Han Cheng Fong v Teo Chong Nghee Patrick: Wrongful Dismissal & Shareholders' Agreement Dispute
In Han Cheng Fong v Teo Chong Nghee Patrick and others, the High Court of Singapore heard a case involving Dr. Han Cheng Fong's claim for wrongful dismissal from Cleantech Partners Hangzhou Pte Ltd (CTPHZ). Han alleged that the defendants, directors of Cleantech Partners Pte Ltd (CTP), breached a shareholders' agreement and conspired against him. The court found that a valid shareholders' agreement existed, entitling Han to his position, and that the dismissal was wrongful. The court ordered the winding up of both CTP and CTPHZ and awarded costs to Han.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Dr. Han Cheng Fong sues for wrongful dismissal, alleging breach of shareholders' agreement. Court finds wrongful dismissal and orders winding up of companies.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Teo Chong Nghee Patrick | Defendant | Individual | Claim Dismissed | Lost | |
| Lim Shih Hsi | Defendant | Individual | Claim Dismissed | Lost | |
| Michael Heng Swee Hai | Defendant | Individual | Claim Dismissed | Lost | |
| Cleantech Partners Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost | |
| Cleantech Partners Hangzhou Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost | |
| Han Cheng Fong | Plaintiff | Individual | Judgment for Plaintiff | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Lee Meng | Judge | Yes |
4. Counsels
4. Facts
- Han was the chairman and a director of CTPHZ.
- Patrick, Richard, and Michael are directors of CTP.
- CTP wanted to collaborate with Vanwarm to develop the Hangzhou project.
- The 1 March document stipulated that Han would be appointed the chairman and a director of CTPHZ.
- Han was dismissed on 12 October 2010.
- Patrick and Richard planned to sell their CTP shares to BKCB.
- Vanwarm terminated the Collaboration Agreement due to internal problems at CTP.
5. Formal Citations
- Han Cheng Fong v Teo Chong Nghee Patrick and others, Suit No 908 of 2010, [2013] SGHC 51
6. Timeline
| Date | Event |
|---|---|
| Shareholders' agreement signed | |
| Tripartite Agreement entered into | |
| Business Times report published | |
| CTPHZ incorporated | |
| Collaboration Agreement signed | |
| HVC incorporated in China | |
| Han discovered plans to deprive him and Christine of their rights | |
| Han discovered plans to sell CTP shares to BKCB | |
| CTPHZ board meeting held | |
| Han dismissed from CTPHZ | |
| Liu Hai came to Singapore to mediate | |
| Defendants allegedly agreed to reinstate Han and Christine | |
| Han served his writ on the defendants | |
| HQEDA issued Letter of Notice | |
| Vanwarm terminated the Collaboration Agreement | |
| HQEDA terminated the Tripartite Agreement | |
| Vanwarm terminated the Collaboration Agreement | |
| Hong Jia terminated the Loan Agreement | |
| Judgment reserved |
7. Legal Issues
- Breach of Shareholders' Agreement
- Outcome: The court found that the 1 March document was a valid shareholders' agreement and that the defendants breached it.
- Category: Substantive
- Sub-Issues:
- Unilateral alteration of agreement terms
- Wrongful removal of director
- Related Cases:
- [2003] 3 SLR(R) 462
- [1992] 1 WLR 588
- Wrongful Dismissal
- Outcome: The court found that the defendants could not justify the dismissal and that Han was wrongfully dismissed.
- Category: Substantive
- Sub-Issues:
- Justification for dismissal
- Failure to act in the best interests of the company
- Breach of fiduciary duties
- Conspiracy to Injure by Unlawful Means
- Outcome: The court found ample evidence that Patrick and Richard conspired to use unlawful means to remove Han from his positions in CTPHZ.
- Category: Substantive
- Sub-Issues:
- Agreement to commit unlawful act
- Intention to injure the plaintiff
- Related Cases:
- [1996] 3 SLR(R) 637
8. Remedies Sought
- Damages for Wrongful Dismissal
- Winding Up of CTP and CTPHZ
9. Cause of Actions
- Breach of Contract
- Conspiracy to Injure
- Wrongful Dismissal
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Clean Technology
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Bakery Mart Pte Ltd (in receivership) v Sincere Watch Ltd | Court of Appeal | Yes | [2003] 3 SLR(R) 462 | Singapore | Cited for the principle that the court can look at all circumstances to determine if parties reached an agreement on essential terms. |
| Projection Pte Ltd v The Tai Ping Insurance Co Ltd | N/A | Yes | [2001] 1 SLR(R) 798 | Singapore | Cited regarding whether parties intended to reserve their rights pending a formal agreement. |
| Dovechem Holdings Pte Ltd (in liquidation) and others v Ng Joo Soon (alias Nga Ju Soon) | Court of Appeal | No | [2011] 4 SLR 345 | Singapore | Distinguished from the present case; cited regarding the validity of a remuneration and benefits plan requiring directors to retire at a certain age. |
| Russell v Northern Bank Development Corp Ltd | House of Lords | Yes | [1992] 1 WLR 588 | England and Wales | Cited for the principle that a clause in a shareholders' agreement may be enforced as a voting agreement between shareholders. |
| Quah Kay Tee v Ong and Co Pte Ltd | Court of Appeal | Yes | [1996] 3 SLR(R) 637 | Singapore | Cited for the definition of conspiracy by unlawful means. |
| R v Siracusa | English Court of Appeal | Yes | (1990) 90 Cr App R 340 | England and Wales | Cited regarding the difficulty of proving the existence of a conspiracy and how it can be inferred from overt facts. |
| Asian Corporate Services (SEA) Pte Ltd v Eastwest Management Ltd (Singapore Branch) | Court of Appeal | Yes | [2006] 1 SLR(R) 901 | Singapore | Cited regarding the difficulty of obtaining direct evidence of a conspiracy and how it is normally inferred from objective facts. |
| Tokuhon (Pte) Ltd v Seow Kang Hong and others | N/A | No | [2003] 4 SLR(R) 414 | Singapore | Cited regarding breach of fiduciary duties by a director-shareholder; distinguished based on the specific circumstances of the case. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Shareholders' Agreement
- Wrongful Dismissal
- Conspiracy
- Hangzhou Project
- CTPHZ
- CTP
- Vanwarm
- Directors' Resolution
- Legitimate Expectation
- Tripartite Agreement
15.2 Keywords
- wrongful dismissal
- shareholders agreement
- conspiracy
- company law
- contract law
- directors duties
17. Areas of Law
16. Subjects
- Company Law
- Contract Law
- Shareholder Disputes
- Employment Law