Kwee Lee Fung Ivon v Gordon Lim Clinic: Derivative Action for Breach of Fiduciary Duty
Dr. Kwee Lee Fung Ivon applied to the High Court of Singapore for leave to commence an action on behalf of Gordon Lim Clinic Pte Ltd against Dr. Gordon Lim Boon Hui, alleging breach of fiduciary duties by operating a rival clinic. Tan Lee Meng J granted the application, finding that Dr. Kwee acted in good faith and that the action was prima facie in the company's interest.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application for leave to commence an action against Dr Lim on behalf of the company granted.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Dr. Kwee sought leave to sue Dr. Lim for breach of fiduciary duty for operating a rival clinic. The court granted leave, finding it in the company's interest.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Kwee Lee Fung Ivon | Plaintiff, Applicant | Individual | Application granted | Won | |
| Gordon Lim Clinic Pte Ltd | Defendant | Corporation | Neutral | Neutral | |
| Gordon Lim Boon Hui | Defendant, Respondent | Individual | Application granted | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Lee Meng | Judge | Yes |
4. Counsels
4. Facts
- Dr. Kwee and Dr. Lim are the only shareholders of Gordon Lim Clinic Pte Ltd.
- Dr. Lim is accused of operating a rival clinic in the company’s premises without disclosing this to the company’s board of directors.
- Dr. Kwee applied for leave to commence an action on behalf of the company against Dr. Lim for breach of fiduciary duties.
- Dr. Lim incorporated another company, named “Gordon Lim Clinic and Surgery for Women Pte Ltd”.
- The rival company took over the company’s Gleneagles property as its place of business and paid the company an allegedly low monthly rental of $8,000.
- Dr. Lim did not disclose his conflict of interest in relation to the rival company to the company’s board of directors.
5. Formal Citations
- Kwee Lee Fung Ivon v Gordon Lim Clinic Pte Ltd and another, Originating Summons No 654 of 2012, [2013] SGHC 65
6. Timeline
| Date | Event |
|---|---|
| Dr Kwee and Dr Lim married | |
| Gordon Lim Clinic Pte Ltd incorporated | |
| Dr Kwee commenced divorce proceedings against Dr Lim | |
| Gordon Lim Clinic and Surgery for Women Pte Ltd incorporated | |
| Gordon Lim Clinic and Surgery for Women Pte Ltd took over Gordon Lim Clinic Pte Ltd's place of business | |
| Originating Summons No 654 of 2012 filed | |
| Decision Date |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court granted leave for Dr. Kwee to bring an action against Dr. Lim for breach of fiduciary duty.
- Category: Substantive
- Sub-Issues:
- Conflict of interest
- Failure to disclose conflict of interest
- Diversion of business
- Derivative Action
- Outcome: The court granted leave for Dr. Kwee to bring a derivative action on behalf of the company.
- Category: Procedural
- Good Faith
- Outcome: The court found that Dr. Kwee acted in good faith in bringing the application.
- Category: Procedural
8. Remedies Sought
- Leave to bring an action in the name and on behalf of the company against Dr Lim for breach of directors’ duties
- Authorisation to control the conduct of the action
- Access to the company’s books, records and documentation
- Costs of proceedings to be funded out of the company’s funds on an indemnity basis
9. Cause of Actions
- Breach of Fiduciary Duty
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Healthcare
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ang Thiam Swee v Low Hian Chor | Court of Appeal | Yes | [2013] SGCA 11 | Singapore | Confirmed the rule that the applicant for leave must establish the presence of good faith. |
| Pang Yong Hock and another v PKS Contracts Services Pte Ltd | Court of Appeal | Yes | [2004] 3 SLR(R) 1 | Singapore | Explained that the presence of hostility does not, without more, mean that there is bad faith on the part of the party applying for leave to commence a derivative action. |
| Barrett v Duckett | English Court of Appeal | Yes | [1995] 1 BCLC 243 | England | Distinguished from the present case; in Barrett, the plaintiff preferred to sue rather than realize benefit in shares through winding up. |
| Teo Gek Luang v Ng Ai Tiong and another | High Court | Yes | [1998] 2 SLR(R) 426 | Singapore | Cited for the principle that at the leave stage, the court is not called upon to adjudicate on the disputes of facts and inferences. |
| Tam Tak Chuen v Eden Aesthetics Pte Ltd and another | High Court | Yes | [2010] 2 SLR 667 | Singapore | The plaintiff applied for leave to commence derivative proceedings on behalf of the holding companies against Dr K and the latter’s company. His application was allowed by Judith Prakash J. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Section 216A of the Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Fiduciary duty
- Derivative action
- Conflict of interest
- Good faith
- Companies Act
- Rival clinic
- Matrimonial assets
15.2 Keywords
- fiduciary duty
- derivative action
- company law
- Singapore
- High Court
- breach of duty
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fiduciary Duties | 95 |
| Company Law | 75 |
| Corporate Law | 70 |
| Family Law | 30 |
| Matrimonial Assets | 25 |
16. Subjects
- Company Law
- Fiduciary Duty
- Civil Procedure
- Corporate Governance