Tan Bee Hong Blossom v Tan Seng Keow Doreen: Winding Up & Family Business Dispute
In Tan Bee Hong Blossom and Tan Seng Hiong Ivy v Tan Seng Keow Doreen, Julie Tan Bee Leng, Chiap Chuan Management Pte Ltd, Yong Peng Realty (Pte) Limited, Tan Boon Liat And Company (Singapore) Private Limited, and Chiap Chuan Holdings Pte Ltd, the Singapore High Court dismissed the plaintiffs' action seeking to wind up four companies under s 254(1)(i) of the Companies Act. The plaintiffs, Blossom and Ivy, argued that the companies were managed as a quasi-partnership and that irreconcilable differences with the defendants, Doreen and Julie, warranted winding up or a court-ordered buy-out of their shares. The court found no quasi-partnership, no deadlock, and that the plaintiffs were not trapped, dismissing the action.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Plaintiffs’ action dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses winding-up action, finding no quasi-partnership or deadlock in family-owned companies. Key issues: shareholder rights, trust.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tan Bee Hong Blossom | Plaintiff | Individual | Claim Dismissed | Lost | |
| Tan Seng Hiong Ivy | Plaintiff | Individual | Claim Dismissed | Lost | |
| Tan Seng Keow Doreen | Defendant | Individual | Judgment for Defendant | Won | |
| Julie Tan Bee Leng | Defendant | Individual | Judgment for Defendant | Won | |
| Chiap Chuan Management Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won | |
| Yong Peng Realty (Pte) Limited | Defendant | Corporation | Judgment for Defendant | Won | |
| Tan Boon Liat And Company (Singapore) Private Limited | Defendant | Corporation | Judgment for Defendant | Won | |
| Chiap Chuan Holdings Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Mavis Chionh Sze Chyi | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Plaintiffs and the 1st and 2nd Defendants are sisters who inherited shares in the 3rd to 6th Defendants.
- The 3rd to 6th Defendants are four companies whose shares are held by the Plaintiffs as well as the 1st and the 2nd Defendants.
- The Plaintiffs sought the winding-up of the 3rd to the 6th Defendants under s 254(1)(i) of the Companies Act.
- The Plaintiffs claimed the Companies were a “Family Business” and a “quasi-partnership”.
- The Plaintiffs claimed that the relationship of mutual trust and confidence which the Sisters enjoyed began to show signs of strain from 2010 onwards.
- The Plaintiffs claimed that Doreen and Julie had “blocked [their] exit as shareholders” and that they were “trapped” in the Companies.
5. Formal Citations
- Tan Bee Hong Blossom and another v Tan Seng Keow Doreen and others, Suit No 925 of 2018, [2020] SGHC 89
6. Timeline
| Date | Event |
|---|---|
| Mr Tan Hock Chong (Father) passed away | |
| Sisters appointed themselves as directors of the four Companies | |
| Julie joined CCM fulltime as a working director | |
| Doreen resigned from her academic position to join CCM fulltime | |
| Julie took a leave of absence from CCM | |
| Doreen invited Blossom to join her in working in CCM | |
| Julie returned to work | |
| Doreen emailed the other Sisters suggesting to look into share ownership | |
| Unhappiness over the sale of the JB Properties caused further friction | |
| Julie made an offer to purchase the JB Properties | |
| Ivy informed the other Sisters that she had received the figure of RM 750,000 as the valuation price of the Melaka Properties | |
| Doreen announced that she intended to sell her shares to Julie | |
| Ivy proposed an en bloc sale of the Companies’ properties or a share swap | |
| Doreen sent the other Sisters a note stating that Mother had authorised her to take the lead in all business-related matters | |
| Directors’ meeting to discuss options such as voluntary liquidation of the Companies | |
| Blossom and Ivy wrote to Doreen to ask for “the return” of their one-quarter interests in the extra TBL share | |
| Mother passed away | |
| Doreen gave Alan a Power of Attorney | |
| Alan met with Blossom and Ivy to discuss how the Sisters “could go about parting ways” | |
| Alan met with Blossom and Ivy to discuss how the Sisters “could go about parting ways” | |
| Jenny Tang tendered her resignation | |
| Blossom tendered her resignation as “an employee” of CCM | |
| Ivy sent a letter to the other Sisters titled “Retirement from Singapore Operations” | |
| At TBL’s AGM, Blossom was not re-elected | |
| Meeting of the directors | |
| Directors’ meeting | |
| Doreen informed them that Alan had been appointed as a “Management Consultant / Advisor” to the Companies | |
| Building and Construction Authority directed MCST 325 to appoint a structural engineer | |
| Blossom and Ivy refused to approve CCM’s 2016 accounts at the CCM AGM | |
| Doreen proposed to Blossom that she should return to work in CCM | |
| The Building and Construction Authority notified MCST 325 that the MCST was required to carry out remedial works | |
| Doreen attempted to invite Blossom back to CCM to “helm” the company as a working director | |
| Doreen and Julie proposed the voluntary liquidation of CCM | |
| Doreen and Julie wrote to Blossom and Ivy to note that it was “heartening to learn that the MCST 325, following BCA’s order, plans to make good the infrastructure” | |
| Blossom and Ivy filed proceedings for the winding-up of all four Companies | |
| The Building and Construction Authority was still chasing MCST 325 for an update on the completion of remedial works | |
| Trial began | |
| Judgment issued |
7. Legal Issues
- Winding up of a company
- Outcome: The court found that the plaintiffs had not established just and equitable grounds for winding up the companies.
- Category: Substantive
- Sub-Issues:
- Just and equitable grounds for winding up
- Deadlock in management
- Breakdown of mutual trust and confidence
- Quasi-partnership
- Outcome: The court found that the companies were not quasi-partnerships or akin to quasi-partnerships.
- Category: Substantive
- Sub-Issues:
- Existence of a quasi-partnership
- Breach of mutual trust and confidence
- Legitimate expectations of shareholders
- Shareholder rights
- Outcome: The court found that the plaintiffs' shareholder rights had not been unfairly prejudiced.
- Category: Substantive
- Sub-Issues:
- Right to participate in management
- Right to dividends
- Right to exit the company
8. Remedies Sought
- Winding-up of the 3rd to the 6th Defendants
- Order for the buy-out of their shares in the four companies
9. Cause of Actions
- Winding-up of company under s 254(1)(i) of the Companies Act
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Real Estate
- Property Management
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sim Yong Kim v Evenstar Investments Pte Ltd | Court of Appeal | Yes | [2006] 3 SLR(R) 827 | Singapore | Key legal principles governing the “just and equitable” jurisdiction under s 254(1)(i) CA were laid down comprehensively. |
| Ebrahimi v Westbourne Galleries Ltd | House of Lords | Yes | [1973] AC 360 | United Kingdom | Gave context to the concept of “just and equitable” in the former s 221(1) of the Companies Act 1948 (c 38) (UK) (presently s 122(1)(g) of the Insolvency Act 1986 (c 45) (UK), which is the equivalent of our s 254(1)(i) CA). |
| Chow Kwok Chuen v Chow Kwok Chi and another | Court of Appeal | Yes | [2008] 4 SLR(R) 362 | Singapore | Provided further guidance on the exercise of the “just and equitable” jurisdiction under s 254(1)(i) CA. |
| Lim Kok Wah and others v Lim Boh Yong and others | High Court | Yes | [2015] 5 SLR 307 | Singapore | Addressed the issue of when a company may be subject to equitable considerations. |
| Perennial (Capitol) Pte Ltd and another v Capitol Investment Holdings Pte Ltd and others | Court of Appeal | Yes | [2018] 1 SLR 763 | Singapore | Provided further guidance as to how the notion of unfairness would operate in a deadlock situation. |
| Poh Leong Soon v SL Hair & Beauty Slimming Centre Pte Ltd | High Court | Yes | [2018] SGHC 109 | Singapore | Emphasised that the “just and equitable” jurisdiction under s 254(1)(i) is a wide jurisdiction that has to be exercised with caution. |
| Summit Co (S) Pte Ltd v Pacific Biosciences Pte Ltd | High Court | Yes | [2007] 1 SLR(R) 46 | Singapore | Where the attempt to invoke s 254(1)(i) is made in the case of a company that is a going concern, the court may look to see if there is a motive behind the application. |
| Ting Shwu Ping v Scanone Pte Ltd and another | Court of Appeal | Yes | [2017] 1 SLR 95 | Singapore | The court must still consider whether the presence of an option for the applicant to be bought out of the company at fair value would negate the unfairness. |
| Over & Over Ltd v Bonvests Holdings Ltd | Court of Appeal | Yes | [2010] 2 SLR 776 | Singapore | “commercial unfairness” involves a consideration of whether there has been 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. |
| Burland v Earle | Privy Council | Yes | [1902] AC 83 | United Kingdom | Directors have no obligation to declare dividends and shareholders correspondingly have no right to receive dividends. |
| Lee Panavision Ltd v Lee Lighting Ltd | Court of Appeal | Yes | [1992] BCLC 22 | England and Wales | Formal disclosure under the equivalent of our s 156 in these jurisdictions is not required where the nature of the interest is known to the other directors. |
| Woolworths Ltd v Kelly | Supreme Court of New South Wales | Yes | [1999] 4 ACSR 431 | Australia | Formal disclosure under the equivalent of our s 156 in these jurisdictions is not required where the nature of the interest is known to the other directors. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act | Singapore |
| Section 254(1)(i) Companies Act | Singapore |
| Section 254(2A) Companies Act | Singapore |
| Section 216 Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Quasi-partnership
- Family business
- Shareholder rights
- Management deadlock
- Mutual trust and confidence
- Legitimate expectations
- Exit mechanism
- Valuation Price
15.2 Keywords
- winding up
- companies act
- quasi-partnership
- family business
- shareholder dispute
- singapore
- companies
- directors
- shares
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 90 |
| Company Law | 70 |
| Commercial Disputes | 30 |
| Share Valuation | 25 |
| Administrative Law | 10 |
16. Subjects
- Company Law
- Corporate Governance
- Shareholder Disputes
- Family Business