Anita Hatta v Lee Siow Kiang Georgia: Misrepresentation & Minority Oppression in DrGL Share Investment

In 2019, Ms. Anita Hatta, a film producer, sued Dr. Lee Siow Kiang Georgia and her companies (DrGL Pte. Ltd., DrGL Spa Pte. Ltd., and Ciel Pte. Ltd.) in the High Court of Singapore, alleging misrepresentation and minority oppression related to a $2 million investment in DrGL. Ms. Hatta claimed Dr. Lee made misrepresentations inducing her investment and subsequently acted oppressively as a minority shareholder. The court, presided over by Justice Valerie Thean, dismissed the misrepresentation claim but found Dr. Lee liable for minority oppression, ordering Dr. Lee to purchase Ms. Hatta's shares at 3% of the valuation of A DrBrand Pte Ltd (ADB).

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Judgment for the Plaintiff on the claim of minority oppression; the misrepresentation claim was dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Film producer Anita Hatta sues Dr Lee over alleged misrepresentations during a $2M DrGL investment and minority oppression. Court finds for Hatta on oppression claim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Anita HattaPlaintiffIndividualShares to be purchased at 3% of the valuation of ADBPartial
Lee Siow Kiang GeorgiaDefendantIndividualShares to be purchased at 3% of the valuation of ADBLost
DrGL Pte. Ltd.DefendantCorporationNeutralNeutral
DrGL Spa Pte. Ltd.DefendantCorporationNeutralNeutral
Ciel Pte. Ltd.DefendantCorporationNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
Valerie TheanJudgeYes

4. Counsels

Counsel NameOrganization
Wong Hin Pkin WendellDrew & Napier LLC
Chen Jie’An JaredDrew & Napier LLC
Ang Xin Yi FeliciaDrew & Napier LLC
Tan Pang Leong NicholasAllen & Gledhill LLP
Chong Yee LeongAllen & Gledhill LLP
Koh Quanli, Sheryl LaurenAllen & Gledhill LLP

4. Facts

  1. Ms. Hatta invested $2 million in DrGL companies in exchange for 5% shareholding.
  2. Ms. Hatta claims Dr. Lee made misrepresentations about the company's financial status.
  3. Dr. Lee loaned Ms. Hatta's investment back to the company with interest.
  4. Dr. Lee discharged Fide from its obligation to pay $2 million to the Companies.
  5. Dr. Lee failed to disclose related party transactions in the Companies’ financial statements.
  6. Dr. Lee entered into a joint venture with Adval without fully addressing Ms. Hatta's concerns.
  7. Dr. Lee promised to write off loans but did not do so in the final joint venture structure.

5. Formal Citations

  1. Anita Hatta v Lee Siow Kiang Georgia and others, Suit No 555 of 2017, [2019] SGHC 222

6. Timeline

DateEvent
Ms. Hatta and Dr. Lee met to discuss investment.
Ms. Hatta invested $2 million in the Companies.
Ms. Hatta received 5% of the Companies’ shareholding.
Fide and the Companies agreed on an Exclusive Rights Agreement.
Fide and the Companies entered into a revised version of the First ERA.
Dr. Lee asked Ms. Hatta to invest a further $2 million.
Dr. Lee introduced Ms. Hatta to Mr. Clarence Ku, Adval’s Chief Financial Officer.
Ms. Hatta received a Notice of Extraordinary General Meeting.
Extraordinary General Meeting was held and adjourned.
Ms. Hatta received notice of passed Members’ Resolutions in Writing.
Ms. Hatta brought proceedings against the defendants.
Trial began.
Judgment reserved.
Judgment issued.

7. Legal Issues

  1. Misrepresentation
    • Outcome: The court found that Ms. Hatta did not reasonably rely on any of the representations made by Dr. Lee.
    • Category: Substantive
  2. Minority Oppression
    • Outcome: The court found that Dr. Lee's actions constituted minority oppression, entitling Ms. Hatta to relief under s 216 of the Companies Act.
    • Category: Substantive
  3. Breach of Fiduciary Duty
    • Outcome: The court found that Dr. Lee breached her fiduciary duties in several aspects, including failing to provide fair information regarding Ms. Hatta's investment, imposing interest-bearing loans on the Companies, and discharging Fide from its obligation.
    • Category: Substantive

8. Remedies Sought

  1. Rescission of Investment
  2. Damages of $2 million
  3. Share Buy-Out

9. Cause of Actions

  • Misrepresentation
  • Minority Oppression
  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation
  • Corporate Law

11. Industries

  • Cosmetics
  • Skincare

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Panatron Pte Ltd v Lee Cheow LeeCourt of AppealYes[2001] 2 SLR(R) 435SingaporeCited for the elements required to establish fraudulent misrepresentation.
OMG Holdings Pte Ltd v Pos Ad Sdn BhdHigh CourtYes[2012] 4 SLR 201SingaporeCited for the elements required to establish fraudulent misrepresentation.
IM Skaugen SE and another v MAN Diesel & Turbo SE and anotherHigh CourtYes[2018] SGHC 123SingaporeCited for the elements required to establish negligent misrepresentation.
RBC Properties Pte Ltd v Defu Furniture Pte LtdCourt of AppealYes[2015] 1 SLR 1021SingaporeCited to explain the nature of Section 2(1) of the Misrepresentation Act.
Hedley Byrne & Co Ltd v Heller & Partners LtdHouse of LordsYes[1964] AC 465United KingdomCited as establishing the tort of negligent misrepresentation at common law.
Wee Chiaw Sek Anna v Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and anotherCourt of AppealYes[2013] 3 SLR 801SingaporeCited for the element of reliance from the perspective of the representee in misrepresentation.
Quah Poh Hoe Peter v Probo Pacific Leasing Pte LtdHigh CourtYes[1992] 3 SLR(R) 400SingaporeCited for the requirement that reliance on a representation must be reasonable.
Ho Yew Kong v Sakae Holdings Ltd and other appeals and other mattersCourt of AppealYes[2018] 2 SLR 333SingaporeCited for the principle that commercial unfairness undergirds the limbs of Section 216 of the Companies Act.
Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appealsCourt of AppealYes[2016] 1 SLR 373SingaporeCited for the principle that commercial fairness must be considered in the context of the commercial agreement between shareholders.
O’Neill v PhillipsHouse of LordsYes[1999] 1 WLR 1092United KingdomCited for the explanation of the law in relation to Section 459 of the Companies Act 1985 (UK), the equivalent of Section 216 of the Companies Act.
Ebrahimi v Westbourne Galleries and othersHouse of LordsYes[1973] 1 AC 360United KingdomCited for the elements of a quasi-partnership.
Over & Over Ltd v Bonvests Holdings Ltd and anotherCourt of AppealYes[2010] 2 SLR 776SingaporeCited as a contrast where the Court of Appeal found the existence of a quasi-partnership.
Fisher v Cadman and othersDeputy High CourtYes[2006] BCLC 499United KingdomCited for the principle that the term 'quasi-partnership' is only intended as a useful shorthand label.
Traxiar Drilling Partners II Pte Ltd (in liquidation) v Dvergsten, Dag OivindHigh CourtYes[2018] SGHC 14SingaporeCited for the principle that a breach of duty could only have been avoided if there was full disclosure to all the shareholders of all the material facts and shareholders’ agreement is subsequently obtained.
Dayco Products Singapore Pte Ltd (in liquidation) v Ong Cheng AikHigh CourtYes[2004] 4 SLR(R) 318SingaporeCited for the principle that a breach of duty could only have been avoided if there was full disclosure to all the shareholders of all the material facts and shareholders’ agreement is subsequently obtained.
Bristol and West Building Society v MothewCourt of AppealYes[1998] Ch 1United KingdomCited for the summation of fiduciary duty.
Ng Eng Ghee v Mamata Kapildev Dave (Horizon Partners Pte Ltd, intervener)Court of AppealYes[2009] 3 SLR(R) 109SingaporeCited for the summation of fiduciary duty.
Leong Chee Kin (on behalf of himself and as a minority shareholder of Ideal Design Studio Pte Ltd) v Ideal Design Studio Pte Ltd and othersHigh CourtYes[2018] 4 SLR 331SingaporeCited for the observation that it follows from a director’s fiduciary duties to act in the best interests of a company that shareholders will have a legitimate expectation that those in control of the company will act bona fide in the interests of the company.
Nordic International Ltd v Morten InnhaugCourt of AppealYes[2017] 3 SLR 957SingaporeCited for the principle that a director in a position of conflict would not be permitted to assert that his actions were bona fide or thought to be in the interests of the company.
Parakou Investment Holdings Pte Ltd and another v Parakou Shipping Pte Ltd (in liquidation) and other appealsCourt of AppealYes[2018] 1 SLR 271SingaporeCited to distinguish the facts of the present case.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and anotherCourt of AppealYes[2015] 5 SLR 1422SingaporeCited for the general rule on pleadings.
OMG Holdings Pte Ltd v Pos Ad Sdn BhdCourt of AppealYes[2012] 4 SLR 231SingaporeCited for the principle that the court may permit an unpleaded point to be raised if no injustice or irreparable prejudice will be occasioned to the other party.
Aberdeen Railway Co v Blaikie BrothersHouse of LordsYes[1843–1860] All ER Rep 249United KingdomCited for the principle that it is irrelevant if the terms of the loans were fair and in the company’s interests.
Kumagai Gumi Co Ltd v Zenecon Pte LtdCourt of AppealYes[1995] 2 SLR(R) 304SingaporeCited for the principle that the court possesses a very wide jurisdiction to make an order that it thinks fit as long as such order is made with a view to bringing to an end or remedying the matters complained of.
Yeo Hung Khiang v Dickson Investment (Singapore) Pte Ltd and othersCourt of AppealYes[1999] 1 SLR(R) 773SingaporeCited for the principle that the determination of share value need not be in accordance with strict accounting principles.
Tullio Planeta v Maoro Andrea GCourt of AppealYes[1994] 2 SLR(R) 501SingaporeCited to distinguish the facts of the present case.
Re Bagot Well Pastoral Co Pty Ltd; Shannon v ReidSupreme CourtYes(1992) 9 ACSR 129AustraliaCited for the principle that no more than an approximate appraisal of the relevant factors is required.
DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd and others and another suitSingapore International Commercial CourtYes[2018] 5 SLR 1SingaporeCited for the principle that the buyout order is probably the most common relief sought and obtained under section 216 of the Companies Act.
Thio Syn Pyn v Thio Syn Kym Wendy and others and another appealCourt of AppealYes[2019] 1 SLR 1065SingaporeCited for the principle that in the context of non-quasi-partnerships, whether a discount should be applied would depend on all the facts and circumstances of the case.
Re London School of Electronics LimitedChancery DivisionYes[1986] Ch 211United KingdomCited for the view that prima facie an interest in a going concern ought to be valued at the date on which it is ordered to be purchased.
Koh Keng Chew and others v Liew Kit Fah and othersHigh CourtYes[2018] 3 SLR 312SingaporeCited for the view that using the date of the court order best reflects what the shareholder is selling.
Poh Fu Tek v Lee Shung GuanHigh CourtYes[2018] 4 SLR 425SingaporeCited for the view that using the date of the court order best reflects what the shareholder is selling.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Misrepresentation Act (Cap 390, 1994 Rev Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Misrepresentation
  • Minority Oppression
  • Fiduciary Duty
  • Share Buy-Out
  • Joint Venture
  • Exclusive Rights Agreement
  • Related Party Transactions
  • Commercial Unfairness
  • Legitimate Expectations
  • Informed Consent

15.2 Keywords

  • misrepresentation
  • minority oppression
  • fiduciary duty
  • share investment
  • DrGL
  • companies act
  • singapore
  • contract law
  • corporate law

17. Areas of Law

Area NameRelevance Score
Misrepresentation80
Contract Law75
Minority Oppression70
Company Law70
Minority Shareholder Rights65
Inducement of Breach of Contract50

16. Subjects

  • Contract Law
  • Company Law
  • Misrepresentation
  • Minority Rights
  • Corporate Governance