Fu Hao v Evancarl Ltd: Breach of Contract, Formation, Illegality & Public Policy
In Fu Hao v Evancarl Ltd and Zheng Jiabin, the High Court of Singapore heard a case regarding breach of contract. Fu Hao sued Evancarl and Zheng for failing to fulfill obligations under procurement agreements and a deed related to a reverse takeover of Sincap Group Limited. The court found in favor of Fu Hao, determining that the overarching agreement existed, the disputed written agreements were valid and enforceable, and the defendants had breached the agreements. The court awarded damages to the plaintiff.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Fu Hao sues Evancarl Ltd for breach of contract related to a reverse takeover agreement. The court found in favor of Fu Hao.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Fu Hao | Plaintiff | Individual | Judgment for Plaintiff | Won | |
| Evancarl Limited | Defendant | Corporation | Claim Allowed | Lost | |
| Zheng Jiabin | Defendant | Individual | Claim Allowed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Plaintiff and Defendants entered into Written Agreements for the sale and purchase of SGL shares.
- The Written Agreements were allegedly pursuant to an Alleged Overarching Agreement for a reverse takeover of SGL.
- Plaintiff transferred shares to Simson Kwok and Joseph Yeo, allegedly Zheng's nominees.
- Defendants allegedly did not perform obligations under the Disputed Written Agreements.
- Evancarl failed to procure the transfer of Subsidiary Shares to the Plaintiff by 30 April 2016.
- Zheng failed to procure the transfer of 12,226,500 shares in SGL to the Plaintiff by 30 April 2015.
5. Formal Citations
- Fu Hao v Evancarl Ltd and another, Suit No 298 of 2019, [2021] SGHC 137
6. Timeline
| Date | Event |
|---|---|
| Sincap Group Limited incorporated | |
| Sincap Group Limited listed on the Catalist board of the Singapore Exchange Securities Trading Limited | |
| Plaintiff engaged lawyer to draft Written Agreements | |
| Written Agreements signed | |
| Sincap Australia Pte Ltd incorporated | |
| SGL obtained shareholders’ approval for the expansion of its core business | |
| Sincap Australia Pte Ltd incorporated a wholly owned subsidiary in Western Australia | |
| Sincap Land (Aus) Pty Ltd incorporated a wholly owned subsidiary in Western Australia | |
| SGL acquired the Murray Street Property | |
| SGL entered into a term sheet to acquire all issued shares in the capital of LTN Land Pte Ltd | |
| SGL entered into a conditional sale and purchase agreement for the acquisition of LTN | |
| SGL took steps to place up to 351,000,000 new shares to fund the acquisition of LTN | |
| SGL’s proposed acquisition of LTN was terminated | |
| Deadline for Defendants to fulfill obligations under the Disputed Written Agreements | |
| Plaintiff issued a letter of demand to Zheng | |
| Plaintiff served a second letter of demand on Zheng | |
| SGL disposed of Beijing Raffles Investment Advisory Co Ltd | |
| Writ filed | |
| Trial began | |
| Trial concluded | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the defendants breached the 1st and 2nd Procurement Agreements and the Deed.
- Category: Substantive
- Sub-Issues:
- Failure to procure transfer of shares
- Failure to pay liquidated damages
- Validity of Contract
- Outcome: The court found that the Disputed Written Agreements were validly executed and enforceable.
- Category: Substantive
- Sub-Issues:
- Intention to create legal relations
- Consideration
- Compliance with formalities
- Illegality of Contract
- Outcome: The court found that the Alleged Overarching Agreement was not illegal.
- Category: Substantive
- Sub-Issues:
- Statutory illegality
- Common law illegality
- Damages for Breach of Contract
- Outcome: The court awarded damages based on the liquidated damages clause and the market price rule.
- Category: Substantive
- Sub-Issues:
- Liquidated damages
- Market price rule
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Centre for Laser and Aesthetic Medicine Pte Ltd v GPK Clinic (Orchard) Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 180 | Singapore | Cited regarding the relevance of post-contractual conduct as evidence of parties’ agreement at the time when the contract was concluded. |
| Browne v Dunn | N/A | Yes | (1893) 6 R 67 | N/A | Cited regarding the rule that a party must give a witness the opportunity to respond to allegations made against them. |
| Asnah bte Ab Rahman v Li Jianlin | Court of Appeal | Yes | [2016] 2 SLR 944 | Singapore | Cited for the application of the rule in Browne v Dunn. |
| Hong Leong Singapore Finance Ltd v United Overseas Bank Ltd | N/A | Yes | [2007] 1 SLR(R) 292 | Singapore | Cited for the application of the rule in Browne v Dunn. |
| Lee Chee Wei v Tan Hor Peow Victor | N/A | Yes | [2007] 3 SLR(R) 537 | Singapore | Cited regarding the effect of entire agreement clauses. |
| Gay Choon Ing v Loh Sze Ti Terence Peter | Court of Appeal | Yes | [2009] 2 SLR(R) 332 | Singapore | Cited regarding the principle that past consideration is not valid consideration. |
| Kuek Siew Chew v Kuek Siang Wei | N/A | Yes | [2015] 1 SLR 396 | Singapore | Cited for the requirements for a deed to be valid. |
| Lim Zhipeng v Seow Suat Thin | Court of Appeal | Yes | [2020] 2 SLR 1151 | Singapore | Cited regarding estoppel in relation to the sealing of a deed. |
| Unitrack Building Construction Pte Ltd v GHL Pte Ltd | High Court | Yes | [1999] 1 SLR(R) 967 | Singapore | Cited regarding the law on delivery of deeds. |
| Vincent v Premo Enterprises (Voucher Sales) Ltd | Court of Appeal | Yes | [1969] 2 QB 609 | England | Cited regarding the law on delivery of deeds. |
| Ting Siew May v Boon Lay Choo | N/A | Yes | [2014] 3 SLR 609 | Singapore | Cited regarding the doctrine of illegality and public policy. |
| Ochroid Trading Ltd v Chua Siok Lui | N/A | Yes | [2018] 1 SLR 363 | Singapore | Cited regarding the doctrine of illegality and public policy. |
| KJ Kim Company (Pte) Ltd v Buck & Company (Pte) Ltd | High Court | Yes | [1997] SGHC 166 | Singapore | Cited regarding the purpose of Section 160(1) of the Companies Act. |
| Auston International Group Ltd v Ng Swee Hua | Court of Appeal | Yes | [2009] 4 SLR(R) 628 | Singapore | Cited regarding the market price rule for damages in breach of contract for failing to deliver shares. |
| Oei Hong Leong v Chew Hua Seng | High Court | Yes | [2020] SGHC 39 | Singapore | Cited regarding blockage discount and control premium. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 160(1) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Reverse Takeover
- Sincap Group Limited
- Procurement Agreement
- Deed of Guarantee
- Subsidiary Shares
- Liquidated Damages Clause
- Nominee
- Catalist Rules
15.2 Keywords
- contract
- breach
- reverse takeover
- shares
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 95 |
| Breach of Contract | 95 |
| Illegality and public policy | 70 |
| Reverse Takeover | 60 |
| Company Law | 50 |
| Statutory illegality | 50 |
| Evidence | 40 |
16. Subjects
- Contract Law
- Company Law
- Commercial Law