Tembusu Growth Fund Ltd v ACTAtek, Inc: Damages for Anticipatory Breach of Contract and Loss of IPO Opportunity

In Tembusu Growth Fund Ltd v ACTAtek, Inc and others, the Singapore High Court addressed the assessment of damages following an anticipatory repudiatory breach of contract by Tembusu. The Court of Appeal had previously found that Tembusu wrongfully declared a default under a convertible loan agreement (CLA) with ACTAtek, Inc, derailing ACTAtek's planned initial public offering (IPO). Vinodh Coomaraswamy J awarded nominal damages of S$1,000 to ACTAtek, Inc, finding that Tembusu's breach did not cause the failed listing and that ACTAtek did not suffer any actual loss. The counterclaim by Wan Wah Tong Thomas was dismissed.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Nominal damages of SGD 1,000 awarded to ACTAtek, Inc.; counterclaim by Wan Wah Tong Thomas dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case concerning damages for anticipatory breach of contract and a failed IPO. Tembusu's breach did not cause the failed listing.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
TEMBUSU GROWTH FUND LTDPlaintiffCorporationPartialPartial
ACTATEK, INC.DefendantCorporationWonWon
WAN WAH TONG THOMASDefendantIndividualLostLost
ACTATEK PTE. LTD.DefendantCorporationNeutralNeutral
HECTRIX, INC.DefendantCorporationNeutralNeutral
THOMROSE HOLDINGS (BVI) LTDDefendantCorporationNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Ker YanguangMorgan Lewis Stamford LLC
Daniel ChiaMorgan Lewis Stamford LLC
S MagintharanEssex LLC
Vineetha GunasekaranEssex LLC
James LiewEssex LLC

4. Facts

  1. Tembusu invested S$1.5m in ACTAtek, Inc through a convertible loan agreement (CLA) in January 2012.
  2. Tembusu declared a default under the 2012 CLA in May 2012, alleging breach of contract by ACTAtek.
  3. ACTAtek planned an initial public offering (IPO) on the New Zealand Alternative Market (NZAX).
  4. Tembusu's declaration of default was found by the Court of Appeal to be an anticipatory repudiatory breach of the CLA.
  5. ACTAtek claimed damages for the loss of the IPO opportunity, valued at NZ$30.5m.
  6. The court found that Tembusu's breach did not cause the failure of ACTAtek's listing on the NZAX.
  7. Mr. Wan is not a party to the 2012 CLA.

5. Formal Citations

  1. Tembusu Growth Fund Ltd v ACTAtek, Inc and others, Suit No 642 of 2012, [2017] SGHC 251

6. Timeline

DateEvent
Tembusu invested S$1.5m in ACTAtek, Inc through a convertible loan agreement.
Tembusu declared a default under the 2012 CLA.
Tembusu's solicitors wrote to AI declaring a default under the 2012 CLA.
Tembusu commenced action against AI, Mr. Wan, and three other defendants.
Hearing before Vinodh Coomaraswamy J.
Hearing before Vinodh Coomaraswamy J.
Hearing on costs.
Hearing before Vinodh Coomaraswamy J.
Judgment delivered by Vinodh Coomaraswamy J.

7. Legal Issues

  1. Anticipatory Breach
    • Outcome: The court held that Tembusu's declaration of default constituted an anticipatory breach of the 2012 CLA.
    • Category: Substantive
    • Related Cases:
      • [2015] 5 SLR 1
      • [2016] 5 SLR 335
      • (1853) 2 E & B 678
  2. Causation
    • Outcome: The court held that Tembusu's breach did not cause ACTAtek's failure to list on the NZAX.
    • Category: Substantive
    • Related Cases:
      • [2007] 3 SLR(R) 782
  3. Mitigation of Damages
    • Outcome: The court found that ACTAtek failed to take reasonable steps to mitigate its loss.
    • Category: Substantive
    • Related Cases:
      • [2010] 2 SLR 1154
  4. Loss of Chance
    • Outcome: The court rejected ACTAtek's claim for loss of chance, finding that the purpose of the 2012 CLA was not to provide ACTAtek a chance of being listed.
    • Category: Substantive
    • Related Cases:
      • [1911] 2 KB 786

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Venture Capital
  • Technology

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The STX Mumbai and another matterCourt of AppealYes[2015] 5 SLR 1SingaporeCited for principles underlying the doctrine of anticipatory breach.
ACTAtek, Inc and another v Tembusu Growth Fund LtdCourt of AppealYes[2016] 5 SLR 335SingaporeCited as the basis for the assessment of damages, establishing Tembusu's anticipatory repudiatory breach of the 2012 CLA.
Tembusu Growth Fund Ltd v ACTAtek, Inc and othersHigh CourtYes[2015] SGHC 206SingaporeCited for the initial High Court decision finding the defendants liable to Tembusu, which was later overturned on appeal.
Monarch Steamship Co, Limited v Karlshamns Oljefabriker (A/B)N/AYes[1949] AC 196N/ACited for the principle of causation in contract law.
Johnson and Another v AgnewN/AYes[1980] AC 367N/ACited for the general rule that damages should be assessed as at the date of breach.
Tredegar Iron and Coal Co (Limited) v Hawthorn Brothers and CoN/AYes(1902) 18 TLR 716N/ACited for the principle that the quantification inquiry turns on the date on which the plaintiff’s loss is to be assessed.
Hochster v De La TourN/AYes(1853) 2 E & B 678N/ACited as the basis for the traditional doctrine of anticipatory breach.
Chilean Nitrate Sales Corporation v Marine Transportation Co Ltd and Pansuiza Compania de Navegacion SA (The “Hermosa”)N/AYes[1982] 1 Lloyd’s Rep 570N/ACited for the definition of 'clear' and 'absolute' refusal to perform a contractual obligation.
Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan DavidN/AYes[2008] 1 SLR(R) 663N/ACited for the requirements for establishing anticipatory breach.
Universal Cargo Carriers Corp v CitatiN/AYes[1957] 2 QB 401N/ACited for the principle that anticipatory breach can occur when a party disables himself from performing a contractual obligation.
Roper v JohnsonN/AYes(1873) LR 8 CP 167N/ACited for the rule that in cases of anticipatory breach, losses should be quantified as at the date fixed for performance.
Johnstone v MillingN/AYes(1886) 16 QBD 460N/ACited for the principle that a renunciation constitutes a breach only when accepted by the plaintiff.
Maredelanto Compania Naviera SA v Bergbau-Handel GmbH, The Mihalis AngelosN/AYes[1970] 3 WLR 601N/ACited for the principle that the renunciation itself is the breach, and damages must be measured accordingly.
Bunge SA v Nidera BVN/AYes[2015] 3 All ER 1082N/ACited for the principle that the duty to mitigate arises from the time the repudiatory breach is accepted.
Robinson v HarmanN/AYes(1848) 1 Ex Rep 850N/ACited for the compensatory principle in assessing damages.
Abdul Latif bin Mohamed Tahiar (trading as Canary Agencies) v Saeed Husain s/o Hakim Gulam Mohiudin (trading as United Limousine)High CourtYes[2003] 2 SLR(R) 61SingaporeCited for the principle that parties stand by their pleaded cases.
Yap Son On v Ding Pei ZhenCourt of AppealYes[2017] 1 SLR 219SingaporeCited for the principle that parties stand by their pleaded cases.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and anotherN/AYes[2015] 5 SLR 1422N/ACited for the principle that procedure is a means to the end of attaining a fair trial.
Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd and anotherN/AYes[2008] 2 SLR(R) 623N/ACited for the principle that a party claiming damages must prove that he has suffered loss.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming EricCourt of AppealYes[2007] 3 SLR(R) 782SingaporeCited for the adoption of the 'but for' test for determining causation in fact.
Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd and another appealN/AYes[2012] 1 SLR 427N/ACited for the principle that the breach of contract does not need to be the sole cause of the loss.
Heskell v Continental Express Ltd and AnotherN/AYes[1950] 1 All ER 1033N/ACited for the principle that if a breach of contract is one of two causes, it is sufficient to carry a judgment for damages.
Ratcliffe v EvansN/AYes[1892] 2 QB 524N/ACited for the principle that the law requires a plaintiff to prove his damage with reasonable certainty.
Allied Maples Group Ltd v Simmons & Simmons (a firm)N/AYes[1995] 1 WLR 1602N/ACited for the distinction between losses contingent on the actions of a plaintiff and losses contingent on the actions of a third party.
Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd and anotherCourt of AppealYes[2005] 1 SLR(R) 661SingaporeCited for the distinction between losses contingent on the actions of a plaintiff and losses contingent on the actions of a third party.
Sykes and Others v Midland Bank Executor and Trustee Co Ltd and OthersN/AYes[1971] 1 QB 113N/ACited for the approach to contingent loss.
JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm)N/AYes[2007] 4 SLR(R) 460N/ACited for the approach to contingent loss.
Chaplin v HicksN/AYes[1911] 2 KB 786N/ACited for the principle that the object of the duty that has been breached must have been to provide the chance in question.
Kitchen v Royal Air Force AssociationN/AYes[1958] 1 WLR 563N/ACited for the principle that the object of the duty that has been breached must have been to provide the chance in question.
Barker v Corus UK LtdN/AYes[2006] 2 AC 572N/ACited for the principle that the loss of a chance of a favourable outcome is compensatable damage in itself.
The Asia StarCourt of AppealYes[2010] 2 SLR 1154SingaporeCited for the principal rule on mitigation of damages.
Darbishire v WarranN/AYes[1963] 1 WLR 1067N/ACited for the principle that the rule on mitigation of damages does not give rise to a duty.
Payzu, Limited v SaundersN/AYes[1919] 2 KB 581N/ACited for the principle that the question of mitigation of damage is a question of fact.
The Owners of the Steamship “Mediana” v The Owners, Master and Crew of the Lightship “Comet” (The Mediana)N/AYes[1900] AC 113N/ACited for the definition of nominal damages.
Hong Fok Realty Pte Ltd v Bima Investment Pte Ltd and another appealN/AYes[1992] 2 SLR(R) 834N/ACited for the principle that a plaintiff cannot claim wasted expenditure and loss of profit at the same time.
Alvin Nicholas Nathan v Raffles Assets (Singapore) Pte LtdN/AYes[2016] 2 SLR 1056N/ACited for the principle that a plaintiff cannot claim wasted expenditure and loss of profit at the same time.

13. Applicable Rules

Rule Name
O 22A r 9(3) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Convertible Loan Agreement
  • Initial Public Offering
  • Anticipatory Breach
  • Repudiatory Breach
  • Nominal Damages
  • Mitigation of Damages
  • Loss of Chance
  • NZAX
  • Default

15.2 Keywords

  • contract
  • damages
  • anticipatory breach
  • IPO
  • Tembusu
  • ACTAtek
  • Singapore
  • loan agreement

17. Areas of Law

Area NameRelevance Score
Breach of Contract90
Contract Law85
Damages80
Causation70
Anticipatory Breach65
Commercial Disputes50
Convertible Loan Agreement40
Nominal damages30

16. Subjects

  • Contract Dispute
  • Assessment of Damages
  • Financial Law