Spectramed Pte Ltd v Lek Puay Puay: Director's Breach of Duty & Minority Shareholder Oppression
In two related suits, Spectramed Pte Ltd, controlled by majority shareholders David, Rosie and Jasmine, sued minority shareholder Lek Puay Puay (Samantha) in Suit 681 for breach of her duties as a director. Samantha responded by suing David, Rosie, Jasmine and Spectramed in Suit 829, alleging oppressive conduct under s 216 of the Companies Act. The High Court found Samantha liable for breach of fiduciary duties in Suit 681. In Suit 829, the court found David, Rosie and Jasmine had acted oppressively and ordered David and Rosie to purchase Samantha's shares in Spectramed at a fair value as of 14 February 2008.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff in Suit 681; Judgment for Plaintiff in Suit 829
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Shareholder dispute involving breach of director's duties and oppression of a minority shareholder. Court orders buyout of minority shares.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Spectramed Pte Ltd | Plaintiff, Respondent | Corporation | Claim Allowed in Part | Partial | |
| Lek Puay Puay | Defendant, Plaintiff | Individual | Claim Allowed in Part | Partial | |
| Lok Yee Min | Defendant | Individual | Claim Allowed | Lost | |
| Tay Hui Choo | Defendant | Individual | Claim Dismissed | Dismissed | |
| Absolute MS (S) Pte Ltd | Defendant | Corporation | Claim Allowed | Lost | |
| Loo Liew Pian | Defendant | Individual | Order to Purchase Shares | Other | |
| Rosie Tang Miew Leng | Defendant | Individual | Order to Purchase Shares | Other | |
| Goh Poh Cheng | Defendant | Individual | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
4. Facts
- Samantha was the managing director and a 48% shareholder of Spectramed.
- David and Rosie, the majority shareholders, sought to divert Spectramed's distributorships to their own company, Innomed.
- David requested commissions from a supplier for sales to Spectramed.
- Jasmine, acting on David and Rosie's instructions, withdrew a significant sum from Spectramed's bank account.
- Samantha caused Spectramed to sell products to Absolute at a discount.
- Samantha and Jimmy diverted Spectramed's distributorships to Absolute.
- Samantha claimed unauthorized petrol expenses from Spectramed.
5. Formal Citations
- Spectramed Pte Ltd v Lek Puay Puay and others and another suit, Suits Nos 681 and 829 of 2009, [2011] SGHC 43
- Over & Over Ltd v Bonvests Holdings Ltd and another, , [2010] 2 SLR 776
6. Timeline
| Date | Event |
|---|---|
| Innomed Pte Ltd incorporated | |
| Samantha joined Innomed | |
| Samantha tendered her resignation from Innomed | |
| Spectramed Pte Ltd incorporated | |
| Initial shareholders of Spectramed appointed as directors | |
| Samantha appointed managing director of Spectramed | |
| Samantha made a loan of $9,600 to Spectramed | |
| Michale Lee, Kong Toong Shiong and Chee Fui Fong resigned as directors of Spectramed | |
| Michale Lee and Kong Toong Shiong transferred their shares in Spectramed to Samantha | |
| Lee Boon Tien transferred his shares in Spectramed to Jasmine | |
| Board resolution signed allowing Jasmine or Samantha to be a signatory to Spectramed’s bank accounts | |
| Samantha bought over Chee Fui Fong’s 8% shareholding in Spectramed | |
| Lee Boon Tien relocated to France for work | |
| Samantha hired Jimmy as a marketing manager for Spectramed | |
| Spectramed and Sybaritic entered into a Non-Exclusive Territory Agreement | |
| Samantha hired Karen as an administrator for Spectramed | |
| David met with Steven Daffer of Sybaritic Inc | |
| Samantha and Jimmy had a meeting with David and Rosie | |
| Jimmy tendered his resignation from Spectramed | |
| Absolute MS (S) Pte Ltd incorporated | |
| Jasmine unlawfully withdrew $225,600 from Spectramed’s bank account | |
| Monies returned to Spectramed’s bank account | |
| David requested Joo for 10% commission of any product sold by Shin Han to Spectramed | |
| Last day of Jimmy’s employment with Spectramed | |
| Spectramed had the exclusive distributorship of the Trio Skin Tightener | |
| Spectramed entered into an Exclusive Distributor Agreement with Sybaritic | |
| Number of employees in Spectramed had fallen to two – Samantha and Karen | |
| Spectramed ceased to distribute the SonoMaster | |
| Samantha procured Spectramed to sell one Co Cell Fractional CO2 Laser to Absolute | |
| Samantha emailed Jasmine proposing to buy over Jasmine’s 52% shareholding in Spectramed or sell her own 48% shareholding to Jasmine | |
| Sybaritic informed Spectramed that it was terminating this agreement with effect from 15 November 2008 | |
| Directors’ meeting held at Spectramed’s office | |
| Karen tendered her resignation from Spectramed | |
| Rosie and Jasmine changed the locks to Spectramed’s office | |
| Samantha was suspended from work | |
| Samantha resigned as Spectramed’s managing director | |
| Sybaritic awarded the exclusive distributorship of its products to Absolute | |
| Spectramed brought Suit 681 against Samantha, Jimmy, Karen and Absolute | |
| Samantha resigned as a director of Spectramed | |
| Samantha commenced Suit 829 against David, Rosie, Jasmine and Spectramed | |
| Spectramed obtained a Mareva injunction in Suit 681 against Samantha, Jimmy and Absolute | |
| Judgment reserved |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: Samantha found liable for breaching her fiduciary duties as a director of Spectramed.
- Category: Substantive
- Sub-Issues:
- Conflict of interest
- Diversion of business opportunities
- Misuse of company resources
- Oppression of Minority Shareholder
- Outcome: David, Rosie and Jasmine found to have acted oppressively towards Samantha, entitling her to relief under s 216 of the Companies Act.
- Category: Substantive
- Sub-Issues:
- Interference in management
- Attempt to divert business
- Unlawful withdrawal of funds
- Related Cases:
- [2010] 2 SLR 776
8. Remedies Sought
- Account of Profits
- Damages
- Order for Purchase of Shares
9. Cause of Actions
- Breach of Fiduciary Duty
- Oppression of Minority Shareholder
10. Practice Areas
- Commercial Litigation
- Corporate Law
- Shareholder Disputes
11. Industries
- Medical Equipment
- Cosmetics
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 principle that commercial fairness is the touchstone for granting relief under s 216 of the Companies Act, especially in quasi-partnerships. |
13. Applicable Rules
| Rule Name |
|---|
| O 59 r 18A of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 157 of the Companies Act | Singapore |
| s 216 of the Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Fiduciary Duty
- Oppression
- Minority Shareholder
- Distributorship
- Quasi-Partnership
- Spectramed Agreement
15.2 Keywords
- shareholder dispute
- fiduciary duty
- minority oppression
- director duties
- companies act
- singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Company Law | 85 |
| Fiduciary Duties | 80 |
| Director's Duties | 75 |
| Commercial Disputes | 70 |
| Minority Oppression | 70 |
| Shareholders Disputes | 65 |
| Contract Law | 60 |
| Quasi-partnership | 50 |
| Arbitration | 30 |
| Estoppel | 25 |
16. Subjects
- Corporate Governance
- Shareholder Rights
- Director's Duties