Ng Joo Soon v Dovechem Holdings: Director Removal & Breach of Contract
In Ng Joo Soon (alias Nga Ju Soon) v Dovechem Holdings Pte Ltd, heard in the High Court of Singapore on 2010-08-18, Ng Joo Soon sued Dovechem Holdings for wrongful removal as a director and breach of contract. Ng Joo Soon claimed breach of agreements for monthly payments and allowances. He also sought relief against the Family Defendants for inducing the breach. The court ruled in favor of Ng Joo Soon against Dovechem Holdings, finding that he was wrongfully removed as a director and that the company breached its contractual obligations regarding the payments. The court did not allow the reliefs sought against the Family Defendants.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Ng Joo Soon sues Dovechem Holdings for wrongful removal as director and breach of contract regarding loan repayments and allowances. The court ruled in favor of Ng Joo Soon.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ng Joo Soon (alias Nga Ju Soon) | Plaintiff | Individual | Judgment for Plaintiff | Won | Adrian Tan, Blossom Hing Shan Shan, Sheryl Wei Kejia |
| Dovechem Holdings Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | Chandra Mohan s/o K Nair |
| Andrew Ng Iet Pew | Defendant | Individual | Reliefs not allowed | Lost | |
| Anta Ng | Defendant | Individual | Reliefs not allowed | Lost | |
| Ng Ju Aik | Defendant | Individual | Reliefs not allowed | Lost | |
| Ng Joo Tian | Defendant | Individual | Reliefs not allowed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Pillai | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Adrian Tan | Drew & Napier LLC |
| Blossom Hing Shan Shan | Drew & Napier LLC |
| Sheryl Wei Kejia | Drew & Napier LLC |
| Chandra Mohan s/o K Nair | Tan Rajah & Cheah |
4. Facts
- Ng Joo Soon sought a declaration that he was wrongfully removed as a director of Dovechem Holdings Pte Ltd.
- Ng Joo Soon claimed against Dovechem Holdings for breach of agreements to pay him monthly payments and allowances.
- Ng Joo Soon sought relief against the Family Defendants for inducing the Company’s breach of contract and for conspiracy.
- Ng Joo Soon was the 52% majority shareholder of Dovechem Holdings.
- In 1997, Dovechem Holdings encountered financial difficulties during the Asian Financial Crisis.
- Ng Joo Soon provided personal loans totalling $6.1m to the Company between 1997 and 2001.
- In 2002, Ng Joo Soon ceded his 52% majority shareholding control for a diluted stake of 24%.
5. Formal Citations
- Ng Joo Soon (alias Nga Ju Soon) v Dovechem Holdings Pte Ltd and another suit, Suit No 59 of 2009 consolidated with Suit No 140 of 2009, [2010] SGHC 242
6. Timeline
| Date | Event |
|---|---|
| Meeting held to discuss the way forward for the Dovechem Group and the handover of leadership from Ng Joo Soon to Andrew Ng. | |
| Meeting held to confirm the amount due to Ng Joo Soon and the payment of monthly allowance. | |
| Restructuring Agreement signed between Ng Joo Soon and the Family Defendants. | |
| Loan Repayment Agreement signed between Ng Joo Soon and the Family Defendants. | |
| Schemes of arrangement approved by the Court. | |
| Ng Joo Soon appointed non-executive chairman of the Company. | |
| Andrew Ng appointed managing director and chief executive officer. | |
| Members’ meeting held to discuss remuneration and benefits. | |
| Remuneration and Benefits Plan presented. | |
| Ng Joo Soon ceased to be employed by Dovechem Stolthaven. | |
| Dispute emerged over the Mistaken Deduction. | |
| Company paid Ng Joo Soon $100,000. | |
| Company sent a letter to Ng Joo Soon regarding loan repayment. | |
| Ng Joo Soon sent an email to Andrew Ng regarding loan repayment. | |
| Ng Joo Soon turned 70. | |
| Ng Joo Soon attended Dovechem Group meeting. | |
| Ng Joo Soon sent a letter to Thiam Joo (M) Sdn Bhd requesting to inspect the accounting records. | |
| Ng Joo Soon received a letter notifying him of his removal as a director of TJ Malaysia and Dovechem Terminals Sdn Bhd. | |
| Ng Joo Soon was removed from Imperial Steel Drum Manufacturers Sdn Bhd. | |
| Ng Joo Soon instituted Suit 59. | |
| Company stopped paying the Monthly Life Allowance and the Monthly Interest Reimbursement to Ng Joo Soon. | |
| Board resolution passed to file with ACRA that Ng Joo Soon had automatically retired. | |
| Company notified ACRA that Ng Joo Soon had ceased to be a director. | |
| Ng Joo Soon wrote to ACRA to dispute the Company’s notification. | |
| ACRA wrote to the Company requesting information/documents. | |
| Defendants’ lawyers responded to ACRA. | |
| Ng Joo Soon brought Suit 140. | |
| Suits 59 and 140 were consolidated. | |
| Judgment reserved. |
7. Legal Issues
- Wrongful Removal of Director
- Outcome: The court held that Ng Joo Soon remained a director of the Company and had a statutory right to request to inspect the accounts of the Company.
- Category: Substantive
- Related Cases:
- [1971-1973] SLR(R) 813
- [1999] 2 SLR(R) 352
- [1992] 3 SLR(R) 64
- Breach of Contract
- Outcome: The court found that the Company had breached its contractual obligations to make payments of the Monthly Interest Reimbursement, the Monthly Life Allowance, the Deduction Instalment Repayment and the Loan Instalment Repayment.
- Category: Substantive
- Related Cases:
- [1912] 1 Ch 284
- Liability of Directors for Company's Breach of Contract
- Outcome: The court did not allow the reliefs sought against the Family Defendants, holding that they were acting within the scope of their authority as directors and were not acting without bona fides.
- Category: Substantive
- Related Cases:
- [1920] 3 KB 497
- [2004] 4 SLR(R) 801
8. Remedies Sought
- Declaration that Ng Joo Soon was wrongfully removed as a director
- Order that Ng Joo Soon be allowed to inspect the accounting and other records of the Company
- Order for specific performance of the payment of amounts due
- Damages against the Family Defendants for inducing the Company’s breach of contract and for conspiracy
9. Cause of Actions
- Breach of Contract
- Wrongful Removal as Director
- Inducing Breach of Contract
- Conspiracy
10. Practice Areas
- Commercial Litigation
- Corporate Litigation
11. Industries
- Chemicals
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Haw Par Bros (Pte) Ltd v Dato Aw Kow | Unknown | Yes | [1971-1973] SLR(R) 813 | Singapore | Cited to establish that only a serving director has the right to request inspection of the Company’s financial records. |
| Wuu Khek Chiang George v ECRC Land Pte Ltd | Court of Appeal | Yes | [1999] 2 SLR(R) 352 | Singapore | Cited to establish that a director has the absolute right to inspect the accounting books and other records of a company under s 199 of the Companies Act, so long as the right is being exercised to enable him to discharge his duties as a director. |
| Welch and another v Britannia Industries Pte Ltd | High Court | Yes | [1992] 3 SLR(R) 64 | Singapore | Cited to establish that a director does not need to furnish any particular reason for his request for inspection and that when there are grounds for suspicion and lack of co-operation, a director is all the more entitled and even obliged to act in the interests of the company and ask for inspection. |
| Re Duomatic Ltd | Unknown | Yes | [1969] 2 Ch 365 | England and Wales | Cited for the Duomatic principle, where courts have regarded informal unanimous director or shareholder assents to be binding on the company provided it was intra vires. |
| Jimat bin Awang & Ors v Lai Wee Ngen | Unknown | Yes | [1995] 3 SLR(R) 496 | Singapore | Cited as an example of the application of the Duomatic principle in Singapore. |
| SAL Industrial Leasing Ltd v Lin Hwee Guan | Unknown | Yes | [1998] 3 SLR(R) 31 | Singapore | Cited as an example of the application of the Duomatic principle in Singapore. |
| Re D’Jan of London Ltd | Unknown | Yes | [1994] 1 BCLC 561 | England and Wales | Cited to clarify that it is inherent in the Duomatic principle that everyone entitled to vote on the question must have applied his mind to it and decided in favour of the step taken. |
| EIC Services Ltd and another v Phipps and others | Unknown | Yes | [2003] BCC 931 | England and Wales | Cited to show that the manner of characterisation of the consent does not matter in the Duomatic principle. |
| EIC Services Ltd and another v Phipps and others | Court of Appeal | Yes | [2005] 1 WLR 1377 | England and Wales | Cited to show that the decision in EIC Services Ltd and another v Phipps and others [2003] BCC 931 was reversed by the Court of Appeal on other grounds. |
| Monecor (London) Limited v Euro Brokers Holdings Limited | Unknown | Yes | [2003] 1 BCLC 506 | England and Wales | Cited to show that the Duomatic principle allows members of a company to reach an agreement without the need for strict compliance with formal procedures. |
| Von Hatzfeldt-Wildenburg v Alexander | Unknown | Yes | [1912] 1 Ch 284 | England and Wales | Cited to determine whether the execution of a further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction will in fact go through. |
| City Hardware Pte Ltd v Kenrich Electronics Pte Ltd | Unknown | Yes | [2005] 1 SLR(R) 733 | Singapore | Cited to dispose of the pro forma defence of moneylending raised by the defendants to resist the plaintiff’s claims of repayment of the loans and interest. |
| Said v Butt | Unknown | Yes | [1920] 3 KB 497 | England and Wales | Cited as the longstanding authority for the proposition that a director is immune from liability for inducing the company’s breach of contract because the director is the company’s alter ego and his acts are in law those of the company. |
| Chong Hon Kuan Ivan v Levy Maurice and others | Unknown | Yes | [2004] 4 SLR(R) 801 | Singapore | Cited in relation to both the tort of inducing breach of contract and the tort of conspiracy, where the court considered and rejected the wider position that a director is liable for a company’s contractual breach if his predominant intention was to injure the plaintiff. |
| Koh Kia Hiong v Guo Enterprises Pte Ltd | Unknown | Yes | [1999] 2 SLR(R) 673 | Singapore | Cited to show that the letter of the Company signed by its managing director and copied to all directors is binding on the Company. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 199 of the Companies Act | Singapore |
| s 188 of the Companies Act | Singapore |
| s 173(6)(a) of the Companies Act | Singapore |
| s 153 of the Companies Act | Singapore |
| s 204(1) of the Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Wrongful Removal
- Breach of Contract
- Director's Duties
- Shareholder Rights
- Family Business
- Corporate Governance
- Duomatic Principle
- Remuneration Plan
- Loan Repayment Agreement
- Restructuring Agreement
15.2 Keywords
- wrongful removal
- director
- breach of contract
- loan repayment
- allowance
- family business
- corporate governance
16. Subjects
- Corporate Law
- Contract Law
- Directors' Duties
- Shareholder Rights
17. Areas of Law
- Company Law
- Contract Law
- Corporate Governance