Kathryn Ma v Trillion Investment: Derivative Action, Directors' Duties & Companies Act
In Ma Wai Fong Kathryn v Trillion Investment Pte Ltd and others, the plaintiff, Kathryn Ma Wai Fong, sought leave under s 216A of the Companies Act to commence a derivative action on behalf of Trillion Investment Pte Ltd against its directors, Wong Kie Yik and Ong Kim Siong, for failing to collect rent on a property rented to Double Ace Pte Ltd. The High Court of Singapore granted the plaintiff leave to bring the action, finding that the claim was legitimate and that the plaintiff was acting in good faith. The court imposed conditions to protect Trillion from costs.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Leave granted to the plaintiff to bring an action on behalf of Trillion against the directors for breach of duties.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Shareholder Kathryn Ma sought leave to sue Trillion Investment's directors for breach of fiduciary duties. The court granted leave, finding a legitimate claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Kathryn Ma Wai Fong | Plaintiff | Individual | Leave granted | Won | Rethnam Chandra Mohan, Chia Xin Ran Alina, On Wee Chun Derek, Stella Ng Yu Xin |
| Trillion Investment Pte Ltd | Defendant | Corporation | Leave granted to Plaintiff | Lost | Nair Suresh Sukumaran, Yeo Guan Wei Joel |
| Wong Kie Yik | Defendant | Individual | Leave granted to Plaintiff | Lost | Palmer Michael Anthony, Reuben Tan Wei Jer, Amanda Chen, Joel Moosa |
| Ong Kim Siong | Defendant | Individual | Leave granted to Plaintiff | Lost | Palmer Michael Anthony, Reuben Tan Wei Jer, Amanda Chen, Joel Moosa |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Valerie Thean | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Rethnam Chandra Mohan | Rajah & Tann Singapore LLP |
| Chia Xin Ran Alina | Rajah & Tann Singapore LLP |
| On Wee Chun Derek | Rajah & Tann Singapore LLP |
| Stella Ng Yu Xin | Rajah & Tann Singapore LLP |
| Nair Suresh Sukumaran | PK Wong & Nair LLC |
| Yeo Guan Wei Joel | PK Wong & Nair LLC |
| Palmer Michael Anthony | Quahe Woo & Palmer LLC |
| Reuben Tan Wei Jer | Quahe Woo & Palmer LLC |
| Amanda Chen | Quahe Woo & Palmer LLC |
| Joel Moosa | Quahe Woo & Palmer LLC |
4. Facts
- Trillion owns an office unit rented to Double Ace.
- Double Ace did not pay rent to Trillion from June 2013.
- WKY and OKS were directors of both Trillion and Double Ace.
- Plaintiff is a shareholder of Trillion as executrix of WKN's estate.
- Plaintiff sought leave to sue the directors for failing to collect rent.
- The directors continued a rental arrangement started by Datuk Wong and continued by WKN.
- Double Ace ceased trading in 2013.
5. Formal Citations
- Ma Wai Fong Kathryn v Trillion Investment Pte Ltd and others, Originating Summons No 805 of 2019 and Summonses Nos 6097, 6098 and 6392 of 2019, [2020] SGHC 79
- Ma Wai Fong Kathryn v Trillion Investment Pte Ltd and others and another appeal, , [2019] 1 SLR 1046
6. Timeline
| Date | Event |
|---|---|
| Trillion incorporated | |
| WKY and his wife acquired Trillion | |
| Trillion purchased the Unit | |
| The Unit was rented out to Double Ace | |
| Double Ace gradually ceased trading | |
| WKN's death | |
| Directors failed to collect rent | |
| WKC stepped down as a director | |
| Court of Appeal ordered Double Ace to be wound up | |
| Plaintiff filed application for leave to commence action | |
| Hearing date | |
| Hearing date | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Breach of Directors' Duties
- Outcome: The court found that the directors may have breached their duties by failing to collect rent or reassess the rental arrangement.
- Category: Substantive
- Sub-Issues:
- Failure to act with reasonable diligence
- Failure to act in the company's best interests
- Related Cases:
- [2019] 1 SLR 1046
- Derivative Action
- Outcome: The court granted leave for the derivative action, finding that the plaintiff was acting in good faith and that the action was prima facie in the interests of the company.
- Category: Procedural
- Sub-Issues:
- Good faith of complainant
- Prima facie interests of the company
- Related Cases:
- [2013] 2 SLR 340
- [2019] 4 SLR 825
8. Remedies Sought
- Leave to commence derivative action
- Damages
- Equitable Compensation
9. Cause of Actions
- Breach of Fiduciary Duty
- Negligence
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Investment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ma Wai Fong Kathryn v Trillion Investment Pte Ltd and others and another appeal | Court of Appeal | Yes | [2019] 1 SLR 1046 | Singapore | Distinguished on the basis that the issue under consideration was whether the company’s business had been run in a fraudulent manner by the directors, whereas the current claim is in the fiduciary duty of due care and diligence. |
| Ang Thiam Swee v Low Hian Chor | High Court | Yes | [2013] 2 SLR 340 | Singapore | Cited for the legal standards applicable to good faith and the interests of the company in derivative actions. |
| Jian Li Investments Holding Pte Ltd and others v Healthstats International Pte Ltd and others | High Court | Yes | [2019] 4 SLR 825 | Singapore | Cited for the legal standards applicable to good faith and the interests of the company in derivative actions. |
| Agus Irawan v Toh Teck Chye and others | High Court | Yes | [2002] 1 SLR(R) 471 | Singapore | Cited regarding the applicant's conduct during proceedings and a failure to be fully candid pointing to a lack of good faith. |
| Law Chin Eng and another v Hiap Seng & Co Pte Ltd (Lau Chin Hu and others, applicants) | High Court | Yes | [2009] SGHC 223 | Singapore | Cited for the requirement that the applicant must show that the company has sustained or may sustain real loss or damage. |
| Pang Yong Hock and another v PKS Contracts Services Pte Ltd | High Court | Yes | [2004] 3 SLR(R) 1 | Singapore | Cited for the need to ensure that the threshold for derivative actions is not so low that it impedes the administration of the company. |
| Wong Lee Vui Willie v Li Qingyun | High Court | Yes | [2016] 1 SLR 696 | Singapore | Cited for the considerations the court may take into account when determining whether it is in the company’s interests for the action to be brought. |
| Petroships Investment Pte Ltd v Wealthplus Pte Ltd and others | High Court | Yes | [2015] SGHC 145 | Singapore | Cited for the considerations the court may take into account when determining whether it is in the company’s interests for the action to be brought. |
| Richardson Greenshields of Canada Limited v Kalmacoff et al | Ontario Court of Appeal | Yes | (1995) 22 OR (3d) 577 | Canada | Cited with approval regarding the irrelevance of personal interests in determining good faith. |
| Dynasty Line Ltd (in liquidation) v Sukamto Sia and another and another appeal | High Court | Yes | [2014] 3 SLR 277 | Singapore | Cited for the application of the six-year limitation period for breaches of fiduciary duties. |
| Yong Kheng Leong and another v Panweld Trading Pte Ltd and another | High Court | Yes | [2013] 1 SLR 173 | Singapore | Cited for the application of the six-year limitation period for breaches of fiduciary duties. |
| Fong Wai Lyn Carolyn v Airtrust (Singapore) Pte Ltd and another | High Court | Yes | [2011] 3 SLR 980 | Singapore | Cited for the purpose of s 216A(3)(a) of the Companies Act. |
| Chong Chin Fook v Solomon Alliance Management Pte Ltd and others and another matter | High Court | Yes | [2017] 1 SLR 348 | Singapore | Cited for the conditions imposed by Court of Appeal. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 216A of the Companies Act | Singapore |
| Limitation Act (Cap 163, 1996 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Derivative action
- Directors' duties
- Good faith
- Prima facie
- Companies Act
- Rental arrears
- Fiduciary duty
- Leave to commence action
15.2 Keywords
- Derivative action
- directors duties
- companies act
- fiduciary duty
- leave to commence action
- Trillion Investment
- Kathryn Ma
16. Subjects
- Company Law
- Directors' Duties
- Civil Procedure
- Derivative Actions
17. Areas of Law
- Company Law
- Directors' Duties
- Civil Procedure