for variation. Court dismissed the appeal, upholding the need for consideration in contractual variations.

1.7 Decision Date

27 October 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
SCP Holdings Pte Ltd	Respondent, Defendant	Corporation	Appeal Dismissed	Won	Tan Kheng Ann Alvin of Wong Thomas & Leong
Ma Hongjin	Appellant, Plaintiff	Individual	Appeal Dismissed	Lost	Derek Kang Yu Hsien of Cairnhill Law LLC Lim Shi Zheng Lucas of Cairnhill Law LLC
Biomax Technologies Pte Ltd	Defendant	Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Andrew Phang Boon Leong	Judge of Appeal	Yes
Judith Prakash	Judge of Appeal	No
Tay Yong Kwang	Judge of Appeal	No
Steven Chong	Judge of Appeal	No

4. Counsels

Counsel Name	Organization
Tan Kheng Ann Alvin	Wong Thomas & Leong
Derek Kang Yu Hsien	Cairnhill Law LLC
Lim Shi Zheng Lucas	Cairnhill Law LLC

4. Facts

Ma Hongjin extended a S$5m convertible loan to SCP Holdings Pte Ltd under a Convertible Loan Agreement (CLA).
The CLA granted Ma Hongjin an option to acquire 15% of Biomax Holdings shares in lieu of S$5.5m repayment.
Ma Hongjin and Mr. Han renegotiated the CLA terms, resulting in a Supplemental Agreement (SA).
The SA increased the share option to 20% and imposed a S$250,000 facility fee.
SCP Holdings paid S$500,000 but failed to pay the S$250,000 facility fee.
Ma Hongjin commenced proceedings to obtain payment of the facility fee.
SCP Holdings argued the SA was unsupported by consideration and unenforceable.

5. Formal Citations

Ma Hongjin v SCP Holdings Pte Ltd, Civil Appeal No 45 of 2019, [2020] SGCA 106
Ma Hongjin v SCP Holdings Pte Ltd and another, HC/Suit No 765 of 2016, [2019] SGHC 277

6. Timeline

Date	Event
2015-01-06	Convertible Loan Agreement signed
2015-01-06	S$2.5m disbursed
2015-01-14	S$1m disbursed
2015-03-01	Renegotiation of CLA terms
2015-03-30	S$1.5m disbursed
2015-04-16	Supplemental Agreement signed
2015-04-16	Share Investment Agreement signed
2015-06-01	Loans extended to Biomax Technologies
2015-10-01	Loans extended to Biomax Technologies
2016-01-05	First interest payment due
2016-01-01	Respondent made payment of S$500,000
2016-01-01	Proceedings commenced in Suit No 765 of 2016
2017-01-05	Sum of S$5.5m due
2020-07-09	Court hearing
2020-10-28	Grounds of decision delivered

7. Legal Issues

Consideration
- Outcome: The court held that consideration was necessary for contractual variation.
- Category: Substantive
- Sub-Issues:
  - Failure of consideration
  - Necessity of consideration
- Related Cases:
  - [2009] 2 SLR(R) 332
  - (1884) 9 App Cas 605
  - [1991] 1 QB 1
Contractual Variation
- Outcome: The court held that consideration was necessary for contractual variation.
- Category: Substantive
- Sub-Issues:
  - Consideration for variation
- Related Cases:
  - [1991] 1 QB 1
Pleadings
- Outcome: The court held that the appellant should be permitted to raise her arguments on consideration notwithstanding the fact that they might have been unpleaded.
- Category: Procedural
No Case to Answer
- Outcome: The court clarified the test to be applied upon a submission of no case to answer by a defendant.
- Category: Procedural

8. Remedies Sought

Payment of facility fee

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
Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal	Court of Appeal	Yes	[2009] 2 SLR(R) 332	Singapore	Endorsed the need for consideration in respect of the variation of an existing contract.
Williams v Roffey Bros & Nicholls (Contractors) Ltd	English Court of Appeal	Yes	[1991] 1 QB 1	England and Wales	Confirmed the need for consideration in respect of the variation of an existing contract.
Foakes v Beer	House of Lords	Yes	(1884) 9 App Cas 605	England and Wales	Held that consideration was required in a situation where it was sought by the promisee to enforce a promise to take less.
United Overseas Bank Ltd v Ng Huat Foundations Pte Ltd	Singapore High Court	Yes	[2005] 2 SLR(R) 425	Singapore	Procedure and substance have an integrated and symbiotic relationship with each other.
Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters	Court of Appeal	Yes	[2018] 2 SLR 333	Singapore	A defendant who elects to make a submission of no case to answer must make an accompanying election not to call evidence in the event that submission fails.
Central Bank of India v Bansal Hemant Govinprasad and others and other actions	Singapore High Court	Yes	[2002] 1 SLR(R) 22	Singapore	A submission of no case to answer would fail if the plaintiff was able to prove a prima facie case.
Tan Juay Pah v Kimly Construction Pte Ltd and others	Court of Appeal	Yes	[2012] 2 SLR 549	Singapore	A plaintiff need only prove a prima facie case upon a submission of no case to answer, and that any statements to that effect were obiter dicta.
Lena Leowardi v Yeap Cheen Soo	Court of Appeal	Yes	[2015] 1 SLR 581	Singapore	A plaintiff need only prove a prima facie case upon a submission of no case to answer, and that any statements to that effect were obiter dicta.
Benlen Pte Ltd v Authentic Builder Pte Ltd	Singapore High Court	Yes	[2018] SGHC 61	Singapore	The clause considered therein was materially different.
Rainforest Trading Ltd and another v State Bank of India Singapore	Court of Appeal	Yes	[2012] 2 SLR 713	Singapore	The CLA and SA could not be construed as being part of a single transaction.
Liberty Sky Investments Ltd v Aesthetic Medical Partners Pte Ltd and other appeals and another matter	Court of Appeal	Yes	[2020] 1 SLR 606	Singapore	The purpose of pleadings is to ensure that each party was aware of the respective arguments against it and that neither was therefore taken by surprise.
OMG Holdings Pte Ltd v Pos Ad Sdn Bhd	Court of Appeal	Yes	[2012] 4 SLR 231	Singapore	The appellant should be permitted to raise her arguments on consideration notwithstanding the fact that they might have been unpleaded as the respondent could be adequately compensated with costs.
Sun Jin Engineering Pte Ltd v Hwang Jae Woo	Court of Appeal	Yes	[2011] 2 SLR 196	Singapore	The appellant should be permitted to raise her arguments on consideration notwithstanding the fact that they might have been unpleaded as the respondent could be adequately compensated with costs.
Britestone Pte Ltd v Smith & Associates Far East, Ltd	Court of Appeal	Yes	[2007] 4 SLR(R) 855	Singapore	The evidential burden is borne by the person on whom the responsibility lies to “contradict, weaken or explain away the evidence that has been led”.
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd	Court of Appeal	Yes	[2011] 2 SLR 63	Singapore	The evidential burden can shift between the parties based on the state of the evidence.
Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd and another appeal	Court of Appeal	Yes	[2012] 1 SLR 427	Singapore	The establishment of a prima facie case on a particular fact on which it bears the legal burden denotes the point at which the evidential burden will shift to the defendant.
Loo Chay Sit v Loo Chay Loo, deceased	Court of Appeal	Yes	[2010] 1 SLR 286	Singapore	The distinction between a prima facie case on the one hand and proof on a balance of probabilities on the other does not mean that the court applies a laxer standard of proof in the former.
Combe v Combe	English Court of Appeal	Yes	[1951] 2 KB 214	England and Wales	If the promisee chooses, of his or her own volition, to incur a detriment, then that would not constitute sufficient consideration in the eyes of the law.
JWR Pte Ltd v Edmond Pereira Law Corp and another	Court of Appeal	Yes	[2020] SGCA 68	Singapore	This argument was purely a legal one which did not require any new evidence to be adduced, which meant that this court would have been in just as advantageous a position as the court below to adjudicate upon the issue.
Grace Electrical Engineering Pte Ltd v Te Deum Engineering Pte Ltd	Court of Appeal	Yes	[2018] 1 SLR 76	Singapore	Applications by a party to raise new points on appeal would be subject to careful consideration.
Ang Sin Hock v Khoo Eng Lim	Court of Appeal	Yes	[2010] 3 SLR 179	Singapore	This argument was purely a legal one which did not require any new evidence to be adduced, which meant that this court would have been in just as advantageous a position as the court below to adjudicate upon the issue.
Thomas v Thomas	Queen's Bench	Yes	(1842) 2 QB 851	England and Wales	There is no consideration for a promise made “in consideration of natural love and affection”, as such purported consideration bore no value in the eyes of the law.
MWB Business Exchange Centres Ltd v Rock Advertising Ltd	Supreme Court of the United Kingdom	Yes	[2019] AC 119	United Kingdom	The court managed to avoid having to deal directly with the issue of consideration in respect of that agreement.
Re Selectmove Ltd	N/A	Yes	[1995] 1 WLR 474	England and Wales	This particular issue was in fact referred to in Gay Choon Ing at [102]–[103].
S Pacific Resources Ltd v Tomolugen Holdings Ltd	Singapore High Court	Yes	[2016] 3 SLR 1049	Singapore	That decision was concerned with the operation of the doctrine of consideration in the context of the formation of contracts whereas the present case relates to the operation of the doctrine in the context of the variation or modification of contracts.
Antons Trawling Co Ltd v Smith	Court of Appeal	Yes	[2003] 2 NZLR 23	New Zealand	The court did, in fact, find that the promisee had furnished sufficient consideration pursuant to the legal principles laid down in Williams.
Stilk v Myrick	N/A	Yes	(1809) 2 Camp 317	England and Wales	That variation of contract is ineffective unless there is fresh consideration, would have resulted in injustice.
Attorney-General for England and Wales v R	N/A	Yes	[2002] 2 NZLR 91	New Zealand	The court did, in fact, find that the promisee had furnished sufficient consideration pursuant to the legal principles laid down in Williams.
Gloria Jean’s Coffees International Pty Ltd and another v Daboko Ltd	New Zealand High Court	Yes	[2020] NZHC 29	New Zealand	The court did, in fact, find that the promisee had furnished sufficient consideration pursuant to the legal principles laid down in Williams.
Blair v Horne and others	New Zealand High Court	Yes	[2006] NZHC 195	New Zealand	The court did, in fact, find that the promisee had furnished sufficient consideration pursuant to the legal principles laid down in Williams.
Teat v Willcocks	Court of Appeal	Yes	[2014] 3 NZLR 129	New Zealand	Consideration in the form of a benefit “in practice” is sufficient to support a binding variation.
New Zealand Local Authority Protection Disaster Fund v Auckland Council	High Court of New Zealand	Yes	[2013] NZHC 1858	New Zealand	Consideration in the form of a benefit “in practice” is sufficient to support a binding variation.
Goldsmith and others v Carter and others	New Zealand High Court	Yes	[2012] NZHC 1693	New Zealand	Consideration is not necessarily essential for the variation to be effective.
Hunan Holdings Ltd v Virionyx Corporation Ltd	N/A	Yes	(2005) 2 NZCCLR 1079	New Zealand	Consideration is not necessarily essential for the variation to be effective.
Mulholland v Hansen	New Zealand High Court	Yes	[2015] NZHC 895	New Zealand	There was no variation to begin with.
Shell (Petroleum Mining) Co Ltd and another v Vector Gas Contracts Ltd and another	New Zealand High Court	Yes	[2014] NZHC 31	New Zealand	There was no decisive or conclusive view on what the legal position ought to be is expressed.
Baxter v Coleman	New Zealand High Court	Yes	[2016] NZHC 2693	New Zealand	There was no decisive or conclusive view on what the legal position ought to be is expressed.
Green v Carr	New Zealand High Court	Yes	[2018] NZHC 3408	New Zealand	There was no decisive or conclusive view on what the legal position ought to be is expressed.
Flight Park Tandems Ltd v Club Flying Kiwi Ltd	N/A	Yes	(2005) 2 NZCCLR 508	New Zealand	There was no decisive or conclusive view on what the legal position ought to be is expressed.
Northwest Developments Ltd v Xue	New Zealand High Court	Yes	[2019] NZHC 1042	New Zealand	Consideration is required in the context of contractual variation or modification.
Greater Fredericton Airport Authority Inc v NAV Canada	N/A	Yes	(2008) 290 DLR (4th) 405	Canada	A post-contractual modification, unsupported by consideration, may be enforceable so long as it is established that the variation was not procured under economic duress.
River Wind Ventures Ltd v British Columbia	British Columbia Supreme Court	Yes	[2009] BCJ No 880	Canada	The court agreed with the reasoning of the court in NAV.
River Wind Ventures Ltd v British Columbia	N/A	Yes	[2011] BCJ No 257	Canada	The court agreed with the reasoning of the court in NAV.
River Wind Ventures Ltd v British Columbia	British Columbia Supreme Court	Yes	[2011] BCJ No 1678	Canada	The court agreed with the reasoning of the court in NAV.
British Columbia v River Wind Ventures Ltd	N/A	Yes	[2011] SCCA No 179	Canada	The court agreed with the reasoning of the court in NAV.
Harrity v Kennedy	N/A	Yes	[2009] NBJ No 305	Canada	The court agreed with the reasoning of the court in NAV.
Rosas v Toca	N/A	Yes	[2018] BCJ No 938	Canada	The court agreed with the reasoning of the court in NAV.
Ng Giap Hon v Westcomb Securities Pte Ltd and others	Court of Appeal	Yes	[2009] 3 SLR(R) 518	Singapore	The court agreed with the reasoning of the court in NAV.
The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd	Court of Appeal	Yes	[2015] 3 SLR 695	Singapore	The court agreed with the reasoning of the court in NAV.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Convertible Loan Agreement
Supplemental Agreement
Consideration
Contractual Variation
Facility Fee
Goodwill
No Case to Answer
Pleadings

15.2 Keywords

Contract Law
Consideration
Contractual Variation
Singapore
Appeal
Civil Procedure

17. Areas of Law

Area Name	Relevance Score
Contract Law	95
Civil Procedure	60

16. Subjects

Contract Law
Civil Procedure
Consideration
Contractual Variation