Swee Wan Enterprises v Yak Thye Peng: Debt Claim, Minority Oppression & Director's Duties

In a suit before the High Court of Singapore, Swee Wan Enterprises Pte Ltd (SWE) sued Yak Thye Peng (YTP) for $1,805,156.62, alleging it was a debt from unauthorized withdrawals. YTP denied the debt and counterclaimed against Yak Tiong Liew (YTL), Yak Chau Wei (YCW), SWE, and Swee Wan Trading Pte Ltd (SWT) for conspiracy and minority oppression. The court allowed SWE's claim in part, deducting US$300,000, and dismissed YTP's counterclaim.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Claim allowed in part and counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

SWE sues YTP for debt. YTP counterclaims for conspiracy and minority oppression. Claim allowed in part, counterclaim dismissed.

1.7 Decision Date

11 June 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Swee Wan Enterprises Pte Ltd	Plaintiff, Defendant in counterclaim	Corporation	Claim allowed in part	Partial	Vikram Nair of Rajah & Tann Singapore LLP Ngo Wei Shing of Rajah & Tann Singapore LLP
Yak Thye Peng	Defendant, Plaintiff in counterclaim	Individual	Counterclaim dismissed	Lost	Sara Ng Qian Hui of Vicki Heng Law Corporation Tan Sia Khoon Kelvin David of Vicki Heng Law Corporation
Yak Tiong Liew	Defendant in counterclaim	Individual	Counterclaim dismissed	Won	Vikram Nair of Rajah & Tann Singapore LLP Ngo Wei Shing of Rajah & Tann Singapore LLP
Yak Chau Wei	Defendant in counterclaim	Individual	Counterclaim dismissed	Won	Vikram Nair of Rajah & Tann Singapore LLP Ngo Wei Shing of Rajah & Tann Singapore LLP
Swee Wan Trading Pte Ltd	Defendant in counterclaim	Corporation	Counterclaim dismissed	Won	Vikram Nair of Rajah & Tann Singapore LLP Ngo Wei Shing of Rajah & Tann Singapore LLP

3. Judges

Judge Name	Title	Delivered Judgment
Hoo Sheau Peng	Judge	Yes

4. Counsels

Counsel Name	Organization
Vikram Nair	Rajah & Tann Singapore LLP
Ngo Wei Shing	Rajah & Tann Singapore LLP
Sara Ng Qian Hui	Vicki Heng Law Corporation
Tan Sia Khoon Kelvin David	Vicki Heng Law Corporation

4. Facts

YTP and YTL are brothers who managed SWE, a family-owned company.
SWE claimed YTP owed $1,805,156.62 from unauthorized withdrawals via BOC cheques.
A 2013 resolution regularized the withdrawals as interest-free loans repayable on demand.
YTP was removed as a director of SWE on 4 September 2015.
A rights issue in June 2017 diluted YTP's shareholding in SWE.
YTP claimed a mutual understanding allowed withdrawals without repayment.
YTP argued the claim was time-barred and compromised by prior settlement agreements.

5. Formal Citations

Swee Wan Enterprises Pte Ltd v Yak Thye Peng, Suit No 67 of 2017, [2019] SGHC 149

6. Timeline

Date	Event
1979-01-01	Swee Wan Enterprises Pte Ltd incorporated
1988-01-01	YTP and YTL began running SWE together
1993-01-01	Swee Wan Trading Pte Ltd incorporated
2006-07-05	YTP withdrew $525,000 from SWE (BOC Cheque No. 394985)
2006-07-07	YTP withdrew $500,000 from SWE (BOC Cheque No. 394988)
2007-02-06	YTP repaid $20,000 to SWE
2007-04-23	YTP withdrew $500,000 from SWE (BOC Cheque No. 606009)
2007-04-24	YTL withdrew $500,000 from SWE (BOC Cheque No. 606010)
2008-06-17	YTP made a deposit to SWT
2008-08-01	YTL withdrew $441,650 from SWE (BOC Cheque No. 793827)
2008-08-11	YTP withdrew $447,700 from SWE (BOC Cheque No. 793826)
2008-09-09	YTP paid US$300,000 to SWT
2008-09-10	YTP returned US$300,000
2008-10-01	YTL repaid $500,000 to SWE
2008-10-24	YTP withdrew $300,000 from SWE (BOC Cheque No. 793845)
2008-10-24	YTP withdrew $200,000 from SWE (BOC Cheque No. 793846)
2009-01-01	Irregularities in accounts of family business reported to YTP
2009-06-16	YTP withdrew $300,156.62 from SWE (BOC Cheque No. 061687)
2009-06-25	YTP made a payment of $300,000 to SWT
2009-01-01	SW Apparel Pte Ltd incorporated
2011-10-07	Chua's services as auditor terminated
2011-10-28	Chua wrote a letter to Siong detailing transactions of concern
2012-02-01	YTL and YTP discovered they were no longer shareholders or directors of SWA
2012-04-01	S2 commenced work on comprehensive review of accounts
2012-10-02	YCW appointed as director of SWE
2012-09-28	YCW appointed as director of SWT
2013-10-09	AccVisory email sent to YCW detailing withdrawals
2013-11-14	Directors’ resolution passed, regularising withdrawals as interest-free loans
2014-02-28	Suits 235 and 236 of 2014 commenced by SWE and SWT
2014-06-20	Suit No 664 of 2014 commenced by YTL
2014-11-09	Letter of Engagement signed between SWE, SWT and S2
2014-12-15	First progress bill for $301,881.70 rendered to SWE and SWT
2014-12-16	SWT paid $301,881.70 to S2
2015-04-10	Suits 235/236 Settlement Agreement signed
2015-04-10	Suit 664 Settlement Agreement signed
2015-04-10	Hwee and Siong transferred shares to YTL
2015-08-21	Notice issued convening an annual general meeting of SWE
2015-09-04	YTP removed as director of SWE
2017-01-25	SWE commenced proceedings against YTP
2017-03-02	YTP brought counterclaim against YTL, YCW, SWE and SWT
2017-03-28	Notice of cancellation of loan facility sent to YTP
2017-04-01	YTL learned about the cancellation of the loan facility
2017-05-15	Second progress bill for $520,000 issued
2017-05-24	YTP received notice of EGM for approving the Rights Issue
2017-05-31	YTP's solicitors wrote to YCW and YTL's solicitors regarding Rights Issue
2017-06-07	EGM convened and rights issue of 1,771,910 SWE shares offered
2017-06-07	YCW and YTL's solicitors responded to YTP's solicitors regarding Rights Issue
2017-06-07	YTL exercised option pursuant to the Rights Issue and purchased a further 950,000 shares
2017-11-22	YTP amended his counterclaim to include facts in relation to the Rights Issue
2018-08-01	A sum of $250,000 was paid in respect of the second progress bill
2018-10-04	Hearing commenced
2018-10-05	Hearing commenced
2018-10-09	Hearing commenced
2018-10-10	Hearing commenced
2018-10-11	Hearing commenced
2018-10-12	Hearing commenced
2018-10-16	Hearing commenced
2018-10-17	Hearing commenced
2018-12-10	Hearing commenced
2019-06-12	Judgment reserved

7. Legal Issues

Debt Recovery
- Outcome: The court found that YTP was liable to repay the debt to SWE, less US$300,000.
- Category: Substantive
- Sub-Issues:
  - Existence of debt
  - Repayment obligation
Minority Oppression
- Outcome: The court dismissed YTP's claim of minority oppression.
- Category: Substantive
- Sub-Issues:
  - Removal of director
  - Dilution of shareholding
  - Breach of fiduciary duties
- Related Cases:
  - [2018] 2 SLR 333
  - [2010] 1 SLR 241
Breach of Fiduciary Duty
- Outcome: The court found no evidence of breach of fiduciary duty by YTL and YCW.
- Category: Substantive
- Sub-Issues:
  - Conflict of interest
  - Overcharging
Limitation of Actions
- Outcome: The court held that SWE's claim was not time-barred.
- Category: Procedural

8. Remedies Sought

Monetary Damages
Derivative Action
Buyout of Shares
Winding Up
Nullification of Resolutions
Rescission of Share Transfers

9. Cause of Actions

Debt
Conspiracy
Minority Oppression

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Textile
Manufacturing

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Ho Yew Kong v Sakae Holdings Ltd	High Court	Yes	[2018] 2 SLR 333	Singapore	Cited for the principle that commercially unfair conduct amounts to a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect.
Eng Gee Seng v Quek Choon Teck	High Court	Yes	[2010] 1 SLR 241	Singapore	Cited for the principle that informal agreements, understandings or promises as between members of a company could give rise to legitimate expectations on the part of minority shareholders.
Tan Yong San v Neo Kok Eng	High Court	Yes	[2011] SGHC 30	Singapore	Cited for the principle that considerations of fairness and equity play a crucial role in an action under s 216, and a court should rightly be able to take into account the conduct of all the parties in determining whether there has been unfairness as a whole warranting the grant of relief under s 216(2).
Grace v Biagioli	English Court of Appeal	Yes	[2006] 2 BCLC 70	England and Wales	Cited for the principle that the reasons for the aggrieved party’s removal are a relevant factor in determining whether the dismissal of the aggrieved party in violation of his legitimate expectation to be involved in management constitutes oppression.
Over & Over Ltd v Bonvests Holdings Ltd	High Court	Yes	[2010] 2 SLR 776	Singapore	Cited for the principle that the issue of shares for any reason other than to raise capital may amount to oppression if the directors representing the majority cast their votes in bad faith.
Edmund Tie & Co (SEA) Pte Ltd v Savills Residential Pte Ltd	High Court	Yes	[2018] 5 SLR 349	Singapore	Cited for the principle that a court may award less but not more than what an applicant claims.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Limitation Act (Cap 163, 1996 Rev Ed)	Singapore
Companies Act (Cap 50, 2006 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

BOC Cheques
2013 Resolution
Rights Issue
Minority Oppression
Fiduciary Duties
Settlement Agreement
Shareholding Dilution
Commercial Unfairness
Family Business
Directors' Duties

15.2 Keywords

debt claim
minority oppression
directors duties
company law
singapore
family business
shareholder dispute

17. Areas of Law

Area Name	Relevance Score
Company Law	70
Corporate Law	70
Minority Oppression	60
Limitation	40
Fiduciary Duties	40
Commercial Disputes	30
Business Litigation	30
Contract Law	30
Civil Procedure	20

16. Subjects

Company Law
Contract Law
Civil Procedure