TG Master v Tung Kee: Option to Purchase, Deposits, and Extension Fees Dispute

In TG Master Pte Ltd v Tung Kee Development (Singapore) Pte Ltd and another, the Appellate Division of the High Court of Singapore heard an appeal by TG Master Pte Ltd against the decision of the trial judge regarding claims for repayment of a loan, unpaid extension fees, and a counterclaim by Mr. Yung Man Tung for the return of sums paid related to options to purchase eight properties. The court allowed TG Master's appeal, finding that the sums paid by Mr. Yung were option fees and that TG Master was entitled to retain them, as well as allowing TG Master's claim for unpaid extension fees. The court ordered Mr. Yung to pay costs of the appeal to TG Master.

1. Case Overview

1.1 Court

Appellate Division of the High Court

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding option to purchase properties, focusing on the nature of sums paid and unpaid extension fees. Appeal allowed with costs.

1.7 Decision Date

1 May 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
TG Master Pte Ltd	Appellant, Plaintiff	Corporation	Appeal Allowed	Won	Lee Peng Khoon Edwin of Eldan Law LLP Amanda Koh Jia Yi of Eldan Law LLP Mirza Akmal Bin Mohamad Shahri of Eldan Law LLP
Tung Kee Development (Singapore) Pte Ltd	Respondent, Defendant	Corporation	Counterclaim Dismissed	Lost	Lin Hui Yin Sharon of Withers KhattarWong LLP Phng Boon Yew Gideon of Withers KhattarWong LLP Oh Zhen Hao Thaddeus of Hu Zhenhao
Yung, Man Tung	Respondent, Defendant	Individual	Counterclaim Dismissed	Lost	Lin Hui Yin Sharon of Withers KhattarWong LLP Phng Boon Yew Gideon of Withers KhattarWong LLP Oh Zhen Hao Thaddeus of Hu Zhenhao

3. Judges

Judge Name	Title	Delivered Judgment
Woo Bih Li	Judge of the Appellate Division	Yes
Debbie Ong Siew Ling	Judge of the Appellate Division	No
Audrey Lim	Judge of the High Court	No

4. Counsels

Counsel Name	Organization
Lee Peng Khoon Edwin	Eldan Law LLP
Amanda Koh Jia Yi	Eldan Law LLP
Mirza Akmal Bin Mohamad Shahri	Eldan Law LLP
Lin Hui Yin Sharon	Withers KhattarWong LLP
Phng Boon Yew Gideon	Withers KhattarWong LLP
Oh Zhen Hao Thaddeus	Hu Zhenhao

4. Facts

TG Master granted Mr. Yung eight options to purchase eight properties.
The option period for each option was 24 months.
Each option came bundled with a tenancy agreement for the respective property.
TG Master lent $620,000 to Tung Kee, guaranteed by Mr. Yung.
The option periods were extended in exchange for extension fees.
The Respondents did not exercise the options and refused to return possession of the Properties.
TG Master claimed against the Respondents for the repayment of the loan and for unpaid extension fees.

5. Formal Citations

TG Master Pte Ltd v Tung Kee Development (Singapore) Pte Ltd and another, Civil Appeal No 53 of 2023, [2024] SGHC(A) 13
TG Master Pte Ltd v Tung Kee Development (Singapore) Pte Ltd and another, , [2022] SGHC 316
TG Master Pte Ltd v Tung Kee Development (Singapore) Pte Ltd and another, , [2023] SGHC 64

6. Timeline

Date	Event
2018-01-03	Options to purchase dated
2018-01-08	Mr. Yung signed letter accepting terms of options to purchase
2018-01-02	Offer to Purchase
2018-01-04	Option fees paid
2018-04-30	Renovation costs paid
2018-04-30	Further sums paid in tranches between 30 April 2018 and 28 December 2018
2020-01-22	Loan agreement dated
2020-01-22	First tranche of loan disbursed
2020-03-03	Extension of time to exercise options to purchase for 1st Group of 4 Properties
2020-03-31	Mr. Yung gave TG Master a cheque for $134,400 dated 31 March 2020. However, this cheque was dishonoured.
2020-04-03	Further extension of time in respect of the OTPs for the 1st Group of 4 Properties from 3 March 2020 to 3 April 2020
2020-04-30	Mr Yung also agreed to transfer the outstanding extension fees of $134,400 to TG Master’s bank account on 30 April 2020. This was not done.
2020-05-03	Further extension of time in respect of the OTPs for the 1st Group of 4 Properties from 3 April to 3 May 2020
2020-05-13	Mr Yung paid an extension fee of $62,720
2020-06-30	Extension of time to exercise options to purchase for 2nd Group of 4 Properties
2020-08-03	Mr Yung paid an extension fee of $60,000
2020-09-01	Mr Yung requested for an extension of time from 30 June to 3 November 2020 in respect of the OTPs for seven properties
2020-11-13	All outstanding extension fees to be paid
2020-11-17	Further extensions in respect of the OTPs for the seven properties
2020-12-04	Further extensions in respect of 15 Miltonia Close
2021-02-22	TG Master gave notice to hand over vacant possession of the Properties
2021-03-08	Respondents to hand over vacant possession of the Properties
2021-03-23	Final notice given
2021-04-05	TG Master commenced proceedings
2021-04-01	Latest end date for the term of the leases of the Properties
2021-09-24	Possession returned to TG Master
2022-09-13	Trial began
2022-12-19	Date from which post-judgment interest on the net judgment sum was calculated
2023-04-30	End of period for post-judgment interest on the net judgment sum
2023-06-06	TG Master paid $3,885,223.17 into court
2023-11-27	Judgment date
2024-05-02	Date of decision

7. Legal Issues

Breach of Contract
- Outcome: The court found that there was no breach of contract because the option was not exercised. The court found that the respondents were in breach of contract for failure to pay extension fees.
- Category: Substantive
- Sub-Issues:
  - Failure to exercise option
  - Failure to pay extension fees
- Related Cases:
  - [2018] 3 SLR 534
Penalty Doctrine
- Outcome: The court held that the penalty doctrine did not apply to the option fee or the renovation costs.
- Category: Substantive
- Related Cases:
  - [2018] 3 SLR 534
New points raised on appeal
- Outcome: The court allowed the appellant to raise new points on appeal.
- Category: Procedural
- Related Cases:
  - [2018] 1 SLR 76

8. Remedies Sought

Repayment of loan
Payment of unpaid extension fees
Retention of option fees
Retention of renovation costs

9. Cause of Actions

Breach of Contract
Claim for repayment of loan
Claim for unpaid extension fees

10. Practice Areas

Commercial Litigation
Real Estate Law

11. Industries

Real Estate

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Hon Chin Kong v Yip Fook Mun and another	High Court	Yes	[2018] 3 SLR 534	Singapore	Sets out the framework governing the law of deposits and the application of the penalty doctrine.
Woo Kah Wai and another v Chew Ai Hua Sandra and another appeal	Court of Appeal	Yes	[2014] 4 SLR 166	Singapore	Cited for the principle that if an option lapses, the prospective purchaser is not in breach of the option and no sale and purchase agreement will come into existence.
Goh Kar Tuck (alias Wu Jiada) and another v Koh Samuel	High Court	Yes	[2022] SGHC 165	Singapore	Cited for the principle that if the prospective purchaser exercises the Option, a sale and purchase agreement is constituted and the vendor is obliged to sell the property to the purchaser.
Ong Keh Choo v Paul Huntington Bernardo and another	Court of Appeal	Yes	[2020] SGCA 69	Singapore	Cited for the principle that if the prospective purchaser opts not to exercise the Option, the option fee is not recoverable as it is paid as good and valuable consideration for the vendor’s grant of the Option and the right to exercise contained therein.
Li Jialin and another v Wingcrown Investment Pte Ltd	High Court	Yes	[2023] SGHC 256	Singapore	Cited for the principle that if the prospective purchaser opts not to exercise the Option, the option fee is not recoverable as it is paid as good and valuable consideration for the vendor’s grant of the Option and the right to exercise contained therein.
Ma Hongjin v SCP Holdings Pte Ltd	Court of Appeal	Yes	[2021] 1 SLR 304	Singapore	Cited for the principle that an appellate court is in just as good a position as the trial court to adjudicate upon purely legal issues.
Denka Advantech Pte Ltd and another v Seraya Energy Pte Ltd and another and other appeals	Court of Appeal	Yes	[2021] 1 SLR 631	Singapore	Cited for the applicable test for whether a clause amounts to a penalty is whether it provides a genuine pre-estimate of the likely loss suffered by the innocent party pursuant to the breach by the offending party.
Pacific Rim Investments Pte Ltd v Lam Seng Tiong and another	Court of Appeal	Yes	[1995] 2 SLR(R) 643	Singapore	Discusses the doctrine of relief against forfeiture in the context of deposits.
How Weng Fan and others v Sengkang Town Council and other appeals	Court of Appeal	Yes	[2023] 2 SLR 235	Singapore	Cited for the rationale for disallowing an insufficiently pleaded claim is to prevent injustice to an opposing party who is unable to respond to the claim due to the failure to plead.
Chan Tam Hoi (alias Paul Chan) v Wang Jian and other matters	High Court	Yes	[2022] SGHC 192	Singapore	Cited for the principle that litigants are generally expected to plead at least a range of dates on which an oral contract was concluded.

13. Applicable Rules

Rule Name
Rules of Court 2021

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Option to Purchase
Option Fee
Further Sum
Extension Fees
Tenancy Agreement
Renovation Costs
True Option Fee
Bulk Discount

15.2 Keywords

Option to Purchase
Deposits
Extension Fees
Contract Law
Real Estate
Singapore

17. Areas of Law

Area Name	Relevance Score
Contracts	95
Civil Procedure	90
Options to purchase	70
Sale of Land	65
Property Law	60
Liquidated Damages	55
Debt Recovery	50
Termination of Leases	40

16. Subjects

Contract Law
Real Estate
Civil Procedure