Heinrich Pte Ltd v Lau Kim Huat: Breach of Director's Duties, Misrepresentation, and Joint Venture Agreement Dispute
Heinrich Pte Ltd and Kor Yong Koo sued Lau Kim Huat, Li Cunkou, and JHY Marine and Offshore Equipment Pte Ltd in the High Court of Singapore, alleging breach of a joint venture agreement, misrepresentation, and breach of director's duties. The court, presided over by Aedit Abdullah JC, dismissed all claims, finding no evidence to support the allegations. The plaintiffs alleged breach of contract claim, misrepresentation claim, and breach of director's duties claim.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Action dismissed in its entirety.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Heinrich Pte Ltd sues Lau Kim Huat for breach of director's duties, misrepresentation, and JV agreement breach. The court dismissed all claims, finding no evidence of wrongdoing.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Heinrich Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Kor Yong Koo | Plaintiff | Individual | Claim Dismissed | Lost | |
| Lau Kim Huat | Defendant | Individual | Judgment for Defendant | Won | |
| Li Cunkou | Defendant | Individual | Judgment for Defendant | Won | |
| JHY Marine and Offshore Equipment Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aedit Abdullah | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Kor and Lau had known each other since 1995 and worked together.
- Lau worked for Kor in Heinrich from 2006.
- Lau left Heinrich in 2013 and set up a new company with Li.
- Kor alleged Lau breached his duties as a director of Heinrich.
- Kor claimed Lau made misrepresentations regarding Macmacor's business.
- Heinrich made payments to JHY, a company connected to Li.
- Lau arranged transhipments for Li using Heinrich's resources.
5. Formal Citations
- Heinrich Pte Ltd and another v Lau Kim Huat and others, Suit No 770 of 2013, [2016] SGHC 116
6. Timeline
| Date | Event |
|---|---|
| Kor Yong Koo and Lau Kim Huat knew each other since about 1995 and had worked with each other. | |
| Lau Kim Huat came to work for Kor Yong Koo in Heinrich Pte Ltd. | |
| Joint Venture Agreement signed. | |
| Business of Macmacor purchased by Kor Yong Koo. | |
| Share capitalisation occurred. | |
| Relationship between Kor Yong Koo and Lau Kim Huat became bad. | |
| Lau Kim Huat left Heinrich Pte Ltd. | |
| Lau Kim Huat set up a new company with Li Cunkou. | |
| Kor Yong Koo filed suit against Lau Kim Huat. | |
| Trial began. | |
| Trial continued. | |
| Judgment issued. |
7. Legal Issues
- Breach of Director's Duties
- Outcome: The court found no breach of director's duties.
- Category: Substantive
- Sub-Issues:
- Failure to act bona fide in the company's interests
- Conflict of interest
- Failure to exercise powers for proper purposes
- Misrepresentation
- Outcome: The court found no actionable misrepresentation.
- Category: Substantive
- Sub-Issues:
- Fraudulent misrepresentation
- Negligent misstatement
- Reliance and inducement
- Breach of Joint Venture Agreement
- Outcome: The court found no breach of the joint venture agreement.
- Category: Substantive
- Sub-Issues:
- Scope of obligation
- Repayment of loan
- Extent of liability
- Knowing Assistance
- Outcome: The court found no knowing assistance.
- Category: Substantive
- Sub-Issues:
- Dishonest state of mind
- Knowledge of breach of fiduciary duty
- Restitution for Wrongs
- Outcome: The court found the user principle inapplicable.
- Category: Substantive
- Sub-Issues:
- User principle
- Unjust enrichment
8. Remedies Sought
- Monetary Damages
- Account of Profits
- Declaration of Breach of Duty
9. Cause of Actions
- Breach of Contract
- Misrepresentation
- Breach of Fiduciary Duty
- Knowing Assistance
- Restitution
10. Practice Areas
- Commercial Litigation
- Corporate Law
- Contract Disputes
- Director Liability
- Trust Litigation
11. Industries
- Marine
- Offshore Equipment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hick Seng, deceased) and another | Court of Appeal | Yes | [2013] 3 SLR 801 | Singapore | Cited for the standard of proof required for fraudulent misrepresentation. |
| Intraco Ltd v Multi-Pak Singapore Pte Ltd | Court of Appeal | Yes | [1994] 3 SLR (R) 1064 | Singapore | Cited for the consideration of whether an honest and intelligent person in the position of the directors, taking an objective view, would reasonably have concluded that the impugned transactions were in the interests of the company. |
| Ho Kang Peng v Scintronix Corp Ltd | Court of Appeal | Yes | [2014] 3 SLR 329 | Singapore | Cited for the principle that the court will be slow to interfere with commercial decisions of directors which have been made honestly even if they turn out, on hindsight, to be financially detrimental. |
| Charterbridge Corporation Ltd v Lloyds Bank Ltd | Chancery Division | Yes | [1970] Ch 62 | England and Wales | Cited for the test of whether an intelligent and honest man in the position of a director of the company concerned, could, in the whole of the existing circumstances, have reasonably believed that the transactions were for the benefit of the company. |
| Cheam Tat Pang v PP | High Court | Yes | [1996] 1 SLR(R) 161 | Singapore | Cited for the principle that it will be difficult to find that a director has acted bona fide in the interests of the company if he takes risks which no director could honestly believe to be taken in the interests of the company. |
| Vita Health Laboratories Pte Ltd v Pang Meng Seng | High Court | Yes | [2004] 4 SLR(R) 162 | Singapore | Cited for the principle that bona fide entrepreneurs and honest commercial men should not fear that business failure entails legal liability, and to encourage commercial risk and entrepreneurship. |
| Langridge v Levy | N/A | Yes | (1837) 2 M&W 519 | England and Wales | Cited for the elements of fraudulent misrepresentation or deceit. |
| In re B (Children)(Fc) | House of Lords | Yes | [2009] 1 AC 11 | United Kingdom | Cited for the principle that the more serious the allegation, the stronger the evidence required to show that something occurred on the balance of probabilities. |
| Caparo Industries plc v Dickman | House of Lords | Yes | [1990] 2 AC 605 | United Kingdom | Cited for the elements of a negligent misstatement in tort. |
| Hedley Byrne & Co Ltd v Heller & Partners Ltd | House of Lords | Yes | [1964] AC 465 | United Kingdom | Cited for the principle that a negligent misstatement may be of fact or of opinion. |
| Xia Zhengyan v Geng Changqing | Court of Appeal | Yes | [2015] 3 SLR 732 | Singapore | Cited for guidance on dealing with misrepresentation claims. |
| Re City Equitable Fire Insurance | Court of Appeal | Yes | [1925] Ch 407 | England and Wales | Cited for the common law duty of care, skill and diligence. |
| Baden v Société Générale pour Favoriser le Développement du Commerce et de I’Industrie en France SA | N/A | Yes | [1993] 1 WLR 509 | N/A | Cited for the five-fold test for the required state of mind for knowing assistance. |
| Royal Brunei Airlines Sdn Bhd v Tan (Philip Kok Ming) | Privy Council | Yes | [1995] 2 AC 378 | United Kingdom | Cited for the principle that a dishonest breach of the fiduciary obligation need not be shown for knowing assistance. |
| Twinsectra Ltd v Yardley | House of Lords | Yes | [2002] 2 AC 164 | United Kingdom | Cited for the principle that a dishonest breach of the fiduciary obligation need not be shown for knowing assistance. |
| Novoship (UK) Ltd and others v Mikhaylyuk and others | Queen's Bench Division | Yes | [2015] QB 499 | England and Wales | Cited for the principle that no actual misapplication of property is required for knowing assistance. |
| JD Wetherspoon plc v Van de Berg & Co Ltd | High Court of Justice | Yes | [2009] EWHC 639 (Ch) | England and Wales | Cited for the principle that knowing assistance could operate without property being involved. |
| George Raymond Zage III and another v Ho Chi Kwong and another | Court of Appeal | Yes | [2010] 2 SLR 589 | Singapore | Cited for the principle that for a defendant to be liable for knowing assistance, he must have such knowledge of the irregular shortcomings of the transaction that ordinary honest people would consider it to be a breach of standards of honest conduct if he failed to adequately query them. |
| ACES System Development Pte Ltd v Yenty Lily (trading as Access International Services) | Court of Appeal | Yes | [2013] 4 SLR 1317 | Singapore | Cited for the recognition that damages awarded pursuant to the user principle were available. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Misrepresentation Act (Cap 390, 1994 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Director's duties
- Fiduciary duty
- Misrepresentation
- Joint venture agreement
- Knowing assistance
- User principle
- Transhipment
- Share capitalisation
- Consignment
- Directors' resolution
15.2 Keywords
- Director's duties
- Misrepresentation
- Breach of contract
- Singapore High Court
- Commercial litigation
17. Areas of Law
16. Subjects
- Company Law
- Contract Law
- Tort Law
- Trust Law
- Restitution