Teo Chong Nghee Patrick v Han Cheng Fong: Dispute Over Joint Venture & Wrongful Removal

The Court of Appeal heard appeals from both sides of a dispute between joint venture partners, Teo Chong Nghee Patrick, Lim Shih Hsi, Michael Heng Swee Hai, and Cleantech Partners Pte Ltd (CTP) against Han Cheng Fong, Liew Sok Kuan, Low Soo Chee, and International Eco-City Pte Ltd. The dispute arose from a project in Hangzhou, China, and involved claims of wrongful removal and conspiracy, as well as counter-claims of breach of fiduciary duties and conspiracy. The Court of Appeal allowed the appeal in part, finding that a key document was not legally enforceable, and dismissed the remaining claims.

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

Appeal regarding wrongful removal from a joint venture. The court found the '1 March document' unenforceable, reversing the lower court's decision.

1.7 Decision Date

22 May 2014

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Teo Chong Nghee Patrick	Appellant	Individual	Appeal Allowed in Part	Partial	Chan Kia Pheng, Tan Wei Ming, Neo Ming Wei Douglas
Lim Shih Hsi	Appellant	Individual	Appeal Allowed in Part	Partial	Chan Kia Pheng, Tan Wei Ming, Neo Ming Wei Douglas
Michael Heng Swee Hai	Appellant	Individual	Appeal Allowed in Part	Partial	Chan Kia Pheng, Tan Wei Ming, Neo Ming Wei Douglas
Cleantech Partners Pte Ltd	Appellant	Corporation	Appeal Allowed in Part	Partial	Chan Kia Pheng, Tan Wei Ming, Neo Ming Wei Douglas
Cleantech Partners Hangzhou Pte Ltd	Appellant	Corporation	Appeal Allowed in Part	Partial	Chan Kia Pheng, Tan Wei Ming, Neo Ming Wei Douglas
Han Cheng Fong	Respondent	Individual	Appeal Dismissed in Part	Partial	Lee Hwee Khiam Anthony, Pua Lee Siang
Liew Sok Kuan	Respondent	Individual	Appeal Dismissed	Dismissed	Lee Hwee Khiam Anthony, Pua Lee Siang
Low Soo Chee	Respondent	Individual	Appeal Dismissed	Dismissed	Lee Hwee Khiam Anthony, Pua Lee Siang
International Eco-City Pte Ltd	Respondent	Corporation	Appeal Dismissed	Dismissed	Lee Hwee Khiam Anthony, Pua Lee Siang

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	Yes
V K Rajah	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Chan Kia Pheng	KhattarWong LLP
Tan Wei Ming	KhattarWong LLP
Neo Ming Wei Douglas	KhattarWong LLP
Lee Hwee Khiam Anthony	Bih Li & Lee
Pua Lee Siang	Bih Li & Lee

4. Facts

Dr. Han was removed from his posts in the joint venture company.
The 1 March document was signed between the parties.
The 1 March document was intended to record the terms of Dr. Han's involvement.
CTP-HZ entered into a collaboration agreement with Vanwarm.
Disputes developed between the parties.
An extraordinary meeting of CTP-HZ was called to remove Dr Han and Christine as directors.
The collaboration agreement was terminated by Vanwarm.

5. Formal Citations

Teo Chong Nghee Patrick and others v Han Cheng Fong and another appeal, Civil Appeal Nos 36 and 37 of 2013, [2014] SGCA 29

6. Timeline

Date	Event
2009-09-01	Michael, Patrick, Richard and Robin decided to undertake a project to develop a low carbon eco-park in Hangzhou.
2010-03-01	The 1 March document was signed.
2010-03-01	Dr Han and Christine's appointment as Company Directors and Deputy Chairman of CTP took effect.
2010-03-01	CleanTech Ventures Asia Pte Ltd appointed as Manager.
2010-03-31	CTP-HZ entered into a collaboration agreement with Vanwarm and a third party.
2010-04-01	Disputes developed between the parties.
2010-08-16	Meeting of the directors of CTP-HZ.
2010-09-29	Dr Han, Robin and Christine convened a meeting of the directors of CTP-HZ.
2010-10-12	Extraordinary meeting of CTP-HZ called by Patrick for the purpose of removing Dr Han and Christine as directors.
2011-02-02	Vanwarm terminated the collaboration agreement.
2011-01-01	Suit 908 was filed.
2012-07-01	Trial began.
2012-10-01	Trial concluded.
2013-09-05	Submissions on both appeals were heard.
2014-05-23	Decision Date

7. Legal Issues

Enforceability of Shareholders’ Agreement
- Outcome: The court held that the 1 March document was not a legally enforceable agreement.
- Category: Substantive
- Sub-Issues:
  - Certainty of terms
  - Intention to create legal relations
Breach of Fiduciary Duties
- Outcome: The court found that there was no breach of fiduciary duties.
- Category: Substantive
- Sub-Issues:
  - Diversion of business opportunity
  - Duty of care, skill and diligence
Wrongful Dismissal
- Outcome: The court held that Dr Han was not wrongfully dismissed.
- Category: Substantive

8. Remedies Sought

Damages for wrongful dismissal
Winding up of companies

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty
Conspiracy
Wrongful Dismissal

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Real Estate Development

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Han Cheng Fong v Teo Chong Nghee Patrick and others	High Court	Yes	[2013] SGHC 51	Singapore	Appeal from the decision of the High Court in [2013] SGHC 51. The Judge ruled that Dr Han was wrongfully dismissed and was entitled to damages for losses to be assessed.
Cleantech Partners Hangzhou Pte Ltd and another v Han Cheng Fong and others	High Court	Yes	[2013] SGHC 52	Singapore	Appeal from the decision of the High Court in [2013] SGHC 52. The Judge dismissed the counter suit against Dr Han for conspiracy and breach of fiduciary duties.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the principle that the threshold for implying a term is necessarily a high one and a term will only be implied if it is necessary.
Over & Over Ltd v Bonvests Holdings Ltd and another	Court of Appeal	Yes	[2010] 2 SLR 776	Singapore	Cited for the doctrine of legitimate expectations arises in the context of a relationship of trust and mutual confidence – a quasi-partnership, in other words – such that equity would intervene to suspend the otherwise oppressive exercise of legal rights.
Ebrahimi v Westbourne Galleries Ltd and Others	House of Lords	Yes	[1973] AC 360	United Kingdom	Cited for the doctrine of legitimate expectations was developed in the context of an action for minority oppression or for a just and equitable winding up of a company.
Kumagai Gumi Co Ltd v Zenecon Pte Ltd and others and other appeals	Court of Appeal	Yes	[1995] 2 SLR(R) 304	Singapore	Cited for the principle that such relief as may be ordered under s 216(2) has to be done “with a view to bringing to an end or remedying the matters complained of”
Yeo Hung Khiang v Dickson Investment (Singapore) Pte Ltd and others	Court of Appeal	Yes	[1999] 1 SLR(R) 773	Singapore	Doubted whether it was open to a party claiming relief under s 216 to seek damages.
Irish Press plc v Ingersoll Irish Publications Ltd	Irish Supreme Court	Yes	[1995] 2 ILRM 270	Ireland	Relied on to doubt whether it was open to a party claiming relief under s 216 to seek damages.

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

1 March document
Shareholders’ agreement
Joint venture
Wrongful removal
Fiduciary duties
Hangzhou project
CTP-HZ
Directors’ resolution
Legitimate expectations
Profit guarantee

15.2 Keywords

joint venture
wrongful removal
shareholders agreement
fiduciary duty
company law
contract law

16. Subjects

Contract Law
Company Law
Shareholder Agreements
Joint Ventures
Fiduciary Duties

17. Areas of Law

Contract Law
Shareholder Agreements
Company Law
Fiduciary Duties