Ting Sing Ning v Ting Chek Swee: Locus Standi in Shareholder Fraud Claim

In Ting Sing Ning (alias Malcolm Ding) v Ting Chek Swee (alias Ting Chik Sui) and Others, the High Court of Singapore, presided over by Choo Han Teck J, addressed the issue of whether the plaintiff, Ting Sing Ning, a minority shareholder in Havilland Ltd, had the locus standi to bring an action against the first, fifth, and sixth defendants for breach of fiduciary duties as directors of Havilland, and against the fourth defendant for an account to be taken. The court ruled that the plaintiff did not sufficiently prove that the majority shareholders were unduly influenced by the defendants from taking legal action through Havilland. Consequently, the court dismissed the action, ruling that the plaintiff had no standing to proceed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

The court ruled that the plaintiff has no standing to proceed with the action, and the action is accordingly dismissed with costs to follow the event.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Shareholder Ting Sing Ning sues directors for fraud. The court considered whether Ting had locus standi to bring the action under the 'fraud on the minority' exception.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ting Sing Ning (alias Malcolm Ding)PlaintiffIndividualAction DismissedLost
Ting Chek Swee (alias Ting Chik Sui)DefendantIndividualJudgment in favor of DefendantWon
Sia Cheng YongDefendantIndividualJudgment in favor of DefendantWon
Havilland LtdDefendantCorporationJudgment in favor of DefendantWon
Borindo Woods Pte LtdDefendantCorporationJudgment in favor of DefendantWon
Gerhard Tesan BintiDefendantIndividualJudgment in favor of DefendantWon

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJudgeYes

4. Counsels

Counsel NameOrganization
See Chern YangTan Kok Quan Partnership
Marina ChinTan Kok Quan Partnership
Paul SeahTan Kok Quan Partnership
Kannan RameshTan Kok Quan Partnership
Francis XavierRajah & Tann
Melvin LumRajah & Tann
Dawn WeeRajah & Tann
Cleophas PfangMichael Khoo & Partners
Andy CheokMichael Khoo & Partners
Tang King SuongTang & Partners

4. Facts

  1. The plaintiff holds 10% of Havilland’s shares.
  2. Ting, Binti and Sia hold 15.5%, 12% and 14.5% of Havilland’s shares respectively, totaling 42%.
  3. The plaintiff alleged breach of fiduciary duties by the defendants.
  4. The plaintiff relied on a forensic accounting report indicating unauthorized payments.
  5. Havilland’s directors wrote a letter to the shareholders asking if they were in favour of the action, and they voted against it.
  6. The plaintiff did not attend the extraordinary general meeting to present his reasons.

5. Formal Citations

  1. Ting Sing Ning (alias Malcolm Ding) v Ting Chek Swee (alias Ting Chik Sui), OS 424/2000, [2006] SGHC 192

6. Timeline

DateEvent
Originating summons commenced by the plaintiff
Havilland’s annual general meeting
Havilland’s directors wrote a letter to the shareholders
Plaintiff's affidavit filed
Five of the shareholders convened an extraordinary general meeting
Extraordinary general meeting held
Judgment reserved

7. Legal Issues

  1. Locus Standi
    • Outcome: The court ruled that the plaintiff did not have locus standi to bring the action.
    • Category: Procedural
    • Related Cases:
      • (1843) 2 Hare 461; 67 ER 189
  2. Fraud on the Minority
    • Outcome: The court found that the plaintiff did not sufficiently prove that the majority shareholders were unduly influenced by the defendants.
    • Category: Substantive
    • Related Cases:
      • [1982] Ch 204

8. Remedies Sought

  1. Damages
  2. Declaration for an account to be taken

9. Cause of Actions

  • Breach of Fiduciary Duties

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Foss v HarbottleN/AYes(1843) 2 Hare 461; 67 ER 189N/ACited for the proper plaintiff rule in company law, which states that the right of action rests with the company and not an individual shareholder.
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2)Court of Appeal in EnglandYes[1982] Ch 204EnglandCited for the principle that the plaintiff carries the burden of proving prima facie that there had been some form of wrongdoing on the part of the majority and that the case was within the exception to the Foss rule.
Waddington Limited v Chan Chun Hoo ThomasN/AYes[2005] HKCFI 1010Hong KongCited for the principle that it is legitimate to take into account the likely effect of a failure on the part of certain shareholders to vote.
Hawkesbury Development Co Ltd v Landmark Finance Pty LtdN/AYes[1969] 2 NSWR 782N/ACited for the principle that there is a further exception to the rule in Foss v. Harbottle where justice so requires.
Biala Pty Ltd v Mallina Holdings Limited (No 2)N/AYes(1993) 11 ACLC 1082N/ACited for the principle that equity is concerned with substance and not form, and it seems contrary to principle to require wronged minority shareholders to bring themselves within the boundaries of the well-recognised exceptions.
Abdul Rahim bin Aki v Krubong Industrial Park (Melaka) Sdn BhdN/AYes[1995] 3 MLJ 417N/ACited for the principle that there is a further exception to the rule in Foss v. Harbottle where justice so requires.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Locus Standi
  • Fraud on the Minority
  • Proper Plaintiff Rule
  • Derivative Action
  • Prima Facie Case
  • De Facto Control
  • Extraordinary General Meeting

15.2 Keywords

  • shareholder
  • fraud
  • locus standi
  • fiduciary duty
  • company law

17. Areas of Law

Area NameRelevance Score
Company Law75
Fraud on the Minority65
Fiduciary Duties60
Corporate Litigation50
Locus Standi40
Derivative action35
Proper Plaintiff Rule30
Litigation30

16. Subjects

  • Company Law
  • Shareholder Rights
  • Minority Shareholders
  • Fiduciary Duty