Ong Heng Chuan v Ong Teck Chuan: Minority Oppression, De Facto & Shadow Directors, Company Accounts

In Ong Heng Chuan v Ong Teck Chuan, the High Court of Singapore addressed a claim by Ong Heng Chuan (OHC) against his siblings Ong Teck Chuan (OTC) and Ong Boon Chuan (OBC) for minority oppression under Section 216 of the Companies Act. OHC alleged that OTC and OBC, as directors and majority shareholders of Tong Guan Food Products Pte Ltd, conducted the company's affairs in a manner oppressive and prejudicial to his interests. The court dismissed OHC's claims, finding no evidence of oppressive conduct or breaches of fiduciary duty by OTC and OBC. The court ordered OHC to pay costs to OTC and OBC.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Claims dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Ong Heng Chuan sues Ong Teck Chuan for minority oppression, alleging breaches of director duties and asset diversion. The court dismissed the claims.

1.7 Decision Date

29 July 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Ong Boon Chuan	Defendant	Individual	Costs Awarded	Won	Andy Chiok Beng Piow of JHT Law Corporation Margaret Lee Hui Zhen of JHT Law Corporation
Ong Heng Chuan	Plaintiff	Individual	Claims Dismissed	Lost	Pradeep Pillai of PRP Law LLC Simren Kaur Sandhu of PRP Law LLC Caleb Tan of PRP Law LLC
Ong Teck Chuan	Defendant	Individual	Costs Awarded	Won	Hari Veluri of TSMP Law Corporation Ong Pei Ching of TSMP Law Corporation Tan Gim Hai Adrian of TSMP Law Corporation David Aw of TSMP Law Corporation Yeoh Jean Ann of TSMP Law Corporation Lim Jian Wei Joel of TSMP Law Corporation
Ong Siew Ann	Defendant	Individual	Neutral	Neutral
Tong Guan Food Products Pte Ltd	Defendant	Corporation	Neutral	Neutral

3. Judges

Judge Name	Title	Delivered Judgment
Mavis Chionh Sze Chyi	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Andy Chiok Beng Piow	JHT Law Corporation
Margaret Lee Hui Zhen	JHT Law Corporation
Pradeep Pillai	PRP Law LLC
Simren Kaur Sandhu	PRP Law LLC
Caleb Tan	PRP Law LLC
Hari Veluri	TSMP Law Corporation
Ong Pei Ching	TSMP Law Corporation
Tan Gim Hai Adrian	TSMP Law Corporation
David Aw	TSMP Law Corporation
Yeoh Jean Ann	TSMP Law Corporation
Lim Jian Wei Joel	TSMP Law Corporation

4. Facts

OHC, OTC, OBC, and OSA are siblings and shareholders of Tong Guan Food Products Pte Ltd.
OHC alleged OTC and OBC conducted the company's affairs oppressively.
OHC claimed OTC and OBC diverted assets to companies owned by OTC.
The company was a holding company deriving revenue from its subsidiaries.
OHC claimed the company was financially viable, while OTC and OBC claimed it was in financial difficulty.
OTC and OBC argued the transactions were to wind down the business orderly.
OHC sought an order for OTC and OBC to buy out his shares at a fair price.

5. Formal Citations

Ong Heng Chuan v Ong Teck Chuan, Suit No 1086 of 2017, [2020] SGHC 161

6. Timeline

Date	Event
1960-01-01	Tong Garden Product Services set up as sole proprietorship
1980-01-01	Tong Guan Food Products Pte Ltd incorporated
1984-07-24	Mr. Ong Tong Guan passed away
1994-01-01	Tong Garden Food Products Singapore Pte Ltd incorporated
2000-03-13	Agreement to sell trademarks to Villawood Holdings Limited
2001-01-04	2001 Thailand SPA signed
2003-05-07	OHC not re-elected as director
2004-12-03	OHC declared bankrupt
2008-03-15	OTC and OBC entered into agreement
2008-03-07	Tong Garden Food (Singapore) Pte Ltd incorporated
2008-04-03	Tong Garden Food (Malaysia) Sdn Bhd incorporated
2009-07-20	Variation Agreement signed
2012-07-01	Food Products (S) put into voluntary liquidation
2015-12-30	OTC appointed as director
2016-09-16	OHC discharged from bankruptcy
2018-07-12	Company ordered to be wound up
2019-08-26	Trial began
2020-07-30	Judgment issued

7. Legal Issues

Minority Oppression
- Outcome: The court dismissed the claim of minority oppression.
- Category: Substantive
- Related Cases:
  - [2010] 2 SLR 776
  - [1978] 2 MLJ 227
  - [2016] 1 SLR 373
  - [2017] SGHC 192
  - [2018] 2 SLR 333
  - [2014] 4 SLR 723
  - [2013] 4 SLR 193
Breach of Directors' Duties
- Outcome: The court found no breach of directors' duties.
- Category: Substantive
De Facto Director
- Outcome: The court accepted that OTC acted as a de facto director.
- Category: Substantive
- Related Cases:
  - [2017] SGHC 73
  - [2010] SGHC 163
  - [2008] BCC 812
  - [1994] BCC 161
Shadow Director
- Outcome: The court did not find sufficient evidence that OTC was a shadow director.
- Category: Substantive
- Related Cases:
  - [1994] BCC 161
Company Solvency
- Outcome: The court found that the company was either insolvent or in a parlous financial state.
- Category: Substantive
- Related Cases:
  - [2017] SGHC 15
  - [2010] 4 SLR 1089
  - [2014] 3 SLR 277

8. Remedies Sought

Order for OTC and OBC to buy out OHC's shares
Order for OTC to transfer shares in Thai entities to OHC

9. Cause of Actions

Minority Oppression
Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Food and Beverage

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Over & Over Ltd v Bonvests Holdings Ltd	Court of Appeal	Yes	[2010] 2 SLR 776	Singapore	Cited for the principle that the common thread under s 216 is some element of unfairness which would justify the invocation of the court’s jurisdiction.
Re Kong Thai Sawmill (Miri) Sdn Bhd	Privy Council	Yes	[1978] 2 MLJ 227	Malaysia	Cited for the principle that the complaint must identify and prove oppression or disregard, and that mere disagreement with policy decisions is not enough.
Tomolugen Holdings Ltd v Silica Investors Ltd	Court of Appeal	Yes	[2016] 1 SLR 373	Singapore	Cited for the principle that the essence of a claim for relief on the ground of oppressive or unfairly prejudicial conduct lies in upholding the commercial agreement between the shareholders of a company.
Leong Chee Kin v Ideal Design Studio Pte Ltd	High Court	Yes	[2017] SGHC 192	Singapore	Cited for the principle that a minority oppression claim can succeed even where equitable considerations are not superimposed or where the court does not find that the company is a quasi-partnership.
Ho Yew Kong v Sakae Holdings Ltd	Court of Appeal	Yes	[2018] 2 SLR 333	Singapore	Cited for the analytical framework to ascertain whether a claim that is being pursued under s 216 is an abuse of process.
Ng Kek Wee v Sim City Technology Ltd	Court of Appeal	Yes	[2014] 4 SLR 723	Singapore	Cited for the principle that s 216 should not be used to vindicate essentially corporate wrongs.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the principle that any order granted must be made with a view to bringing an end to or remedying the matters complained of.
Sakae Holdings Ltd v Gryphon Real Estate Investment Corp Pte Ltd	High Court	Yes	[2017] SGHC 73	Singapore	Cited for the principle that a de jure, de facto, or shadow director owes the same duties to the company under the Companies Act and at general law.
Raffles Town Club Pte Ltd v Lim Hock Eng Peter	High Court	Yes	[2010] SGHC 163	Singapore	Cited for the definition of a de facto director.
Gemma Ltd v Davies	High Court	Yes	[2008] BCC 812	England and Wales	Cited for the principles to establish that a person was a de facto director of a company.
Re Hydrodam (Corby) Ltd	Unknown	Yes	[1994] BCC 161	England and Wales	Cited for the principle that a shadow director is one in accordance with whose instructions and directions the directors are accustomed to act.
Parakou Shipping Pte Ltd v Liu Cheng Chan	High Court	Yes	[2017] SGHC 15	Singapore	Cited for the principle that directors have a duty to act in the interests of the company, and the company’s solvency status is relevant.
Liquidators of Progen Engineering Pte Ltd v Progen Holdings Ltd	Unknown	Yes	[2010] 4 SLR 1089	Singapore	Cited for the principle that when a company is insolvent, directors have a fiduciary duty to take into account the interests of the company’s creditors.
Dynasty Line Ltd v Sukamto Sia	Unknown	Yes	[2014] 3 SLR 277	Singapore	Cited for the principle that the greater the concern over the company’s financial health, the more weight the directors must accord to the interests of creditors over those of the shareholders.
Re Saul D Harrison & Sons plc	Unknown	Yes	[1995] 1 BCLC 14	England and Wales	Cited for the principle that the legitimate expectations of shareholders must be analysed against the company’s constitution and the fiduciary duties imposed by the law.
Ebrahimi v Westbourne Galleries Ltd	Unknown	Yes	[1972] 2 All ER 492	England and Wales	Cited for the principle that equitable considerations may make it unfair for those conducting the affairs of the company to rely upon their strict legal powers.
Teo Chong Nghee Patrick v Han Cheng Fong	Court of Appeal	Yes	[2014] 3 SLR 595	Singapore	Cited for the principle that the doctrine of legitimate expectations arises in the context of a relationship of trust and mutual confidence – a quasi-partnership.
O’Neill v Phillips	Unknown	Yes	[1999] 1 WLR 1092	England and Wales	Cited for the principle that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted.
Re Charnley Davies Ltd (No 2)	Unknown	Yes	[1990] BCLC 760	England and Wales	Cited for the principle that the petitioners wanted to be bought out and wanted relief from mismanagement, not a remedy for misconduct.
Ng Eng Ghee v Mamata Kapildev Dave	Unknown	Yes	[2009] 4 SLR(R) 155	Singapore	Cited for the guidelines on awarding costs.
Dynasty Line Ltd v Sia Sukamto	Unknown	Yes	[2013] 4 SLR 253	Singapore	Cited for the principle that laches is an equitable defence which operates only to bar the grant of equitable relief such as an injunction.
Tan Yong San v Neo Kok Eng	High Court	Yes	[2011] SGHC 30	Singapore	Cited for the principle that s 6 of the Limitation Act does not apply to oppression actions under s 216 of the Companies Act.
Lim Seng Wah v Han Meng Siew	High Court	Yes	[2016] SGHC 177	Singapore	Cited for the principle that s 6 of the Limitation Act does not apply to oppression actions under s 216 of the Companies Act.
Low Peng Boon v Low Janie	Unknown	Yes	[1999] 1 SLR(R) 337	Singapore	Cited for the principle that breaches of directors’ duties by the majority shareholder(s) in a company could – in addition to amounting to corporate wrongs – also amount to oppression of a minority shareholder.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

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

15. Key Terms and Keywords

15.1 Key Terms

Minority oppression
De facto director
Shadow director
Fiduciary duty
Legitimate expectations
Oppressive conduct
Companies Act
Holding company
Net tangible assets
Trademark
Insolvency
Restructuring
Directors' duties

15.2 Keywords

minority oppression
directors' duties
company law
singapore
corporate governance
shareholders rights

17. Areas of Law

Area Name	Relevance Score
Minority Oppression	90
Company Law	90
Director's Duties	85
De facto director	75
Shadow director	75
Minority shareholders	70
Accounts	70
Liquidation	60

16. Subjects

Company Law
Corporate Law
Minority Rights
Directors' Duties