Lim Kok Leong v Seen Joo Company: Director's Right to Inspect Company Records under Companies Act
In Lim Kok Leong v Seen Joo Company Pte Ltd and others, the Singapore High Court addressed the issue of whether a director, Lim Kok Leong, should be granted inspection of the company's records under Section 199 of the Companies Act. Lim Kok Leong, a 'sleeping' director of Seen Joo Company Pte Ltd, sought to inspect the company's accounting records, which was denied. The court, presided over by Justice Tan Siong Thye, granted Lim Kok Leong's application, holding that a director has an absolute right to inspect the company's records, and the defendants failed to prove an improper purpose for the inspection. The court ordered the defendants to allow the inspection within eight weeks and to pay the plaintiff's costs.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application granted
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court granted Lim Kok Leong, a 'sleeping' director, access to Seen Joo Company's accounting records, affirming a director's statutory right to inspection.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lim Kok Leong | Plaintiff | Individual | Application granted | Won | Ismail bin Atan |
| Seen Joo Company Pte Ltd | Defendant | Corporation | Application denied | Lost | Gregory Vijayendran, Dhiviya Mohan |
| Third defendant | Defendant | Individual | Application denied | Lost | Gregory Vijayendran, Dhiviya Mohan |
| Fourth defendant | Defendant | Individual | Application denied | Lost | Gregory Vijayendran, Dhiviya Mohan |
| Fifth defendant | Defendant | Individual | Application denied | Lost | Gregory Vijayendran, Dhiviya Mohan |
| Second defendant | Defendant | Individual | Application denied | Lost | Gregory Vijayendran, Dhiviya Mohan |
| Sixth defendant | Defendant | Individual | Application denied | Lost | Gregory Vijayendran, Dhiviya Mohan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Siong Thye | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ismail bin Atan | Salem Ibrahim LLC |
| Gregory Vijayendran | Rajah & Tann LLP |
| Dhiviya Mohan | Rajah & Tann LLP |
4. Facts
- The plaintiff was a 'sleeping' director of the Company since 1997.
- The plaintiff was given 10,000 shares in the Company for free in 1996.
- The plaintiff sought to inspect the accounting and other records of the Company on 1 July 2014.
- The defendants did not accede to the plaintiff's request to inspect the records.
- The plaintiff was removed as director of HLC sometime on 26 July 2014.
- The plaintiff filed the present summons against the defendants on 7 July 2014.
5. Formal Citations
- Lim Kok Leong v Seen Joo Company Pte Ltd and others, Originating Summons No 638 of 2014, [2014] SGHC 239
6. Timeline
| Date | Event |
|---|---|
| Plaintiff worked for the partnership as a salesperson. | |
| Plaintiff joined HLC Enterprises Pte Ltd. | |
| Company was incorporated; plaintiff given shares and appointed as a director. | |
| Plaintiff became a 'sleeping' director of the Company. | |
| Plaintiff sought to inspect the accounting and other records of the Company. | |
| Plaintiff filed summons against the defendants. | |
| Plaintiff discovered he was removed as director of HLC. | |
| Court granted the plaintiff's application. |
7. Legal Issues
- Director's Right to Inspect Company Records
- Outcome: The court held that the plaintiff, as a director, had an absolute right to inspect the company's records under s 199(3) of the Companies Act.
- Category: Substantive
- Fiduciary Duty of Directors
- Outcome: The court found the defendants' allegations of breach of fiduciary duty by the plaintiff to be unmeritorious.
- Category: Substantive
8. Remedies Sought
- Order to compel the Company and its directors to allow inspection of the Company’s accounting and other records
9. Cause of Actions
- Application to compel inspection of company records under s 199 of the Companies Act
10. Practice Areas
- Commercial Litigation
11. Industries
- General Wholesale Business
- Electronic Components
- Electrical and Network Cables and Accessories
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Wuu Khek Chiang George v ECRC Land Pte Ltd | Court of Appeal | Yes | [1999] 2 SLR(R) 352 | Singapore | Cited for the principle that a director's right to inspect company records is absolute and does not require justification. |
| Molomby v Whitehead & Australian Broadcasting Corp | Federal Court of Australia | Yes | (1985) 63 ALR 282 | Australia | Cited to support the principle that a director has a prima facie entitlement to access corporate material. |
| Welch and another v Brittania Industries Pte Ltd | High Court | Yes | [1992] 3 SLR(R) 64 | Singapore | Cited to support the principle that the right to inspect flows from the office of director. |
| W&P Piling Pte Ltd (in liquidation) v Chew Yin What and others | High Court | Yes | [2007] 4 SLR(R) 218 | Singapore | Cited for the principle that the law makes no distinction between fiduciary duties owed by different categories of directors. |
| Hau Tau Khang v Sanur Indonesian Restaurant Pte Ltd and another (Hau Tau Thong, non-party) and another matter | High Court | Yes | [2011] 3 SLR 1128 | Singapore | Cited for the principle that the purpose of the right to inspect is to enable a director to discharge all his statutory duties. |
| Law Wai Duen v Boldwin Construction Co Ltd | Hong Kong Court of Appeal | Yes | [2001] HKCA 284 | Hong Kong | Cited to support the principle that a director must be at liberty to satisfy himself as to any matter in relation to the company's business. |
| Conway and others v Petronius Clothing Co Ltd | High Court | No | [1977] 1 WLR 72 | United Kingdom | Cited and distinguished regarding whether directors could be joined to legal proceedings. |
| Edman v Ross | Supreme Court of New South Wales | Yes | (1922) 22 SR (NSW) 351 | Australia | Cited for the principle that the right to inspect documents is essential to the proper performance of a director’s duties. |
| Berlei Hestia (NZ) Ltd v Fernyhough | High Court | Yes | [1980] 2 NZLR 150 | New Zealand | Cited regarding the interpretation of the right to inspection as a statutory one. |
| Deluge Holdings Pty Ltd v Bowlay | Supreme Court | Yes | (1991) 6 ACSR 36 | Australia | Cited regarding the interpretation of the right to inspection. |
| Haw Par Bros (Pte) Ltd v Dato Aw Kow | High Court | Yes | [1971–1973] SLR(R) 813 | Singapore | Cited for the principle that a statute has to be read as a whole. |
| Arthur Bokenham | N/A | Yes | (1708) 88 ER 957 | N/A | Cited to understand the common law right of a director to inspect the company’s documents. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 199 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Sleeping director
- Inspection of company records
- Fiduciary duty
- Companies Act
- Accounting records
15.2 Keywords
- director
- inspection
- company records
- companies act
- fiduciary duty
- accounting records
16. Subjects
- Company Law
- Director's Duties
- Inspection Rights
17. Areas of Law
- Company Law
- Civil Procedure