Lee Chee Wei v Tan Hor Peow Victor: Specific Performance & Damages for Breach of Share Purchase Agreement

In Lee Chee Wei v Tan Hor Peow Victor, the Court of Appeal of Singapore heard an appeal regarding a breach of a share purchase agreement. Lee Chee Wei sued Tan Hor Peow Victor, Yip Hwai Chong, and Damien Ang Tse Aun for failing to complete the purchase of shares in Distribution Management Solutions Pte Ltd. The court dismissed the fourth defendant's cross-appeal, allowed the plaintiff's appeal in part, and ordered an assessment of damages in lieu of specific performance.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed in part; cross-appeal dismissed. Assessment of damages ordered.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Share purchase dispute involving Lee Chee Wei and Tan Hor Peow Victor. The court addressed specific performance, damages, and the effect of 'entire agreement' clauses.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lee Chee WeiAppellantIndividualAppeal allowed in partPartial
Tan Hor Peow VictorRespondentIndividualCross-appeal dismissedLost
Yip Hwai ChongRespondentIndividualUnknownNeutral
Damien Ang Tse AunRespondent, AppellantIndividualCross-appeal dismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudgeYes
Andrew Phang Boon LeongJustice of the Court of AppealYes
V K RajahJustice of the Court of AppealYes

4. Counsels

Counsel NameOrganization
Tan Chee MengHarry Elias Partnership
Adrian Wee Heng YiHarry Elias Partnership
Philip Fong Yeng FattHarry Elias Partnership
Jenny Chang Man PhingHarry Elias Partnership
Ng Lip ChihNg Lip Chih & Co
K. Muralidharan PillaiRajah & Tann
Sim Wei NaRajah & Tann
Harveen SinghRajah & Tann

4. Facts

  1. Lee Chee Wei sold his companies to DMS and joined DMS as an employee.
  2. Tan Hor Peow Victor induced Lee Chee Wei to believe he would profit from the proposed listing of DMS.
  3. Lee Chee Wei felt marginalized after his companies were absorbed by the ACCS group.
  4. Lee Chee Wei and Damien Ang Tse Aun executed a share purchase agreement for $4.5m.
  5. $750,000 was immediately paid to Lee Chee Wei, leaving a balance of $3.75m.
  6. Nokia Pte Ltd terminated its contract with ACCS.
  7. CAD began an investigation into the affairs of ACCS and some of its senior officers.

5. Formal Citations

  1. Lee Chee Wei v Tan Hor Peow Victor and Others and Another Appeal, CA 88/2006, 91/2006, [2007] SGCA 22

6. Timeline

DateEvent
Share purchase agreement executed between Lee Chee Wei and Damien Ang Tse Aun.
Share purchase agreement executed between Lee Chee Wei and Damien Ang Tse Aun.
Nokia Pte Ltd announced the termination of its contract with ACCS.
Lee Chee Wei met Tan Hor Peow Victor to enquire about the completion of the Agreement.
Lee Chee Wei contacted Tan Hor Peow Victor and Yip Hwai Chong to enquire about the transaction’s progress.
Damien Ang Tse Aun failed to turn up at the venue scheduled for completion.
Letter of demand sent by Lee Chee Wei.
Hearing on whether damages would have to be quantified should specific performance fail.
Parties directed to submit on whether a separate assessment of damages could be ordered in the absence of an express pleading.
Written submissions filed by both parties.
Judgment reserved.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendants breached the share purchase agreement.
    • Category: Substantive
    • Sub-Issues:
      • Failure to complete share purchase
      • Failure to pay balance purchase price
  2. Specific Performance
    • Outcome: The court refused to grant specific performance.
    • Category: Remedial
  3. Damages in Lieu of Specific Performance
    • Outcome: The court ordered an assessment of damages in lieu of specific performance.
    • Category: Remedial
    • Sub-Issues:
      • Assessment of damages
      • Pleading of damages
  4. Interpretation of Contractual Terms
    • Outcome: The court interpreted the 'entire agreement' clause and determined that listing was not a contingent condition of the agreement.
    • Category: Substantive
    • Sub-Issues:
      • Entire agreement clauses
      • Contingent conditions
  5. Admissibility of Extrinsic Evidence
    • Outcome: The court discussed the admissibility of extrinsic evidence in interpreting the contract, considering the parol evidence rule and the 'factual matrix'.
    • Category: Procedural
    • Sub-Issues:
      • Parol evidence rule
      • Factual matrix

8. Remedies Sought

  1. Specific Performance
  2. Damages in Lieu of Specific Performance

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Yee Chee Pang v Wong Nam Sang Enterprise Sdn BhdUnknownYes[1988] 2 MLJ 57MalaysiaCited for the principle that a condition precedent cannot be implied in the face of clear and express provisions to the contrary.
Pacific Century Regional Development Ltd v Canadian Imperial Investment Pte LtdHigh CourtYes[2001] 2 SLR 443SingaporeCited to show that evidence of surrounding circumstances may be admissible to assist in the interpretation of a contract.
Tan Hock Keng v L and M Group Investments LtdHigh CourtYes[2002] 2 SLR 213SingaporeCited in relation to the parol evidence rule.
Inntrepreneur Pub Co v East Crown LtdUnknownYes[2000] 2 Lloyd’s Rep 611England and WalesCited for the purpose and effect of an entire agreement clause.
Sere Holdings Limited v Volkswagen Group United Kingdom LimitedHigh CourtYes[2004] EWHC 1551 (Ch)England and WalesCited to support the reasoning in Inntrepreneur Pub Co v East Crown Ltd on the purpose and effect of an entire agreement clause.
IBM Singapore Pte Ltd v UNIG Pte LtdHigh CourtYes[2003] SGHC 71SingaporeCited to show that entire agreement clauses effectively erase any legal consequences that might have ensued from prior discussions or negotiations.
Chuan Hup Marine Ltd v Sembawang Engineering Pte LtdHigh CourtYes[1995] 2 SLR 629SingaporeCited to show that a similarly worded clause excluded any implied term, collateral warranty and misrepresentation.
Thomas Witter Ltd v TBP Industries LtdUnknownYes[1996] 2 All ER 573England and WalesCited in relation to whether an entire agreement clause can purport to exclude a claim in misrepresentation.
Exklusiv Auto Services Pte Ltd v Chan Yong Chua EricHigh CourtYes[1996] 1 SLR 433SingaporeCited for the status of an entire agreement clause.
MacMillan v Kaiser Equipment LtdBritish Columbia Court of AppealYes[2004] BCJ 969CanadaCited to address and assess the intricate relationship between entire agreement clauses and the parol evidence rule.
Power Consolidated (China) Pulp Inc v British Columbia Resources Investment CorpUnknownYes(1988) 14 ACWS (3d) 11CanadaCited when referring to the intention of parties in formulating an entire evidence clause.
Master Strike Sdn Bhd v Sterling Heights Sdn BhdCourt of AppealYes[2005] 3 MLJ 585MalaysiaCited to endorse Abdul Aziz J’s views in Macronet Sdn Bhd v RHB Bank Sdn Bhd [2002] 3 MLJ 11 at 25, where the latter had determined that the entire agreement clause precluded any purported variation by oral agreement.
Macronet Sdn Bhd v RHB Bank Sdn BhdUnknownYes[2002] 3 MLJ 11MalaysiaCited to determine that the entire agreement clause precluded any purported variation by oral agreement.
John v Price WaterhouseCourt of AppealYes[2002] EWCA Civ 899England and WalesCited to show that a conventional entire agreement clause could not “affect the question whether some matter of fact (whether or not in documentary form) is admissible as an aid to the process of construing a contractual document”.
The Vishva ApurvaCourt of AppealYes[1992] 2 SLR 175SingaporeCited for the principle that an appellate court would normally only interfere with the exercise of judicial discretion where the trial judge was misguided with regard to the principles under which his discretion was to be exercised.
Koek Tiang Kung v Antara Bumi Sdn BhdUnknownYes[2005] 4 MLJ 525MalaysiaCited for the principle that the court has the discretion either to grant specific performance or to leave the parties to their rights at law.
Stickney v KeebleHouse of LordsYes[1915] AC 386United KingdomCited for the principle that equity will only grant specific performance “if under all the circumstances, it is just and equitable to do so”.
Chua Kwok Fun Kevin v Etons Management Consultants Pte LtdHigh CourtYes[2000] 3 SLR 337SingaporeCited for factors affecting the court’s discretion in granting specific performance.
Pamaron Holdings Sdn Bhd v Ganda Holdings BhdUnknownYes[1988] 3 MLJ 346MalaysiaCited for the principle that a seller of shares not freely saleable in the open market is entitled to specific performance.
Duncruft v AlbrechtUnknownYes(1841) 12 Sim 189England and WalesCited for the principle that the court decreed specific performance for the sale of shares which were limited in number and not always available in the open market.
Perestrello E Companhia Limitada v United Paint Co LtdUnknownYes[1969] 1 WLR 570England and WalesCited for the proposition that a plaintiff need not plead general damage.
Ratcliffe v EvansUnknownYes[1892] 2 QB 524England and WalesCited for the principle that the question to be decided does not depend on words, but is one of substance.
Lim Eng Kay v Jaafar bin Mohamed SaidUnknownYes[1982] 2 MLJ 156MalaysiaCited for the principle that the court awarded special damages notwithstanding that they had been incorrectly pleaded as general damages.
Lea Tool & Moulding Industries Pte Ltd v CGU International Insurance plcHigh CourtYes[2001] 1 SLR 413SingaporeCited for the principle that procedural laws are ultimately handmaidens to help us achieve the ultimate and only objective of achieving justice as best we can in every case.
Chwee Kin Keong v Digilandmall.com Pte LtdHigh CourtYes[2004] 2 SLR 594SingaporeCited for the principle that rules of court which are meant to facilitate the conduct of proceedings invariably encapsulate concepts of procedural fairplay.
Polskie Towarzystwo Handlu Zagranicznego Dla Elektrotechniki “Elecktrim” Spolka Z Ograniczona Odpowiadziolnoscia v Electric Furnace Co LtdUnknownYes[1956]1 WLR 562England and WalesCited for the principle that an application for a bifurcation of the hearing on liability and damages will inevitably succeed if the circumstances render it just and convenient to so order.
Johnson v AgnewHouse of LordsYes[1980] AC 367United KingdomCited for the principle that in so far as contracts capable of being specifically performed are concerned, the law does not require the innocent party at the time of breach to accept the repudiation and treat the contract as discharged.
Maxisegar Sdn Bhd v Silver Concept Sdn BhdUnknownYes[2005] 5 MLJ 1MalaysiaCited for the principle that a party’s claim for specific performance of the agreement together with a further or alternative claim of damages for breach of contract was a perfectly conventional claim.
Souster v Epsom Plumbing Contractors LtdUnknownYes[1974] 2 NZLR 515New ZealandCited for the principle that where a party seeks a decree of specific performance, he is in fact approbating the contract and seeking damages as an alternative remedy.
Toh Tiong Huat v PM Gunasaykaran (personal representative of the estate of Mayandi s/o Sinnathevar deceased)High CourtYes[1996] 1 SLR 384SingaporeCited for the principle that it was perfectly legitimate for the trial judge to have ordered damages to be assessed in lieu of specific performance, despite the failure to adduce evidence on damages at the trial.
Ho Kian Siang v Ong Cheng HooHigh CourtYes[2000] 4 SLR 376SingaporeCited for the principle that it was perfectly legitimate for the trial judge to have ordered damages to be assessed in lieu of specific performance, despite the failure to adduce evidence on damages at the trial.
Cropper v SmithUnknownYes(1884) 26 Ch D 700England and WalesCited for the principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights.
Triangle Auto Pte Ltd v Zheng Zi Construction Pte LtdHigh CourtYes[2001] 1 SLR 370SingaporeCited for the law relating to deposits in a sale and purchase contract and its recoverability.
Lim Lay Bee v Allgreen Properties LtdHigh CourtYes[1999] 1 SLR 471SingaporeCited for the principle that an advance payment does not fall within the category of forfeitable deposits and is neither designed nor intended to secure performance.
Dies v British and International Mining and Finance Corporation LimitedUnknownYes[1939] 1 KB 724England and WalesCited for the premise that the vendor is already amply protected by the recovery of damages he has sustained.
Mayson v ClouetPrivy CouncilYes[1924] AC 980United KingdomCited for the principle that the object that the parties had in mind must be ascertained.
Howe v SmithUnknownYes(1884) 27 Ch D 89England and WalesCited for the principle that the payer cannot insist on abandoning the contract and yet expect to recover the deposit as this would enable him to take advantage of his own wrong.
McDonald’s Hamburgers Limited v Burgerking (UK) LimitedCourt of AppealYes[1987] FSR 112England and WalesCited for the proposition that if the party concerned has an arguable case for claiming damages, the court would, as a matter of justice, make an order for an inquiry to enable that party to pursue it.
Fraser & Neave Ltd v Yeo Hiap Seng LtdCourt of AppealYes[1988] SLR 96SingaporeCited for the proposition that if the party concerned has an arguable case for claiming damages, the court would, as a matter of justice, make an order for an inquiry to enable that party to pursue it.
Hong Fok Realty Pte Ltd v Bima Investment Pte LtdHigh CourtYes[1993] 1 SLR 73SingaporeCited for the ascertainment of damages is an exercise to establish a question of fact, ie, what loss and damage have been sustained by the plaintiff and to award him any such damages computed according to these principles.
Penang Port Commission v Kanawangi s/o SepurumaniamUnknownYes[1996] 3 MLJ 427MalaysiaCited for the principle that the loss must be shown to have actually occurred and to be legitimately recoverable in law before any award can be made.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)Singapore
Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)Singapore
Misrepresentation Act (Cap 390, 1994 Rev Ed)Singapore
Rules of Court (Cap 322, R 5, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Share Purchase Agreement
  • Specific Performance
  • Damages
  • Entire Agreement Clause
  • Listing
  • Completion Date
  • Factual Matrix
  • Parol Evidence Rule
  • Contingent Condition
  • Assessment of Damages

15.2 Keywords

  • Share Purchase Agreement
  • Specific Performance
  • Damages
  • Breach of Contract
  • Singapore
  • Contract Law
  • Civil Procedure

17. Areas of Law

Area NameRelevance Score
Contract Law90
Civil Procedure75
Damages70
Specific performance65
Shares50
Rules of construction40

16. Subjects

  • Contract Law
  • Civil Procedure
  • Share Purchase Agreements
  • Remedies