TG Master Pte Ltd v Tung Kee: Contractual Terms, Penalties, and Land Sale Dispute

In TG Master Pte Ltd v Tung Kee Development (Singapore) Pte Ltd and another, the General Division of the High Court of Singapore heard a case involving claims by TG Master Pte Ltd against Tung Kee Development (Singapore) Pte Ltd and Mr. Yung Man Tung for unpaid extension fees and loan repayment, and a counterclaim by the defendants for the refund of option fees, further sums, and additional payments related to a property transaction. The court, presided over by Goh Yihan JC, allowed the plaintiff's claim in part and the defendants' counterclaim in part, resulting in a net claim in favor of the defendants. The primary legal issues revolved around the enforceability of contractual terms, the penalty rule, and unilateral mistake.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Plaintiff's claim allowed in part; Defendant's counterclaim allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The case involves a dispute over extension fees, loan repayment, and forfeiture of sums in a property transaction. The court partially allowed both the claim and counterclaim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
TG Master Pte LtdPlaintiff, Defendant in CounterclaimCorporationClaim for Extension Fees DismissedLost
Tung Kee Development (Singapore) Pte LtdDefendant, Plaintiff in CounterclaimCorporationCounterclaim for Option Fees RejectedLost
Yung, Man TungDefendant, Plaintiff in CounterclaimIndividualCounterclaim for Option Fees RejectedLost

3. Judges

Judge NameTitleDelivered Judgment
Goh YihanJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Lee Ming Hui KelvinWNLEX LLC
Ong Xin Ying SamanthaWNLEX LLC
Tan Ly-Ru DawnADTLaw LLC
Teo Wei Jian TristanZhang Weijian
Cheyenne LowADTLaw LLC

4. Facts

  1. TG Master is the developer of Skies Miltonia.
  2. Tung Kee Development was the tenant of properties owned by TG Master.
  3. Yung, Man Tung is a director of Tung Kee Development.
  4. TG Master claimed $863,147 for Extension Fees and $620,000 for loan repayment.
  5. Defendants counterclaimed for setting aside tenancy agreements and refund of fees.
  6. Second defendant did not exercise the OTPs by the final deadline.
  7. The second defendant paid $122,720 towards the purchase of the Properties as extension fees.

5. Formal Citations

  1. TG Master Pte Ltd v Tung Kee Development (Singapore) Pte Ltd and another, Suit No 321 of 2021, [2022] SGHC 316

6. Timeline

DateEvent
Options to Purchase signed
Option Fees paid
Confirmation letter signed
Further Sum paid (start date)
Further Sum paid (end date)
Promissory Note signed
Deed of Guarantee and indemnity signed
$620,000 disbursed to the first defendant
Letter of demand issued
Summary judgment for vacant possession obtained
Appeal against summary judgment dismissed
Suit filed
Action against third party discontinued
Trial began
Judgment reserved
Judgment issued

7. Legal Issues

  1. Enforceability of Extension Fees
    • Outcome: The court held that the plaintiff failed to prove the underlying contract that entitled it to claim the Extension Fees.
    • Category: Substantive
    • Sub-Issues:
      • Proof of underlying contract
      • Interpretation of contractual terms
  2. Unilateral Mistake
    • Outcome: The court held that the OTPs should not be set aside due to the second defendant’s alleged unilateral mistake due to insufficient pleading.
    • Category: Substantive
    • Sub-Issues:
      • Mistake as to contractual terms
      • Knowledge of mistake
  3. Penalty Rule
    • Outcome: The court held that the forfeiture of the Further Sum and the Renovation Costs infringed the penalty rule.
    • Category: Substantive
    • Sub-Issues:
      • Forfeiture of sums paid
      • True deposit vs. part payment
      • Genuine pre-estimate of loss
  4. Loan Agreement
    • Outcome: The court allowed the plaintiff’s claim for the repayment of the loan with interest.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Setting Aside of Agreements
  3. Refund of Fees

9. Cause of Actions

  • Breach of Contract
  • Claim for Loan Repayment

10. Practice Areas

  • Commercial Litigation
  • Real Estate Law

11. Industries

  • Construction
  • Real Estate Development

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Su Sh-Hsyu v Wee Yue ChewCourt of AppealYes[2007] 3 SLR(R) 673SingaporeCited for the principle that strong compelling grounds must prevail before the court will consider the exercise of its discretion to vacate trial dates.
PT Humpuss Intermoda Transportasi and another v Humpuss Sea Transport Pte Ltd (in compulsory liquidation)Court of AppealYes[2019] SGCA 8SingaporeCited to confirm that the test in Singapore for the vacation of trial dates remained the need for strong compelling grounds.
Unilever Computer Services Ltd v Tiger Leasing SAEnglish Court of AppealYes[1983] 1 WLR 856England and WalesCited to contrast the test for vacation of trial dates in England with the stricter test in Singapore.
Chan Kern Miang v Kea Resources Pte LtdCourt of AppealYes[1998] 2 SLR(R) 85SingaporeCited for the principle that the High Court adopted a strict view on the question of vacating hearing dates in the interest of prompt administration of justice and efficiency.
Lucky Realty Co Ltd v HSBC Trustee (Singapore) LtdCourt of AppealYes[2016] 1 SLR 1069SingaporeCited for the principle that a plain reading of the contractual text is the rightful first port-of-call.
Kingston v PrestonCourt of King's BenchYes(1773) 2 Doug KB 689England and WalesCited for the principle that there are covenants which are conditions and dependant, in which case the performance of one depends on the prior performance of another.
Taylor v WebbEnglish Court of AppealYes[1937] 2 KB 283England and WalesCited as an example of independent obligations, where a tenant may not withhold payment of rent because of failures on the part of the landlord to keep the premises in good repair.
Chan Tam Hoi (alias Paul Chan) v Wang Jian and other mattersHigh CourtYes[2022] SGHC 192SingaporeCited for the principle that pleadings are even more important in cases involving oral agreements.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and anotherCourt of AppealYes[2015] 5 SLR 1422SingaporeCited for the principle that procedural fairness and substantive justice interact with each other and cannot survive without the other.
OMG Holdings Pte Ltd v Pos Ad Sdn BhdCourt of AppealYes[2012] 4 SLR 231SingaporeCited for the principle that pleadings must contain all the necessary elements of the cause of action or defence.
Quoine Pte Ltd v B2C2 LtdCourt of AppealYes[2020] 2 SLR 20SingaporeCited for the principle that knowledge is a core element of a claim of unilateral mistake.
Ho Seng Lee Construction Pte Ltd v Nian Chuan Construction Pte LtdHigh CourtYes[2001] 3 SLR(R) 184SingaporeCited for the principle that the grant of relief on the basis of mistake is something not lightly or commonly done.
Ingram and others v LittleEnglish Court of AppealYes[1960] 3 All ER 332England and WalesCited for the principle that mistake is a ground of defence and it is for the defendant to sufficiently plead it and assert that the contract is not what it seems to be.
Bell v Lever Brothers LtdHouse of LordsYes[1932] AC 161United KingdomCited for criticism made of a party’s inadequacy of pleading in mistake in past cases.
Denka Advantech Pte Ltd and another v Seraya Energy Pte Ltd and another and other appealsCourt of AppealYes[2021] 1 SLR 631SingaporeCited as the most recent Court of Appeal case dealing with the penalty rule in the context of liquidated damages.
Hon Chin Kong v Yip Fook Mun and anotherHigh CourtYes[2018] 3 SLR 534SingaporeCited as the governing case on forfeiture of sums paid and what amounts to a true deposit.
Cavendish Square Holding BV v MakdessiSupreme CourtYes[2016] AC 1172United KingdomCited as a case where the Court of Appeal in Denka declined to follow the legitimate interest approach.
Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co LtdHouse of LordsYes[1915] AC 79United KingdomCited for the long-standing principles set out by Lord Dunedin on the penalty rule.
Polyset Ltd v Panhandat LtdHong Kong Court of Final AppealYes[2002] HKCFA 15Hong KongCited for the test of whether the sum is reasonable as an earnest or is customary or moderate.
Triangle Auto Pte Ltd v Zheng Zi Construction Pte LtdHigh CourtYes[2000] 3 SLR(R) 594SingaporeCited for the principle that the magic number of 10% of the price has been regarded as a reasonable deposit in sale and purchase of immovable property.
Workers Trust & Merchant Bank Ltd v Dojap Investments LtdPrivy CouncilYes[1993] AC 573United KingdomCited for the principle that a vendor who sought a larger amount than the customary deposit of 10% must show special circumstances which justify such a deposit.
Pacific Rim Investments Pte Ltd v Lam Seng Tiong and anotherCourt of AppealYes[1995] 2 SLR(R) 643SingaporeCited for the principle that in respect of contracts for the sale of land relief against forfeiture has been granted in appropriate cases.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Moneylenders Act (Cap 188, 1985 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Extension Fees
  • Options to Purchase
  • Further Sum
  • Renovation Costs
  • Loan Agreement
  • Bundling Provisions
  • Forfeiture
  • Penalty Rule
  • Unilateral Mistake

15.2 Keywords

  • contract
  • property
  • loan
  • forfeiture
  • penalty
  • singapore

17. Areas of Law

Area NameRelevance Score
Contract Law90
Penalties70
Remedies60
Sale of Land50
Property Law40
Mistake30
Rescission25

16. Subjects

  • Contract Law
  • Real Estate
  • Civil Litigation