Bamian Investments v Lo Haw: Directors' Duties & Breach of Fiduciary Duty

In Bamian Investments Pte Ltd v Lo Haw and others, the High Court of Singapore addressed a claim by Bamian Investments against Lo Haw for breach of his duties as a director. The case concerned resolutions passed at general meetings of Guangzhou Mayer Corporation Limited (GMayer). The court found that Lo Haw had breached his duties as a director of Bamian Investments. The court granted the plaintiff's claim for declaratory relief.

1. Case Overview

1.1 Court

High Court

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

Bamian Investments sued Lo Haw for breaching his director duties regarding GMayer shareholder meetings. The court found Lo Haw liable.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Bamian Investments Pte LtdPlaintiffCorporationJudgment for PlaintiffWonGan Theng Chong, Yik Shu Ying
Lo HawDefendantIndividualClaim DismissedLostWoo Tchi Chu, Lim Rui Cong Roy
Wu Kuo-LungDefendantIndividual
Personal Representatives of Wu Kuo-Lung (deceased)DefendantOther

3. Judges

Judge NameTitleDelivered Judgment
Audrey LimJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Gan Theng ChongLee & Lee
Yik Shu YingLee & Lee
Woo Tchi ChuRobert Wang & Woo LLP
Lim Rui Cong RoyRobert Wang & Woo LLP

4. Facts

  1. Lo and Wu were directors of Bamian Investments, the plaintiff.
  2. Bamian Investments held 81.4% of the shares in GMayer.
  3. Lo was also the chairman of GMayer.
  4. Lo and Wu voted in favor of resolutions at GMayer's general meetings that amended the Articles of Association.
  5. The amendments to the Articles reduced the plaintiff's control over GMayer.
  6. The plaintiff claimed that Lo and Wu breached their duties as directors by voting in favor of the resolutions.
  7. Lo claimed he acted in the best interest of Mayer Taiwan and GMayer.

5. Formal Citations

  1. Bamian Investments Pte Ltd v Lo Haw and others, Suit No 320 of 2015, [2017] SGHC 166

6. Timeline

DateEvent
Mayer Taiwan bought over by Lo’s father and the second defendant, Wu.
Lo joined Mayer Taiwan as an administration specialist.
Lo and Shen Heng-Chiang went to Guangzhou, China, to set up a steel pipe manufacturing plant.
Lo and Wu were appointed as directors of the plaintiff.
Guangzhou Mayer Metal Corporation (GMayer Metal) incorporated.
GMayer Metal became a sino-foreign equity joint venture enterprise.
GMayer Metal was reincorporated as GMayer.
Mayer Taiwan decided to list GMayer on the Hong Kong Stock Exchange through Mayer HK, a shell company.
Wu stepped down as chairman of Mayer Taiwan.
Lo fell out with the Huang family and was not re-elected as a director of Mayer Taiwan.
Lo was not re-elected as a director of Mayer Taiwan.
GMayer’s general meeting.
The plaintiff’s board of directors passed a resolution to take appropriate legal action to protect its rights.
The plaintiff’s lawyers wrote to GMayer to inform it to cooperate and assist Mayer HK’s auditors with the annual audit.
First general meeting of shareholders of GMayer held.
Mayer BVI’s appeal was eventually dismissed in July 2014.
Jiangsu Wuzhong Industrial Co Ltd requested GMayer to convene an extraordinary general meeting in September.
Mayer BVI’s 21.56% shareholding in Mayer HK was transferred to two entities, Bumper East Ltd and Aspial Investment Ltd.
Another meeting of GMayer’s shareholders held.
A new board was constituted in Mayer HK, with Lee appointed as a director.
Mayer HK removed Lo and Wu as the plaintiff’s directors and appointed Lee as its director.
The second defendant passed away.
Trial began.
Trial concluded.
Judgment issued.

7. Legal Issues

  1. Breach of Directors' Duties
    • Outcome: The court found that Lo Haw breached his duties as a director of the plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Conflict of interest
      • Failure to act bona fide in the company's interest
      • Subordination of company's interest
    • Related Cases:
      • [2007] 2 SLR(R) 597
      • [1970] Ch 62
      • [1994] 3 SLR(R) 1064
      • [2006] 2 SLR(R) 307
      • [1998] Ch 1

8. Remedies Sought

  1. Declaratory Relief
  2. Damages

9. Cause of Actions

  • Breach of Directors' Duties
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation)N/AYes[2007] 2 SLR(R) 597SingaporeCited for the principle that the duty to act honestly is the statutory equivalent of the duty under common law to act bona fide in the interest of the company.
Charterbridge Corporation Ltd v Lloyds Bank LtdN/AYes[1970] Ch 62England and WalesCited for the test of whether a director has breached his duty to the company.
Intraco Ltd v Multi-Pak Singapore Pte LtdN/AYes[1994] 3 SLR(R) 1064SingaporeCited for the test of whether a director has breached his duty to the company.
Golden Village Multiplex Pte Ltd v Phoon Chiong KitN/AYes[2006] 2 SLR(R) 307SingaporeCited for the test of whether a director has breached his duty to the company.
Bristol and West Building Society v MothewN/AYes[1998] Ch 1England and WalesCited for the 'no conflict rule' and its sub-categories.
Clark Boyce v MouatN/AYes[1994] 1 AC 428United KingdomCited regarding acting for two principals with potentially conflicting interests.
Moody v Cox and HattN/AYes[1917] 2 Ch 71England and WalesCited regarding actual conflict of duty.
Commonwealth Bank of Australia v SmithN/AYes(1991) 102 ALR 453AustraliaCited regarding actual conflict of duty.
Gardner v ParkerN/AYes[2004] 1 BCLC 417N/ACited regarding a rigid compartmentalisation of a director’s conduct vis-à-vis a subsidiary and its parent company is to be eschewed.
Item Software (UK) Ltd v Fassihi and othersCourt of AppealYes[2004] EWCA Civ 1244England and WalesCited for the duty of a director to disclose information of relevance and concern to the company.
British Midland Tool Ltd v Midland International Tooling Ltd and othersN/AYes[2003] BCLC 523N/ACited for a director's duty to inform the company of any activity which damages its interests.
Bell v Lever Bros LtdN/ANo[1931] ALL ER Rep 1N/ACited regarding whether a director is legally bound to disclose to the company any breach of his own obligations as a director.
Ho Kon Kim v Lim Gek Kim Betsy and others and another appealN/AYes[2001] 3 SLR(R) 253SingaporeCited for the principle that costs should normally follow the event.
Tullio Planeta v Maoro Andrea GN/AYes[1994] 2 SLR(R) 501SingaporeCited for the principle that a successful party who has not raised issues or made allegations improperly or unreasonably should not be deprived of his costs.
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries LtdN/ANo[1951] 1 All ER 873N/ACited for the principle that a plaintiff who gets only nominal damages should not be regarded as successful at trial.
Alltrans Express Ltd v CVA Holdings LtdN/ANo[1984] 1WLR 394N/ACited for the principle that a plaintiff who gets only nominal damages should not be regarded as successful at trial.
Mahtani and others v Kiaw Aik Hang Land Pte LtdN/AYes[1994] 2 SLR(R) 996SingaporeCited for the principle that a plaintiff who gets only nominal damages should not be regarded as successful at trial.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Section 157 of the Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Directors' duties
  • Breach of fiduciary duty
  • Conflict of interest
  • Articles of Association
  • General meeting
  • Shareholder resolution
  • Corporate governance

15.2 Keywords

  • Directors' duties
  • Fiduciary duty
  • Corporate governance
  • Shareholder rights
  • Conflict of interest

16. Subjects

  • Corporate Law
  • Fiduciary Duties
  • Company Law

17. Areas of Law

  • Companies Law
  • Directors' Duties
  • Civil Procedure
  • Costs