Spectramed Pte Ltd v Lek Puay Puay: Mareva Injunction & Breach of Fiduciary Duty
In Spectramed Pte Ltd v Lek Puay Puay & others, the High Court of Singapore, presided over by Justice Chan Seng Onn on 14 April 2010, granted a Mareva injunction against Lek Puay Puay, her husband, and their company, Absolute MS (S) Pte Ltd, due to concerns over potential asset dissipation. Spectramed alleged that the defendants breached their fiduciary and contractual duties by diverting the plaintiff's business to the fourth defendant. The court found a good arguable case and a real risk of asset dissipation, justifying the injunction up to S$600,000.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Mareva injunction granted against the first, second, and fourth defendants.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Spectramed sought a Mareva injunction against Lek Puay Puay and others for breach of fiduciary duty. The court granted the injunction to prevent asset dissipation.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Second defendant | Defendant | Individual | Mareva injunction granted | Lost | |
| Fourth defendant | Defendant | Individual | Mareva injunction granted | Lost | |
| Spectramed Pte Ltd | Plaintiff | Corporation | Mareva injunction granted | Won | |
| Lek Puay Puay | Defendant | Individual | Mareva injunction granted | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Judge | Yes |
4. Counsels
4. Facts
- First defendant was the managing director and a shareholder of the plaintiff.
- Second defendant is the first defendant’s husband and was a marketing manager of the plaintiff.
- Fourth defendant was incorporated by the second defendant and is in the same business as the plaintiff.
- Plaintiff claims the defendants acted dishonestly and breached their fiduciary duties.
- Plaintiff alleges the fourth defendant was set up to divert the plaintiff’s business.
- Defendants allegedly concealed exclusive distributorships from the plaintiff's other shareholders.
- Defendants allegedly directed a supplier to direct all future purchases to the fourth defendant.
5. Formal Citations
- Spectramed Pte Ltd v Lek Puay Puay & others, Suit No 681 of 2009/B (Summons No 4169 of 2009/K), [2010] SGHC 112
6. Timeline
| Date | Event |
|---|---|
| Spectramed Pte Ltd incorporated | |
| First defendant appointed managing director and director of Spectramed Pte Ltd | |
| First defendant became a 48% shareholder of Spectramed Pte Ltd | |
| Spectramed Pte Ltd started distributing products of Medro Medical Division Co Ltd | |
| Second defendant started working for Spectramed Pte Ltd as marketing manager | |
| Third defendant started working for Spectramed Pte Ltd as an administrator | |
| Jasmine relocated to France and first defendant became sole signatory to Spectramed Pte Ltd's bank account | |
| Spectramed Pte Ltd secured exclusive right to distribute Shin Han's laser systems in Singapore | |
| Second defendant incorporated the fourth defendant, Absolute MS (S) Pte Ltd | |
| Second defendant resigned from Spectramed Pte Ltd | |
| Sybaritic appointed Spectramed Pte Ltd as exclusive distributor of machines in Singapore | |
| First and second defendants procured Spectramed Pte Ltd to sell products to the fourth defendant at lower prices | |
| First defendant instructed third defendant to bring Steinman to the fourth defendant's office | |
| First defendant emailed Mr. John Park of Medro Medical to direct all future purchases to the fourth defendant | |
| Steinman visited the plaintiff's office and was brought to the fourth defendant's office | |
| First and second defendants procured Spectramed Pte Ltd to sell products to the fourth defendant at lower prices | |
| Third defendant ceased employment with the plaintiff | |
| First defendant ceased being the managing director of the plaintiff | |
| First defendant ceased being a director of the plaintiff | |
| Hearing of plaintiff's application for an ex parte Mareva injunction | |
| Mareva injunction granted | |
| Decision date |
7. Legal Issues
- Risk of Dissipation of Assets
- Outcome: The court found a real risk of dissipation of assets, justifying the grant of a Mareva injunction.
- Category: Procedural
- Related Cases:
- [2009] 4 SLR(R) 365
- [1984] 1 All ER 398
- [2003] 1 SLR(R) 157
- [1996] 3 SLR(R) 812
- [1983] 2 Lloyd’s Rep 600
- [2009] 1 SLR(R) 1000
- 18 NSWLR 319
- Breach of Fiduciary Duty
- Outcome: The court found that the plaintiff had established a prima facie case that the defendants had dishonestly misappropriated the plaintiff's assets.
- Category: Substantive
8. Remedies Sought
- Mareva Injunction
- Account of Profits
- Damages
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Contract
- Dishonest Assistance
- Knowing Receipt
10. Practice Areas
- Commercial Litigation
11. Industries
- Medical
- Cosmetic Surgery
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Bahtera Offshore (M) Sdn Bhd v Sim Kok Beng and Another | High Court | Yes | [2009] 4 SLR(R) 365 | Singapore | Cited for the requirements to successfully apply for a Mareva injunction. |
| Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH (The Niedersachsen) | N/A | Yes | [1984] 1 All ER 398 | N/A | Cited for the test of whether the refusal of a Mareva injunction would involve a real risk that a judgment or award in favour of the plaintiffs would remain unsatisfied. |
| Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA | High Court | Yes | [2003] 1 SLR(R) 157 | Singapore | Cited with approval of the test in The Niedersachsen for whether the refusal of a Mareva injunction would involve a real risk that a judgment or award in favour of the plaintiffs would remain unsatisfied. |
| Choy Chee Keen Collin v Public Utilities Board | High Court | No | [1996] 3 SLR(R) 812 | Singapore | Cited for the principle that a mere possibility or unsupported fear of dissipation is insufficient and what is required is solid evidence of a risk of dissipation of assets. |
| The Niedersachsen | N/A | Yes | [1983] 2 Lloyd’s Rep 600 | N/A | Illustrated the different forms that solid evidence of risk of asset dissipation may take. |
| Multi-Code Electronics Industries (M) Bhd and another v Toh Chun Toh Gordon and others | High Court | Yes | [2009] 1 SLR(R) 1000 | Singapore | Cited for the principle that the probity, honesty and integrity of the defendants had been called into question by the claim against them based on their participation in a conspiracy to defraud such that the risk of dissipation of assets was very real. |
| Patterson v BTR Engineering (Aust) Ltd and others | New South Wales Court of Appeal | Yes | 18 NSWLR 319 | Australia | Cited for the principle that evidence as to the nature of the scheme in which the appellant was allegedly involved established a prima facie case against him such as to justify the conclusion that there was a danger that the appellant would dispose of assets in order to defeat any judgment that might be obtained against him. |
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
- Mareva Injunction
- Dissipation of Assets
- Fiduciary Duty
- Exclusive Distributorship
- Dishonest Misappropriation
15.2 Keywords
- Mareva injunction
- fiduciary duty
- asset dissipation
- Spectramed
- Lek Puay Puay
17. Areas of Law
16. Subjects
- Injunctions
- Fiduciary Duty
- Commercial Litigation