Loh Kwok Kee v Foo Hee Toon Gilbert: Minority Shareholder Oppression under Companies Act
Loh Kwok Kee, a minority shareholder in Hexa Chemicals, brought a claim in the High Court of Singapore against Foo Hee Toon Gilbert and other shareholder defendants, alleging oppression under Section 216 of the Companies Act. Loh sought to have Hexa Chemicals wound up or his shares bought out. Quentin Loh J dismissed the claim, finding no evidence of a quasi-partnership or that the defendants acted unfairly or prejudicially towards Loh. The court also dismissed Loh's claim for unpaid director's fees.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Claim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Minority shareholder Loh Kwok Kee claimed oppression against fellow shareholders in Hexa Chemicals. The court dismissed the claim, finding no unfair conduct.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Loh Kwok Kee | Plaintiff | Individual | Claim dismissed | Lost | Anna Oei, Chen Weiling |
| Foo Hee Toon Gilbert | Defendant | Individual | Claim dismissed | Won | Cavinder Bull, Loi Teck Yi Yarni, Daniel Cai |
| Ko | Defendant | Individual | Claim dismissed | Won | Cavinder Bull, Loi Teck Yi Yarni, Daniel Cai |
| Goh | Defendant | Individual | Claim dismissed | Won | Cavinder Bull, Loi Teck Yi Yarni, Daniel Cai |
| Wee | Defendant | Individual | Claim dismissed | Won | Cavinder Bull, Loi Teck Yi Yarni, Daniel Cai |
| Chua | Defendant | Individual | Claim dismissed | Won | Cavinder Bull, Loi Teck Yi Yarni, Daniel Cai |
| Hexa Chemicals | Defendant | Corporation | No order as to costs | Neutral | Alvin Cheng |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Anna Oei | Tan, Oei & Oei LLC |
| Chen Weiling | Tan, Oei & Oei LLC |
| Cavinder Bull | Drew & Napier LLC |
| Loi Teck Yi Yarni | Drew & Napier LLC |
| Daniel Cai | Drew & Napier LLC |
| Alvin Cheng | Chris Chong & C T Ho Partnership |
4. Facts
- Loh and the other defendants previously worked together in the Chemical Division of Getz Bros.
- Hexa Chemicals was incorporated in 1997 with equity and shareholder loans.
- Loh retired from Hexa Chemicals in 2005 but remained a shareholder.
- Hexa Chemicals never paid dividends, distributing profits through salaries, fees, and incentives.
- After Loh's retirement, the remuneration structure was revised to emphasize performance.
- The directors decided that it would be prudent not to distribute the company’s profits to the shareholders by way of dividends.
- There was a clear understanding that each shareholder would have to work in order to be remunerated.
5. Formal Citations
- Loh Kwok Kee v Foo Hee Toon Gilbert and others, Suit No 1060 of 2009, [2011] SGHC 116
6. Timeline
| Date | Event |
|---|---|
| Hexa Chemicals incorporated | |
| Loh joined Hexa Chemicals | |
| Foo joined Hexa Chemicals | |
| Loh, Foo, Ko and Goh became directors | |
| Chua joined Hexa Chemicals | |
| Chua became a shareholder | |
| Wee joined Hexa Chemicals | |
| Wee became a shareholder | |
| Loh was a director | |
| Loh tendered resignation | |
| Loh retired from Hexa Chemicals | |
| Suit filed | |
| Judgment reserved |
7. Legal Issues
- Minority Shareholder Oppression
- Outcome: The court found no evidence of oppression, unfair discrimination, or prejudicial conduct.
- Category: Substantive
- Sub-Issues:
- Unfair discrimination
- Prejudicial conduct
- Breach of legitimate expectations
- Quasi-Partnership
- Outcome: The court found that Hexa Chemicals was not run as a quasi-partnership.
- Category: Substantive
- Sub-Issues:
- Mutual trust and confidence
- Informal understandings
- Legitimate Expectations
- Outcome: The court found that Loh did not rightfully hold any legitimate expectations which were unfairly dashed by the defendants.
- Category: Substantive
- Sub-Issues:
- Right to dividends
- Entitlement to share of profits
- Director's Fees
- Outcome: The court found that the other directors and shareholders had reason to withhold Loh's directors fees for the period from October to December 2005.
- Category: Substantive
- Sub-Issues:
- Performance of duties
- Entitlement to remuneration
8. Remedies Sought
- Winding up of Hexa Chemicals
- Order for defendants to purchase Loh's shares
9. Cause of Actions
- Oppression under s 216 of the Companies Act
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Chemicals
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Over & Over Ltd v Bonvests Holdings Ltd and another | Court of Appeal | Yes | [2010] 2 SLR 776 | Singapore | Cited for the four alternative limbs under which relief may be granted for minority oppression and the element of unfairness. |
| Re Kong Thai Sawmill (Miri) Sdn Bhd | N/A | Yes | [1978] 2 MLJ 227 | N/A | Cited for the test of a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect. |
| Low Peng Boon v Low Janie and others and other appeals | Court of Appeal | Yes | [1999] 1 SLR(R) 337 | Singapore | Cited with approval the test in Re Kong Thai Sawmill (Miri) Sdn Bhd. |
| Re Saul D Harrison & Sons plc | N/A | Yes | [1995] 1 BCLC 14 | N/A | Cited for the principle that the personal relationship between a shareholder and those who control the company may entitle him to say that it would in certain circumstances be unfair for them to exercise a power conferred by the articles upon the board or the company in general meeting. |
| Eng Gee Seng v Quek Choon Teck and others | High Court | Yes | [2010] 1 SLR 241 | Singapore | Cited for the principle that informal understandings are more easily found in quasi-partnerships than in ordinary companies. |
| Sim Yong Kim v Evenstar Investments Pte Ltd | Court of Appeal | Yes | [2006] 3 SLR(R) 827 | Singapore | Cited as a case concerning a quasi-partnership decided under s 254. |
| Hoban Steven Maurice Dixon and another v Scanlon Graeme John and others | N/A | Yes | [2005] 2 SLR(R) 632 | Singapore | Cited for the principle that the court cannot exercise jurisdiction to grant relief under s 216 unless a case of oppression and/or discriminatory and/or prejudicial conduct amounting to commercial unfairness is established. |
| Hoban Steven Maurice Dixon and another v Scanlon Graeme John and others | Court of Appeal | Yes | [2007] 2 SLR(R) | Singapore | Cited to show that the ruling in [2005] 2 SLR(R) 632 was not disturbed on appeal. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Section 216 of the Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Minority shareholder
- Oppression
- Quasi-partnership
- Legitimate expectations
- Directors' fees
- Shareholder loans
- Remuneration structure
- No work, no pay
15.2 Keywords
- minority shareholder
- oppression
- companies act
- quasi-partnership
- legitimate expectations
- directors fees
- singapore
16. Subjects
- Company Law
- Shareholder Rights
- Corporate Governance
17. Areas of Law
- Company Law
- Minority Oppression