Goh Chan Peng v Beyonics Technology: Director's Duties & Diversion of Business
Goh Chan Peng, Lee Bee Lan, Wyser International Ltd, and Wyser Capital Ltd appealed against the High Court's decision finding Goh Chan Peng in breach of his fiduciary duties to Beyonics Technology Ltd and Beyonics International Pte Ltd. The Court of Appeal partially allowed the appeal, setting aside the order for Diversion Loss and Total Loss payments to Beyonics Technology Ltd, but confirmed the payment orders against Goh Chan Peng in favor of Beyonics International Pte Ltd, with a slight adjustment to the unjustified expenses. Beyonics Technology Ltd's cross-appeal was dismissed.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Civil Appeal No 94 of 2016 allowed in part and Civil Appeal No 98 of 2016 dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding breach of fiduciary duties by a director who diverted business. The court partially allowed the appeal, adjusting damages.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Goh Chan Peng | Appellant, Respondent | Individual | Appeal allowed in part | Partial | |
| Lee Bee Lan | Appellant | Individual | Appeal dismissed | Lost | |
| Wyser International Ltd | Appellant | Corporation | Appeal allowed in part | Partial | |
| Wyser Capital Ltd | Appellant | Corporation | Appeal dismissed | Lost | |
| Beyonics Technology Ltd | Respondent, Appellant | Corporation | Appeal allowed in part, Cross-appeal dismissed | Partial | |
| Beyonics International Pte Ltd | Respondent | Corporation | Judgment for Plaintiff | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Judge of Appeal | No |
| Andrew Phang Boon Leong | Judge of Appeal | No |
| Judith Prakash | Judge of Appeal | Yes |
4. Counsels
4. Facts
- Goh Chan Peng was the director and CEO of BTL and Beyonics-I from May 1, 2000, to January 9, 2013.
- The Beyonics Group's PE Division manufactured baseplates and supplied them to Seagate.
- In October 2011, severe flooding in Thailand disrupted the Beyonics Group's manufacturing facilities.
- Seagate approved a collaboration between the Beyonics Group and the NedKo Group (B-N Alliance) on November 24, 2011.
- Goh Chan Peng signed two agreements on behalf of Wyser-I with Kodec and Nedec on April 5, 2012, for payments to be made to Wyser-I.
- Goh Chan Peng tendered his resignation on January 9, 2013, and continued to receive his monthly salary until April 30, 2013.
- The Beyonics Group's sale to Seagate declined steadily from 2012 and was eventually terminated.
5. Formal Citations
- Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal, Civil Appeals Nos 94 and 98 of 2016, [2017] SGCA 40
6. Timeline
| Date | Event |
|---|---|
| Goh Chan Peng appointed as director and CEO of BTL and Beyonics-I. | |
| Severe flooding in Thailand disrupts hard disk manufacturers, including Beyonics Group. | |
| Seagate approves collaboration between Beyonics Group and NedKo Group (B-N Alliance). | |
| BAP and LND formalize the B-N Alliance in the BAP-LND Contract. | |
| Goh Chan Peng signs two agreements on behalf of Wyser-I with Kodec and Nedec. | |
| Goh Chan Peng tenders his resignation. | |
| High Court Judge found in favour of the plaintiffs. | |
| Civil Appeal No 94 of 2016 lodged. | |
| Civil Appeal No 98 of 2016 lodged. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that Mr. Goh breached his fiduciary duties to BTL by under-representing the Beyonics Group’s capacity, endorsing the B-N Alliance, facilitating the NedKo Group’s business, and accepting payments under the Wyser Agreements.
- Category: Substantive
- Sub-Issues:
- Conflict of interest
- Failure to act in the best interests of the company
- Secret profits
- Failure to disclose wrongdoing
- Validity of Expense Claims
- Outcome: The court found that certain expense claims made by Mr. Goh were unjustified as they were for his personal benefit and/or that of his family members.
- Category: Substantive
- Recovery of Salary Paid After Resignation
- Outcome: The court found that the salary paid to Mr. Goh after his resignation was unjustified because the agreement to abridge the contractual notice period was not supported by consideration.
- Category: Substantive
- Entitlement to Claim Loss of Profits
- Outcome: The court found that BTL was not entitled to claim the Diversion Loss and the Total Loss because these losses were suffered by BAP, a separate legal entity.
- Category: Procedural
8. Remedies Sought
- Equitable Compensation
- Repayment of Unjustified Expenses
- Recovery of Unjustified Salary
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Contract
- Dishonest Assistance
- Conspiracy by Unlawful Means
10. Practice Areas
- Commercial Litigation
11. Industries
- Manufacturing
- Technology
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Smith & Fawcett Ltd | Court of Chancery | Yes | [1942] Ch 304 | England and Wales | Cited for the principle that a director must exercise discretion bona fide in what they consider to be in the interests of the company. |
| Cheong Kim Hock v Lin Securities (Pte) (in liquidation) | High Court | Yes | [1992] 1 SLR(R) 497 | Singapore | Cited for the principle that a director must exercise discretion bona fide in what they consider to be in the interests of the company. |
| Ho Kang Peng v Scintronix Corp Ltd (formerly known as TTL Holdings Ltd) | Court of Appeal | Yes | [2014] 3 SLR 329 | Singapore | Cited for the principle that a director must exercise discretion bona fide in what they consider to be in the interests of the company. |
| Charterbridge Corporation Ltd v Lloyds Bank Ltd | High Court | Yes | [1970] 1 Ch 62 | England and Wales | Cited for the objective element in the test of whether a director has acted honestly and bona fide in the best interests of the company. |
| Intraco Ltd v Multi-Pak Singapore Pte Ltd | High Court | Yes | [1994] 3 SLR(R) 1064 | Singapore | Cited for the objective element in the test of whether a director has acted honestly and bona fide in the best interests of the company. |
| Nordic International Ltd v Morten Innhaug | Court of Appeal | Yes | [2017] 3 SLR 957 | Singapore | Cited for the principle that a fiduciary must avoid situations where personal interests conflict with those of the company. |
| Lim Suat Hua v Singapore HealthPartners Pte Ltd | High Court | Yes | [2012] 2 SLR 805 | Singapore | Cited for the principle that a company may release a director from fiduciary duty through full disclosure and ratification. |
| New Zealand Netherlands Society “Oranje” Incorporated v Kuys | Privy Council | Yes | [1973] 2 All ER 1222 | New Zealand | Cited for the principle that a company may release a director from fiduciary duty through full disclosure and ratification. |
| Public Prosecutor v Lew Syn Pau and another | High Court | No | [2006] 4 SLR(R) 210 | Singapore | Cited to support the doctrine that each incorporated entity is a separate legal entity with separate legal rights and liabilities. |
| Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd | High Court | No | [2014] 4 SLR 832 | Singapore | Cited to support the doctrine that each incorporated entity is a separate legal entity with separate legal rights and liabilities. |
| Re Lee, Behrens & Co Ltd | High Court | Yes | [1932] 2 Ch 46 | England and Wales | Cited for the three-part test in relation to the validity of commercial transactions entered into by directors who owe a duty as fiduciaries to companies. |
| Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others | High Court | Yes | [2010] SGHC 163 | Singapore | Cited for the three-part test in relation to the validity of commercial transactions entered into by directors who owe a duty as fiduciaries to companies. |
| John While Springs (S) Pte Ltd v Goh Sai Chuah Justin and others | High Court | Yes | [2004] 3 SLR(R) 596 | Singapore | Cited for the principle of shifting the evidential burden in cases involving breach of fiduciary duty. |
| Schonk Atonius Martinus Mattheus and another v Enholco Pte Ltd and another appeal | Court of Appeal | No | [2016] 2 SLR 881 | Singapore | Cited for the principle that an employer may not use an employee’s breach of fiduciary duties to justify withholding payment of salary that that employee is entitled to. |
| Heron, Gethin-Jones & Liow v John Chong | High Court | Yes | [1963] MLJ 310 | Malaysia | Cited for the principle that an employee is not entitled to terminate the contract of employment by payment of salary in lieu of notice. |
| Ang Sin Hock v Khoo Eng Lim | High Court | Yes | [2010] 3 SLR 179 | Singapore | Cited for the principle that forbearance can constitute sufficient consideration. |
| Sea-Land Service Inc v Cheong Fook Chee Vincent | High Court | No | [1994] 3 SLR(R) 250 | Singapore | Cited for the principle that there must be a request from the appellants for the respondent to forbear to sue them for forbearance to be sufficient consideration. |
| Beyonics Technology Ltd and another v Goh Chan Peng and others | High Court | No | [2016] SGHC 120 | Singapore | The judgment under appeal. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 391 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Fiduciary Duty
- Diversion Loss
- Total Loss
- B-N Alliance
- Wyser Agreements
- Seagate Grant
- Baseplates
- NedKo Group
- BAP-LND Contract
- Secret Profits
- Conflict of Interest
15.2 Keywords
- Director
- Fiduciary Duty
- Breach of Duty
- Diversion of Business
- Loss of Profits
- Companies Act
- Singapore
- Court of Appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Director's Duties | 95 |
| Fiduciary Duties | 80 |
| Company Law | 75 |
| Employment Law | 65 |
| Breach of Contract | 50 |
16. Subjects
- Company Law
- Fiduciary Duty
- Employment Law
- Commercial Litigation