Lim Leong Huat v Chip Hup Hup Kee Construction: Conspiracy & Director Liability

In Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd, the High Court of Singapore, presided over by Andrew Ang J, considered whether a company director, Neo Kok Eng, could be liable for conspiracy with his company, Chip Hup Hup Kee Construction Pte Ltd (CHHKC), to injure Lim Leong Huat by depriving him of payments. Lim applied to add Neo as a defendant, alleging conspiracy and unlawful interference with CHHKC's payment obligations. The court allowed the application, finding that a director can be liable for conspiracy with the company, even if he is the controlling mind.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application allowed to add director as defendant.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The case examines if a company director can be liable for conspiracy with the company he controls. The court allowed the director to be added as a defendant.

1.7 Decision Date

5 January 2009

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Neo Kok Eng	Other	Individual	Application to add director as defendant allowed	Lost	Ling Daw Hoang Philip of Wong Tan & Molly Lim LLC Hwa Hoong Luan of Wong Tan & Molly Lim LLC
Lim Leong Huat	Plaintiff, First Defendant	Individual	Application Allowed	Won	Khoo Boo Teck Randolph of Drew & Napier LLC Keow Mei-Yen of Drew & Napier LLC Loo Teck Lee Johnson of Drew & Napier LLC
Chip Hup Hup Kee Construction Pte Ltd	Defendant, Plaintiff	Corporation	Application to add director as defendant allowed	Lost	Ling Daw Hoang Philip of Wong Tan & Molly Lim LLC Hwa Hoong Luan of Wong Tan & Molly Lim LLC
Tan Siew Lim	Second Defendant	Individual	Neutral	Neutral

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Ang	Judge	Yes

4. Counsels

Counsel Name	Organization
Ling Daw Hoang Philip	Wong Tan & Molly Lim LLC
Hwa Hoong Luan	Wong Tan & Molly Lim LLC
Khoo Boo Teck Randolph	Drew & Napier LLC
Keow Mei-Yen	Drew & Napier LLC
Loo Teck Lee Johnson	Drew & Napier LLC

4. Facts

Lim was the former general manager and designated executive director/projects director of CHHKC.
Neo is the managing director of CHHKC and beneficially owns 100% of its parent company, Chip Hup Holdings Pte Ltd.
Lim applied to add Neo as a defendant, alleging conspiracy and unlawful interference with CHHKC's payment obligations.
Neo allegedly controlled the accounts and funds of the Chip Hup Group.
Lim alleged that Neo conspired with CHHKC to deprive Lim of payment of moneys advanced by Lim to CHHKC.
Lim alleged that Neo acted unlawfully and in bad faith to interfere with CHHKC’s payment obligations to Lim.

5. Formal Citations

Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd, Suit 779/2006, SIC 107/2008, [2009] SGHC 2

6. Timeline

Date	Event
2006-01-01	Suit 779/2006 filed
2008-01-01	SIC 107/2008 filed
2007-01-01	Suit 241 of 2007 commenced by Neo against Tan
2009-01-06	Judgment issued

7. Legal Issues

Conspiracy
- Outcome: The court held that a director can be liable for conspiracy with the company, even if he is the controlling mind.
- Category: Substantive
- Sub-Issues:
  - Combination of two or more persons
  - Agreement to do certain acts
  - Predominant purpose to cause damage (for lawful acts)
  - Acts performed in furtherance of the agreement
  - Damage suffered by the plaintiff
- Related Cases:
  - [2008] 1 SLR 80
  - [1997] 1 SLR 390
  - [2006] 4 SLR 451
Director's Liability
- Outcome: The court found that the director could be added as a defendant, leaving the determination of liability to the trial judge.
- Category: Substantive
- Sub-Issues:
  - Acting bona fide
  - Scope of authority
  - Intention to injure
- Related Cases:
  - [1920] 3 KB 497
  - [2004] 4 SLR 801

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Conspiracy
Inducement of Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Nagase Singapore Pte Ltd v Ching Kai Huat	High Court	Yes	[2008] 1 SLR 80	Singapore	Relied upon for the principle that a company and its controlling director can conspire to damage a third party by unlawful means.
Quah Kay Tee v Ong & Co Pte Ltd	Court of Appeal	Yes	[1997] 1 SLR 390	Singapore	Cited for the definition of the tort of conspiracy, including conspiracy by unlawful means and conspiracy by lawful means.
Wu Yang Construction Group Ltd v Zhejiang Jinyi Group Co, Ltd	High Court	Yes	[2006] 4 SLR 451	Singapore	Cited for summarising the nature and rationale underlying the two forms of conspiracy and their similarities and differences.
Chew Kong Huat v Ricwil (Singapore) Pte Ltd	Court of Appeal	Yes	[2000] 1 SLR 385	Singapore	Cited as implicitly rejecting the conceptual objection to treating a company and its directors as separate individuals for the purpose of a conspiracy.
Taylor v Smyth	Irish Supreme Court	Yes	[1991] 1 IR 142	Ireland	Relied upon for the principle that a director controlling a company should not give immunity from suit to both the company and the director in a conspiracy.
Belmont Finance (No 1) v Williams Furniture	Court of Appeal	Yes	[1979] Ch 250	England and Wales	Cited in support of the proposition that there can be a conspiracy between a company and its controlling director to damage a third party by unlawful means.
O’Brien v Dawson	High Court	Yes	(1942) 66 CLR 18	Australia	Cited for setting out the traditional conceptual objection to treating a company and its directors as separate individuals for the purpose of a conspiracy.
Catherine Lee v Lee’s Air Farming Ltd	Privy Council	Yes	(1960) 3 WLR 758	New Zealand	Cited for affirming Salomon v A. Salomon & Co Ltd and establishing the separate legal personality of a company.
Salomon v A. Salomon & Co Ltd	House of Lords	Yes	[1896] AC 22	England and Wales	Cited as the locus classicus establishing the separate legal personality of a company.
Chong Hon Kuan Ivan v Levy Maurice (No 2)	High Court	Yes	[2004] 4 SLR 801	Singapore	Distinguished as the alleged conspiracy was amongst the three directors of Publicis Singapore, and the company itself was not a party to the conspiracy.
Said v Butt	King’s Bench Division	Yes	[1920] 3 KB 497	England and Wales	Applied in Chong Hon Kuan for the principle that a servant acting bona fide within the scope of his authority does not become liable for breach of contract between his employer and a third person.
Kuwait Oil Tanker Co SAK v Al Bader	Court of Appeal	Yes	[2000] 2 All ER (Comm) 271	England and Wales	Cited for the principle that an intention to injure the claimant is necessary to establish an unlawful means conspiracy.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Conspiracy
Director's liability
Separate legal personality
Controlling mind
Unlawful means
Bona fide
Scope of authority

15.2 Keywords

Conspiracy
Director liability
Company law
Singapore
Tort
Construction

17. Areas of Law

Area Name	Relevance Score
Torts	75
Director's Liability	50
Corporate Law	25
Contract Law	25

16. Subjects

Conspiracy
Director's Liability
Tort Law
Company Law