Lin Choo Mee v Tat Leong: Winding Up Family Companies on Just & Equitable Grounds

Lin Choo Mee applied to the High Court of Singapore to wind up Tat Leong Development (Pte) Ltd and other related companies, arguing it was just and equitable to do so. The primary legal issue was whether the Tat Leong companies, owned and managed by a family, should be wound up due to a breakdown of trust, exclusion of Lin Choo Mee from management, and loss of substrata. Steven Chong J granted the applications, ordering the companies to be wound up but deferring the order for 30 days to allow for settlement.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Applications granted; defendant companies ordered to be wound up, order deferred for 30 days to allow amicable settlement.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Applications to wind up Tat Leong companies due to breakdown of trust and exclusion of a director were granted on just and equitable grounds.

1.7 Decision Date

12 April 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lin Choo Mee	Applicant	Individual	Application Granted	Won	N Sreenivasan of Straits Law Practice LLC Tan Kai Ning Claire of Straits Law Practice LLC Zhu Zhihao Daniel of Straits Law Practice LLC
Tat Leong Development (Pte) Ltd	Respondent	Corporation	Winding Up Ordered	Lost	Hui Choon Wai of Wee Swee Teow & Co Ho Si Hui of Wee Swee Teow & Co
Tat Leong Investment Pte Ltd	Respondent	Corporation	Winding Up Ordered	Lost	Hui Choon Wai of Wee Swee Teow & Co Ho Si Hui of Wee Swee Teow & Co
Tat Leong Petroleum Co (Pte) Ltd	Respondent	Corporation	Winding Up Ordered	Lost	Hui Choon Wai of Wee Swee Teow & Co Ho Si Hui of Wee Swee Teow & Co

3. Judges

Judge Name	Title	Delivered Judgment
Steven Chong	Judge	Yes

4. Counsels

Counsel Name	Organization
N Sreenivasan	Straits Law Practice LLC
Tan Kai Ning Claire	Straits Law Practice LLC
Zhu Zhihao Daniel	Straits Law Practice LLC
Hui Choon Wai	Wee Swee Teow & Co
Ho Si Hui	Wee Swee Teow & Co

4. Facts

Lin Whan Chiu (LWC) expressed wishes for division of wealth in a handwritten note.
LWC's sons were to inherit the family wealth, with the eldest son receiving a larger share.
The Tat Leong companies were started in 1977 with a petrol kiosk.
Lin Choo Mee (LCM) was excluded from management after being a director for three decades.
LCM's directorships in TLD and TLI were not renewed.
The relationship between LCM and LSE deteriorated, leading to a breakdown of trust.
The Tat Leong companies never declared dividends.

5. Formal Citations

Lin Choo Mee v Tat Leong Development (Pte) Ltd and Others and Other Matters, Companies Winding Up Nos 226, 227 and 228 of 2014, [2015] SGHC 99

6. Timeline

Date	Event
1976-01-01	Tat Leong Petroleum Company partnership founded
1977-06-17	Tat Leong Petroleum Co (Pte) Ltd incorporated
1977-11-23	Lin Choo Mee appointed a director of Tat Leong Petroleum Co (Pte) Ltd
1978-11-08	LWC appointed a director of Tat Leong Petroleum Co (Pte) Ltd
1979-01-05	Tat Leong Development (Pte) Ltd incorporated
1979-03-01	Tat Leong Petroleum Co (Pte) Ltd purchased land in Bedok New Town
1983-04-28	LWC and LCL appointed as directors of Tat Leong Development (Pte) Ltd
1983-05-14	Tat Leong Investment Pte Ltd incorporated
1983-05-20	LWC and LCL appointed directors of Tat Leong Investment Pte Ltd
1983-08-08	Resolution passed to transfer LSE's share to TLI
1986-01-01	LWC and TAK decided to sub-divide the parcel of land
1986-12-24	LWC and TAK executed a sale of a portion of No 5 Teo Kim Eng Road to TLD
1990-01-01	Construction completed in September
1990-01-01	TLD acquired four shophouses
1990-11-28	LWC authored a handwritten note
1991-01-01	TLP purchased the Far East Plaza unit
1992-06-26	LWC passed away
1994-01-01	First shophouse was sold
1994-01-01	TLD purchased a plot of land at No 16 Jalan Rimau
1999-01-01	Nos 16A and 16B Jalan Rimau were sold
2000-01-01	Three shophouses were sold
2000-04-11	LCL ceased to be a director of the Tat Leong companies
2000-06-16	LTK was appointed as a director of TLD
2002-01-01	No 16C Jalan Rimau was sold to LJH
2004-02-03	LTK was appointed as a director of TLP
2007-03-23	Lin Choo Mee and LTK ceased to be directors of TLP
2007-03-23	TLH was appointed a director of TLP
2007-01-01	Far East Plaza unit has been rented out since
2009-01-01	No 16 Jalan Rimau was sold
2013-03-07	Annual General Meeting of TLD and TLI, Lin Choo Mee's term as director was not renewed
2014-09-30	Lin Choo Mee proposed that the Tat Leong companies be voluntarily wound up
2014-10-21	TLD and TLI indicated their disagreement with the proposal
2014-10-28	Letter to TLP proposing voluntary winding up
2014-11-05	Defendants stated that any offer of a buy-out would not be considered
2014-11-13	Lin Choo Mee filed applications to wind up the Tat Leong companies
2015-02-23	Application to cross-examine LSE on his affidavits granted
2015-04-13	Judgment Date

7. Legal Issues

Just and Equitable Winding Up
- Outcome: The court found that it was just and equitable to wind up the companies due to the breakdown of trust and exclusion of the applicant from management.
- Category: Substantive
- Sub-Issues:
  - Breakdown of mutual trust and confidence
  - Exclusion from management participation
  - Loss of substratum
Family Company as Quasi-Partnership
- Outcome: The court determined that the Tat Leong companies were family companies in the narrow sense, akin to a quasi-partnership, where mutual trust and confidence were central.
- Category: Substantive
- Sub-Issues:
  - Relationship of mutual trust and confidence
  - Expectation of management participation
Breach of Understanding
- Outcome: The court found that the non-renewal of the applicant's directorships in TLD and TLI was a breach of the understanding that he would have a management role in both companies.
- Category: Substantive
- Sub-Issues:
  - Non-renewal of directorship
  - Deliberate exclusion from management

8. Remedies Sought

Winding Up Order

9. Cause of Actions

Winding Up on Just and Equitable Grounds

10. Practice Areas

Winding Up
Corporate Litigation

11. Industries

Petroleum
Property Development
Investment

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Chua Kien How v Goodwealth Trading Pte Ltd and another	Court of Appeal	Yes	[1992] 1 SLR(R) 870	Singapore	Cited for the principle that a company's substratum is the main object it was formed to achieve, and if it can no longer achieve that object, it may be wound up.
Sim Yong Kim v Evenstar Investments Pte Ltd	Court of Appeal	Yes	[2006] 3 SLR(R) 827	Singapore	Cited to distinguish the circumstances under which a petitioner can argue for winding up based on a departure from the original object of the company, especially when the petitioner acquiesced to the changes.
Re Suburban Hotel Company	English Court of Appeal	Yes	(1867) LR 2 Ch App 737	England	Cited for the principle that the unprofitability of a company, short of insolvency, is not a basis for winding up on just and equitable grounds.
Re Lee Tung Co (Pte) Ltd and other matters	High Court	Yes	[2008] 1 SLR(R) 800	Singapore	Cited for the principle that the viability and profitability of a company is no bar to it being wound up on just and equitable grounds.
Chow Kwok Chuen v Chow Kwok Chi and another	Court of Appeal	Yes	[2008] 4 SLR(R) 362	Singapore	Cited for the definition and importance of mutual trust and confidence in a family company, akin to a quasi-partnership, and the circumstances under which a breakdown of such trust can justify winding up.
Fisher v Cadman	English High Court	Yes	[2005] EWHC 377 (Ch)	England and Wales	Cited to support the principle that equitable constraints on behavior in a quasi-partnership operate even between controlling members and minority shareholders, even if the minority shareholder's role is marginal.
Ebrahimi v Westbourne Galleries Ltd	House of Lords	Yes	[1973] AC 360	United Kingdom	Cited for the principle that the deliberate exclusion of a person from management participation in a company, in contravention of an understanding that they will have a management role, can be a basis for winding up on just and equitable grounds.
Re Iniaga Building Supplies (S) Pte Ltd	High Court	Yes	[1994] 2 SLR(R) 416	Singapore	Cited for the principle that the deliberate exclusion of a person from management participation in a company, in contravention of an understanding that they will have a management role, can be a basis for winding up on just and equitable grounds.
Re Kong Thai Sawmill (Miri) Sdn Bhd	Federal Court	Yes	[1978] 2 MLJ 227	Malaysia	Cited regarding the relevance of the interests of other shareholders in deciding whether the remedy of winding up ought to be granted in oppression cases.
Lim Swee Khiang and another v Borden Co (Pte) Ltd and others	Court of Appeal	Yes	[2006] 4 SLR(R) 745	Singapore	Cited regarding the relevance of the interests of other shareholders in deciding whether the remedy of winding up ought to be granted in oppression cases.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
Companies Act s 254(1)(i)	Singapore
Companies Act s 254(1)(e)	Singapore
Companies Act s 257(1)	Singapore
Companies Act s 216	Singapore
Insolvency Act 1986 (c 45)	United Kingdom
Companies (Amendment) Act 2014 (Act 36 of 2014)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Winding up
Family company
Just and equitable
Mutual trust and confidence
Exclusion from management
Substratum
Patriarchal leadership
Primogeniture
Director's duties
Shareholder rights

15.2 Keywords

Winding up
Family company
Just and equitable
Trust
Management
Singapore
Companies Act
Insolvency

17. Areas of Law

Area Name	Relevance Score
Winding Up	95
Company Law	80
Minority Oppression	70
Corporate Governance	30
Corporate Law	30
Duty to Account	30
Commercial Disputes	20
Contract Law	10

16. Subjects

Corporate Governance
Shareholder Disputes
Family Business
Minority Oppression