Full House Building Construction v Tan Hong Joo: Breach of Contract & Director's Duties
In Full House Building Construction Pte Ltd v Tan Hong Joo, the High Court of Singapore addressed claims and counterclaims arising from a settlement agreement intended to resolve prior disputes. Full House, along with Tan Hong Chian, sued Tan Hong Joo, Goh Siew Ling, and Ooi Chooi Teik for wrongful reimbursement of legal fees and breach of warranty regarding trade receivables. The defendants counterclaimed for unpaid director's fees, remuneration, and breach of confidence. The court ruled in favor of Full House on the reimbursement and warranty claims, ordering the defendants to pay damages. The court ruled in favour of the defendants and granted an injunction against Tan Hong Chian regarding Prime Maintenance and email issues.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Judgment for Plaintiff in part and Defendant in part.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Settlement agreement dispute over legal fee reimbursement, warranty breach, and director's fees. Judgment for Plaintiff on warranty breach and reimbursement claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tan Hong Joo | Defendant, Plaintiff in Counterclaim | Individual | Judgment against Defendant in part | Lost | |
| Goh Siew Ling | Defendant, Plaintiff in Counterclaim | Individual | Judgment against Defendant in part | Lost | |
| Ooi Chooi Teik | Defendant, Plaintiff in Counterclaim | Individual | Judgment against Defendant in part | Lost | |
| Full House Building Construction Pte Ltd | Plaintiff, Defendant in Counterclaim | Corporation | Judgment for Plaintiff in part | Partial | |
| Tan Hong Chian | Defendant in Counterclaim, Plaintiff | Individual | Injunction granted against Plaintiff | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Senior Judge | Yes |
4. Counsels
4. Facts
- Full House and the defendants entered into a Settlement Agreement on 20 April 2018 to resolve disputes.
- The Settlement Agreement included a warranty that Full House's trade receivables were not less than $3,300,000.00 as of 28 February 2018.
- The defendants caused Full House to reimburse them for legal fees incurred in defending HC/S 895/2017.
- THC was removed as a director of Full House by 10 March 2017.
- The defendants claimed entitlement to director's fees under Clause 12 of the Settlement Agreement.
- THC forwarded email correspondence between the defendants and their solicitors to a third party.
- THC made multiple requests to the liquidators of Prime Maintenance to investigate certain transactions.
5. Formal Citations
- Full House Building Construction Pte Ltd v Tan Hong Joo and others, Suit No 74 of 2020, [2023] SGHC 114
6. Timeline
| Date | Event |
|---|---|
| Settlement Agreement dated | |
| Defendants to step down from directorship of Full House | |
| Trial began | |
| Closing submissions | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the defendants breached the warranty in Clause 18 of the Settlement Agreement.
- Category: Substantive
- Sub-Issues:
- Breach of warranty
- Interpretation of contractual terms
- Director's Duties
- Outcome: The court found that the defendants were not entitled to reimburse themselves for legal costs out of Full House’s assets.
- Category: Substantive
- Sub-Issues:
- Reimbursement of legal fees
- Entitlement to director's fees
- Breach of Confidence
- Outcome: The court found that THC's forwarding of the email was a breach of confidence.
- Category: Substantive
- Interpretation of Settlement Agreement
- Outcome: The court interpreted various clauses of the Settlement Agreement to determine the rights and obligations of the parties.
- Category: Substantive
- Sub-Issues:
- Clause 10
- Clause 12
- Clause 24
8. Remedies Sought
- Monetary Damages
- Injunction
- Specific Performance
9. Cause of Actions
- Breach of Contract
- Breach of Warranty
- Breach of Confidence
- Unjust Enrichment
10. Practice Areas
- Commercial Litigation
- Construction Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lim Sze Eng v Lin Choo Mee | High Court | Yes | [2019] 1 SLR 414 | Singapore | Cited as an example of a settlement agreement. |
| Allplus Holdings Pte Ltd and others v Phoon Wui Nyen (Pan Weiyuan) | High Court | Yes | [2016] SGHC 144 | Singapore | Cited as an example of a settlement agreement. |
| Sita Jaswant Kaur v Surindar Singh s/o Jaswant Singh | High Court | Yes | [2013] 4 SLR 838 | Singapore | Cited as an example of a settlement agreement. |
| Centre for Laser and Aesthetic Medicine Pte Ltd v GPK Clinic (Orchard) Pte Ltd | High Court | Yes | [2018] 1 SLR 180 | Singapore | Cited for the principle of establishing parties’ understanding of their agreement at the time it was concluded. |
| Zurich Insurance (Singapore Pte Ltd v B-Gold Interior Design & Construction Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 1029 | Singapore | Cited for the principle that a construction which leads to unreasonable results is to be avoided. |
| Rayfield v Hands and others | High Court | Yes | [1958] 2 WLR 851 | England and Wales | Cited regarding the interpretation of a company’s constitution or articles of association. |
| Intraco Ltd v Multi-Pak Singapore Pte Ltd | High Court | Yes | [1994] 3 SLR(R) 1064 | Singapore | Cited for the principle that courts will be slow to interfere with bona fide management or commercial decisions taken by directors. |
| ECRC Land Pte Ltd (in liquidation) v Ho Wing On Christopher and others | High Court | Yes | [2004] 1 SLR(R) 105 | Singapore | Cited for the principle that courts will be slow to interfere with bona fide management or commercial decisions taken by directors. |
| Swiss Butchery Pte Ltd v Huber Ernst and others and another suit | High Court | Yes | [2010] 3 SLR 813 | Singapore | Cited for the principle that a fiduciary is not allowed to enter into transactions in which he has a personal interest conflicting with the interest of those whom he is bound to protect. |
| Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace) | High Court | Yes | [2010] 1 SLR 1129 | Singapore | Cited for the principle that the court must consider the factual or other premises on which an expert bases his opinion and examine the correctness of those premises and the expert’s reasoning process. |
| Abhilash s/o Kunchian Krishnan v Yeo Hock Huat and another | High Court | Yes | [2019] 1 SLR 873 | Singapore | Cited for the principle that the court would be slow to substitute its views for those of the expert in the absence of good grounds. |
| Holland Leedon Pte Ltd (in liquidation) v Metalform Asia Pte Ltd | High Court | Yes | [2012] 3 SLR 377 | Singapore | Cited for the appropriate measure of damages in cases of breach of warranty. |
| Bauer, Adam Godfrey and another v Wee Tien Liang, deceased | High Court | Yes | [2021] SGHCR 8 | Singapore | Cited for the principle that the burden would be on them to prove that the plaintiffs were unreasonable in failing to mitigate their loss. |
| Coco v AN Clark (Engineers) Ltd | High Court | Yes | [1969] RPC 41 | England and Wales | Cited for the test for breach of confidence. |
| Mykytowych, Pamela Jane v V I P Hotel | High Court | Yes | [2016] 4 SLR 829 | Singapore | Cited for the principle that the court may grant an injunction against the use, disclosure, or publication of confidential information. |
| Asplenium Land Pte Ltd v Lam Chye Shing and others | High Court | Yes | [2019] 5 SLR 130 | Singapore | Cited for the principle that the court may grant an injunction against the use, disclosure, or publication of confidential information. |
| HT SRL v Wee Shuo Woon | High Court | Yes | [2016] 2 SLR 442 | Singapore | Cited for the principle that the court may grant an injunction against the use, disclosure, or publication of confidential information. |
| LVM Law Chambers LLC v Wan Hoe Keet and another and another matter | High Court | Yes | [2020] 1 SLR 1083 | Singapore | Cited for the modified Coco v AN Clark (Engineers) Ltd test in LVM Law Chambers. |
| Lim Oon Kuin and others v Rajah & Tann Singapore LLP and another appeal | Court of Appeal | Yes | [2022] 2 SLR 280 | Singapore | Cited for the wrongful gain and loss interests. |
| I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others | High Court | Yes | [2020] 1 SLR 1130 | Singapore | Cited for the appropriate test in cases involving unauthorised acquisition or “taking” of confidential information. |
| Wee Shuo Woon v HT SRL | High Court | Yes | [2017] 2 SLR 94 | Singapore | Cited for the principle that solicitor-client communications could be confidential and subject to an obligation of confidence. |
| ARX v Comptroller of Income Tax | High Court | Yes | [2016] 5 SLR 590 | Singapore | Cited for the principle that the email had not in any way been released into the public domain, and so retained its quality of confidence. |
| Candey Ltd v Bosheh and another | Court of Appeal | Yes | [2022] EWCA Civ 1103 | England and Wales | Cited for the principle that the email had not in any way been released into the public domain, and so retained its quality of confidence. |
| RGA Holdings International Inc v Loh Choon Phing Robin and another | High Court | Yes | [2017] 2 SLR 997 | Singapore | Cited for the principle that an injunction restraining further breaches will readily be granted unless doing so would cause undue hardship over and beyond simply having to observe the contract. |
| Viking Engineering Pte Ltd v Feen, Bjornar and others | High Court | Yes | [2022] SGHC 144 | Singapore | Cited for the principle that an injunction restraining further breaches will readily be granted unless doing so would cause undue hardship over and beyond simply having to observe the contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) section 271 | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) section 125(2)(a) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Settlement Agreement
- Trade Receivables
- Warranty
- Director's Fees
- Reimbursement
- Breach of Confidence
- Prime Maintenance
- Liquidators
- Articles of Association
- Management Decision
15.2 Keywords
- contract
- construction
- settlement agreement
- directors
- legal fees
- warranty
- receivables
- injunction
- breach of contract
- directors duties
17. Areas of Law
16. Subjects
- Contract Law
- Company Law
- Civil Procedure
- Construction Law
- Injunctions