Dovechem Holdings v Ng Joo Soon: Director Removal & Company Record Inspection

In Dovechem Holdings Pte Ltd (in liquidation) and others v Ng Joo Soon (alias Nga Ju Soon), the Singapore Court of Appeal heard an appeal regarding the High Court's decision in favor of Ng Joo Soon. The High Court had ruled that Ng Joo Soon's removal as a director of Dovechem Holdings Pte Ltd was invalid and that he was entitled to inspect the company's records. The Court of Appeal dismissed the appeal, upholding Ng Joo Soon's position as a director and his right to inspect company records.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Court of Appeal addressed the validity of Ng Joo Soon's removal as director of Dovechem Holdings and his right to inspect company records, ultimately dismissing the appeal.

1.7 Decision Date

18 July 2011

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Dovechem Holdings Pte Ltd (in liquidation)	Appellant, Defendant	Corporation	Appeal Dismissed	Lost	Rajah Chelva Retnam, Chandra Mohan K Nair
Andrew Ng Iet Pew	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Rajah Chelva Retnam, Chandra Mohan K Nair
Anta Ng	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Rajah Chelva Retnam, Chandra Mohan K Nair
Ng Ju Aik alias Ng Ju Goh	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Rajah Chelva Retnam, Chandra Mohan K Nair
Ng Ju Lak alias Ng Joo Tian	Appellant, Defendant	Individual	Appeal Dismissed	Lost	Rajah Chelva Retnam, Chandra Mohan K Nair
Ng Joo Soon (alias Nga Ju Soon)	Respondent, Plaintiff	Individual	Appeal Dismissed	Won	Adrian Tan Gim Hai, Blossom Hing Shan Shan, Ong Pei Ching, Nurul Aziah Hussin

3. Judges

Judge Name	Title	Delivered Judgment
Chao Hick Tin	Justice of the Court of Appeal	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	No
V K Rajah	Justice of the Court of Appeal	No

4. Counsels

Counsel Name	Organization
Rajah Chelva Retnam	Tan Rajah & Cheah
Chandra Mohan K Nair	Tan Rajah & Cheah
Adrian Tan Gim Hai	Drew & Napier LLC
Blossom Hing Shan Shan	Drew & Napier LLC
Ong Pei Ching	Drew & Napier LLC
Nurul Aziah Hussin	Drew & Napier LLC

4. Facts

NJS founded a successful business conglomerate.
NJS invited family members to join the business.
DHPL is the holding company of the Group's subsidiaries.
NJS was the managing director and chairman of DHPL until 2002.
NJS held 52% of the shares in DHPL.
DHPL encountered financial difficulties during the Asian financial crisis.
NJS advanced S$6.1m to DHPL to rescue it.

5. Formal Citations

Dovechem Holdings Pte Ltd (in liquidation) and others v Ng Joo Soon (alias Nga Ju Soon), Civil Appeal No 164 of 2010, [2011] SGCA 35
Ng Joo Soon (alias Nga Ju Soon) v Dovechem Holdings Pte Ltd, , [2011] 1 SLR 1155

6. Timeline

Date	Event
1997-01-01	Asian financial crisis struck, causing financial difficulties for DHPL
2002-07-08	Restructuring agreement signed between NJS and the Other Directors
2002-12-01	Schemes of arrangement approved by the court
2003-01-06	NJS appointed as the non-executive chairman of DHPL
2003-02-03	Andrew appointed as managing director and chief executive officer of DHPL
2003-03-11	Meeting held to discuss remuneration and benefits scheme for family members
2003-03-17	Anta sent an e-mail regarding benefits proposal for board to consider
2003-05-01	Remuneration Plan effective date
2003-05-27	Remuneration Plan presented, discussed, and adopted
2008-03-04	NJS turned 70
2008-04-07	NJS attended a board of directors meeting
2008-06-11	NJS sent a letter to Thiam Joo (Malaysia) Sdn Bhd to inspect records
2008-06-11	NJS sent a letter to DHPL to inspect records
2008-06-19	NJS received a letter removing him as a director of TJ Malaysia and Dovechem Terminals
2008-06-20	NJS received a letter removing him as a director of Imperial Steel
2008-06-24	NJS instituted Originating Summons No 841 of 2008
2008-07-14	Board resolution passed to file with ACRA regarding NJS's retirement
2008-07-15	DHPL notified ACRA that NJS had ceased to be a director
2008-08-04	NJS wrote to ACRA disputing DHPL's notification
2008-08-04	NJS's lawyers wrote to the Appellants' lawyers proposing appointment of a new director
2008-08-20	ACRA wrote to DHPL requesting information
2008-08-26	Appellants' lawyers responded to ACRA
2009-01-20	OS 841/2008 converted to a writ action (S 59/2009)
2009-02-16	NJS commenced S 140/2009
2009-06-03	S 59/2009 and S 140/2009 were consolidated
2011-07-19	Judgment reserved

7. Legal Issues

Validity of Director Removal
- Outcome: The court held that the director's removal was invalid as it did not comply with the company's articles of association and the remuneration plan did not mandate retirement.
- Category: Substantive
- Sub-Issues:
  - Compliance with company's articles of association
  - Interpretation of remuneration plan
  - Application of Duomatic principle
Right to Inspect Company Records
- Outcome: The court held that the director was entitled to inspect the company's records as the request was not made mala fide and would not be detrimental to the company's interests.
- Category: Substantive
- Sub-Issues:
  - Director's statutory right to inspect
  - Bona fides of inspection request
  - Detriment to company's interests

8. Remedies Sought

Declaration that removal as director was invalid
Order to rectify ACRA records
Right to inspect company records
Damages for breach of payment agreements

9. Cause of Actions

Breach of Contract
Declaration regarding Directorship

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

No industries specified

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Ng Joo Soon (alias Nga Ju Soon) v Dovechem Holdings Pte Ltd and another suit	High Court	Yes	[2011] 1 SLR 1155	Singapore	This is the decision from which the appeal arose, and the Court of Appeal affirmed the High Court's decision regarding the directorship and inspection rights of NJS.
In re Duomatic Ltd	Chancery Division	Yes	[1969] 2 Ch 365	England and Wales	Cited for the Duomatic principle, which states that unanimous assent of shareholders is as binding as a resolution. The court distinguished this case, finding the principle did not apply.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the principle of documentary construction, allowing the court to consider surrounding circumstances and factual matrix.
Straits Advisors Pte Ltd v Behringer Holdings (Pte) Ltd and another and another application	Court of Appeal	Yes	[2010] 1 SLR 760	Singapore	Cited for the importance of construing contractual terms in light of the context in which they were drafted.
Wuu Khek Chiang George v ECRC Land Pte Ltd	Court of Appeal	Yes	[1999] 2 SLR(R) 352	Singapore	Cited for the principle that a director has an absolute right to inspect company records under s 199 of the Companies Act, as long as the right is exercised to discharge his duties.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 199	Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 37(1)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Remuneration Plan
Ruling Member
Founding Member
Director
Inspection of Records
Articles of Association
Duomatic principle
Non est factum

15.2 Keywords

Director Removal
Company Records
Inspection Rights
Corporate Governance
Companies Act
Remuneration Plan

16. Subjects

Company Law
Corporate Governance
Directors' Duties
Shareholder Rights

17. Areas of Law

Company Law
Contract Law
Corporate Governance