Fan Juan Fen v Crocodile Holdings: Share Transfer, Dividends & Fraud Allegations

In Fan Juan Fen v Crocodile Holdings Pte Ltd and Another, the High Court of Singapore heard a case involving Fan Juan Fen, the plaintiff, and Crocodile Holdings Pte Ltd (CH), Crocodile International Pte Ltd (CI), and Dato Dr Tan Hian Tsin, the defendants. The plaintiff claimed unpaid dividends and the wrongful cancellation of her shares in CH. The court found that the plaintiff did not have to pay for the CH shares, that she only authorized Dato Tan to collect her dividends on her behalf on 25 September 1998, that CH did not follow the proper procedure in cancelling the plaintiff’s shares, and that CI had induced the breach by making the request and offering the indemnity that led CH to do that. The court entered judgment in favor of the plaintiff.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Fan Juan Fen sued Crocodile Holdings and Crocodile International over unpaid dividends and the cancellation of her shares. The court found in favor of Fan Juan Fen.

1.7 Decision Date

25 August 2005

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Fan Juan Fen	Plaintiff	Individual	Judgment for Plaintiff	Won	Thio Shen Yi of TSMP Law Corporation Adrian Tan of TSMP Law Corporation Dean Cher of TSMP Law Corporation
Crocodile Holdings Pte Ltd	Defendant	Corporation	Judgment against Defendant	Lost	Josephine Low of Michael Khoo and Partners Andy Chiok of Michael Khoo and Partners Michael Khoo, SC of Michael Khoo and Partners
Crocodile International Pte Ltd	Defendant	Corporation	Judgment against Defendant	Lost	Josephine Low of Michael Khoo and Partners Andy Chiok of Michael Khoo and Partners Michael Khoo, SC of Michael Khoo and Partners
Dato Dr Tan Hian Tsin	Defendant	Individual	Judgment against Defendant	Lost	Josephine Low of Michael Khoo and Partners Andy Chiok of Michael Khoo and Partners Michael Khoo, SC of Michael Khoo and Partners

3. Judges

Judge Name	Title	Delivered Judgment
Kan Ting Chiu	Judge	Yes

4. Counsels

Counsel Name	Organization
Thio Shen Yi	TSMP Law Corporation
Adrian Tan	TSMP Law Corporation
Dean Cher	TSMP Law Corporation
Josephine Low	Michael Khoo and Partners
Andy Chiok	Michael Khoo and Partners
Michael Khoo, SC	Michael Khoo and Partners

4. Facts

Fan Juan Fen was issued 400,000 shares in Crocodile Holdings (CH) on 20 March 1996.
A one-for-one share bonus issue resulted in Fan Juan Fen receiving another 400,000 shares on 27 July 1998.
Fan Juan Fen claimed Dato Tan asked her to sign a letter on 25 September 1998, backdated to 20 March 1996, authorizing dividend payments to him.
On 8 May 2000, CH cancelled Fan Juan Fen's share certificates at CI's request, transferring ownership to CI.
The transfer of shares was not in accordance with CH's articles of association.
The court found that the letter authorizing dividend payments was signed on 25 September 1998, not 20 March 1996.
CH did not follow proper procedure in cancelling Fan Juan Fen's shares.

5. Formal Citations

Fan Juan Fen v Crocodile Holdings Pte Ltd, Suit 518/2004, DC Suit 4011/2003, [2005] SGHC 152

6. Timeline

Date	Event
1993-01-01	Fan Juan Fen met Dato Tan in Shanghai.
1994-01-01	Shanghai Eastern Crocodile Apparels Company (SEAC) was incorporated.
1994-05-01	Dato Tan allegedly promised Fan Juan Fen a 10% stake in Cartelo.
1994-11-11	CI issued an option to Fan Juan Fen to purchase 150,000 Cartelo shares.
1996-03-19	Agreement made for CI to sell 400,000 Singapore Crocodile shares to the plaintiff.
1996-03-20	Share certificates for 400,000 shares in CH were issued to Fan Juan Fen.
1997-04-24	First dividend payment was made.
1997-05-31	Second dividend payment was made.
1998-04-08	Third dividend payment was made.
1998-04-08	Singapore Crocodile Pte Ltd changed its name to Crocodile Holdings Pte Ltd.
1998-07-27	Fan Juan Fen obtained another share certificate for 400,000 shares due to a bonus issue.
1998-09-25	Dato Tan allegedly asked Fan Juan Fen to sign a backdated letter authorizing CH to pay dividends to him.
1998-09-26	Fan Juan Fen's appointment as general manager of SEC was terminated.
1998-11-18	Fan Juan Fen wrote to CH declaring the dividend authorization letter invalid.
2000-03-28	CI informed Fan Juan Fen that she had repudiated the share purchase agreement.
2000-04-28	CI requested CH to cancel Fan Juan Fen's shares and register them in CI's name.
2000-05-05	CH passed a directors' resolution to cancel Fan Juan Fen's shares and register them in CI's name.
2000-05-08	CH cancelled Fan Juan Fen's share certificates at the request of CI.
2003-01-01	DC Suit 4011/2003 filed.
2004-01-01	Suit 518/2004 filed.
2005-01-29	SEAC's registration records were obtained during the hearing.
2005-08-26	Judgment reserved.

7. Legal Issues

Validity of Share Transfer
- Outcome: The court found that CH did not follow the proper procedure in cancelling the plaintiff’s shares, and CI had induced the breach.
- Category: Substantive
- Sub-Issues:
  - Compliance with articles of association
  - Requirement of proper instrument of transfer
  - Cancellation of shares without authority
Entitlement to Dividends
- Outcome: The court found that the plaintiff only authorized Dato Tan to collect her dividends on her behalf on 25 September 1998.
- Category: Substantive
- Sub-Issues:
  - Validity of authorization letter
  - Date of execution of authorization letter
  - Diversion of dividend payments
Vendor's Lien
- Outcome: The court found that there was no payment due from the plaintiff for the shares, and that there was no lien.
- Category: Substantive
- Sub-Issues:
  - Existence of unpaid purchase price
  - Right to enforce lien by transferring shares
  - Equitable remedies
- Related Cases:
  - [1996] 2 SLR 196
Limitation of Actions
- Outcome: The court found that the requisite fraud and concealment were present, and time did not run until the plaintiff had notice of the diverted payments. The claims were not time-barred.
- Category: Procedural
- Sub-Issues:
  - Applicability of limitation period
  - Fraudulent concealment
  - Discovery of fraud
- Related Cases:
  - [1973] 1 WLR 29
  - [1899] A.C. 351
  - [1971] 1 Q.B. 406
  - [1998] 2 SLR 265
Adverse Inference for Failure to Call Witnesses
- Outcome: The court drew an adverse inference against the defendants for failing to call Teri Koh and Chew Heng Ching as witnesses.
- Category: Procedural
- Sub-Issues:
  - Failure to call key witnesses
  - Availability of evidence
  - Unfavorable evidence

8. Remedies Sought

Declaration of legal and beneficial ownership of shares
Rectification of register of transfers and register of members
Account of profits in respect of shares
Payment of unpaid dividends

9. Cause of Actions

Breach of Contract
Fraud
Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation
Shareholder Disputes

11. Industries

No industries specified

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Re Caveat No CV/21366D	High Court	Yes	[1996] 2 SLR 196	Singapore	Cited regarding equitable unpaid vendor's lien.
King v Victor Parsons & Co	English Court of Appeal	Yes	[1973] 1 WLR 29	England and Wales	Cited for the definition of 'fraud' in the context of limitation periods.
Bulli Coal Mining Co. v. Osborne	House of Lords	Yes	[1899] A.C. 351	United Kingdom	Cited regarding the principle that a wrongdoer cannot rely on the Statute of Limitations if the wrongdoing was knowingly committed and unlikely to be discovered.
Applegate v. Moss	Court of Appeal	Yes	[1971] 1 Q.B. 406	England and Wales	Cited regarding the principle that a wrongdoer cannot rely on the Statute of Limitations if the wrongdoing was knowingly committed and unlikely to be discovered.
Bank of America National Trust and Savings Association v Herman Iskandar	Court of Appeal	Yes	[1998] 2 SLR 265	Singapore	Cited for approving the definition of 'fraud' in the context of limitation periods as defined in King v Victor Parsons & Co.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act (Cap 97, 1997 Rev Ed) s 116	Singapore
Limitation Act (Cap 163, 1996 Rev Ed) s 6	Singapore
Limitation Act (Cap 163, 1996 Rev Ed) s 29(1)	Singapore
Companies Act (Cap 50, 1994 Rev Ed) s 126(1)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Share transfer
Dividends
Fraudulent backdating
Vendor's lien
Cancellation of shares
Articles of association
Limitation of actions
Adverse inference
Share certificates
Bonus issue

15.2 Keywords

Shares
Dividends
Share transfer
Fraud
Companies Act
Singapore

17. Areas of Law

Area Name	Relevance Score
Company Law	90
Contract Law	70
Evidence Law	60
Limitation	50
Vendor's Lien	40
Fraud and Deceit	40
Dividends	30
Duty to Account	30

16. Subjects

Company Law
Contract Law
Civil Procedure