Lim Chee Seng v Phang Yew Kiat: Appeal on Total Failure of Consideration
In Lim Chee Seng v Phang Yew Kiat, the High Court of Singapore heard an appeal by Lim Chee Seng against the District Court's decision in favor of Phang Yew Kiat. The District Court had granted judgment to Phang for $200,000 plus interest, based on a total failure of consideration. The dispute arose from an agreement where Phang paid Lim $200,000 for shares in Hearti Lab Pte Ltd, which were never transferred. Lim appealed, arguing that there was no total failure of consideration. The High Court dismissed the appeal, affirming the District Court's finding of a total failure of consideration.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding a $200,000 payment for shares. The court dismissed the appeal, finding a total failure of consideration due to non-transfer of shares.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lim Chee Seng | Appellant, Defendant | Individual | Appeal Dismissed | Lost | |
| Phang Yew Kiat | Respondent, Plaintiff | Individual | Judgment for Respondent | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Lim Chee Seng and Phang Yew Kiat entered into an agreement on 18 April 2018.
- Phang Yew Kiat transferred $200,000 to Lim Chee Seng on 23 April 2018.
- The shares in Hearti Lab Pte Ltd were never transferred to Phang Yew Kiat.
- Lim Chee Seng claimed an oral trust agreement existed, which the court rejected.
- The company, Hearti Lab Pte Ltd, commenced voluntary winding up proceedings on 14 January 2022.
- Phang Yew Kiat sought the return of $200,000 plus interest.
5. Formal Citations
- Lim Chee Seng v Phang Yew Kiat, District Court Appeal No 30 of 2023, [2024] SGHC 100
- Phang Yew Kiat v Lim Chee Seng, DC/DC 479/2022, [2023] SGDC 218
6. Timeline
| Date | Event |
|---|---|
| Parties met to discuss share sale. | |
| Agreement entered into. | |
| Phang Yew Kiat transferred $200,000 to Lim Chee Seng. | |
| Company commenced voluntary winding up proceedings. | |
| Letter of demand issued by respondent's solicitors. | |
| DC 479 commenced. | |
| Company wound up. | |
| Hearing held. | |
| Judgment reserved. |
7. Legal Issues
- Total Failure of Consideration
- Outcome: The court found a total failure of consideration due to the non-transfer of shares and failure to provide quarterly financial statements.
- Category: Substantive
- Sub-Issues:
- Non-transfer of shares
- Failure to provide quarterly financial statements
- Related Cases:
- [2018] 1 SLR 239
- [2023] SGHC(A) 29
- Inconsistent Pleadings
- Outcome: The court considered whether the respondent's claim on appeal was inconsistent with the case below but found no prejudice to the appellant.
- Category: Procedural
- Related Cases:
- [1991] 2 SLR(R) 471
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Restitution
- Unjust Enrichment
10. Practice Areas
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Huang Han Chao v Leong Fook Meng and another | Court of Appeal | Yes | [1991] 2 SLR(R) 471 | Singapore | Cited regarding inconsistent pleadings and whether a party can pursue a claim inconsistent with their pleadings. |
| Rotam Agrochemical Co Ltd and another company v GAT Microencapsulation GmbH (formerly GAT Microencapsulation AG) | English High Court | Yes | [2018] EWHC 2765 (Comm) | England and Wales | Cited regarding inconsistent pleadings. |
| Benzline Auto Pte Ltd v Supercars Lorinser Pte Ltd and another | Court of Appeal | Yes | [2018] 1 SLR 239 | Singapore | Cited regarding the principle that restitution should not redistribute risks already allocated by contract and the exception for total failure of consideration. |
| Carlsberg South Asia Pte Ltd v Pawan Kumar Jagetia | Appellate Division of the High Court | Yes | [2023] SGHC(A) 29 | Singapore | Cited regarding the exception to the principle that restitution should not redistribute risks already allocated by contract for total failure of consideration. |
| Max Media FZ LLC v Nimbus Media Pte Ltd | High Court | Yes | [2010] 2 SLR 677 | Singapore | Cited regarding the principle that the law of restitution should not redistribute risks already allocated by contract. |
| V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and another | Court of Appeal | Yes | [2015] 5 SLR 1422 | Singapore | Cited regarding the objective of pleadings to set the boundaries of the parties’ dispute. |
| SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and others | Court of Appeal | Yes | [2016] 2 SLR 118 | Singapore | Cited regarding the objective of pleadings to prevent surprises at trial. |
| Recovery Vehicle 1 Pte Ltd v Industries Chimiques Du Senegal and another appeal and another matter | Court of Appeal | Yes | [2021] 1 SLR 342 | Singapore | Cited regarding the doctrine of approbation and reprobation. |
| Esben Finance Ltd and others v Wong Hou-Lianq Neil | Court of Appeal | Yes | [2022] 1 SLR 136 | Singapore | Cited regarding the principle that a claim in unjust enrichment can operate only if there is no valid contract between the parties, save in exceptional cases. |
| Alwie Handoyo v Tjong Very Sumito and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 308 | Singapore | Cited regarding the rationale that the law of restitution should not redistribute the risks which the parties have, by contract, already allocated. |
| Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal | Court of Appeal | Yes | [2018] 2 SLR 655 | Singapore | Cited regarding the law of unjust enrichment ranks next to contract and tort as a distinct part of the law of obligations. |
| Roxborough v Rothmans of Pall Mall Australia Ltd | High Court of Australia | Yes | [2001] HCA 68 | Australia | Cited regarding payments made under a subsisting contract but there has been a failure of a distinct and severable part of the consideration for those payments. |
| Britestone Pte Ltd v Smith & Associates Far East, Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 855 | Singapore | Cited regarding the legal burden of proof. |
| Yong Kheng Leong and another v Panweld Trading Pte Ltd and another | Court of Appeal | Yes | [2013] 1 SLR 173 | Singapore | Cited regarding that an appellate court will generally be slow to overturn factual findings. |
| Jagatheesan s/o Krishnasamy v Public Prosecutor | High Court | Yes | [2006] 4 SLR(R) 45 | Singapore | Cited regarding the distinction between findings of fact and inferences of fact. |
| Public Prosecutor v Mohammed Liton Mohammed Syeed Mallik | Court of Appeal | Yes | [2008] 1 SLR(R) 601 | Singapore | Cited regarding the distinction between findings of fact and inferences of fact. |
| Public Prosecutor v Muhammad Farid bin Mohd Yusop | Court of Appeal | Yes | [2015] 3 SLR 16 | Singapore | Cited regarding the distinction between the trial judge’s findings of fact based on the credibility of the witness and an inference of fact based on the objective evidence. |
| Lian Tian Yong Johnny v Tan Swee Wan and another | High Court | Yes | [2023] SGHC 292 | Singapore | Cited regarding that an appellate court will generally be slow to overturn factual findings, especially if the trial judge was better placed to assess the credibility of the witness. |
| Tan Meow Hiang (trading as Chip Huat) v Ong Kay Yong (trading as Wee Wee Laundry Service) | High Court | Yes | [2023] SGHC 218 | Singapore | Cited regarding the applicable principles regarding the threshold of appellate intervention. |
| Sandz Solutions (Singapore) Pte Ltd and others v Strategic Worldwide Assets Ltd and others | Court of Appeal | Yes | [2014] 3 SLR 562 | Singapore | Cited regarding findings of facts based on a witness’s testimony. |
| Giedo Van Der Garde BV and another v Force India Formula One Team Ltd (Formerly Spyker F1 Team Ltd (England)) | English High Court | Yes | [2010] EWHC 2373 (QB) | England and Wales | Cited regarding the essential purpose of the contract. |
| Ooi Ching Ling v Just Gems Inc | Court of Appeal | Yes | [2003] 1 SLR(R) 14 | Singapore | Cited regarding that failure of consideration occurs when one party has not enjoyed the benefit of any part of what it bargained for. |
| Stocznia Gdanska SA v Latvian Shipping Co and others | House of Lords | Yes | [1998] 1 WLR 574 | United Kingdom | Cited regarding the test is not whether the promisee has received a specific benefit, but rather whether the promisor has performed any part of the contractual duties in respect of which the payment is due. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Total Failure of Consideration
- Oral Trust Agreement
- Shares
- Agreement
- Quarterly Financial Statements
- Performance Targets
- Restitution
15.2 Keywords
- failure of consideration
- restitution
- shares
- contract
- singapore
- appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Failure of consideration | 95 |
| Unjust Enrichment | 90 |
| Civil Procedure | 85 |
| Civil Practice | 75 |
| Contracts | 70 |
| Civil Litigation | 60 |
| Breach of Contract | 50 |
| Jurisdiction | 40 |
| Commercial Disputes | 40 |
| Mistake | 30 |
| Rescission | 30 |
16. Subjects
- Contract Law
- Restitution
- Civil Procedure