Metalform Asia v Ser Kim Koi: Striking Out Claim for Breach of Warranties

Metalform Asia Pte Ltd sued Ser Kim Koi and Ser Song Cheh, directors of Holland Leedon Pte Ltd (in liquidation), in the High Court of Singapore, alleging breach of fiduciary duties related to a sale and purchase agreement. Metalform Asia claimed damages for breach of warranties, calculating losses using a multiplier from the purchase price agreement. Judith Prakash J dismissed Metalform Asia's appeal, upholding the decision to strike out portions of the claim, finding the damages calculation unsustainable.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Metalform Asia sues Ser Kim Koi for breach of fiduciary duties. The court struck out parts of the claim relating to the calculation of damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ser Kim KoiDefendantIndividualSuccessful in striking out portions of the claimWon
Holland Leedon Pte Ltd (in liquidation)Third PartyCorporationNeutralNeutral
Metalform Asia Pte LtdPlaintiffCorporationAppeal DismissedLost
Ser Song ChehDefendantIndividualSuccessful in striking out portions of the claimWon

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Kirindeep SinghRodyk & Davidson LLP
Ajinderpal SinghRodyk & Davidson LLP
Philip JeyaretnamRodyk & Davidson LLP
Koh Jiaying HsienRodyk & Davidson LLP
Lee Eng BengRajah & Tann
Farrah SalamRajah & Tann
Chew Kei-JinTan Rajah & Cheah
C R RajahTan Rajah & Cheah
Lavinia RajahTan Rajah & Cheah

4. Facts

  1. Metalform Asia purchased the business and assets of Holland Leedon Pte Ltd.
  2. The defendants were directors and majority shareholders of Holland Leedon Pte Ltd.
  3. The purchase price was calculated using a formula that included EBITDA multiplied by seven.
  4. Metalform Asia alleged breaches of warranties by Holland Leedon Pte Ltd.
  5. Metalform Asia claimed damages calculated by multiplying the difference in EBITDA by seven.
  6. The defendants applied to strike out portions of the statement of claim related to this calculation.

5. Formal Citations

  1. Metalform Asia Pte Ltd v Ser Kim Koi and Another, Suit 496/2006, RA 410/2007, [2008] SGHC 131

6. Timeline

DateEvent
Sale and purchase agreement signed
Completion date for acquisition
Summons 4377 of 2007 heard by the Assistant Registrar
Appeal to the judge in chambers dismissed
Judgment delivered

7. Legal Issues

  1. Breach of Fiduciary Duty
    • Outcome: The court considered the claim for breach of fiduciary duty in the context of the damages calculation.
    • Category: Substantive
  2. Damages Calculation for Breach of Warranty
    • Outcome: The court held that the plaintiff's method of calculating damages by multiplying costs by a factor of seven was unsustainable.
    • Category: Substantive
    • Sub-Issues:
      • application of EBITDA multiplier
      • cost of cure vs. loss of bargain
  3. Striking Out Pleadings
    • Outcome: The court upheld the decision to strike out portions of the statement of claim.
    • Category: Procedural

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Warranty
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Senate Electrical Wholesalers Ltd v Alcatel Submarine Networks LtdN/AYes[1999] 2 Lloyd’s Rep 423N/ACited regarding the assessment of damages suffered by the purchaser of a business as a result of a breach of warranty by the seller.
Lion Nathan Ltd v C-C Bottlers LtdN/AYes[1996] 1 WLR 1438N/ACited regarding the calculation of damages based on a multiplier of forecast profits after tax.

13. Applicable Rules

Rule Name
Order 18 Rule 19 of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • EBITDA
  • Recurring Costs
  • Purchase Price
  • Warranties
  • Multiplier
  • Statement of Claim
  • Cost of Cure
  • Loss of Bargain

15.2 Keywords

  • breach of warranty
  • fiduciary duty
  • damages
  • EBITDA
  • striking out
  • Metalform Asia
  • Holland Leedon

17. Areas of Law

Area NameRelevance Score
Damages90
Breach of Contract80
Contract Law75
Warranties70
Civil Practice70
Striking out60
Fiduciary Duties60
Pleadings50
Company Law30
Corporate Law30

16. Subjects

  • Contract Law
  • Civil Procedure
  • Damages
  • Pleadings