Seaspan Agencies v Chin Siew Seng: Director's Duties & Breach in Ship-Brokering Business

In Seaspan Agencies Pte Ltd v Chin Siew Seng, the High Court of Singapore addressed claims by Seaspan Agencies against Chin Siew Seng for breach of director's duties, including diverting commissions and business to Seaspan Singapore Pte Ltd. The court, presided over by Justice Lai Siu Chiu, found Chin liable for diverting commissions and the ship-brokering business, and for wrongful payment of Address Commissions. The court also found Ho Syn Ngan Joanne partly liable for the diversion of commission and ship-brokering business. Chin's claim against Quah for the price of shares transferred was dismissed. The court awarded Seaspan Agencies interlocutory judgment against Chin, with damages to be assessed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff in Suit 373; Claim in Suit 859 Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Seaspan Agencies sued Chin Siew Seng for breaching director's duties by diverting commissions. The court found Chin liable for damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chin Siew SengDefendant, PlaintiffIndividualJudgment against DefendantLost
Quah Hun Kok FrancisDefendantIndividualClaim DismissedWon
Seaspan Agencies Pte LtdPlaintiffCorporationJudgment for PlaintiffWon
Ho Syn Ngan JoanneThird PartyIndividualLiable in PartPartial

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuJusticeYes

4. Counsels

Counsel NameOrganization
K MuralitherapanyJoseph Tan Jude Benny LLP
Prakash P MulaniM & A Law Corporation
Poonaam BaiTS Oon & Bazul
Oon Thian SengTS Oon & Bazul

4. Facts

  1. Chin was a director of Seaspan Agencies and also managed the ship-brokering business.
  2. Chin incorporated Seaspan Singapore to carry on the ship-brokering business.
  3. Chin diverted commissions due to Seaspan Agencies to Seaspan Singapore.
  4. Chin paid out Address Commissions to a third party without disclosing the recipient's identity to the other directors.
  5. Ho, another director, joined Seaspan Singapore and benefited from the diverted business.
  6. Quah, a director, was not fully aware of the extent of Chin's activities and did not provide clear and unequivocal assent to the breaches.
  7. Chin transferred his shares to Quah for a specified price.

5. Formal Citations

  1. Seaspan Agencies Pte Ltd v Chin Siew Seng, Suit No 373 of 2008/J and Suit No 859 of 2008/G, [2010] SGHC 38

6. Timeline

DateEvent
Seaspan Agencies Pte Ltd and Seaspan Chartering Pte Ltd founded
Quah resigned as a director of Seaspan Chartering
Seaspan Chartering ceased business; Chin shifted ship-brokering business to Seaspan Agencies
Ho and Leong joined Seaspan Agencies
Quah questioned Chin about large amounts of Address Commissions disbursed
Chin orally informed Quah he would be resigning as a director
Quah sent letters to Chin notifying him not to make withdrawals without shareholder approval
Chin replied to Quah disagreeing with his position
Chin incorporated Seaspan Singapore Pte Ltd
Ho joined Seaspan Singapore as a director and shareholder
Plaintiff's lease for old premises expired
Plaintiff rented part of new premises from Seaspan Singapore
Chin, Ho, and Leong agreed to transfer their shares in the plaintiff to Quah for $30,000
Draft deed prepared for share transfer
Chin transferred his shares to Quah and resigned as director
Ho and Leong transferred their shares to Quah
Quah moved the operations of the plaintiff to other premises
Plaintiff brought Suit 373 against Chin
Chin brought Suit 859 against Quah
Judgment reserved

7. Legal Issues

  1. Breach of Director's Duties
    • Outcome: The court found that Chin breached his director's duties by diverting commission and the ship-brokering business to Seaspan Singapore and by paying out Address Commissions.
    • Category: Substantive
    • Sub-Issues:
      • Conflict of interest
      • Diversion of business opportunities
      • Failure to act in the best interests of the company
    • Related Cases:
      • [1967] 2 AC 46
      • [1942] 2 AC 134
  2. Informal Assent of Shareholders
    • Outcome: The court held that even if informal assent could absolve a director, the knowledge of the breach and assent to release the director from liability had to be very specific and unequivocal, which was not the case here.
    • Category: Substantive
    • Related Cases:
      • [1967] 2 AC 46
      • [1942] 2 AC 134

8. Remedies Sought

  1. Monetary Damages
  2. Account of Profits

9. Cause of Actions

  • Breach of Director's Duties
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Shipping
  • Maritime

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Boardman v PhippsHouse of LordsYes[1967] 2 AC 46England and WalesCited regarding the principle of informal assent of shareholders and its effect on a director's liability for breach of duties.
Regal (Hastings) Ltd v GulliverN/AYes[1942] 2 AC 134N/ACited for the principle that a fiduciary must account for net profit secretly acquired in the course of their agency, with emphasis on the knowledge and assent of the other person.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore
s 157(1) of the Companies Act (Cap 50, 2006 Rev Ed)Singapore
s 391 of the Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Director's Duties
  • Breach of Duty
  • Ship-Brokering Business
  • Address Commissions
  • Conflict of Interest
  • Informal Assent
  • Fiduciary Duty

15.2 Keywords

  • director's duties
  • breach of duty
  • ship-brokering
  • commissions
  • conflict of interest
  • Seaspan
  • Singapore
  • Companies Act

17. Areas of Law

Area NameRelevance Score
Director's Duties90
Company Law70
Commercial Disputes50

16. Subjects

  • Company Law
  • Commercial Law
  • Directors' Duties