Sandz Solutions v Strategic Worldwide: Dividends Dispute & Unwinding of Lexicon SPA

The Singapore Court of Appeal heard an appeal by Sandz Solutions (Singapore) Pte Ltd and its shareholders/directors against Strategic Worldwide Assets Ltd and others, regarding a claim by Strategic for a 25% share of dividends declared by Sandz in 2007. The Appellants had also brought a counterclaim against Strategic and two individuals for conspiracy. The High Court had ruled in favor of Strategic, but the Court of Appeal overturned the decision regarding the dividend entitlement, finding that there was an understanding that Strategic would not be entitled to the dividends. The court upheld the dismissal of the Appellants' conspiracy counterclaim.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed in Part

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal case involving a dispute over dividend entitlement after the unwinding of a sale and purchase agreement. The court overturned the lower court's decision.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Tan Choon WeeRespondentIndividualCounterclaim DismissedDismissed
Sandz Solutions (Singapore) Pte LtdAppellantCorporationAppeal Allowed in PartPartial
Lawrence Liaw Shoo KhenAppellantIndividualAppeal Allowed in PartPartial
Koh Siang Ling AlinaAppellantIndividualAppeal Allowed in PartPartial
Tan Jeck MinAppellantIndividualAppeal Allowed in PartPartial
Strategic Worldwide Assets LtdRespondentCorporationAppeal AllowedLost
Poon Seng FattRespondentIndividualCounterclaim DismissedDismissed

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealYes
Andrew Phang Boon LeongJustice of AppealYes
V K RajahJustice of AppealYes

4. Counsels

Counsel NameOrganization
Ronnie TanCentral Chambers Law Corporation
Rajendran KumaresanCentral Chambers Law Corporation
Low Chai ChongRodyk & Davidson LLP
Daryl OngRodyk & Davidson LLP
Alvin LiongRodyk & Davidson LLP
Devinder K RaiACIES Law Corporation
Kelly YapOon & Bazul LLP
Morgan ChngOon & Bazul LLP

4. Facts

  1. Strategic sought payment of $1m, being its purported 25% share of dividends of $4m declared by Sandz in 2007.
  2. The Liaw Group held 75% of the shares in Sandz and the remaining 25% was held by SES Systems Pte Ltd.
  3. Strategic SPA was signed on or about 15 March 2007 by Lawrence Liaw Shoo Khen and Poon Seng Fatt.
  4. On 26 March 2007, Strategic’s lawyers remitted $2.5m to Lawrence Liaw Shoo Khen’s bank account.
  5. On 20 April 2007, Strategic became the registered shareholder of the shares which comprised that 25% stake.
  6. The Lexicon SPA was signed by the parties on 30 May 2007.
  7. The Appellants and Lexicon entered into a settlement deed on 21 November 2008 in respect of those proceedings.

5. Formal Citations

  1. Sandz Solutions (Singapore) Pte Ltd and others v Strategic Worldwide Assets Ltd and others, Civil Appeal No 112 of 2013, [2014] SGCA 27
  2. Strategic Worldwide Assets Ltd v Sandz Solutions (Singapore) Pte Ltd and others, , [2013] 4 SLR 662

6. Timeline

DateEvent
Sandz Solutions (Singapore) Pte Ltd founded
Initial plans to list Sandz on the Malaysian Stock Exchange failed
Lawrence Liaw Shoo Khen introduced to Tan Choon Wee
Lawrence Liaw Shoo Khen met Poon Seng Fatt
Tan Choon Wee sent a draft of the Strategic SPA to Lawrence Liaw Shoo Khen
Lawrence Liaw Shoo Khen met Ricky Ang Gee Hing
Lawrence Liaw Shoo Khen made an offer to SES Systems Pte Ltd to purchase the 25% stake in Sandz
Strategic SPA signed
Lawrence Liaw Shoo Khen entered into an agreement with SES Systems Pte Ltd to purchase the 25% stake in Sandz
Strategic's lawyers remitted $2.5m to Lawrence Liaw Shoo Khen's bank account
SES Systems Pte Ltd transferred the shares which comprised the 25% stake in Sandz to Lawrence Liaw Shoo Khen
First interim dividend of $2.5m declared by Sandz
Lawrence Liaw Shoo Khen transferred the 25% stake in Sandz to Strategic Worldwide Assets Ltd
Finalised term sheet for the Sandz-Lexicon deal signed
Tan Choon Wee sent a text message to Lawrence Liaw Shoo Khen regarding the declaration of dividends
Lexicon, Lawrence Liaw Shoo Khen and Sandz entered into a Loan and Guarantee Agreement
Strategic Worldwide Assets Ltd requested a full account of all dividends declared and paid by Sandz
Sale and purchase agreement between Lexicon and the shareholders of Sandz signed
Second interim dividend of $1.5m declared by Sandz
Sandz informed the Securities Industry Council that Strategic was the investment vehicle of Poon Seng Fatt
Lexicon SPA completed and first tranche of the $12m cash consideration paid
Suits Nos 111 and 176 of 2008 commenced
Sandz-Lexicon Settlement Deed entered into
Strategic Worldwide Assets Ltd sent a letter of demand to Sandz and the Liaw Group
Present Suit commenced by Strategic Worldwide Assets Ltd
Strategic-Lexicon Settlement Deed dated
High Court judge held that Strategic was entitled to succeed in its claim and dismissed the Appellants’ counterclaim and third-party action
Judgment reserved by Court of Appeal

7. Legal Issues

  1. Entitlement to Dividends
    • Outcome: The Court of Appeal held that Strategic was not entitled to a 25% share of the dividends due to an understanding between the parties.
    • Category: Substantive
    • Sub-Issues:
      • Rights of registered shareholders
      • Interpretation of sale and purchase agreements
      • Effect of settlement deeds on prior agreements
    • Related Cases:
      • [1896] 1 Ch 559
      • [1929] 2 Ch 121
  2. Breach of Collateral Contract
    • Outcome: The Court of Appeal upheld the dismissal of the Appellants’ conspiracy counterclaim.
    • Category: Substantive
    • Sub-Issues:
      • Existence of collateral contract
      • Inducement of breach
      • Damages
  3. Appellate Intervention
    • Outcome: The Court of Appeal discussed the principles governing appellate intervention vis-à-vis findings of fact by the trial judge.
    • Category: Procedural
    • Sub-Issues:
      • Findings of fact by trial judge
      • Inferences of fact
      • Assessment of witness credibility
    • Related Cases:
      • [2009] 4 SLR(R) 1101
      • [2001] 1 SLR(R) 53
      • [2003] SGCA 20
      • [2006] 4 SLR(R) 45
      • [2003] 3 SLR(R) 307
      • [2007] 2 SLR(R) 181
      • [1996] 1 SLR(R) 939
      • [2012] 3 SLR 1038
      • [1998] 2 SLR(R) 855
      • [2013] 1 SLR 207
      • [2008] 2 SLR(R) 61

8. Remedies Sought

  1. Payment of Dividends
  2. Indemnity
  3. Damages

9. Cause of Actions

  • Breach of Contract
  • Conspiracy

10. Practice Areas

  • Commercial Litigation
  • Corporate Law
  • Shareholder Disputes

11. Industries

  • Information Technology
  • Venture Capital
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Strategic Worldwide Assets Ltd v Sandz Solutions (Singapore) Pte LtdHigh CourtYes[2013] 4 SLR 662SingaporeThe decision from which this appeal arose.
Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore LtdCourt of AppealYes[2009] 4 SLR(R) 1101SingaporeCited for the principles governing appellate intervention vis-à-vis findings of fact by the trial judge.
Seah Ting Soon v Indonesian Tractors Co Pte LtdCourt of AppealYes[2001] 1 SLR(R) 53SingaporeCited regarding the appellate court’s power of review with respect to findings of facts.
Alagappa Subramanian v Chidambaram s/o AlagappaCourt of AppealYes[2003] SGCA 20SingaporeCited regarding the appellate court’s power to overturn a trial judge’s assessment if it is plainly wrong or against the weight of the evidence.
Jagatheesan s/o Krishnasamy v PPCourt of AppealYes[2006] 4 SLR(R) 45SingaporeCited regarding the appellate court’s power to overturn a trial judge’s assessment if it is plainly wrong or against the weight of the evidence.
Tan Chin Seng v Raffles Town Club Pte LtdCourt of AppealYes[2003] 3 SLR(R) 307SingaporeCited regarding the appellate court being in as good a position as the trial judge to undertake an exercise where a finding of fact is based on an inference drawn from the facts or the evaluation of primary facts.
Ho Soo Fong v Standard Chartered BankCourt of AppealYes[2007] 2 SLR(R) 181SingaporeCited regarding the appellate court being in as good a position as the trial judge to undertake an exercise where a finding of fact is based on an inference drawn from the facts or the evaluation of primary facts.
Peh Eng Leng v Pek Eng LeongCourt of AppealYes[1996] 1 SLR(R) 939SingaporeCited regarding the appellate court evaluating the cogency of the evidence given by the witnesses by testing it against inherent probabilities or against uncontroverted facts.
Goh Sin Huat Electrical Pte Ltd v Ho See Jui (trading as Xuanhua Art Gallery) and anotherCourt of AppealYes[2012] 3 SLR 1038SingaporeCited for extending the principles of appellate intervention to appeals concerning the apportionment of liability amongst two or more defendants.
Yap Giau Beng Terence v Public ProsecutorHigh CourtYes[1998] 2 SLR(R) 855SingaporeCited regarding the appellate court being as competent as any trial judge to draw any necessary inferences of fact from the circumstances of the case.
Jagatheesan s/o Krishnasamy v Public ProsecutorHigh CourtYes[2006] 4 SLR(R) 45SingaporeCited regarding the appellate court being as competent as any trial judge to draw any necessary inferences of fact from the circumstances of the case.
Ho Soo Fong and another v Standard Chartered BankHigh CourtYes[2007] 2 SLR(R) 181SingaporeCited regarding the appellate court being as competent as any trial judge to draw any necessary inferences of fact from the circumstances of the case.
Tan Chin Seng and others v Raffles Town Club Pte LtdHigh CourtYes[2003] 3 SLR(R) 307SingaporeCited regarding the appellate court being as competent as any trial judge to draw any necessary inferences of fact from the circumstances of the case.
Thorben Langvad Linneberg v Leong Mei KuenCourt of AppealYes[2013] 1 SLR 207SingaporeCited regarding an appellate court with access to the same material as the trial judge being in as good a position as the trial judge to assess a witness’s credibility in two situations.
Public Prosecutor v Wang Ziyi AbleHigh CourtYes[2008] 2 SLR(R) 61SingaporeCited regarding an appellate court with access to the same material as the trial judge being in as good a position as the trial judge to assess a witness’s credibility in two situations.
In re Severn and Wye and Severn Bridge Railway CompanyChancery DivisionYes[1896] 1 Ch 559England and WalesCited for the principle that once a dividend has been validly declared, it is a debt owed by the company to its registered shareholders from the date on which it is payable.
In re KidnerChancery DivisionYes[1929] 2 Ch 121England and WalesCited for the principle that the mere postponement of payment does not operate to deprive the registered shareholder at the time of dividend declaration of its right to payment.
Binney v The Ince Hall Coal and Cannel CompanyCourt of ChanceryYesBinney v The Ince Hall Coal and Cannel Company (1866) 35 LJ Ch 363England and WalesCited for the principle that the proper party to have commenced the Present Suit was the legal owner of the shares comprising the 25% stake in Sandz, ie, Lexicon. Alternatively, Lexicon should have been joined as a party to the action.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Dividends
  • Strategic SPA
  • Lexicon SPA
  • Settlement Deed
  • NTA
  • Sale Shares
  • Completion Date
  • Representations
  • Unwinding
  • Collateral Contract

15.2 Keywords

  • dividends
  • shareholder dispute
  • contract law
  • company law
  • settlement deed
  • appellate review
  • conspiracy

17. Areas of Law

Area NameRelevance Score
Dividends80
Company Law70
Contract Law60
Commercial Disputes50
Shares40
Misrepresentation30
Estoppel20
Fraud and Deceit20

16. Subjects

  • Contract Law
  • Company Law
  • Shareholder Rights
  • Dividends
  • Appellate Review