Tan Yeow Khoon v Tan Yeow Tat and Another (No 1)

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 15 April 1998
• Neutral Citation: [1998] SGHC 111
• Docket Number: Originating Summons Nos 739 and
• Date: 15 April 1998
• Year: 1998
• Published date: 19 September 2003
• Plaintiff Counsel: Michael Khoo SC and Ng Chon Hsing (Michael Khoo & Partners),Lee Mun Hooi (Lee Bon Leong & Co)
• Citation: [1998] SGHC 111
• Defendant Counsel: Anthony Lee (Bih Li & Lee),Lee Chau Ee (Drew & Napier)
• Court: High Court (Singapore)
• Subject Matter: Equity,Only issue one of construction of document,Civil Procedure,Contractual terms,Appointment of valuer contemplated,Originating summons,Originating processes,Whether essential terms incorporated and only subsidiary aspects unresolved,Contract,Contract for sale at valuation,Terms in letter,Whether letter evidences binding agreement between parties,Remedies,Whether summons should be converted to writ action,Whether specific performance appropriate,Settlement agreement,Whether terms subject to contract

: The plaintiffs and defendants in both originating summonses are siblings. Two older brothers, Tan Yeow Khoon (`Yeow Khoon`) the plaintiff in OS 739/96 and Tan Yeow Lam (`Yeow Lam`) the plaintiff in OS 740/96 are in one camp whereas their younger brother Tan Yeow Tat (`Yeow Tat`) and their sister Tan Guek Tin (`Guek Tin`) are in the opposite camp. Both summonses raise, in a small compass, one main issue, that is, whether a settlement agreement reportedly concluded between the feuding parties on 24 November 1995 and admittedly encapsulated in a letter dated 28 November 1995 written by Mr Anthony Lee, a senior partner from the legal firm of Bih Li & Lee, who was at all material times representing the first defendant, was binding and enforceable. The plaintiffs contended that it was binding whereas the defendants argued to the contrary.

The plaintiffs and the defendants are shareholders of three family-owned companies, namely, Soon Hock Transportation Pte Ltd (`SH Transportation`), Soon Hock Container & Warehousing Pte Ltd (`SH Container`) and Cogent Container Services Pte Ltd (`Cogent Container`).

Their respective shareholdings in the said three companies are as follows:

Names of companies	Yeow Khoon oon (plaintiff in OS 739/96)	Yeow Lam (plaintiff in OS 740/96)	Yeow Tat (first defendant in OS 739 and 740/96)	Guek Tin (second defendant in OS 739 and 740/96)
SH Transportation	90,000 shares (45%)	60,000 shares (30%)	50,000 shares (25%)	-
SH Container	275,000 shares (55%)	100,000 shares (20%)	100,000 shares (20%)	25,000 shares (5%)
Cogent Container	165,000 shares (55%)	60,000 shares (20%)	60,000 shares (20%)	15,000 shares (20%)

Admittedly, the relationship between the parties became frayed and the defendants started questioning the plaintiffs concerning the operation and accounts of the three companies - not to mention the defendants` unhappiness over Cogent Container granting a lucrative construction contract to one Wah Tien Building Contractors (`Wah Tien`), a company wholly owned by Yeow Khoon without the latter formally declaring his interest in Wah Tien. Yeow Khoon did not take the criticisms kindly and the upshot was that the plaintiffs caused the defendants to be removed as directors of the family companies at an extraordinary general meeting held on 8 November 1995.

After much mutual recriminations, parties eventually met on 17 and 24 November 1995 to discuss their differences. The result was an agreement between the parties, terms of which were promptly encapsulated by Mr Anthony Lee in his firm`s letter dated 28 November 1995 (`the letter agreement`). As this letter agreement is the key document around which the arguments of the contestants swirl, it requires reproduction in full and it reads as follows:

We refer to the above matters and to the meetings held on 17 November 1995 and 24 November 1995.

As arranged, we write to confirm that the parties, as a step towards achieving a comprehensive settlement of the disputes between them, have agreed to the following:

1 Tan Yeow Khoon shall act for himself and for Tan Yeow Lam as one party (Yeow Khoon).

2 Tan Yeow Tat shall act for himself and Tan Guek Tin as one party (Yeow Tat).

3 Yeow Tat shall sell his interest in the three companies (Companies):

a Soon Hock Container & Warehousing Pte Ltd;

b Soon Hock Transportation Pte Ltd;

c Cogent Container Services Pte Ltd.

4 Yeow Khoon shall buy Yeow Tat`s interest in the Companies.

5 The purchase price of the interest in the Companies shall be based on the value of the companies as at 31 October 1995.

6 The value of the Companies shall be based on the audited book value but subject to the following:

(a) adjusted for market value of the immovable properties owned by the company;

(b) adjusted for payments made by the Companies other than for business purposes for the period 1 January 1990 to 31 October 1995;

(c) adjusted for transactions between the Companies and Wah Tien for the period 1 January 1990 to 30 October 1995;

(d) adjusted for transactions between the Companies and Hoon Nam for the period 1 January 1990 to 30 October 1995.

7 The valuation of the immovable properties shall be carried out as follows:

a Yeow Khoon shall appoint, at their own cost, Richard Ellis to undertake the valuation;

b Yeow Tat shall appoint, at their own cost, Knight Frank to undertake the valuation;

c The valuation of the immovable properties shall be arrived at by taking the average figure of the two valuations.

8 The mechanism as to how the adjustments set out in paragraph 6(b), (c) and (d) are (sic) to be ascertained will be further discussed at the next meeting fixed for Thursday, 7 December 1995 .

9 Yeow Khoon shall pay Yeow Tat an amount equal to 25% value of the Companies. If the amount is below $2m, it shall be paid in one lump sum. If it exceeds $2m, the excess beyond $2m shall be payable in instalments to be agreed upon provided that the entire consideration is to be paid within a year from the date of the 1st payment.

10 Tan Guek Tin shall tender her resignation as a director and employee of the Companies upon the signing of the agreement and shall be entitled to six (6) months paid leave immediately. Tan Yeow Tat shall tender his resignation as a director and employee of the Companies upon the payment of the last instalment to him referred to in paragraph 9 hereof.

11 Yeow Khoon shall procure the unconditional release of Yeow Tat from all guarantees executed by them for the Companies.

12 Yeow Khoon confirms that they and the Companies shall have no further claims against Yeow Tat and Yeow Tat confirms that they shall have no further claims against Yeow Khoon and the Companies.

As agreed, please let us have copies of the leases of all the immoveables properties owned by the companies and the floor plans of these properties on an urgent basis. As we have indicated, our clients require these documents to obtain a valuation of these properties. [Emphasis added.] (Signed Bih Li & Lee)

As envisaged under para 8 of the letter agreement, parties again met on 7 December 1995 to work out the mechanism mentioned. There were altogether 11 people present at the meeting including the parties and their solicitors - Mr Lee Mun Hooi representing the plaintiffs whereas Mr Anthony Lee and Mr Christopher Chuah representing Yeow Tat and Guek Tin respectively. The meeting was reportedly chaired by one Mr Gea Ban Peng (`Mr Gea`) a company secretary providing secretarial services to Cogent Container. The relevant segments of the notes of proceedings taken by him as Chairman of the meeting reads as follows:

3 The letter dated 28 November 1995 ... from Bih Li & Lee to Lee Bon Leong & Co was tabled for the purpose of discussing and agreeing on the mechanism as to how the adjustments stated in item 6(b), (c) and (d) are to be ascertained and for this purpose, it was agreed that the following steps shall be taken:

1 Both Yeow Tat and Yeow Khoon shall have full access to the accounting documents in the presence of Mr Gea Ban Peng and the arbitrator.

2 Mr Gea Ban Peng be appointed to coordinate and manage the execution of items 6(b), (c), and (d).

3 Both parties shall inspect the companies record and present a list of items for adjustments.

4 An adjustment shall be made to the relevant accounts in the case where both parties agree on the item for adjustment.

5 Where the two parties could not agree on the item to be adjusted then that item shall be referred to an arbiter who shall make a final decision on this matter.

6 To appoint Kaka Singh of Deliotte & Touche to be the arbitrator.

7 The fee for Mr. Gea Ban Peng shall be paid by the three companies. ...

8 The fees to the arbitrator shall be borne by the two parties in proportion to the amounts adjusted to their respective accounts based on items 6(b), (c), and (d).

9 Anthony Lee shall instruct Knight Frank to obtain the information for the valuation of the Company`s immovable properties from Richard Ellis.

10 Anthony Lee shall instruct Knight Frank to carry out the valuation per item 6(a).

Yeow Khoon claimed that in order to fulfill the plaintiffs` obligations as required under paras 7 and 10 of the letter agreement, he promptly commissioned Richard Ellis, a firm of international property consultants to value the immovable properties belonging to the three family companies; allowed Yeow Tat and Guek Tin to continue as directors and employees as the case may be of the family companies and further arranged for them to be remunerated, thereby suspending an earlier decision taken at the extraordinary general meeting held on 8 November 1995 to remove the defendants as directors.

As it turned out, for some reason, the defendants would not wish to put in motion the points of agreement reached at the meeting of 24 November 1995. Yeow Tat maintained that there was no concluded agreement reached between the parties. In this regard, his assertions as contained in paras 54 to 59 of his affidavit of 19 August 1996 read as follows:

54 By a letter dated 28 November 1995, my solicitors set out the terms of understanding reached between the parties. The letter clearly denoted that these terms were subject to contract and did not and could not, in any manner of interpretation, evidence a final and conclusive agreement as it is now alleged. Many issues had to be resolved and we were far from reaching a conclusive settlement .

55 In his affidavit, Tan Yeow Khoon has misquoted parts of the said letter, in particular, at paras 45(e) and (g). The wording in my solicitors` letter was that certain of the proposed adjustments to the value of the shares would be further discussed at a meeting on 7 December 1995 and not that the adjustments ` other than that concerning the immovable properties ` were to be discussed then. More significantly, as...