Real Estate Consortium v East Coast Properties: Convertible Bond Agreement Dispute

Real Estate Consortium Pte Ltd sued East Coast Properties Pte Ltd and Ng Chun Yong Alvin in the High Court of Singapore on 29 December 2010, for breach of a Convertible Bond Agreement after the defendants failed to repay a $3m loan. The defendants initially disputed the termination of the agreement but later offered a settlement. The court found that a valid settlement agreement existed, precluding the defendants from re-litigating the original issues. The court allowed the plaintiff's claim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Real Estate Consortium sued East Coast Properties for failing to repay a $3m loan under a Convertible Bond Agreement. The court found for the plaintiff.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Real Estate Consortium Pte LtdPlaintiffCorporationJudgment for PlaintiffWon
East Coast Properties Pte LtdDefendantCorporationClaim DismissedLost
Ng Chun Yong AlvinDefendantIndividualClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Andrew AngJudgeYes

4. Counsels

Counsel NameOrganization
Lim Yee MingKelvin Chia Partnership
Thio Ying YingKelvin Chia Partnership
Tan DenisToh Tan LLP
John GeorgeToh Tan LLP

4. Facts

  1. Real Estate Consortium provided financing of approximately $3m to East Coast Properties for a housing development project.
  2. East Coast Properties failed to repay the principal sum of $3m when it fell due.
  3. Real Estate Consortium terminated the Convertible Bond Agreement and claimed moneys owed.
  4. East Coast Properties initially disputed the termination but later offered to resolve the disputes amicably.
  5. A settlement agreement was reached between the parties, with an installment payment schedule.
  6. East Coast Properties defaulted on the agreed installment payment schedule.
  7. East Coast Properties claimed the Convertible Bond Agreement was a sham and that they entered into the settlement agreement under economic duress.

5. Formal Citations

  1. Real Estate Consortium Pte Ltd v East Coast Properties Pte Ltd and another, Suit No 376 of 2009, [2010] SGHC 373

6. Timeline

DateEvent
East Coast Properties exercised an option to purchase No 25 Shelford Road.
Ng Chun Yong Alvin met with Chan Hui-Ling Angelena and Sern Chia Lung to discuss investment in the Shelford Project.
Agreement reached for a $3m loan to East Coast Properties.
Chan and Sern instructed Lee Ying Ying to prepare a draft of the Convertible Bond Agreement.
Meeting between Ng Chun Yong Alvin, Sern Chia Lung, and Lee Ying Ying to discuss the Convertible Bond Agreement.
Convertible Bond Agreement executed.
Ng Chun Yong Alvin paid for an option for the purchase of the Dapenso Building.
East Coast Properties exercised an option to purchase No 121B Whitley Road.
Sern Chia Lung reminded Ng Chun Yong Alvin of the obligation to repay the $3m principal.
Ng Chun Yong Alvin unsuccessfully sought to borrow $3m from Delia Chua.
East Coast Properties paid $1.2m to Real Estate Consortium.
Real Estate Consortium terminated the Convertible Bond Agreement.
East Coast Properties' solicitors sent a letter disputing Real Estate Consortium's rights under the Convertible Bond Agreement.
East Coast Properties' solicitors sent a letter expressing intention to negotiate an amicable settlement.
East Coast Properties offered to compromise the issues.
Real Estate Consortium's solicitors proposed a repayment schedule.
East Coast Properties' solicitors agreed to the terms of the repayment schedule with a counter-proposal.
East Coast Properties delivered four post-dated cheques to Real Estate Consortium.
East Coast Properties sent a cheque for $14,051.75 representing legal costs.
Cheque for $1,740,870.31 was met on presentation.
East Coast Properties defaulted on the cheque for $1m.
East Coast Properties defaulted on the cheque for $1m.
East Coast Properties defaulted on the cheque for $1m.
Real Estate Consortium filed a writ seeking payment.
Judgment reserved.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendants breached the Convertible Bond Agreement.
    • Category: Substantive
  2. Validity of Settlement Agreement
    • Outcome: The court held that a valid and binding settlement agreement existed, precluding the defendants from re-litigating the original issues.
    • Category: Substantive
    • Sub-Issues:
      • Economic duress
      • Failure of consideration
    • Related Cases:
      • [2009] 2 SLR(R) 332
      • [2002] 2 SLR(R) 136
  3. Non Est Factum
    • Outcome: The court rejected the defendant's plea of non est factum.
    • Category: Substantive
  4. Moneylending
    • Outcome: The court found that the transaction was not an unenforceable moneylending transaction under the Moneylenders Act.
    • Category: Substantive
  5. Wrongful Termination
    • Outcome: The court found that the plaintiff was entitled to terminate the Convertible Bond Agreement.
    • Category: Substantive

8. Remedies Sought

  1. Payment of debt
  2. Interest
  3. Legal costs

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Corporate Finance

11. Industries

  • Real Estate
  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Gay Choon Ing v Loh Sze Ti Terence Peter and another appealCourt of AppealYes[2009] 2 SLR(R) 332SingaporeCited to define 'compromise' as the settlement of a dispute by mutual concession, based on contract law.
Info-communications Development Authority of Singapore v Singapore Telecommunications LtdHigh CourtYes[2002] 2 SLR(R) 136SingaporeCited for the principle that a compromise requires a dispute or difference of view between parties which are eventually settled.
Shunmugam Jayakumar v Jeyaretnam Joshua BenjaminCourt of AppealYes[1996] 2 SLR(R) 658SingaporeCited for the principle that a threat to enforce one's legal rights by instituting civil proceedings is not a wrongful threat.
Miles v New Zealand Alford Estate CompanyCourt of AppealYes(1886) 32 Ch D 266England and WalesCited for the principle that a threat to enforce one's legal rights by instituting civil proceedings is not a wrongful threat.
Jayawickreme v Amarsuriya (since deceased)Privy CouncilYes[1918] AC 869United KingdomCited for the principle that a threat to enforce one's legal rights by instituting civil proceedings is not a wrongful threat.
Ang Sin Hock v Khoo Eng LimCourt of AppealYes[2010] 3 SLR 179SingaporeCited for the principle that forbearance to sue constitutes sufficient consideration.
Sea-Land Service Inc v Cheong Fook Chee VincentCourt of AppealYes[1994] 3 SLR(R) 250SingaporeCited for the principle that forbearance to sue constitutes sufficient consideration.
Imperial Steel Drum Manufacturers Sdn Bhd v Wong Kin HengHigh CourtYes[1997] 1 SLR(R) 297SingaporeCited for the principle that forbearance to sue constitutes sufficient consideration.
Hongkong & Shanghai Banking Corp Ltd v Jurong Engineering LtdHigh CourtYes[2000] 1 SLR(R) 204SingaporeCited for the principle that forbearance to sue constitutes sufficient consideration.
Tan Kee v The Titular Roman Catholic Archbishop of SingaporeHigh CourtYes[1997] SGHC 281SingaporeCited for the principle that a compromise is a settlement agreement that neither party may resile from.
Aircharter World Pte Ltd v Kontena Nasional BhdCourt of AppealYes[1999] 2 SLR(R) 440SingaporeCited for the principle that once parties have outwardly agreed, neither can rely on unexpressed reservations.
Lee Kuan Yew v Chee Soon JuanHigh CourtYes[2003] 3 SLR(R) 8SingaporeCited for the principle that courts scrutinize attempts to renege on compromise contracts.
Prudential Assurance Co Ltd v McBains Cooper (a firm) and others (CA)Court of AppealYes[2000] 1 WLR 2000England and WalesCited for the principle that an unimpeached compromise represents the end of the dispute.
Plumley v HorrellCourt of AppealYes(1869) 20 LT 473England and WalesCited for the principle that a compromise means the question is not to be tried over again.
Binder v AlachouzosCourt of AppealYes[1972] 2 QB 151England and WalesCited for the principle that a compromise agreement is not an absolute bar to reopening issues if there is abuse.
Mills Conduit Investment Ltd. v. LeslieCourt of AppealYes[1932] 1 K.B. 233England and WalesCited as an example where the court refused to enforce a consent to judgment where the interest charged was so high that it was presumed to be harsh and unconscionable.
City Hardware Pte Ltd v Kenrich Electronics Pte LtdHigh CourtYes[2005] 1 SLR(R) 733SingaporeCited for the principle that the Moneylenders Act is not intended to impede legitimate commercial intercourse.
Ang Eng Thong v Lee Kiam HongHigh CourtYes[1998] SGHC 64SingaporeCited for the principle that there must be a 'system and continuity' to establish a moneylending business.
Mak Chik Lun v Loh Kim HerHigh CourtYes[2003] 4 SLR(R) 338SingaporeCited for the principle that there must be a 'system and continuity' to establish a moneylending business.
Agus Anwar v Orion Oil LtdHigh CourtYes[2010] SGHC 6SingaporeCited for the principle that there must be a 'system and continuity' to establish a moneylending business.
Litchfield v DreyfusKing's Bench DivisionYes[1906] 1 KB 584England and WalesCited for the principle that there must be a willingness to lend money to 'all and sundry' to establish a moneylending business.
Nissho Iwai International (Singapore) Pte Ltd v Kohinoor Impex Pte LtdHigh CourtYes[1995] 2 SLR(R) 170SingaporeCited for the principle that the arrangements involved must be considered in totality to determine the substance of the transaction.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Moneylenders Act (Cap 188, 1985 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Convertible Bond Agreement
  • Settlement Agreement
  • Economic Duress
  • Non Est Factum
  • Moneylending
  • Termination
  • Principal Sum
  • Interest
  • Shelford Project
  • First Option
  • Second Option
  • First Drawdown Date
  • Project Sale Proceeds

15.2 Keywords

  • Convertible Bond Agreement
  • Settlement
  • Economic Duress
  • Breach of Contract
  • Real Estate
  • Singapore
  • Loan
  • Investment

17. Areas of Law

Area NameRelevance Score
Contract Law90
Commercial Litigation70
Convertible Bond Agreement70
Settlement Agreement60
Duress40
Mistake30

16. Subjects

  • Contract Law
  • Finance
  • Real Estate
  • Dispute Resolution