Chow Kwok Ching v Chow Kwok Chi: Oppression, Family Business, and Companies Act

In 2008, the High Court of Singapore heard three consolidated suits, Chow Kwok Ching v Chow Kwok Chi and Others, where the plaintiff, Chow Kwok Ching, sought relief under Section 216 of the Companies Act against his brothers, Chow Kwok Chi and Chow Kwok Chuen, alleging oppressive conduct in the management of Chow Cho Poon Pte Ltd, Associated Development Pte Ltd, and Lee Tung Company (Pte) Ltd. The court, presided over by Judith Prakash J, found evidence of oppressive conduct, particularly in the handling of company funds and exclusion of the plaintiff from management decisions. However, as the companies were already in the process of being wound up, the court could not grant the primary reliefs sought but determined the issue of costs, awarding the plaintiff 65% of his costs from the defendants.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff succeeded in his case. However, the court ordered that the plaintiff be entitled to recover only 65% of his costs from the first and second defendants.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment reserved

1.5 Jurisdiction

Singapore

1.6 Description

Shareholder oppression case involving brothers in a family business. The court found oppressive conduct but noted the companies were already wound up.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chow Kwok ChuenDefendantIndividualPartial LossPartial
Chow Kwok ChiDefendantIndividualPartial LossPartial
Chow Kwok ChingPlaintiffIndividualPartial VictoryPartial
Peter Low of Independent Practitioner
Chow Cho Poon (Private) LtdOtherCorporation

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Ang Cheng HockAllen & Gledhill LLP
Tan XeauweiAllen & Gledhill LLP
Jacqueline LeeAllen & Gledhill LLP
Abraham VergisDrew & Napier LLC
Jimmy YimDrew & Napier LLC
Clive Myint SoeDrew & Napier LLC
See Tow Soo LingColin Ng & Partners LLP
Peter LowIndependent Practitioner
Robert YuColin Ng & Partners LLP

4. Facts

  1. The plaintiff and his brothers are shareholders and directors of three companies: CCPL, ADPL, and Lee Tung.
  2. The plaintiff alleged that his brothers conducted the affairs of the companies in a manner oppressive to him.
  3. The plaintiff's father, Chow Cho Poon, set up the companies, which are in the business of holding real property for investment.
  4. After their parents' death, the brothers took over management and soon found themselves at odds.
  5. The plaintiff complained about the transfer of shares, unauthorized loans, and exclusion from management.
  6. The plaintiff sought an order for his brothers to purchase his shares or for the companies to be wound up.
  7. The court found evidence of oppressive conduct but noted the companies were already being wound up.

5. Formal Citations

  1. Chow Kwok Ching v Chow Kwok Chi and Others and Other Suits, Suit 70/2005, 71/2005, 72/2005, [2008] SGHC 100
  2. Unknown, , [2007] SGHC 197

6. Timeline

DateEvent
Chow Cho Poon Pte Ltd set up
Lee Tung Company (Pte) Ltd set up
Associated Development Pte Ltd set up
Mr. Chow died
Mrs. Chow died
Jeslyn Goh appointed company manager of Lee Tung
Sng Chor Heah appointed company secretary of all companies
Astute Consultants Pte Ltd engaged to provide accounting services
Sng Chor Heah resigned as company secretary
Winston Loong appointed company secretary
Valuation of immovable assets owned by each of the companies
Oppression actions filed
Letters issued to the Estate demanding repayment of debts
Board meetings of the companies held
Companies sent letters to the Estate to notify it of exercising rights of lien
Board meetings held authorising directors to adopt share valuation reports
Companies sent letters to all the shareholders offering them the Estate’s shares
Court appointed Gerald Loong Sie Kiong as the independent administrator of the Estate
Notices issued for board meetings
Board meetings held to transfer shares of the Estate
Transfers of the shares were effected
Chi filed applications to wind up the companies
Winding up applications heard
Judgment delivered in the winding up applications
Decision Date

7. Legal Issues

  1. Oppression of Minority Shareholders
    • Outcome: The court found evidence of oppressive conduct by the defendants.
    • Category: Substantive
    • Sub-Issues:
      • Exclusion from management
      • Improper use of company funds
      • Disregard of shareholder interests
  2. Unauthorised Directors’ Loans
    • Outcome: The court found that it was wrong of the defendants to have taken loans from the companies in the way that they did.
    • Category: Substantive
  3. Transfer of Shares
    • Outcome: The court found that no real prejudice has been caused to the plaintiff by virtue of the fact that his requests to be made a joint trustee were not acceded to.
    • Category: Substantive
  4. Dividends and Directors’ Fees
    • Outcome: The court considered that the defendants’ arguments are more substantial than those put forward by the plaintiff.
    • Category: Substantive
  5. Exclusion from Management
    • Outcome: The court found that although the plaintiff’s complaints were in many cases exaggerated and his troubles were often contributed to by his own unreasonable behaviour and bullying way with others, the plaintiff was excluded from the management of the companies by his brothers in a way that unfairly discriminated against him.
    • Category: Substantive

8. Remedies Sought

  1. Order for brothers to purchase shares
  2. Order for companies to be wound up

9. Cause of Actions

  • Oppression
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation
  • Corporate Law

11. Industries

  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re Kong Thai Sawmill (Miri) Sdn BhdUnknownYes[1978] 2 MLJ 227MalaysiaCited for the principle that oppression requires a visible departure from fair dealing and a violation of fair play.
Re Cumana LtdUnknownYes[1986] BCLC 430England and WalesCited as an example where the court found that the majority shareholders had taken action to reduce the minority shareholder’s shareholding in the respective companies, had been found by the court to be unfairly prejudicial to the interest of the minority shareholder.
Clemens v Clemens Bros LtdUnknownYes[1976] 2 All ER 268England and WalesCited as an example where the court found that the majority shareholders had taken action to reduce the minority shareholder’s shareholding in the respective companies, had been found by the court to be unfairly prejudicial to the interest of the minority shareholder.
Re Coliseum Stand Car Services LtdUnknownYes[1972] 1 MLJ 109MalaysiaCited regarding improper use of company funds through unauthorized loans.
Re H.R. Harmer LtdUnknownYes[1958] 3 All ER 689England and WalesCited for the proposition that shareholders are entitled to have the affairs of a company conducted in the way laid down by the company’s constitution.
Seg Investment v Seg International Securities (HK) LtdUnknownYes[2005] HK 1633Hong KongCited for the proposition that the length of the notice should be reasonable in all circumstances.
Guan Seng Co v Tan Hock ChanIpoh High CourtYes[1990] 2 CLJ 761MalaysiaCited regarding the denial of information to a shareholder.
Lim Cheng Huat Raymond v Teoh Siang TeikCourt of AppealYes[1996] 3 SLR 605SingaporeCited regarding the exclusion from management of a company.
Re Associated Color LaboratoriesBritish Colombian Supreme CourtYes[1970] Carswell BC 8CanadaCited regarding directors meeting over the telephone.
Wagner v International Health PromotionsUnknownYesWagner v International Health Promotions (1994) 15 ACSR 418AustraliaCited regarding directors meeting over the telephone.
Re S Q Wong Holdings (Pte) LtdUnknownYes2 MLJ 298SingaporeCited regarding directors' discretion to declare dividends.

13. Applicable Rules

Rule Name
Order 59 r 6(2) of the Rules of Court (2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Oppression
  • Companies Act
  • Shareholder
  • Directors
  • Family business
  • Directors' fees
  • Dividends
  • Loans
  • Share transfer
  • Management exclusion

15.2 Keywords

  • Oppression
  • Shareholder
  • Company
  • Family
  • Business

17. Areas of Law

Area NameRelevance Score
Minority Oppression95
Company Law75
Corporate Governance40
Corporate Law40
Corporate Litigation30
Estate Administration30
Succession Law20
Wills and Probate20
Contract Law20
Trust Law15
Costs10
Estoppel10

16. Subjects

  • Company Law
  • Shareholder Rights
  • Corporate Governance