Lee Siew Ngug v Lee Brothers: Rectification of Company Register & Minority Shareholder Rights

Lee Siew Ngug and others, grandsons of the late Lee Wee Nam and minority shareholders of Lee Brothers (Wee Kee) Pte Ltd, brought an action against Lee Brothers (Wee Kee) Pte Ltd and Lee Hiok Kee Pte Ltd in the High Court of Singapore, seeking to remove Lee Hiok Kee Pte Ltd as a member of Lee Brothers. The plaintiffs argued that Lee Hiok Kee Pte Ltd, as the majority shareholder, was abusing its position. The defendants applied to strike out the plaintiffs' action, but the application was dismissed by an Assistant Registrar. The defendants appealed, and Justice Kan Ting Chiu allowed the appeals, ordering that the plaintiffs' originating summons be struck out.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding the dismissal of an application to strike out an action seeking to remove a shareholder. The court considered its inherent power to rectify a company register.

1.7 Decision Date

22 April 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lee Siew Ngug	Plaintiff, Respondent	Individual	Appeal Dismissed	Lost	Wong Soon Peng Adrian of Rajah & Tann Singapore LLP Chan Yong Neng of Rajah & Tann Singapore LLP Andrea Baker of Rajah & Tann Singapore LLP
Lee Brothers (Wee Kee) Pte Ltd	Defendant, Appellant	Corporation	Appeal Allowed	Won	Tan Kheng Ann Alvin of Wong Thomas & Leong
Lee Hiok Kee Pte Ltd	Defendant, Appellant	Corporation	Appeal Allowed	Won	Low Chai Chong of Rodyk & Davidson LLP Alvin Liong of Rodyk & Davidson LLP

3. Judges

Judge Name	Title	Delivered Judgment
Kan Ting Chiu	SJ	Yes

4. Counsels

Counsel Name	Organization
Wong Soon Peng Adrian	Rajah & Tann Singapore LLP
Chan Yong Neng	Rajah & Tann Singapore LLP
Andrea Baker	Rajah & Tann Singapore LLP
Tan Kheng Ann Alvin	Wong Thomas & Leong
Low Chai Chong	Rodyk & Davidson LLP
Alvin Liong	Rodyk & Davidson LLP

4. Facts

The Plaintiffs are grandsons of the late Lee Wee Nam and minority shareholders of Lee Brothers.
The Defendants are Lee Brothers (Wee Kee) Pte Ltd and Lee Hiok Kee Pte Ltd.
Lee Hiok Kee Pte Ltd has been a member of Lee Brothers since May 1963 and is the majority shareholder.
The Plaintiffs sought to remove Lee Hiok Kee Pte Ltd as a member of Lee Brothers.
The Defendants applied to strike out the Plaintiffs’ action based on s 194(4) of the Companies Act.
The Plaintiffs argued that they were relying on the court’s equitable power and their contractual right to enforce the Memorandum of Association.
The court found that the Plaintiffs were seeking to circumvent a clear provision of the law without special circumstances.

5. Formal Citations

Lee Siew Ngug and others v Lee Brothers (Wee Kee) Pte Ltd and another, Originating Summons No 503 of 2014 (Registrar's Appeal Nos 398 and 399 of 2014), [2015] SGHC 106

6. Timeline

Date	Event
1963-05-01	Lee Hiok Kee Pte Ltd became a member of Lee Brothers (Wee Kee) Pte Ltd.
2012-10-01	Lee Siew Ngug and others became shareholders of Lee Brothers (Wee Kee) Pte Ltd.
2014-05-29	Plaintiffs filed originating summons.
2014-07-01	First Defendant applied to strike out the Plaintiffs’ action.
2014-08-01	Second Defendant applied to strike out the Plaintiffs’ action.
2014-11-03	Plaintiffs amended the prayers in the originating summons.
2014-12-08	Assistant Registrar dismissed the Defendants’ applications to strike out the originating summons.
2015-04-23	High Court allowed the Defendants’ appeals and set aside the Assistant Registrar’s orders.

7. Legal Issues

Rectification of Company Register
- Outcome: The court held that it should not invoke its inherent powers to override the statutory prohibition in s 194(4) of the Companies Act.
- Category: Substantive
- Sub-Issues:
  - Validity of membership
  - Application of statutory limitations
  - Exercise of equitable jurisdiction
Inherent Jurisdiction of the Court
- Outcome: The court held that its inherent jurisdiction should not be invoked to circumvent a clear statutory provision without special or exceptional circumstances.
- Category: Jurisdictional
- Sub-Issues:
  - Circumventing statutory provisions
  - Need for justice
  - Exceptional circumstances
Minority Shareholder Rights
- Outcome: The court noted that the plaintiffs' grievance was that the 2nd Defendant had persistently disregarded their interests as minority shareholders, but they did not file an oppression action or other action in court to prove their case.
- Category: Substantive
- Sub-Issues:
  - Abuse of majority position
  - Disregard of minority interests
  - Oppression action

8. Remedies Sought

Declaration that membership of Lee Brothers shall be restricted to natural persons
Declaration that Lee Hiok Kee Pte Ltd cannot legally be a member of Lee Brothers
Order that Lee Hiok Kee Pte Ltd be removed as a member from the share register of Lee Brothers
Order that the allotments of shares in Lee Brothers to Lee Hiok Kee Pte Ltd be declared invalid
Injunction restraining Lee Hiok Kee Pte Ltd from exercising any rights as a member of Lee Brothers

9. Cause of Actions

Application for Rectification of Company Register
Enforcement of Contractual Rights under Memorandum of Association

10. Practice Areas

Commercial Litigation
Shareholder Disputes

11. Industries

No industries specified

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
In the Matter of Motasea Pty Ltd	New South Wales Supreme Court	Yes	[2014] NSWSC 69	Australia	Cited to affirm the court’s equitable jurisdiction to rectify a register.
In the Matter of Mogul Stud Pty Ltd	New South Wales Supreme Court	Yes	[2012] NSWSC 1639	Australia	Cited to affirm the court’s equitable jurisdiction to rectify a register.
Price v Powers	Western Australia Supreme Court	Yes	[2005] WASC 154	Australia	Cited to affirm the court’s equitable jurisdiction to rectify a register.
Grant v John Grant & Sons Pty Ltd	High Court of Australia	Yes	(1950) 82 CLR 1	Australia	Cited to affirm the court’s equitable jurisdiction to rectify a register.
Re Len Chee Omnibus Ltd	High Court of Malaya	Yes	[1969] 2 MLJ 202	Malaysia	Cited to affirm the court’s equitable jurisdiction to rectify a register.
Wee Soon Kim Anthony v Law Society of Singapore	Court of Appeal of Singapore	Yes	[2001] 2 SLR(R) 821	Singapore	Cited for the principle that the court's inherent jurisdiction should be exercised judiciously and only when there is a need to do justice between the parties.
Roberto Building Material Pte Ltd and others v Oversea-Chinese Banking Corp Ltd and another	Court of Appeal of Singapore	Yes	[2003] 2 SLR 353	Singapore	Cited for the principle that the court's inherent jurisdiction should only be exercised in special circumstances where the justice of the case so demands.
Wellmix Organics (International) Pte Ltd v Lau Yu Man	High Court of Singapore	Yes	[2006] 2 SLR(R) 117	Singapore	Cited for the principle that if there is an existing rule already covering the situation at hand, the courts would generally not invoke its inherent powers.
Chinese Chamber Realty Pte Ltd and others v Samsung Corp	High Court of Singapore	Yes	[2003] 3 SLR(R) 656	Singapore	Cited for the principle that where a matter of procedure is covered by the Rules of Court and those rules are clear, the court should be most circumspect in declining to follow those rules.
Samsung Corp v Chinese Chamber Realty Pte Ltd and others	Court of Appeal of Singapore	Yes	[2004] 1 SLR(R) 382	Singapore	Cited for the principle that generally where the Rules of Court have expressly provided what can or cannot be done in a certain circumstance, it is not for the court to override the clear provision in exercise of its inherent powers.
Tan Ah Thee and another (administrators of the estate of Tan Kiam Poh (alias Tan Gna Chua), deceased) v Lim Soo Foong	High Court of Singapore	Yes	[2009] 3 SLR(R) 957	Singapore	Cited for the principle that the jurisdiction of the court cannot be used to override a statutory rule that deals with the exact situation at hand, except, perhaps, in the most exceptional cases.
Tan Poh Beng v Choo Lee Mei	High Court of Singapore	Yes	[2014] 4 SLR 462	Singapore	Cited for the principle that the court is precluded from exercising its inherent powers to fill in a lacuna in the law that was deliberately left there by the Legislature.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R5, 2014 Rev Ed) Order 92 Rule 4
Rules of Court Order 18 Rule 19

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, Rev Ed 2006) s 194	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Rectification of register
Inherent jurisdiction
Minority shareholders
Majority shareholder
Companies Act
Memorandum of Association
Equitable power
Striking out
Abuse of process
Originating summons

15.2 Keywords

company register
rectification
minority shareholder
inherent jurisdiction
companies act
singapore

17. Areas of Law

Area Name	Relevance Score
Company Law	75
Companies Act	70
Minority Oppression	60
Civil Procedure	50
Commercial Disputes	30

16. Subjects

Company Law
Shareholder Rights
Civil Procedure