Eng Gee Seng v Quek Choon Teck: Minority Oppression in Quasi-Partnership Duck Abattoir

In Eng Gee Seng v Quek Choon Teck and Others, the High Court of Singapore ruled in favor of Eng Gee Seng, a minority shareholder, in his claim against Quek Choon Teck and Goh Gok Siang, the majority shareholders of DA Foods Industries Pte Ltd, for oppressive conduct under Section 216 of the Companies Act. The court found that the defendants unfairly discriminated against the plaintiff by removing him as a director, varying slaughter rates to his detriment, and denying him benefits, breaching their initial agreement. The court ordered the defendants to purchase the plaintiff's shares at a fair value determined by an independent valuer.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Minority shareholder Eng Gee Seng sued Quek Choon Teck for oppression in DA Foods Industries, a duck abattoir. The court found in favor of Eng Gee Seng.

1.7 Decision Date

17 September 2009

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Eng Gee Seng	Plaintiff	Individual	Claim Allowed	Won	Ang Cheng Hock, Tham Wei Chem, Eunice Chew
Quek Choon Teck	Defendant	Individual	Claim Against Defendant Upheld	Lost	Foo Maw Shen, Terence Tan, Looi Hooi Ying
Goh Gok Siang	Defendant	Individual	Claim Against Defendant Upheld	Lost	Foo Maw Shen, Terence Tan, Looi Hooi Ying
DA Foods Industries Pte Ltd	Defendant	Corporation	Orders Made Against Company	Neutral	Cheng Wai Yuen Mark, Chin Wei Lin

3. Judges

Judge Name	Title	Delivered Judgment
Chan Seng Onn	Judge	Yes

4. Counsels

Counsel Name	Organization
Ang Cheng Hock	Allen & Gledhill LLP
Tham Wei Chem	Allen & Gledhill LLP
Eunice Chew	Allen & Gledhill LLP
Foo Maw Shen	Rodyk & Davidson LLP
Terence Tan	Rodyk & Davidson LLP
Looi Hooi Ying	Rodyk & Davidson LLP
Cheng Wai Yuen Mark	Rajah & Tann LLP
Chin Wei Lin	Rajah & Tann LLP

4. Facts

Eng Gee Seng, Quek Choon Teck, and Goh Gok Siang were equal partners in DA Foods Industries, a duck abattoir.
DA was incorporated based on an oral agreement for equal shareholding, management rights, and revenue sharing.
Eng Gee Seng was removed as a director and excluded from management.
The slaughter fee structure was changed, disadvantaging Eng Gee Seng.
The defendants paid themselves large sums in directors' fees and salaries while paying the plaintiff only a small amount.
The defendants authorized DA to advance larger loans to themselves at reduced interest rates, precluding the plaintiff from taking up such loans.

5. Formal Citations

Eng Gee Seng v Quek Choon Teck and Others, Suit 679/2007, [2009] SGHC 205

6. Timeline

Date	Event
1990-08-01	DA Foods Industries Pte Ltd incorporated
2003-12-01	Flat slaughtering fee per duck changed
2004-01-01	First rebate/quota system introduced
2004-08-01	DA declared dividends
2004-10-26	AVA fined DA
2005-03-30	AVA fined DA
2005-05-03	AVA fined DA
2005-05-03	YSH farm ceased storing pork on DA’s premises
2005-10-21	Eng Gee Seng removed as director
2006-03-21	Board resolution passed increasing directors’ loans
2007-10-24	Proceedings commenced
2008-03-07	17th AGM held
2009-09-18	Judgment issued

7. Legal Issues

Minority Oppression
- Outcome: The court found that the defendants' actions constituted minority oppression under Section 216 of the Companies Act.
- Category: Substantive
- Sub-Issues:
  - Breach of shareholders' agreement
  - Exclusion from management
  - Unfair discrimination
  - Breach of mutual understanding

8. Remedies Sought

Order under Section 216 of the Companies Act
Purchase of Plaintiff's shares by the Defendants

9. Cause of Actions

Oppression of Minority Shareholder

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Food Industry
Agriculture

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Low Peng Boon v Low Janie and Others and Other Appeals	Court of Appeal	Yes	[1999] 1 SLR 761	Singapore	Cited for the test of fairness under Section 216 of the Companies Act.
Lim Swee Khiang and Another v Borden Co (Pte) Ltd and Others	Unknown	Yes	[2006] 4 SLR 745	Singapore	Cited for the test of fairness under Section 216 of the Companies Act.
Re Kong Thai Sawmill (Miri) Sdn Bhd	Privy Council	Yes	[1978] 2 MLJ 227	Malaysia	Cited for the principle that there must be a visible departure from fair dealing for oppression to be made out.
O’Neill v Phillips	Unknown	Yes	[1999] 1 WLR 1092	England and Wales	Cited for the principle that fairness must be applied judicially and based upon rational principles.
Re a company (No 000477 of 1986)	Unknown	Yes	[1986] BCLC 376	England and Wales	Cited for applying principles guiding just and equitable winding up in the context of oppression.
Ebrahimi v Westbourne Galleries Ltd	House of Lords	Yes	[1973] AC 360	England and Wales	Cited for the principle that personal character between individuals may make it unjust to insist on legal rights.
Re Saul D Harrison & Sons plc	Unknown	Yes	[1995] 1 BCLC 14	England and Wales	Cited for the principle that informal understandings may give rise to legitimate expectations.
Ng Sing King and Others v PSA International Pte Ltd and Others (No 2)	Unknown	Yes	[2005] 2 SLR 56	Singapore	Cited to show the difficulty in finding legitimate expectations apart from those contained in the agreement.
Sim Yong Kim v Evenstar Investments Pte Ltd	Court of Appeal	Yes	[2006] 3 SLR 827	Singapore	Cited for the distinction between ordinary companies and quasi-partnerships, implying greater leeway for finding informal understandings in the latter.
Re Astec (BSR) plc	Unknown	Yes	[1998] 2 BCLC 556	England and Wales	Cited for the requirement of a personal relationship or dealings to give rise to an equitable constraint based on legitimate expectation.
Goh Kim Hai Edward v Pacific Can Investment Holdings Ltd	Unknown	Yes	[1996] 2 SLR 109	Singapore	Cited for the principle that wrongful dismissal can be justified by subsequently discovered misconduct.
Suncorp Insurance and Finance v Milano Assicurazioni SpA	Unknown	Yes	[1993] 2 Lloyd’s Rep 225	England and Wales	Cited for the principle that ratification requires full knowledge of material circumstances.
Yona International Ltd and Heftsiba Overseas Works Pte Ltd v La Réunion Française Société Anonyme d’Assurances et de Réassurances and Ors	Unknown	Yes	[1996] 2 Lloyd’s Rep 84	England and Wales	Cited for observations on inferring ratification from silence or inactivity.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Section 216 of the Companies Act	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Minority oppression
Quasi-partnership
Shareholders' agreement
Directors' fees
Slaughter rates
Rebate system
Directors' loans
Mutual understanding
Ratification
Corporate governance

15.2 Keywords

minority oppression
quasi-partnership
companies act
shareholder dispute
directors' fees
slaughter rates
duck abattoir

16. Subjects

Companies
Oppression
Minority Shareholders

17. Areas of Law

Company Law
Minority Oppression
Quasi-Partnership