Bakery Mart Pte Ltd (In Receivership) v Sincere Watch Ltd

JurisdictionSingapore
JudgeChao Hick Tin JA
Judgment Date02 September 2003
Neutral Citation[2003] SGCA 36
Docket NumberCivil Appeal No 142 of 2002
Date02 September 2003
Published date17 December 2003
Year2003
Plaintiff CounselGabriel Peter (Gabriel Law Corporation)
Citation[2003] SGCA 36
Defendant CounselPhilip Ling (Wong Tan & Molly Lim LLC),Ismail Atan (Gabriel Law Corporation)
CourtCourt of Appeal (Singapore)
Subject MatterCivil Procedure,Whether defendant ought to be granted unconditional instead of conditional leave to defend,Summary judgment,Whether defence bona fide,Leave to defend

Delivered by Chao Hick Tin JA

1 This was an appeal by the defendant against a decision of the High Court affirming a decision of the Assistant Registrar granting the defendant conditional leave to defend the action, the condition being the provision of a banker’s guarantee for the full amount of the claim in the action. We heard the appeal on 24 July 2003 and allowed it, granting the defendant unconditional leave to defend. We now give our reasons.

The facts

2 The defendant, Bakery Mart Pte Ltd (“Bakery”), is a private limited company in the business of distributing baking and confectionery materials. Bakery is wholly owned by Hup Wing Pte Ltd (“Hup Wing”). All the shares of Hup Wing, except one, are owned by Mr Charles Ng (“Ng”) who manages and controls Bakery.

3 The plaintiff, Sincere Watch Ltd (“Sincere”), is a public listed company and is in the business of retailing fine watches. Two officers of Sincere played a key role in the present dispute with Bakery: Mr Tay Liam Wee (“Tay”), its managing director, and Mr Soh Gim Teik (Soh), its director.

4 In late 1999, Bakery and Sincere agreed to cooperate and embark on a business venture by equally acquiring all the shares in Culina Pte Ltd (“Culina”), a company then owned by the Hai Sun Hup Group (“Hai Sun Hup”). Culina dealt in the supply and distribution of fresh and frozen foods, pastry products and wines. For this venture, Sincere acted through its wholly owned subsidiary, Avante Investment Pte Ltd (“Avante”). However, as Bakery lacked funds to pay for half of the shares in Culina, the same was provided by Sincere and an arrangement, by way of an option deed, was entered into under which Sincere was given an option, within two years thereof, to subscribe for 300,000 shares in Bakery at the price of $500,000. The deed also provided that upon subscription to the shares of Bakery, Sincere would give a loan of $100,000 to Bakery. For reasons which will be apparent later, Sincere did not exercise the option but it did, on the same day on which the option deed was executed, make a pre-payment of $500,000 to Bakery, plus the further loan of $100,000.

5 The purchase of Culina was completed on 30 November 1999 and, as agreed, Ng became its Managing Director.

6 About a year later, both parties thought that it would best advance their business venture if they undertook a corporate restructuring through the setting up of a holding company. They started negotiations on that. The parties had planned to bring under the umbrella of the proposed holding company (“HC”) three companies: Culina, Bakery and Food Resources Pte Ltd (“Food Resources”), the latter being a company owned by Tay and Soh and was involved in the business of importing ice-cream from Australia. In fact, earlier in September 2000, Ng was appointed a director of Food Resources.

7 By April 2001, it was agreed that Sincere would have 70% of the shareholding of the HC, and Bakery, 30%. Draft agreements drawn on this basis were put up by their respective solicitors. As part of the restructuring plan, 299,999 shares in Food Resources were transferred to Ng at a nominal value and he was to hold the shares in trust for Tay and Soh. Another one share of Food Resources was held by Ng’s sister, Ng Sock Cheng, on a similar trust. This transfer of shares of Tay and Soh in Food Resources to Ng and his sister was because of a perceived conflict of interest situation arising.

8 Ng said that in arriving at the 70/30 shareholding ratio in the HC by Sincere and Bakery, account was taken of the advance of $600,000 given by Sincere to Bakery, the amount that was paid to Hai Sun Hup for the acquisition of the shares of Culina and the amounts which were contributed by Sincere in the purchase of a property at No. 24 Senoko Way (“Senoko property”). It was the understanding of all parties that the Senoko property would be used for the purposes of the group’s operations.

9 Ng also said that it was further understood that all the moneys advanced by Sincere to Bakery need not be repayable by Bakery as they had become Sincere’s investment in the group and it was on this basis that Sincere was allocating 70% of the shareholding in the HC. Accordingly, the character of the moneys paid over to Bakery had been altered and they were no longer pure loans, repayable upon demand. It was also understood that the loans granted to acquire the Senoko property would only be repaid if the HC should eventually be listed on the stock exchange. It was because of the restructuring of the various companies under a HC that made it unnecessary for Sincere to acquire 300,000 shares in Bakery, as originally envisaged under the option deed.

10 However, in December 2001, the relationship between the parties turned sour because Sincere had asked for an increase in the percentage of its shareholding in the HC from 70%, as previously agreed, to 85%. Furthermore, Sincere planned to sell much of this 85% shareholding in the HC to another public listed company. Bakery disagreed with Sincere’s proposal to change the proportion of Bakery’s shareholding in the HC. Because of these differences, Sincere sought to remove Ng as the Managing Director of Culina which in turn led to a separate action by Bakery to restrain Culina and Avante from so removing Ng as the Managing Director.

11 All in all, from late 1999 when Bakery and Sincere started business cooperation, the sums advanced by Sincere to Bakery...

To continue reading

Request your trial
6 cases
  • Shenzhen Kenouxin Electronic Co Ltd v Heliyanto and others
    • Singapore
    • High Court (Singapore)
    • 21 July 2016
    ...the cases cited by the plaintiff on the interpretation of contracts namely, Bakery Mart Pte Ltd (in receivership) v Sincere Watch Ltd [2003] 3 SLR(R) 462, Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 and Tribune Investment Trust I......
  • Tan Swee Wan and another v Johnny Lian Tian Yong
    • Singapore
    • High Court (Singapore)
    • 26 July 2018
    ...must be answered on the basis of an objective assessment of the facts. In Bakery Mart Pte Ltd (in receivership) v Sincere Watch Ltd [2003] 3 SLR(R) 462 at [22], Chao Hick Tin JA noted that: … where negotiations are protracted the court is entitled to look at all the circumstances and apply ......
  • Supercars Lorinser Pte Ltd and another v Benzline Auto Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 23 December 2016
    ...is that intention to make an offer or to accept is determined objectively: Bakery Mart Pte Ltd (in receivership) v Sincere Watch Ltd [2003] 3 SLR(R) 462 at [22]; Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 at [1]. Applying that t......
  • Han Cheng Fong v Teo Chong Nghee Patrick and others
    • Singapore
    • High Court (Singapore)
    • 27 February 2013
    ...the 1 March document is a shareholders’ agreement, note may be taken of Bakery Mart Pte Ltd (in receivership) v Sincere Watch Ltd [2003] 3 SLR(R) 462, where the Court of Appeal stated (at [22]): … [W]here negotiations are protracted the court is entitled to look at all the circumstances and......
  • Request a trial to view additional results
2 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2003, December 2003
    • 1 December 2003
    ...9.74 infra, with regard to ‘Duress’); Sincere Watch Ltd v Bakery Mart Pte Ltd[2003] 3 SLR 345; Bakery Mart Pte Ltd v Sincere Watch Ltd[2003] 3 SLR 462 (see also para 9.9 infra, with regard to ‘Formation of contract’); Chinese Chamber Realty Pte Ltd v Samsung Corp[2003] 3 SLR 656 (recently r......
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2003, December 2003
    • 1 December 2003
    ...leave to defend was reversed by the Court of Appeal which granted unconditional leave (see Bakery Mart Pte Ltd v Sincere Watch Ltd[2003] 3 SLR 462). 6.75 A garnishee order may not be made to attach salaries or wages because s 13(c) of the SCJA, which applies to writs of execution, is operat......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT