Lim Siau Hing v Compass Consulting: Contractual Terms & Construction Rules in Reverse Takeover Dispute

In the Court of Appeal of Singapore, Lim Siau Hing and Lim Vhe Kai appealed against the decision in favor of Compass Consulting Pte Ltd regarding a dispute over bonus shares and cash fees related to a reverse takeover (RTO). The court considered the interpretation of contractual terms and the rules of construction, ultimately allowing the appeal in part and dismissing Compass Consulting's claim, finding that certain conditions of the agreement were not met.

1. Case Overview

1.1 Court

Court of Appeal of the republic of singapore

1.2 Outcome

Appeal allowed in part, claim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court clarifies contract terms in a reverse takeover dispute between Lim Siau Hing and Compass Consulting, focusing on bonus shares and cash fees.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lim Siau Hing @ Lim Kim HoeAppellant, DefendantIndividualAppeal allowed in partPartial
Lim Vhe KaiAppellant, DefendantIndividualAppeal allowed in partPartial
Compass Consulting Pte LtdRespondent, Appellant, ClaimantCorporationClaim DismissedDismissed

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Steven ChongJustice of the Court of AppealYes
Belinda Ang Saw EanJustice of the Court of AppealNo

4. Counsels

Counsel NameOrganization
Cheng Wai Yuen MarkRajah & Tann Singapore LLP
Tan Tian HuiRajah & Tann Singapore LLP
Kelvin Poon Kin MunRajah & Tann Singapore LLP
Ong Min-Tse PaulPaul Ong Chambers LLC

4. Facts

  1. The Lims appointed Compass to structure a reverse takeover (RTO) of Lereno by KTMG.
  2. At a meeting on 17 July 2017, the parties agreed that Compass would be paid incentives in the form of bonus shares and a cash fee upon successful completion of the RTO.
  3. Three documents were signed by the Lims during the 17 July 2017 meeting.
  4. The RTO was completed on 18 February 2019, with the Lims holding a 77.79% stake in Lereno.
  5. Compass commenced proceedings claiming for the bonus shares and the cash fee, which the Lims denied.
  6. The Lims argued that the bonus shares and cash fee were only payable if their shares were worth at least $30 million upon completion of the RTO.
  7. The court found that the $30 million condition was a term of the agreement and was not satisfied.

5. Formal Citations

  1. Lim Siau Hing @ Lim Kim Hoe and another v Compass Consulting Pte Ltd and another appeal, Civil Appeal Nos 23 of 2023 and 24 of 2023, [2023] SGCA 39

6. Timeline

DateEvent
Compass Consulting Pte Ltd incorporated in Singapore
Corporate advisory agreement (1st LOE) signed
Kick-off meeting held
Addendum to the 1st LOE (2nd LOE) signed
Meeting held where the structure of the RTO was finalised
Put and Call Option Agreement entered into
RTO completed
Compass commenced HC/S 433/2021
Judge delivered his decision in Compass Consulting Pte Ltd v Lim Siau Hing (alias Lim Kim Hoe) and another [2023] SGHC 17
Judgment reserved
Judgment delivered

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the $30 million condition was a term of the agreement, and since it was not met, there was no breach of contract.
    • Category: Substantive
    • Sub-Issues:
      • Failure to fulfill conditions precedent
  2. Contractual Interpretation
    • Outcome: The court considered the nature of the agreement and the admissibility of oral evidence to interpret the written documents.
    • Category: Substantive
    • Sub-Issues:
      • Admissibility of extrinsic evidence
      • Parol evidence rule

8. Remedies Sought

  1. Monetary Damages
  2. Transfer of Bonus Shares

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Corporate Advisory
  • Reverse Takeover

11. Industries

  • Consulting

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The “Luna” and another appealCourt of AppealYes[2021] 2 SLR 1054SingaporeCited regarding the approach to receiving evidence of the background or context in which the contract was concluded.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdN/AYes[2008] 3 SLR(R) 1029SingaporeCited for the principles governing the admission of extrinsic evidence in the context of contractual interpretation.
COT v COU and others and other appealsCourt of AppealYes[2023] SGCA 31SingaporeCited for the interpretation of the words “contained in or evidenced by” in relation to an oral contract.
Hewlett-Packard Singapore (Sales) Pte Ltd v Chin Shu Hwa CorinnaN/AYes[2016] 2 SLR 1083SingaporeCited regarding the criteria for admitting evidence of subsequent conduct in contractual interpretation.
Simpson Marine (SEA) Pte Ltd v Jiacipto JiaravanonN/AYes[2019] 1 SLR 696SingaporeCited regarding the admissibility and relevance of subsequent conduct in the formation and interpretation of contracts.
Seah Han v Onwards Media Group Pte LtdHigh CourtYes[2021] SGHC 179SingaporeCited regarding the weight given to a written summary of an oral agreement sent shortly after the agreement was made.

13. Applicable Rules

Rule Name
Rules of Court (2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Securities and Futures Act (Cap 289, 2006 Rev Ed)Singapore
Civil Law Act 1909 (2020 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Reverse Takeover
  • Bonus Shares
  • Cash Fee
  • Conditions
  • Corporate Advisory Service Agreement
  • Scheme Spreadsheet
  • RTO
  • 65% Condition
  • $30m Condition

15.2 Keywords

  • contractual terms
  • reverse takeover
  • bonus shares
  • cash fee
  • contractual interpretation
  • Singapore
  • RTO
  • conditions

17. Areas of Law

Area NameRelevance Score
Interpretation of contractual terms90
Contractual terms85
Contract Law75
Rules of construction70
Commercial Disputes50
Company Law30

16. Subjects

  • Contract Law
  • Corporate Law
  • Civil Procedure