Golden Village v Phoon Chiong Kit: Director's Fiduciary Duties & Conflict of Interest
In Golden Village Multiplex Pte Ltd v Phoon Chiong Kit, the High Court of Singapore addressed a claim by Golden Village Multiplex Pte Ltd against its director, Phoon Chiong Kit, for breach of director's and fiduciary duties. The case arose from a conflict of interest, as Phoon was also a director of Golden Harvest Films Distribution (Pte) Ltd, which was being sued by Golden Village in a separate suit. Golden Village sought an injunction to restrain Phoon from acting against its interests. The court ordered Phoon to provide a written undertaking not to act against Golden Village's interests and to abstain from participating in Suit 413 pending the resolution of a related application.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Orders made for the defendant to give a written undertaking not to act against the interests of the plaintiff as its director and not to participate in any manner in Suit 413 pending the outcome of SIC 3346 in that suit.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Director Phoon Chiong Kit sued for breach of fiduciary duties for acting against Golden Village's interests to benefit another company. Court orders undertaking.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Golden Village Multiplex Pte Ltd | Plaintiff | Corporation | Orders made for the defendant to give a written undertaking | Partial | Philip Ling, Ambrose Chia Heng Guan |
| Phoon Chiong Kit | Defendant | Individual | Orders made for the defendant to give a written undertaking | Partial | Chan Kia Pheng, Shaun Koh |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Philip Ling | Wong Tan and Molly Lim LLC |
| Ambrose Chia Heng Guan | Wong Tan and Molly Lim LLC |
| Chan Kia Pheng | KhattarWong |
| Shaun Koh | KhattarWong |
4. Facts
- Defendant was a director of both Golden Village and Golden Harvest Films Distribution (GHFD).
- Golden Village and GHFD were engaged in litigation against each other.
- Defendant filed an affidavit on behalf of GHFD in the litigation against Golden Village.
- Defendant had access to confidential information of Golden Village.
- Golden Village claimed the defendant was exploiting his position to benefit GHFD to Golden Village's detriment.
- The defendant directed that GHFD be billed a 50% share of the fixed rent payable to IMAX under the Agreement for Lease which amounted to $1.145m.
5. Formal Citations
- Golden Village Multiplex Pte Ltd v Phoon Chiong Kit, Suit 557/2005, [2006] SGHC 38
6. Timeline
| Date | Event |
|---|---|
| Shareholders’ Agreement signed | |
| Letter of Intent from IMAX accepted by GHFD and VRS | |
| Agreement for Lease signed between IMAX, GHFD, and VRS | |
| Assignment agreement signed, assigning rights and obligations to the plaintiff | |
| Transfer Notice issued to GHFD | |
| Transfer Agreement made between Village, VRS, GHFD, GHE and GVH | |
| IMAX theatre operated by the plaintiff | |
| Board meeting of the plaintiff decided that the IMAX theatre at Great World City would cease operations | |
| Second letter sent to GHFD reminding the company and GHE that they were in breach of the Agreement for Lease | |
| GHFD alleged that the plaintiff was in breach of its obligations under the Transfer Agreement | |
| GHFD alleged that the plaintiff was in breach of its obligations under the Transfer Agreement | |
| Earlier suit commenced | |
| GHFD filed SIC 3346 in the earlier suit | |
| Warrant to act signed by Mr Kirk Senior | |
| Defendant filed affidavit for the defendant’s application | |
| Defendant filed affidavit to oppose the plaintiff’s application | |
| SIC 3346 heard by an assistant registrar | |
| Suit 413 was struck out by AR Quek | |
| Plaintiff's appeal allowed by Andrew Ang J, suit restored, and SIC 3346 dismissed | |
| Decision Date |
7. Legal Issues
- Breach of Fiduciary Duties
- Outcome: The court found that the defendant's actions constituted a potential breach of his fiduciary duties as a director of the plaintiff.
- Category: Substantive
- Sub-Issues:
- Acting against company's interests
- Exploiting position for personal gain
- Conflict of interest
- Conflict of Interest
- Outcome: The court determined that the defendant was in a conflict of interest by being a director of both the plaintiff and GHFD, and siding with GHFD against the plaintiff.
- Category: Substantive
- Sub-Issues:
- Concurrent directorships
- Duty of loyalty
- Acting for competing interests
8. Remedies Sought
- Injunction to restrain the defendant from acting in breach of his duties
- Order for the defendant to withdraw affidavits filed on behalf of GHFD
9. Cause of Actions
- Breach of Director's Duties
- Breach of Fiduciary Duties
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Entertainment
- Film
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Kea Holdings Pte Ltd v Gan Boon Hock | Court of Appeal | Yes | [2000] 3 SLR 129 | Singapore | Cited to support the application regarding the statutory duties of a director under s 157 of the Companies Act and the principle that a director must act in the company's interest and not place himself in a position of conflict. |
| Charterbridge Corporation Ltd v Lloyds Bank Ltd | Chancery Division | Yes | [1970] Ch 62 | England and Wales | Cited for the test to determine whether a director of a company within a group is acting in the best interest of the company. |
| Intraco Ltd v Multi-Pak Singapore Pte Ltd | Court of Appeal | Yes | [1995] 1 SLR 313 | Singapore | Cited for applying the test in Charterbridge Corporation regarding the duties of a director within a group of companies. |
| Duke Group Limited v Pilmer | Supreme Court of South Australia | Yes | (1999) 73 SASR 64 | Australia | Cited to argue against the plaintiff's application, concerning the duty of a director faced with a conflict of interest. |
| Fitzsimmons v The Queen | Western Australian Court of Criminal Appeal | Yes | (1997) 23 ACSR 355 | Australia | Cited within the discussion of Duke Group Limited v Pilmer regarding the duty of a director to disclose knowledge of a company's true financial position. |
| Permanent Building Society v Wheeler | Supreme Court of Western Australia | Yes | (1994) 11 WAR 187 | Australia | Cited within the discussion of Duke Group Limited v Pilmer regarding the actions required of a director when a material conflict arises. |
| Boulting v Association of Cinematograph, Television and Allied Technicians | Court of Appeal | Yes | [1963] 2 QB 606 | England and Wales | Cited regarding the relationship between the 'no conflict of interests' rule and directors who hold posts in more than one company. |
| Holder v Holder | Court of Appeal | Yes | [1968] Ch 353 | England and Wales | Cited by the defendant to support his contention that the plaintiff had consented to his concurrent directorships, but the court found it irrelevant. |
| re Duckwari Plc | Court of Appeal | Yes | [1998] Ch 253 | England and Wales | Cited by the defendant to support his contention that the plaintiff had consented to his concurrent directorships, but the court found it irrelevant. |
| American Cyanamid Co v Ethicon Ltd | House of Lords | Yes | [1975] AC 396 | United Kingdom | Cited by the defendant to argue that an injunction ought not to be granted, based on the principles for granting interlocutory injunctions. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Section 157 Companies Act (Cap 50, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Director's duties
- Fiduciary duties
- Conflict of interest
- Shareholders’ Agreement
- IMAX theatre
- Transfer Agreement
- Transfer Notice
- Warrant to act
- Board resolution
15.2 Keywords
- Director
- Fiduciary duty
- Conflict of interest
- Companies Act
- Golden Village
- Golden Harvest
- IMAX
16. Subjects
- Corporate Governance
- Company Law
- Directors' Duties
17. Areas of Law
- Companies Law
- Directors' Duties
- Fiduciary Duties
- Conflict of Interest