Sim Yong Kim v Evenstar Investments: Winding Up Petition on Just and Equitable Grounds
In Sim Yong Kim v Evenstar Investments Pte Ltd, the High Court of Singapore heard a petition by Sim Yong Kim to wind up Evenstar Investments, a holding company co-owned with his brother Mike Sim, on just and equitable grounds under Section 254(1)(i) of the Companies Act. Sim Yong Kim cited health problems, difficulties at work, and the need to realize his investment. The court, led by Tay Yong Kwang J, dismissed the petition, finding that the company was functioning without difficulty and that Sim Yong Kim's complaints related to a separate entity, Sinwa Limited.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Petition dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Sim Yong Kim sought to wind up Evenstar Investments, a holding company, on just and equitable grounds. The court dismissed the petition, finding no basis for winding up.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Sim Yong Kim | Petitioner | Individual | Petition dismissed | Lost | |
| Evenstar Investments Pte Ltd | Respondent | Corporation | Petition dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judge | Yes |
4. Counsels
4. Facts
- Sim Yong Kim and Mike Sim are brothers and the only shareholders of Evenstar Investments Pte Ltd.
- Mike Sim holds 86.5% of the shares, while Sim Yong Kim holds 13.5%.
- The company was incorporated in December 1999 as a holding company authorized to invest in various businesses and properties.
- Sim Yong Kim sought to wind up the company on the 'just and equitable' ground.
- Sim Yong Kim cited health problems, difficulties at work, and the need to realize his investment as reasons for winding up the company.
- The company holds shares in Sinwa Limited and KS Tech Limited.
- Sim Yong Kim was an executive director of Sinwa Limited.
5. Formal Citations
- Sim Yong Kim v Evenstar Investments Pte Ltd, CWU 111/2005, [2005] SGHC 236
6. Timeline
| Date | Event |
|---|---|
| Sinwa Ship Supply Pte Ltd (SSS) started by the father of Sim Yong Kim and Mike Sim. | |
| Mike Sim took over management of SSS. | |
| Mike Sim bought over SSS from his father and siblings. | |
| Sim Yong Kim started working full-time in the sales department of SSS. | |
| Evenstar Investments Pte Ltd (the company) was incorporated. | |
| Sinwa KS Limited (now known as Sinwa Limited) was incorporated to acquire the entire capital of SSS and a company called KS Seafirst. | |
| Sinwa Limited was listed on the SESDAQ of the Singapore Exchange Limited (SGX). | |
| Resolution signed by the petitioner regarding dividend payment. | |
| Resolution signed by the petitioner regarding dividend payment. | |
| Sim Yong Kim signed a cheque for an amount in excess of $500,000 drawn in favour of Mike Sim which he believed was for the payment of dividends. | |
| Mike Sim’s son and daughter joined the company’s board. | |
| Judgment issued. |
7. Legal Issues
- Just and Equitable Winding Up
- Outcome: The court held that the petitioner had not made out a case for the court to wind up the company on the 'just and equitable' ground.
- Category: Substantive
- Sub-Issues:
- Loss of substratum
- Breakdown of relationship
- Inability to participate in management
8. Remedies Sought
- Winding up of the company
- Appointment of liquidator
- Costs on an indemnity basis
9. Cause of Actions
- Winding Up on Just and Equitable Grounds
10. Practice Areas
- Corporate Law
- Insolvency Law
11. Industries
- Investment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Chua Kien How v Goodwealth Trading Pte Ltd | Court of Appeal | Yes | [1992] 2 SLR 296 | Singapore | Cited for the principle that a company can be wound up if the two directors cannot agree and neither can overrule the other, leading to a deadlock. |
| Re Iniaga Building Supplies (S) Pte Ltd | High Court | Yes | [1994] 3 SLR 359 | Singapore | Cited for the application of the 'just and equitable' ground for winding up, referencing the elements of personal relationship, participation in business conduct, and restrictions on share transfer. |
| Ebrahimi v Westbourne Galleries Ltd | House of Lords | Yes | [1973] AC 360 | United Kingdom | Cited for the principle that a limited company is more than a mere legal entity and that equitable considerations can be applied to the exercise of legal rights. |
| Quek Hong Yap v Quek Bee Leng | High Court | Yes | [2005] SGHC 111 | Singapore | Cited to support the principle that there is no right on the part of a shareholder to exit a company at will. |
| O’Neill v Phillips | Court of Appeal | Yes | [1999] 1 WLR 1092 | England and Wales | Cited to support the principle that there is no right on the part of a shareholder to exit a company at will. |
| In re Yenidje Tobacco Company, Limited | Chancery Division | Yes | [1916] 2 Ch 426 | England and Wales | Cited as an example of a company being wound up despite making large profits due to a complete breakdown in the relationship between the shareholders and directors. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Section 254(1)(i) Companies Act (Cap 50, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Just and equitable
- Holding company
- Shareholder
- Director
- Substratum
- Companies Act
- Sinwa Limited
- KS Tech Limited
- Dividends
- First right of refusal
15.2 Keywords
- Winding up
- Just and equitable
- Company law
- Singapore
- Investment
- Shareholder dispute
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 90 |
| Company Law | 75 |
| Commercial Disputes | 30 |
16. Subjects
- Company Law
- Insolvency