AAHG, LLC v Hong Hin Kay Albert: Conversion of Shares, Reversionary Damage, and Unjust Enrichment

In AAHG, LLC v Hong Hin Kay Albert, the High Court of Singapore ruled in favor of the plaintiff, AAHG, LLC, finding the defendant, Albert Hong Hin Kay, liable for conversion of 10,000 shares in Universal Medicare Pte Ltd. The court, presided over by Judicial Commissioner Chua Lee Ming, ordered the defendant to pay $2,496,222.07 in damages, along with interest and costs. The case involved a claim for conversion of shares, with alternative claims for reversionary damage and unjust enrichment. The court rejected the defendant's defenses, including arguments related to pre-emption rights and estoppel.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court found Albert Hong Hin Kay liable for conversion of shares in Universal Medicare Pte Ltd, awarding damages to AAHG, LLC.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
AAHG, LLCPlaintiffCorporationJudgment for PlaintiffWon
Hong Hin Kay AlbertDefendantIndividualClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chua Lee MingJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Siraj OmarPremier Law LLC
Premalatha SilwarajuPremier Law LLC
Ker YanguangMorgan Lewis Stamford LLC
Daniel Chia Hsiung WenMorgan Lewis Stamford LLC
Kenneth KongMorgan Lewis Stamford LLC
Annette LiuMorgan Lewis Stamford LLC

4. Facts

  1. The defendant transferred 10,000 shares in Universal Medicare Pte Ltd to himself.
  2. The shares were initially registered in the name of DVI Inc.
  3. The defendant claimed he exercised his right of pre-emption to acquire the shares.
  4. The plaintiff, AAHG, LLC, acquired the beneficial interest in the shares from DVI Liquidating Trust.
  5. The defendant sold 99% of the shares in Universal to Columbia Asia.
  6. DVI issued a Notice of Sale to sell the shares to GS Asia, which the defendant objected to.
  7. The court found that DVI did not issue a transfer notice under the Articles of Association.

5. Formal Citations

  1. AAHG, LLC v Hong Hin Kay Albert, Suit No 822 of 2014, [2016] SGHC 274

6. Timeline

DateEvent
Universal Medicare Pte Ltd incorporated
Medical Equipment Credit Pte Ltd issued letter of offer for US$12m loan
Universal Medicare Pte Ltd accepted loan offer
Universal Medicare Pte Ltd entered into loan agreement with Medical Equipment Credit Pte Ltd
10,000 shares in Universal Medicare Pte Ltd registered in the name of DVI Inc
Deed of Subordination signed
Share Mortgage Agreement signed
DVI Inc filed for reorganisation under Chapter 11 of the United States Bankruptcy Code
DVI Inc obtained order to sell de minimis assets, including the shares
DVI Inc signed term sheet with Goldman Sachs (Asia) Finance
Notice of Sale of De Minimis Shares of Stock issued
Wee Swee Teow & Co, wrote to DVI’s solicitors objecting to the sale of the Shares to GS Asia
Eddie Foo Kwok Fee sent a copy of Universal’s Memorandum and Articles of Association to DVI
DVI Inc filed a Notice of Withdrawal of the Notice of Sale
DVI Inc informed Eddie Foo that it would not sell its equity interest in Universal to GS Asia
Goldman Sachs (Asia) Finance bought the rights to contracts owned by MEC
Universal and the defendant were notified of the sale to GS Asia
DVI's assets conveyed to the DVI Liquidating Trust
GS Asia commenced proceedings in Suit No 593 of 2005
GS Asia obtained judgments in default of appearance against Universal and the defendant
AAHG, LLC entered into an Asset and Stock Purchase Agreement with the Trust
International Columbia US LLC offered to buy all the shares in Universal
Eddie Foo informed the managing director of the Columbia Asia Group that the defendant was entitled to complete the purchase of the Shares for US$1,000
Edward Hong agreed to sell 99% of the shares in Universal to Columbia Asia
The defendant wrote to Universal stating he wished to purchase the 10,000 shares in the company from DVI Inc for US$1,000.00
The defendant and Edward Hong convened a board meeting of Universal and passed resolutions purporting to cancel the Shares held by DVI and to register the defendant as the holder of the Shares
Universal and the defendant entered into a Deed of Settlement and Discharge with GS Asia
The defendant, Edward Hong and Muliadi entered into a Share Sale Agreement to sell 99% of the shares in Universal to Columbia Asia
GS Asia’s solicitors sent documents to Michael Khoo & Partners
The defendant and Edward Hong obtained an anti-suit injunction
Rights in respect of the Shares assigned to the plaintiff
Judgment issued

7. Legal Issues

  1. Conversion of Shares
    • Outcome: The court found the defendant liable for conversion of shares.
    • Category: Substantive
  2. Right of Pre-emption
    • Outcome: The court held that the defendant did not validly exercise his right of pre-emption.
    • Category: Substantive
  3. Estoppel
    • Outcome: The court rejected the defendant's argument that the plaintiff was estopped from challenging the defendant's actions.
    • Category: Substantive
  4. Right to Immediate Possession
    • Outcome: The court found that the plaintiff had the right to immediate possession of the shares.
    • Category: Substantive
  5. Reversionary Damage
    • Outcome: The court found that the plaintiff would have been entitled to recover the value of the Shares as damages for its reversionary damage claim.
    • Category: Substantive
  6. Unjust Enrichment
    • Outcome: The court found that the plaintiff would have succeeded in its claim in unjust enrichment and would have been entitled to recover the value of the Shares from the defendant.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Conversion
  • Reversionary Damage
  • Unjust Enrichment

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Healthcare

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Hong Hin Kay Albert and another v AAHG, LLC and anotherHigh CourtYes[2014] SGHC 206SingaporeCited regarding an anti-suit injunction restraining the plaintiff from suing the defendant in the United States of America.
Lyle & Scott Ltd v Scott’s TrusteesHouse of LordsYes[1959] AC 763United KingdomCited regarding the interpretation of articles of association concerning the transfer of shares.
The “Bunga Melati 5”Singapore Court of AppealYes[2016] 2 SLR 1114SingaporeCited for the principle of estoppel by representation.
Tradax Export S.A. v Dorada Compania Naviera S.A. (The “Lutetian”)Queen's Bench DivisionYes[1982] 2 Lloyd’s Rep 140England and WalesCited for the proposition that a party cannot remain silent if the other party mistakenly believes they have complied with a contractual term.
Multi-Pak Singapore Pte Ltd (in receivership) v Intraco Ltd and othersSingapore High CourtYes[1992] 2 SLR(R) 382SingaporeCited regarding the distinction between conversion and reversionary damage claims.
Multistar Holdings Ltd v Geocon Piling & Engineering Pte LtdSingapore Court of AppealYes[2016] 2 SLR 1SingaporeCited regarding the pleading of essential factual material to support a claim.
Wee Chiew Sek Anna v Ng Li-Ann Genevieve and othersSingapore Court of AppealYes[2013] 3 SLR 801SingaporeCited regarding the elements required to succeed in a claim in unjust enrichment.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
United States Bankruptcy Code (Title 11 of the United States Code)United States

15. Key Terms and Keywords

15.1 Key Terms

  • Conversion
  • Shares
  • Right of Pre-emption
  • Articles of Association
  • Transfer Notice
  • Reversionary Damage
  • Unjust Enrichment
  • DVI Liquidating Trust
  • Share Mortgage Agreement
  • GS Settlement Deed

15.2 Keywords

  • conversion
  • shares
  • unjust enrichment
  • singapore
  • high court

17. Areas of Law

Area NameRelevance Score
Conversion of Shares80
Torts75
Unjust Enrichment65
Reversionary damage50
Corporate Law40
Company Law40
Commercial Disputes30

16. Subjects

  • Tort Law
  • Company Law
  • Restitution