Ting Shwu Ping v Scanone Pte Ltd: Winding Up on Just and Equitable Ground
The Singapore Court of Appeal heard appeals by Ting Shwu Ping, administrator of the estate of Chng Koon Seng, against Autopack Pte Ltd and Scanone Pte Ltd, regarding winding up applications based on the 'just and equitable' ground. The court, comprising Sundaresh Menon CJ, Chao Hick Tin JA, Andrew Phang Boon Leong JA, Judith Prakash JA, and Tay Yong Kwang JA, dismissed the appeals, finding no cause to justify winding up the companies and ordered costs to the respondents.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeals dismissed with costs to the respondents.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses winding up applications for Autopack and Scanone, focusing on the 'just and equitable' ground and shareholder buy-out remedy.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| TING SHWU PING (ADMINISTRATOR OF THE ESTATE OF CHNG KOON SENG, DECEASED) | Appellant, Plaintiff | Individual | Appeal dismissed | Lost | |
| SCANONE PTE LTD | Respondent, Defendant | Corporation | Appeal dismissed | Won | |
| AUTOPACK PTE LTD | Defendant | Corporation | Appeal dismissed | Won | |
| TING SHWU PING | Appellant | Individual | Appeal dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Chao Hick Tin | Justice of the Court of Appeal | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| Judith Prakash | Justice of the Court of Appeal | Yes |
| Tay Yong Kwang | Justice of the Court of Appeal | No |
4. Counsels
4. Facts
- Mdm Ting sought to wind up Autopack and Scanone, claiming it was just and equitable due to Chng's death.
- Autopack was started by Chng, Chan, and Yeo; Scanone was incorporated later and owns property rented to Autopack.
- Chng and Chan ran the companies jointly until Chng's death in 2014.
- Mdm Ting, as administrator, applied to wind up the companies or compel Chan to buy the shares.
- The first instance judge found the applications an abuse of process and that no grounds for winding up existed.
- Mdm Ting contended the companies were quasi-partnerships, and Chng's death had consequences for their existence.
- The Companies argued they were incorporated bodies, and a shareholder's death doesn't have the same effect as a partner's death.
5. Formal Citations
- Ting Shwu Ping (Administrator of the estate of Chng Koon Seng, deceased) v Scanone Pte Ltd and another appeal, Civil Appeals Nos 12 and 17 of 2016, [2016] SGCA 65
6. Timeline
| Date | Event |
|---|---|
| Autopack Pte Ltd incorporated | |
| Yeo Seng Poh withdrew from Autopack Pte Ltd | |
| Scanone Pte Ltd incorporated | |
| Chng Koon Seng died | |
| Mdm Ting and CKB met Chan to discuss the future of the Companies | |
| Mdm Ting proposed to Chan that Autopack appoint a professional valuer | |
| Mdm Ting informed Chan that she valued the Companies at $22m | |
| Chan put in a counter-offer through his lawyers | |
| Mdm Ting engaged Stone Forest Corporate Advisory | |
| Section 254(2A) of the Companies Act took effect | |
| Mdm Ting proposed that she sell the Shares to Chan at a value to be determined by a valuer | |
| Chan rejected Mdm Ting's proposal | |
| Mdm Ting issued statutory demands against Autopack and Scanone | |
| Chan gave Mdm Ting notice that she had been requested to resign as a director of the Companies | |
| Auditor stated that Mdm Ting should write to and obtain the financial statements from the management of the Companies | |
| Mdm Ting applied to wind up the Companies | |
| Applications heard before the Judge | |
| Judgment reserved | |
| Judgment delivered |
7. Legal Issues
- Just and Equitable Winding Up
- Outcome: The court found that Mdm Ting had not been able to establish any cause which would justify the court in holding that it would be just and equitable to wind up the Companies.
- Category: Substantive
- Sub-Issues:
- Loss of substratum
- Breakdown of trust and confidence
- Inability to extract value from shares
- Abuse of Process
- Outcome: The court determined that seeking a remedy in the precise circumstances intended by the statute cannot be considered an abuse of process.
- Category: Procedural
- Sub-Issues:
- Collateral purpose
- Circumvention of articles
- Alternative remedies available
- Shareholder Buy-Out Remedy
- Outcome: The court determined that the existence of a buy-out provision in the articles of any particular private limited company could affect whether there are just and equitable grounds for a winding up.
- Category: Substantive
- Sub-Issues:
- Valuation of shares
- Application of articles
- Impartiality of auditor
8. Remedies Sought
- Winding Up Order
- Order for Share Buy-Out
9. Cause of Actions
- Winding Up on Just and Equitable Grounds
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- Wholesale Trade
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ting Shwu Ping and another v Autopack Pte Ltd and another matter | First Instance Judge | Yes | [2016] 2 SLR 152 | Singapore | Refers to the first instance decision where the judge held that the applications were an abuse of process. |
| Sim Yong Kim v Evenstar Investments Pte Ltd | Court of Appeal | Yes | [2006] 3 SLR(R) 827 | Singapore | Discusses the basis and operation of both s 254(1)(i) and s 216 of the Companies Act. |
| Tang Choon Keng Realty (Pte) Ltd and Others v Tang Wee Cheng | High Court | Yes | [1991] 2 SLR(R) 1 | Singapore | States that a member’s right to present a winding up petition against his company cannot be restrained even if his complaint is sufficient to found another action. |
| Summit Co (S) Pte Ltd v Pacific Biosciences Pte Ltd | High Court | Yes | [2007] 1 SLR(R) 46 | Singapore | States that a shareholder who tries to wind up the company under s 254(1)(i) in order to bypass the more appropriate and moderate remedies under s 216 of the Act is at risk of having his petition being struck out. |
| Camulos Partners Offshore Limited v Kathrein and Company | Cayman Islands Court of Appeal | Yes | [2010] (1) CILR 303 | Cayman Islands | Observed that the “gateway” to the buy-out relief was that the court was satisfied that it was just and equitable that the company be wound up. |
| Asia Pacific Limited v ARC Capital LLC and Haida Investments Limited | Cayman Islands Court of Appeal | Yes | [2015] (1) CILR 299 | Cayman Islands | Held that when making a buy-out order the court would not be dismissing the winding up petition for the obvious reason that, if it were to dismiss the petition, it would have no jurisdiction to make the buy-out order. |
| Lai Shit Har and another v Lau Yu Man | Court of Appeal | Yes | [2008] 4 SLR(R) 348 | Singapore | States that a winding up petition can be struck out or dismissed on the basis that it is an abuse of process if it is brought to harass the company or for a collateral purpose. |
| Re John While Springs (S) Pte Ltd; Re Segno Precision Pte Ltd | High Court | Yes | [2001] 1 SLR(R) 484 | Singapore | The High Court dismissed a winding up petition brought under s 254(1)(i) because the applicant was unable to establish the ground. |
| Mincom Pty Ltd v Murphy | Supreme Court of Queensland | Yes | 7 ACLR 370 | Australia | The court granted an injunction because the court found that the winding up petition was bound to fail and that there was no case of oppression. |
| Re a Company (No 007623 of 1984) | Unknown | Yes | [1986] BCLC 362 | England | The court held that if the majority are unwilling to pay the certified fair price but none the less insist on going through with the rights issue or refuse to pay the petitioner any dividend or pension, he may well be able to complain of unfairly prejudicial conduct. |
| Re a Company (No 004377 of 1986) | Unknown | Yes | [1987] 1 WLR 102 | England | The court held that if the articles provide a method for determining the fair value of a party’s shares, a member seeking to sell his shares on a breakdown of relations with other shareholders should not ordinarily be entitled to complain of unfair conduct if he has made no attempt to use the machinery provided by the articles. |
| Re a Company (No 006834 of 1988) ex parte Kremer | Unknown | Yes | [1989] BCLC 365 | England | The court held that when it was plain that the appropriate solution to a breakdown of relations is for the petitioner to be able to sell his shares at a fair price and the articles contain provisions for determining a price which the respondent is willing to pay or the respondent has offered to submit to an independent determination of a fair price, the presentation or maintenance of an oppression petition will ordinarily be an abuse of process. |
| Ebrahimi v Westbourne Galleries Ltd | House of Lords | Yes | [1973] AC 360 | England | The court stated that the “just and equitable” provision does not entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. |
| Lim Kok Wah and others v Lim Boh Yong and others and other matters | Unknown | Yes | [2015] 5 SLR 307 | Singapore | Defines a quasi-partnership as an association formed or continued on the basis of a personal relationship, involving mutual confidence. |
| Over & Over Ltd v Bonvests Holdings Ltd and another | Court of Appeal | Yes | [2010] 2 SLR 776 | Singapore | Held that while legal rights and expectations are usually enshrined in the company’s constitution in the majority of cases, a special class of quasi-partnership companies form an exception to this rule. |
| Chow Kwok Chuen v Chow Kwok Chi and another | Court of Appeal | Yes | [2008] 4 SLR(R) 362 | Singapore | Observed that the reason an incorporated partnership is treated somewhat differently is because of the express or implicit understanding among the partners before incorporation as to how the new company is to be run or managed and equity will not allow a person who is a party to that understanding to renege on that understanding. |
| Re Guidezone | Unknown | Yes | [2000] 2 BCLC 321 | England | Held that it is incorrect to say that if a company is a quasi-partnership, then “the court will make a winding up order if the circumstances are such that, had the company been a partnership, the court would have made a dissolution order”. |
| Cheung Shu Chuen v Lee Der Industrial Co and anor | Hong Kong Court of First Instance | Yes | [2009] HKCU 478 | Hong Kong | Held that a quasi-partnership was a personal relationship that did not survive death and therefore the administrator of the deceased “partner’s” estate could not claim that he had succeeded the deceased as a quasi-partner. |
| Murray’s Judicial Factor v Thomas Murray & Sons (Ice Merchants) Ltd | Scottish Court of Session | Yes | [1993] BCLC 1437 | Scotland | Held there was no ground for thinking that the deceased had any legitimate expectation that his executor or his heirs should have rights to participate in the management and profits of the company. |
| Re Halcyon Heights Estates Ltd | Barbados Supreme Court | Yes | [1980-84] LRC (Comm) 583 | Barbados | Held that any special business relationship in the nature of partnership which Telford may have had with his brother would have ceased on Kenneth’s death, and no obligation arising therefrom can enure to the benefit of persons outside that special relationship. |
| Clarfield v Manley | Unknown | Yes | [1993] O.J 878 | Canada | Certain Canadian courts have taken the view that because of its drastic nature and the adverse effect it would have on the company’s employees, where the company is capable of operating profitably a winding up order should be granted only as a last resort and a buy-out order should be made whenever equity may be achieved without dissolving the company. |
| Re Gee Hoe Chan Trading Co Pte Ltd | Unknown | Yes | [1991] 3 MLJ 137 | Singapore | Held that the fact that respondents had, for five years, “lined their pockets with the profits of the company in the form of either salaries and bonuses (for four of the five respondents) and/or directors’ fees”, without distributing dividends to the petitioners, meant that the benefits they had obtained from the company were “out of all proportion to the benefits which the petitioners had gained”. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50) | Singapore |
| Section 254(1)(i) of the Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Section 254(2A) of the Companies Act (Cap 50) | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
| Section 33(1) of the Partnership Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding Up
- Just and Equitable
- Share Buy-Out
- Quasi-Partnership
- Abuse of Process
- Companies Act
- Articles of Association
- Director's Loans
- Substratum
- Mutual Trust and Confidence
15.2 Keywords
- Winding Up
- Shareholder Dispute
- Companies Act
- Just and Equitable
- Singapore
- Buy-Out
- Autopack
- Scanone
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Company Law | 60 |
| Contract Law | 30 |
| Commercial Disputes | 25 |
16. Subjects
- Company Law
- Insolvency
- Shareholder Rights