Goodwood Associates v. Southernpec: Sham Contracts, Conspiracy & Fuel Oil Trading

In Goodwood Associates Pte Ltd v Southernpec (Singapore) Shipping Pte Ltd and another suit, the High Court of Singapore heard claims by Goodwood Associates Pte Ltd against Southernpec (Singapore) Pte Ltd and Southernpec (Singapore) Shipping Pte Ltd for breach of contract and under a guarantee, respectively, related to contracts for the sale of fuel oil. Southernpec counterclaimed against Goodwood, Mr. Lee Soek Shen, and Mr. Andrew Lim Boon Leong for conspiracy. The court found the contracts were not shams, Goodwood had performed its obligations, and Southernpec's conspiracy claims failed. Judgment was entered in favor of Goodwood.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court case involving Goodwood Associates and Southernpec over sham fuel oil contracts and conspiracy claims. Judgment for Goodwood.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Goodwood Associates Pte LtdPlaintiff, Defendant in CounterclaimCorporationJudgment for PlaintiffWon
Southernpec (Singapore) Pte LtdDefendant, Plaintiff in CounterclaimCorporationJudgment for PlaintiffLost
Lee Soek ShenDefendant in CounterclaimIndividualCounterclaim DismissedDismissed
Andrew Lim Boon LeongDefendant in CounterclaimIndividualCounterclaim DismissedDismissed
Southernpec (Singapore) Shipping Pte LtdDefendant, Plaintiff in CounterclaimCorporationJudgment for PlaintiffLost

3. Judges

Judge NameTitleDelivered Judgment
Hoo Sheau PengJudgeYes

4. Counsels

Counsel NameOrganization
Koh Swee YenWongPartnership LLP
Quek Yi Zhi JoelWongPartnership LLP
Anand Shankar Tiwari s/o Sivakant TiwariWongPartnership LLP
Khoo Boo Teck RandolphDrew & Napier LLC
Chan Jian DaDrew & Napier LLC
Vanessa Chiam Hui TingDrew & Napier LLC
Chacko SamuelLegis Point LLC
Angeline Soh Ean LengLegis Point LLC
Sim ChongSim Chong LLC
Choong Jia ShunSim Chong LLC
Phua Jun HanSim Chong LLC

4. Facts

  1. Goodwood claimed against SPPL for the purchase price of fuel oil under two contracts.
  2. Goodwood claimed against SPSPL as guarantor for SPPL's payments.
  3. Southernpec contended the July Contracts were shams and counterclaimed for conspiracy.
  4. Mr. Lee is the sole director and shareholder of Goodwood.
  5. Mr. Lim was the Head of the Oil Trading Division of IEG.
  6. SPPL and SPSPL are Singapore-incorporated companies.
  7. Goodwood required a corporate guarantee before acting as an intermediary.
  8. SPSPL executed a guarantee of US$5m in favor of Goodwood.
  9. Goodwood performed its obligations based on inter-tank transfers and cargo release notices.
  10. UA defaulted on its payment to Taigu, leading to SPPL’s default to Goodwood.

5. Formal Citations

  1. Goodwood Associates Pte Ltd v Southernpec (Singapore) Shipping Pte Ltd and another suit, Suit No 1245 of 2015 and Suit No 51 of 2016, [2020] SGHC 242

6. Timeline

DateEvent
SPSPL Guarantee granted in favor of Goodwood
Contracts of sale of fuel oil (July Contracts) signed
Goodwood delivered 2,000 MT of fuel oil to SPPL
Goodwood delivered 1,200 MT of fuel oil to SPPL
BMS was duly paid by Digiland on behalf of Goodwood
Goodwood lodged a report to the Commercial Affairs Department
Suit 1245 of 2015 commenced by BMS against SPPL
Suit 51 of 2016 commenced by Goodwood
SPPL counterclaims against BMS, Mr Kounalakis, Mr Arif, Goodwood, Mr Lee and Mr Lim
BMS’s claim, as well as SPPL’s counterclaim against BMS, Mr Kounalakis and Mr Arif, were settled
SPSPL introduced counterclaims against Goodwood, Mr Lee and Mr Lim for lawful and unlawful means conspiracy
Goodwood counterclaims against SPPL for the purchase price based on the July Contracts
Trial began
Trial concluded
Judgment reserved

7. Legal Issues

  1. Sham Transaction
    • Outcome: The court found that the July Contracts were not sham transactions.
    • Category: Substantive
    • Sub-Issues:
      • Common intention to mislead
      • Lack of intention to create legal relations
    • Related Cases:
      • [1967] 2 QB 786
      • [1992] 2 SLR(R) 858
  2. Breach of Contract
    • Outcome: The court found that Goodwood had performed its obligations under the July Contracts and was entitled to payment.
    • Category: Substantive
    • Sub-Issues:
      • Failure to pay
      • Failure to perform obligations
  3. Conspiracy
    • Outcome: The court dismissed Southernpec's claims for lawful and unlawful means conspiracy.
    • Category: Substantive
    • Sub-Issues:
      • Lawful means conspiracy
      • Unlawful means conspiracy
      • Intention to cause damage or injury
    • Related Cases:
      • [2014] 1 SLR 860
  4. Estoppel
    • Outcome: The court found that SPPL was estopped from denying that the July Contracts were performed.
    • Category: Substantive
    • Sub-Issues:
      • Estoppel by representation
      • Reliance on representation
      • Detriment

8. Remedies Sought

  1. Monetary Damages
  2. Interest
  3. Indemnity for Costs

9. Cause of Actions

  • Breach of Contract
  • Breach of Guarantee
  • Conspiracy

10. Practice Areas

  • Commercial Litigation
  • Contract Disputes
  • Conspiracy Claims
  • Commodities Trading

11. Industries

  • Oil and Gas
  • Shipping
  • Commodities Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Chng Bee Kheng and another (executrixes and trustees of the estate of Fock Poh Kum, deceased) v Chng Eng ChyeHigh CourtYes[2013] 2 SLR 715SingaporeCited for the principle that the onus of rebutting the presumption of intention to create legal relations rests on the party asserting the contrary.
Edwards v Skyways LtdN/AYes[1964] 1 WLR 349England and WalesCited in support of the principle that the onus of rebutting the presumption of intention to create legal relations rests on the party asserting the contrary.
Snook v London and West Riding Investments LtdQueen's BenchYes[1967] 2 QB 786England and WalesCited for the classic definition of a sham transaction, requiring a common intention to mislead.
TKM (Singapore) Pte Ltd v Export Credit Insurance Corp of Singapore LtdHigh CourtYes[1992] 2 SLR(R) 858SingaporeCited with approval of the definition of a sham transaction laid down in Snook v London and West Riding Investments Ltd.
W T Ramsay Ltd v Inland Revenue CommissionersHouse of LordsYes[1982] AC 330England and WalesCited for the principle that the court will consider the underlying substance of a wider series of transactions in determining whether a transaction is a sham.
Tower MCashback LLP 1 and another v Revenue and Customs CommissionersCourt of AppealYes[2011] 2 AC 457England and WalesCited to show that circular chains of transactions are not ipso facto shams.
Garnac Grain Co. Inc v HMF Faure and Fairclough LtdQueen's BenchYes[1966] 1 QB 650England and WalesCited as an example of a genuine circular chain of back-to-back contracts for the sale and purchase of lard.
The “Dolphina”Court of AppealYes[2012] 1 SLR 992SingaporeCited for the principle that knowledge acquired by an agent while acting within the scope of his authority may be imputed to the principal.
Sigma Cable Co (Pte) Ltd v NEI Parsons LtdCourt of AppealYes[1992] 2 SLR(R) 403SingaporeCited for the principle that an agency relationship could only be established if there exists a representation (whether expressly or by conduct) by Goodwood or Mr Lee to that effect.
Goldrich Venture Pte Ltd v Halcyon Offshore Pte LtdHigh CourtYes[2015] 3 SLR 990SingaporeCited for the principle that an agency relationship could only be established if there exists a representation (whether expressly or by conduct) by Goodwood or Mr Lee to that effect.
Wartsila Singapore Pte Ltd v Lau Yew Choong and another suitHigh CourtYes[2017] 5 SLR 268SingaporeCited for the principle that there is no expectation of utmost precision and certainty in draftsmanship.
G-Fuel Pte Ltd v Gulf Petrochem Pte LtdHigh CourtYes[2016] SGHC 62SingaporeCited to define a sleeving trade in the fuel oil industry.
BWG v BWFCourt of AppealYes[2020] 1 SLR 1296SingaporeCited for comparison of facts and findings in a similar case involving circular oil trading transactions.
Nippon Menkwa Kabushiki Kaisha (Japan Cotton Trading Company, Ltd) v Dawsons Bank LtdN/AYes(1935) 51 LI L Rep 147N/ACited for the principle that a party can be assisted in enforcing a cause of action by preventing the defendant from denying the existence of some fact essential to establish the cause of action.
Linkforce Pte Ltd v Kajima Overseas Asia Pte LtdHigh CourtYes[2017] SGHC 46SingaporeCited for the principle that for an estoppel by representation to arise, the representation must be clear and unambiguous.
Yokogawa Engineering Asia Pte Ltd v Transtel Engineering Pte LtdCourt of AppealYes[2009] 2 SLR(R) 532SingaporeCited for the principle that it must be demonstrated that a party was encouraged to act to his detriment in reliance on the representation.
Rafsanjan Pistachio Producers Co-operative v Bank Leumi (UK) PlcN/AYes[1992] 1 Lloyd’s Rep 513England and WalesCited for the 'fraud exception' where a party cannot benefit from its own fraud.
Lambias (Importers & Exporters) Co Pte Ltd v Hongkong & Shanghai Banking CorpHigh CourtYes[1993] 1 SLR(R) 752SingaporeCited for the principle that plaintiffs were not allowed to rely on a forged document notwithstanding that their conduct fell short of fraud, because their failure to act with care and circumspection in producing documents in conformity with the contractual requirements contributed to the fraud
Beam Technology (Mfg) Pte Ltd v Standard Chartered BankHigh CourtYes[2003] 1 SLR(R) 597SingaporeCited for the principle that the court will be very hesitant to allow a party to rely on its own fraudulent document, or a fraudulent document in which preparation it had assisted in some way, to enforce against or to evade the enforcement of contractual rights by an innocent party.
Hindley v East Indian Produce Co LtdN/AYes[1973] 2 Lloyd’s Rep 515England and WalesCited for the principle that it was an implied term of a contract of this nature that the bill of lading shall not only appear to be true and accurate in the material statements which it contains, but that such statements shall in fact be true and accurate
United City Merchants (Investments) Ltd and Glass Fibres and Equipments Ltd v Royal Bank of Canada, Vitrorefuerzos SA and Banco Continental SA (incorporated in Canada)House of LordsYes[1983] AC 168England and WalesCited for the well-established “fraud principle”, that a party may not benefit from his own fraud, and in particular may not, for the purposes of enforcing an agreement, rely on documents which contain material representations of fact that to his knowledge are untrue
Tinsley v MilliganHouse of LordsYes[1994] 1 AC 340England and WalesCited for the well-established that a party is not entitled to rely on his own fraud or illegality to assist a claim or rebut a presumption
EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and anotherCourt of AppealYes[2014] 1 SLR 860SingaporeCited for the four elements of lawful or unlawful means conspiracy
MCH International Pte Ltd and others v YG Group Pte Ltd and others and other suitsHigh CourtYes[2019] SGHC 43SingaporeCited for the principle that a lawful act predominantly motivated by self-interest will generally not furnish a basis for lawful means conspiracy as the predominant intention to injure is not present
Marrinan v VibartQueen's BenchYes[1963] 1 QB 528England and WalesCited for the principle that no civil action in conspiracy (nor indeed in law) lies against witnesses in respect of evidence prepared, given, adduced, or procured by them in the course of legal proceedings
Darker (as personal representative of Docker, deceased) v Chief Constable of the West Midlands PoliceCourt of AppealYes[2000] 3 WLR 747England and WalesCited for the principle that no civil action in conspiracy (nor indeed in law) lies against witnesses in respect of evidence prepared, given, adduced, or procured by them in the course of legal proceedings
Times Publishing Bhd and others v SivadasCourt of AppealYes[1988] 1 SLR(R) 572SingaporeCited for the principle that no civil action in conspiracy (nor indeed in law) lies against witnesses in respect of evidence prepared, given, adduced, or procured by them in the course of legal proceedings
Tanaka Lumber Pte Ltd v Datuk Haji Mohammad Tufail bin Mahmud and anotherHigh CourtYes[2015] SGHC 276SingaporeCited for the principle that no civil action in conspiracy (nor indeed in law) lies against witnesses in respect of evidence prepared, given, adduced, or procured by them in the course of legal proceedings

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Fuel Oil
  • Inter-Tank Transfer (ITT)
  • Cargo Release Notice (CRN)
  • Sleeving Trade
  • Sham Transaction
  • Guaranteed Liabilities
  • Transaction Documents
  • Circular Trade
  • Credit Limit
  • Corporate Guarantee

15.2 Keywords

  • Contract
  • Sham
  • Fuel Oil
  • Guarantee
  • Conspiracy
  • Shipping
  • Singapore
  • Commercial
  • ITT
  • CRN

17. Areas of Law

Area NameRelevance Score
Contract Law90
Breach of Contract80
Sham Transaction70
Fraud and Deceit60
Conspiracy by Unlawful Means50
Estoppel40
Agency Law30

16. Subjects

  • Contract Law
  • Commercial Litigation
  • Shipping
  • Commodities Trading
  • Guarantees
  • Torts
  • Civil Procedure