WBL Corp v Lew Chee Fai Kevin: Specific Performance & Insider Trading
In Civil Appeals Nos 149 and 150 of 2010, the Court of Appeal of Singapore heard appeals arising from Suit No 129 of 2008, Lew Chee Fai Kevin v WBL Corp Ltd. Lew sought specific performance for WBL's failure to issue him shares under an Executive Share Options Scheme (ESOS), which WBL refused due to alleged insider trading. The court held that WBL was in breach of contract for failing to issue the shares and allowed Lew's appeal, while partially allowing WBL's appeal regarding the obligation to seek consent from the Commercial Affairs Department (CAD).
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal allowed in part and also allow Lew’s appeal
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
WBL refused to issue shares to Lew due to alleged insider trading. The court found WBL in breach of contract for failing to issue the shares.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| WBL Corporation Ltd | Appellant, Respondent | Corporation | Appeal allowed in part | Partial | Yeo Khirn Hin Andrew, Aaron Lee Teck Chye, Tay Yong Seng, Chang Ya Lan |
| Lew Chee Fai Kevin | Respondent, Appellant | Individual | Appeal allowed | Won | Thio Shen Yi, Leow Yuan An Clara Vivien, Charmaine Kong |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Sek Keong | Chief Justice | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | Yes |
| V K Rajah | Justice of the Court of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Yeo Khirn Hin Andrew | Allen & Gledhill LLP |
| Aaron Lee Teck Chye | Allen & Gledhill LLP |
| Tay Yong Seng | Allen & Gledhill LLP |
| Chang Ya Lan | Allen & Gledhill LLP |
| Thio Shen Yi | TSMP Law Corporation |
| Leow Yuan An Clara Vivien | TSMP Law Corporation |
| Charmaine Kong | TSMP Law Corporation |
4. Facts
- Lew was the Group General Manager of WBL's Enterprise Risk Management Group.
- Lew sought specific performance for WBL's failure to issue him 167,500 shares.
- WBL refused to issue the shares, alleging Lew used proceeds from insider trading.
- Lew sold 90,000 WBL shares on 4 July 2007 after acquiring confidential information.
- WBL lodged a Suspicious Transaction Report with the Commercial Affairs Department.
- Lew exercised share options with proceeds from the 4 July 2007 transaction.
- The court found WBL in breach of contract for failing to issue the shares.
5. Formal Citations
- WBL Corporation Ltd v Lew Chee Fai Kevin and another appeal, Civil Appeals Nos 149 and 150 of 2010, [2012] SGCA 13
6. Timeline
| Date | Event |
|---|---|
| Lew was granted share options. | |
| Lew was granted share options. | |
| Lew was granted share options. | |
| Lew allegedly acquired confidential information. | |
| Lew sold 90,000 WBL shares. | |
| Lew submitted notices to exercise share options. | |
| WBL lodged a Suspicious Transaction Report with CAD. | |
| Lew resigned from WBL. | |
| Lew sought a response from WBL regarding share options. | |
| WBL replied stating it was bound by legal restrictions. | |
| MAS instituted civil proceedings against Lew. | |
| Lew commenced proceedings against WBL. | |
| Civil Appeals Nos 149 and 150 of 2010 were filed. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Contract
- Outcome: The court held that WBL was in breach of contract for failing to issue the shares.
- Category: Substantive
- Sub-Issues:
- Failure to issue shares under ESOS
- Illegality as a defense to breach
- Illegality under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act
- Outcome: The court found that s 44 and s 47 of the CDSA did not apply to WBL's failure to issue the shares.
- Category: Substantive
- Sub-Issues:
- Application of s 44 CDSA
- Application of s 47 CDSA
- Definition of criminal conduct
- Insider Trading
- Outcome: The court considered the facts established in Lew Chee Fai Kevin v Monetary Authority of Singapore [2012] SGCA 12 regarding Lew's insider trading.
- Category: Substantive
- Sub-Issues:
- Use of proceeds from insider trading
- Definition of benefits from criminal conduct
8. Remedies Sought
- Specific Performance
- Damages
9. Cause of Actions
- Breach of Contract
- Specific Performance
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lew Chee Fai Kevin v WBL Corp Ltd | High Court | Yes | [2010] 4 SLR 774 | Singapore | Decision from which this appeal arose. |
| Lew Chee Fai Kevin v Monetary Authority of Singapore | Court of Appeal | Yes | [2012] SGCA 12 | Singapore | Established the facts of Lew's insider trading. |
| Monetary Authority of Singapore v Lew Chee Fai Kevin | High Court | Yes | [2010] 4 SLR 209 | Singapore | Cited for the amount of loss avoided by Lew. |
| Lars Wester v Euan Cecil Santhagens Borland | English High Court | Yes | [2007] EWHC 2484 | England and Wales | Cited for the wide meaning of 'arrangement' under similar legislation. |
| The Queen v Lo Chak Man and Tsoi Sau Ngai | Hong Kong Court of Appeal | Yes | [1996] HKCU 172 | Hong Kong | Cited for the wide meaning of 'arrangement' under similar legislation. |
| Ang Jeanette v PP | Court of Appeal | Yes | [2011] 4 SLR 1 | Singapore | Cited regarding the need to prove a predicate offence. |
| Re Mahmoud and Ispahani | King's Bench Division | Yes | [1921] 2 KB 716 | England and Wales | Cited for the principle that performance of a contract is illegal if it would be illegal for either party. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap 65A, 2000 Rev Ed) | Singapore |
| Securities and Futures Act (Cap 289, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Executive Share Options Scheme
- Insider Trading
- Suspicious Transaction Report
- Benefits of Criminal Conduct
- Specific Performance
- Illegality
- Proceeds of Criminal Conduct
15.2 Keywords
- WBL Corporation
- Lew Chee Fai Kevin
- Share Options
- Insider Trading
- Breach of Contract
- Specific Performance
- Singapore Court of Appeal
16. Subjects
- Contract Law
- Securities Law
- Insider Trading
- Money Laundering
- Corporate Law
17. Areas of Law
- Contract Law
- Securities Law
- Insider Trading
- Money Laundering