Pacrim Investments v Tan Mui Keow Claire: Company Secretary's Power & Share Transfer Moratorium

In Pacrim Investments Pte Ltd v Tan Mui Keow Claire and Mediastream Ltd, the High Court of Singapore heard an originating summons by Pacrim Investments seeking an order for the first defendant, Tan Mui Keow Claire (company secretary), to register the transfer of shares in the second defendant, Mediastream Ltd, and for damages. Andrew Ang JC dismissed the application, finding that the pledge of shares was an equitable mortgage that breached a moratorium on share transfers and that the transfers were also affected by the bankruptcy of the transferor.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Pacrim Investments sued Tan Mui Keow Claire for refusing to register share transfers. The court dismissed the application, holding the moratorium valid.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Pacrim Investments Pte LtdPlaintiffCorporationApplication dismissedLost
Tan Mui Keow ClaireDefendantIndividualApplication dismissedWon
Mediastream LtdDefendantCorporationApplication dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Andrew AngJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Peter PangPeter Pang and Co
Lim Chor PeeChor Pee and Partners
Johnny CheoCheo Yeoh and Associates LLC

4. Facts

  1. MSL acquired all shares of Allandes from Desmond Poh and Cho Wee Min.
  2. Pacrim Investments acted as a broker for the acquisition.
  3. MSL allotted 210 million shares to DP and Cho as consideration.
  4. DP and Cho agreed to a one-year moratorium on selling the shares.
  5. DP created a pledge over 70 million shares in MSL to secure commission payment to Pacrim.
  6. MSL rescinded the acquisition agreement due to alleged fraudulent misrepresentations.
  7. A bankruptcy order was made against DP.

5. Formal Citations

  1. Pacrim Investments Pte Ltd v Tan Mui Keow Claire and Another, OS 165/2004, NAOS 137/2004, [2004] SGHC 240

6. Timeline

DateEvent
Acquisition agreement dated
Completion of acquisition
Pledge created over shares
Bankruptcy petition filed
Acquisition agreement rescinded
Bankruptcy order made
Share transfer submitted for registration
Transfer of remaining shares submitted
Further reason given for declining transfer
Affidavit filed by Thia Peng Heok
Decision date

7. Legal Issues

  1. Company Secretary's Power to Register Share Transfers
    • Outcome: The court held that the company secretary does not have the power to register transfers of shares without the board’s authority.
    • Category: Substantive
    • Related Cases:
      • (1905) 22 TLR 27
  2. Validity of Moratorium on Share Transfers
    • Outcome: The court held that the moratorium on share transfers was valid even though it existed outside the company's articles of association.
    • Category: Substantive
    • Related Cases:
      • [1927] AC 916
  3. Pledge as Equitable Mortgage
    • Outcome: The court held that the pledge of shares amounted to an equitable mortgage.
    • Category: Substantive
    • Related Cases:
      • [1901] 2 Ch 314
      • [1993] 1 SLR 1
  4. Effect of Bankruptcy on Share Transfers
    • Outcome: The court held that the share transfers were void due to the transferor's bankruptcy.
    • Category: Substantive

8. Remedies Sought

  1. Order to register transfer of shares
  2. Damages

9. Cause of Actions

  • Breach of Contract
  • Refusal to register transfer of shares

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Chida Mines (Limited) v AndersonN/AYes(1905) 22 TLR 27N/ACited for the principle that a company secretary cannot register transfers of shares without the board’s authority.
Harrold v PlentyN/AYes[1901] 2 Ch 314N/ACited as authority that the deposit of a share certificate by way of security for a debt amounted to an equitable mortgage.
Chase Manhattan Bank NA v Wong Tui SunCourt of AppealYes[1993] 1 SLR 1SingaporeCited to determine whether arrangements created a pledge or an equitable mortgage of shares.
Re EG Tan & Co (Pte); Wong Tui San v Chase Manhattan Bank NAN/AYes[1990] SLR 1030SingaporeCited for the view that it would be unusual for a bank to be content to accept the pledge of the paper relating to the shares and not security over the rights or choses in action attaching thereto.
Linden Gardens Trust Ltd v Lenesta Sludge Disposals LtdHouse of LordsYes[1994] 1 AC 85N/ACited for the principle that a contravention of a provision prohibiting assignment of rights is not only a breach of contract but also ineffective to give the assignee any rights against the debtors.
Ontario Jockey Club, Limited v McBridePrivy CouncilYes[1927] AC 916CanadaCited for the principle that restrictions may be placed upon a shareholder’s right of transfer of his shares by agreement.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Section 121 Companies Act (Cap 50, 1994 Rev Ed)Singapore
Section 77(1) Bankruptcy Act (Cap 20, 2000 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Moratorium
  • Pledge
  • Equitable mortgage
  • Share transfer
  • Company secretary
  • Bankruptcy
  • Acquisition agreement
  • Consideration shares

15.2 Keywords

  • Company secretary
  • Share transfer
  • Moratorium
  • Equitable mortgage
  • Bankruptcy
  • Singapore
  • Companies Act
  • Bankruptcy Act

17. Areas of Law

Area NameRelevance Score
Company Law70
Credit and Security60
Bankruptcy50
Insolvency Law50

16. Subjects

  • Companies
  • Shares
  • Transfer
  • Allotment of shares
  • Moratorium
  • Credit
  • Security
  • Pledges
  • Pawns
  • Insolvency Law
  • Bankruptcy