WAI CHOO v 1. ) PLATINUM INTEGRATED CITY SDN. BHD. 2. ) LEE THAI YOUNG MATAHARI 3. ) BINTANG LEE THAI HSIN

Case Significance

Illustrates the enforcement by Order 14 summary judgment of a put option agreement and a directors' guarantee, the court giving effect to freedom of contract and rejecting unparticularised defences of illegality, settlement and breach that were inconsistent with the contemporaneous documents and unsupported by any counterclaim.

This High Court decision concerns an application for summary judgment under Order 14 of the Rules of Court 2012 to enforce a put option agreement over listed shares, together with a guarantee given by the company's directors. The plaintiff had entered into a call option agreement and a put option agreement over ordinary shares in a listed company, each at an agreed price, and the directors of the first defendant had given an irrevocable undertaking to guarantee the first defendant's due performance jointly and severally. When the plaintiff exercised the put option, the first defendant failed to buy the shares as agreed, and the plaintiff claimed the difference between the agreed put-option price and the lower weighted-average market price of the shares over the days following the exercise, pursuant to the default clause in the put option agreement. In resisting summary judgment, the defendants alleged that the agreements were a cover for illegal money-lending, that liability had been superseded by settlement agreements providing for the transfer of land, and that the plaintiff had breached a negative-pledge clause by dealing with the shares. The court held that these defences did not give rise to any triable issue: the allegations were unparticularised, the settlement agreements had no apparent connection to the subject matter of the agreements, the alleged breach of the negative pledge was pleaded without any specific transaction or evidence and relied on a penalty that did not appear in the agreement, and no counterclaim had been pleaded for the alleged breach. Applying the principle that a court must reject assertions that are equivocal, imprecise or inconsistent with undisputed contemporaneous documents, and giving effect to the parties' freedom of contract, the court found no triable issues within the pleaded case and entered summary judgment against the first defendant for the differential sum and against the guarantor directors. The judgment illustrates the enforcement of an option agreement and guarantee by summary judgment.