Evotech (Asia) Pte Ltd v Koh Tat Lee: Breach of Fiduciary Duties by Directors

In Evotech (Asia) Pte Ltd v Koh Tat Lee, the High Court of Singapore ruled in favor of the plaintiff, Evotech, against its former directors, Koh Tat Lee and Lily Bey Lay Lay, for breach of fiduciary duties. The court found that the defendants authorized several unauthorized payments after their removal as directors. The first defendant's counterclaim for salary and housing allowance during his termination notice period was also dismissed. The judgment was delivered by Justice Kannan Ramesh on 20 November 2018.

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

Evotech sued former directors for breach of fiduciary duties for unauthorized payments. The court found in favor of Evotech, dismissing the directors' defense.

1.7 Decision Date

19 November 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Evotech (Asia) Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Leng Siew Wei Aloysius of AbrahamLow LLC Jonathan Tan Yi Wen of AbrahamLow LLC Koh Jian Ying of AbrahamLow LLC Sarah Phang Shih Min of AbrahamLow LLC
Koh Tat Lee	Defendant	Individual	Claim Dismissed	Lost	Nichol Yeo of JLC Advisors LLP Nicholas Jeyaraj s/o Narayanan of Nicholas & Tan Partnership Lim Seng Sheoh of Seng Sheoh & Co
Lily Bey Lay Lay	Defendant	Individual	Claim Dismissed	Lost	Nichol Yeo of JLC Advisors LLP Nicholas Jeyaraj s/o Narayanan of Nicholas & Tan Partnership Lim Seng Sheoh of Seng Sheoh & Co

3. Judges

Judge Name	Title	Delivered Judgment
Kannan Ramesh	Judge	Yes

4. Counsels

Counsel Name	Organization
Leng Siew Wei Aloysius	AbrahamLow LLC
Jonathan Tan Yi Wen	AbrahamLow LLC
Koh Jian Ying	AbrahamLow LLC
Sarah Phang Shih Min	AbrahamLow LLC
Nichol Yeo	JLC Advisors LLP
Nicholas Jeyaraj s/o Narayanan	Nicholas & Tan Partnership
Lim Seng Sheoh	Seng Sheoh & Co

4. Facts

The defendants were former directors of the plaintiff, Evotech (Asia) Pte Ltd.
The defendants authorized seven payments to various parties after their removal as directors.
The payments were made to Kesterion Investments Limited, the first defendant, Yao Jun, and Yew Eng Piow.
Kesterion is owned by the first defendant's wife.
The payments were made from proceeds realized from the surrender of the plaintiff’s leasehold property.
There were no board resolutions approving the payments.
The plaintiff was in poor financial health at the time of the payments.

5. Formal Citations

Evotech (Asia) Pte Ltd v Koh Tat Lee and another, Suit No 1242 of 2016, [2018] SGHC 252

6. Timeline

Date	Event
2011-07-26	Second defendant appointed as director of the plaintiff
2013-09-16	First defendant appointed as director of the plaintiff
2015-11-14	Ms. Yip and Mr. Shiu appointed as executive directors of UAE
2016-04-01	First defendant appointed as general manager of the plaintiff
2016-05-20	Ms Yip and Mr Shiu appointed as directors of the plaintiff
2016-05-23	Defendants removed as directors of the plaintiff
2016-05-25	Payment of S$1,400,000 made to Kesterion
2016-05-25	Payment of S$135,000 made to Yew
2016-05-26	Payment of S$300,000 made to the first defendant
2016-05-26	Payment of S$250,000 made to Yao Jun
2016-05-30	Defendants notified of their removal as directors
2016-05-31	Payment of S$200,000 made to Kesterion
2016-06-16	Kesterion made loan of S$400,000 to the plaintiff
2016-07-21	Payment of US$500,000 made to Yao Jun
2016-08-01	Payment of US$570,000 made to Kesterion
2016-09-28	Plaintiff issued notice of termination of the first defendant's employment
2016-11-23	Writ issued
2018-10-08	Oral judgment given
2018-11-20	Judgment issued

7. Legal Issues

Breach of Fiduciary Duty
- Outcome: The court found that the defendants breached their fiduciary duties by authorizing payments that were not in the company's best interest and created conflicts of interest.
- Category: Substantive
- Sub-Issues:
  - Conflict of interest
  - Failure to act in the company's best interests
  - Unauthorised payments
- Related Cases:
  - [1994] 3 SLR(R) 1064
  - [1993] 32 NSWLR 50
De Facto Director
- Outcome: The court determined that the second defendant was a de facto director.
- Category: Substantive
- Related Cases:
  - [2010] SGHC 163
Termination of Employment Contract
- Outcome: The court found that the first defendant was not entitled to salary during the notice period because he did not report for work.
- Category: Substantive
- Sub-Issues:
  - Salary in lieu of notice
  - Breach of contract
- Related Cases:
  - [2017] 2 SLR 592

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation

11. Industries

Installation of industrial machinery
Mechanical engineering

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Intraco Ltd v Multi-Pak Singapore Pte Ltd	Court of Appeal	Yes	[1994] 3 SLR(R) 1064	Singapore	Cited regarding the extent to which directors can consider the interests of a business group as a whole when making decisions.
Equiticorp Finance Ltd (in liq) v Bank of New Zealand	Court of Appeal	Yes	[1993] 32 NSWLR 50	New South Wales	Cited regarding the extent to which directors can consider the interests of a business group as a whole when making decisions.
Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties)	High Court	Yes	[2010] SGHC 163	Singapore	Cited for the definition of a de facto director.
Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal	Court of Appeal	Yes	[2017] 2 SLR 592	Singapore	Cited for the principle that entities within a group are separate legal entities with separate rights and liabilities.
Charterbridge Corporation Ltd v Lloyds Bank Ltd	N/A	Yes	[1970] Ch 62	N/A	Cited regarding the extent to which directors can consider the interests of a business group as a whole when making decisions.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Fiduciary duty
De facto director
Conflict of interest
Unauthorised payments
Related party transactions
Verbal Agreement
UAE group

15.2 Keywords

fiduciary duty
directors
unauthorized payments
company law
singapore
evotech
koh tat lee

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	90
Director's Duties	85
Company Law	70
De facto director	65
Commercial Disputes	60

16. Subjects

Company Law
Directors' Duties
Breach of Fiduciary Duty