EQ Capital Investments Ltd v Sunbreeze Group Investments Ltd: Minority Oppression & Third-Party Indemnity

EQ Capital Investments Ltd sued Sunbreeze Group Investments Limited, Manoj Mohan Murjani, Kanchan Manoj Murjani, and The Wellness Group Pte Ltd in the High Court of Singapore, alleging minority oppression. The defendants commenced third party proceedings against Ron Sim Chye Hock for indemnity or contribution. The High Court, presided over by Chua Lee Ming J, granted Ron Sim’s application to strike out the third party claim, finding that the third party statement of claim did not disclose a reasonable cause of action. The defendants' appeal against this decision is pending.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Application to strike out the third party claim granted.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

EQ Capital sued Sunbreeze for minority oppression. Sunbreeze's third-party claim against Ron Sim for indemnity was struck out for redundancy.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
EQ Capital Investments LtdPlaintiffCorporationNeutralNeutralDavinder Singh s/o Amar Singh, Jaikanth Shankar, Tan Ruo Yu, Charlene Wong Su-Yi
Sunbreeze Group Investments LimitedDefendant, Third Party ClaimantCorporationLostLostYeo Khirn Hai Alvin, Koh Swee Yen, Lin Chunlong, Mak Shin Yi
Manoj Mohan MurjaniDefendant, Third Party ClaimantIndividualLostLostYeo Khirn Hai Alvin, Koh Swee Yen, Lin Chunlong, Mak Shin Yi
Kanchan Manoj MurjaniDefendant, Third Party ClaimantIndividualLostLostYeo Khirn Hai Alvin, Koh Swee Yen, Lin Chunlong, Mak Shin Yi
The Wellness Group Pte LtdDefendantCorporationNeutralNeutral
Ron Sim Chye HockThird Party RespondentIndividualWonWonDavinder Singh s/o Amar Singh, Jaikanth Shankar, Tan Ruo Yu, Charlene Wong Su-Yi

3. Judges

Judge NameTitleDelivered Judgment
Chua Lee MingJudgeYes

4. Counsels

Counsel NameOrganization
Yeo Khirn Hai AlvinWong Partnership LLP
Koh Swee YenWong Partnership LLP
Lin ChunlongWong Partnership LLP
Mak Shin YiWong Partnership LLP
Davinder Singh s/o Amar SinghDrew & Napier LLC
Jaikanth ShankarDrew & Napier LLC
Tan Ruo YuDrew & Napier LLC
Charlene Wong Su-YiDrew & Napier LLC

4. Facts

  1. EQ Capital sued the defendants for minority oppression in relation to the affairs of Wellness.
  2. The defendants commenced third party proceedings against Ron Sim for an indemnity or contribution.
  3. EQ Capital claimed that Manoj and Kanchan caused Wellness not to convene AGMs or provide audited accounts.
  4. EQ Capital claimed that Manoj brought about the dilution of Wellness’ shareholding in TWG Tea.
  5. EQ Capital claimed Manoj and Kanchan failed to cause Wellness to subscribe to the Rights Issue.
  6. EQ Capital claimed Manoj and Kanchan did not exercise Wellness' right to appoint a director to TWG Tea's board.
  7. EQ Capital claimed Manoj and Kanchan caused Wellness to bring S187/2014 and CA64/2016 without merit.

5. Formal Citations

  1. EQ Capital Investments Ltd v Sunbreeze Group Investments Ltd and others (Sim Chye Hock Ron, third party), Suit No 17 of 2017(Summons No 1356 of 2017), [2017] SGHC 271

6. Timeline

DateEvent
TWG Tea Company Pte Ltd took over Wellness’ tea division.
EQ Capital acquired a 7.55% stake in Wellness.
OSIM, Wellness and Paris signed a Sale and Purchase Agreement.
Shareholders’ resolution approving the payment of dividends was executed.
OSIM and TWG Tea incorporated the first joint venture, OSIM-TWG Tea (North Asia) Pte Ltd.
Manoj resigned as CEO of TWG Tea with effect from 15 September 2012.
Manoj resigned as a director of TWG Tea.
TWG Tea’s audited PBT for FY2013 was signed off by its auditors.
OSIM purchased all the shares in Paris.
TWG Tea proposed a rights issue to raise capital.
Extraordinary general meeting was held for the purposes of approving the Rights Issue.
Wellness and Manoj commenced Suit 187 of 2014 against OSIM, Paris and the directors of TWG Tea.
The claims in S187/2014 were dismissed.
Wellness nominated Manoj as director.
Wellness’ appeal in CA/CA 64 of 2016 was dismissed by the Court of Appeal.
EQ Capital filed the present action, claiming minority oppression.
Sunbreeze, Manoj and Kanchan issued a third party notice against Ron Sim, claiming to be indemnified against any liability in respect of EQ Capital’s claim, or contribution.
Wellness nominated Associate Professor Mak Yuen Teen as director of TWG Tea.
Wellness made an application by way of HC/OS 206 of 2017 seeking, inter alia, an order that Associate Professor Mak be appointed as director pursuant to the SHA.
Ron Sim applied to strike out the third party notice and statement of claim.
The court granted Ron Sim’s application to strike out the third party claim.
The court dismissed OS 206/2017.
Judgment Date

7. Legal Issues

  1. Redundancy of Third Party Claim
    • Outcome: The court held that the third party claim was redundant because the defence and the third party claim were based on the same allegations.
    • Category: Procedural
    • Related Cases:
      • [2013] 1 SLR 173
  2. Cause of Action for Indemnity or Contribution
    • Outcome: The court held that the third party statement of claim did not disclose any cause of action for indemnity or contribution against Ron Sim.
    • Category: Substantive

8. Remedies Sought

  1. Indemnity
  2. Contribution
  3. Payment for loss in value of shares
  4. Repayment of funds used for costs orders
  5. Winding up of Wellness
  6. Purchase of EQ Capital’s shares in Wellness

9. Cause of Actions

  • Minority Oppression
  • Indemnity
  • Contribution

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Yong Kheng Leong and another v Panweld Trading Pte LtdCourt of AppealYes[2013] 1 SLR 173SingaporeCited as authority for the redundancy principle in third party claims, where the third party claim is based on allegations that would defeat the plaintiff's claim.
Airtrust (Singapore) Pte Ltd v Kao Chai-Chau Linda and another suitHigh CourtNo[2014] 2 SLR 673SingaporeCited to illustrate that reliance on the same facts in the third party claim and the defence did not necessarily mean that the third party claim was redundant.
Tan Juay Pah v Kimly Construction Pte Ltd and othersN/AYes[2012] 2 SLR 549SingaporeCited for the three-stage test under s 15 of the Civil Law Act regarding entitlement to contribution.
Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others and other appealsCourt of AppealNo[2013] 1 SLR 374SingaporeCited regarding the principle that a company's separate legal personality should not be allowed to unjustly enrich shareholders.
The Wellness Group Pte Ltd and another v OSIM International Ltd and othersN/ANo[2016] 3 SLR 729SingaporeCited for the findings made in Suit 187 of 2014, which are relevant to the current action.

13. Applicable Rules

Rule Name
Order 18 rule 19(1)(a) of the Rules of Court
Order 16 r 1(1)(c) of the Rules

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court (Cap 322, R 5, 2014 Rev Ed)Singapore
Civil Law Act (Cap 43, 1999 Rev Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Minority oppression
  • Third party claim
  • Indemnity
  • Contribution
  • Redundancy
  • Profit Swing Clause
  • Rights Issue
  • Alter ego
  • Unconscionability

15.2 Keywords

  • minority oppression
  • third party
  • indemnity
  • contribution
  • striking out
  • redundancy

16. Subjects

  • Civil Procedure
  • Third Party Claims
  • Minority Oppression
  • Company Law

17. Areas of Law

  • Civil Procedure
  • Third Party Proceedings
  • Minority Oppression