OOPA Pte Ltd v Bui Sy Phong: Director's Fiduciary Duties & Corporate Opportunity

In OOPA Pte Ltd v Bui Sy Phong, the High Court of Singapore found the defendant, Bui Sy Phong, in breach of his fiduciary duties to the plaintiff, OOPA Pte Ltd. The court held that Bui, as a director of OOPA, had improperly diverted a maturing business opportunity, the Central Supply Business (CSB), to a new entity, Telio, without OOPA's consent. The court declared that Bui held his shares in Telio on trust for OOPA and ordered him to transfer the shares and account for any dividends. The claim was for breach of fiduciary duty.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Director breached fiduciary duties by diverting a maturing business opportunity (CSB) to a new entity (Telio) without OOPA's consent. Court declared constructive trust.

1.7 Decision Date

15 June 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
OOPA Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Koong Len Sheng of David Lim & Partners LLP Koh Choon Guan Daniel of Eldan Law LLP Richard Yeoh Kar Hoe of David Lim & Partners LLP Tan Kee Ming Glen of David Lim & Partners LLP
Bui Sy Phong	Defendant	Individual	Claim Dismissed	Lost	Thio Shen Yi SC of TSMP Law Corporation Nguyen Vu Lan of TSMP Law Corporation Uma Jitendra Sharma of TSMP Law Corporation Niklas Wong See Keat of TSMP Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Philip Jeyaretnam	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Koong Len Sheng	David Lim & Partners LLP
Koh Choon Guan Daniel	Eldan Law LLP
Richard Yeoh Kar Hoe	David Lim & Partners LLP
Tan Kee Ming Glen	David Lim & Partners LLP
Thio Shen Yi SC	TSMP Law Corporation
Nguyen Vu Lan	TSMP Law Corporation
Uma Jitendra Sharma	TSMP Law Corporation
Niklas Wong See Keat	TSMP Law Corporation

4. Facts

Bui was a director of OOPA and OnOnPay.
OOPA owned 60% directly and 40% indirectly of OnOnPay.
OnOnPay undertook a procurement and supply business for small retailers, known as the Central Supply Business (CSB).
Bui incorporated Telio as its sole shareholder.
Telio was incorporated to take over the CSB.
Bui did not inform the other directors of OOPA about Telio's involvement with Surge until after Surge had made its investment.
OOPA claimed that Bui diverted the CSB to Telio in breach of fiduciary duty.

5. Formal Citations

OOPA Pte Ltd v Bui Sy Phong, Suit No 885 of 2019, [2021] SGHC 142

6. Timeline

Date	Event
2015-07-30	OnOnPay assigned its intellectual property to OOPA by a Deed of Assignment.
2017-08-09	Bui and Van assigned shares in their names to OOPA by a Deed of Assignment.
2018-11-01	OnOnPay began procurement and supply business for small retailers (Central Supply Business).
2019-01-16	Bui emailed the board of OOPA reporting on the progress of the Central Supply Business.
2019-01-21	Telio Pte Ltd was incorporated by Bui as its sole shareholder.
2019-01-25	Van requested the company secretary of OOPA to prepare directors’ resolutions of OOPA to approve the spin-off of the CSB into Telio.
2019-01-28	Telio Vietnam Co Ltd was incorporated.
2019-03-19	Bui signed a term sheet and a convertible note agreement with Surge on behalf of Telio.
2019-04-15	A board meeting of OOPA was held to discuss the ownership of Telio and the financial situation of OOPA and OnOnPay.
2019-04-21	Ng emailed the board of OOPA (excluding Bui) on a proposed action plan in respect of asserting OOPA’s rights over Telio.
2019-09-06	OOPA commenced proceedings against Bui and Telio.
2020-05-06	Telio ceased to be a party to the suit.
2020-06-16	Bui ceased to be a director of OOPA.
2021-01-20	OOPA amended its Statement of Claim.
2021-03-09	Trial began.
2021-03-12	Trial.
2021-03-16	Trial.
2021-03-17	Trial.
2021-05-10	Oral argument.
2021-06-16	Judgment reserved.

7. Legal Issues

Breach of Fiduciary Duty
- Outcome: The court found that Bui breached his fiduciary duties to OOPA by usurping a maturing business opportunity and secretly dealing with new investors.
- Category: Substantive
- Sub-Issues:
  - Usurping corporate opportunity
  - Conflict of interest
  - Lack of candour
  - Lack of loyalty
Express Trust
- Outcome: The court held that Bui held his shares in Telio on express trust for OOPA, finding that the three certainties were present.
- Category: Substantive
- Sub-Issues:
  - Certainty of intention
  - Certainty of subject matter
  - Certainty of objects
Constructive Trust
- Outcome: The court stated that even if an express trust had not been found, it would have declared a constructive trust over the shares in Telio held by Bui, in favor of OOPA.
- Category: Substantive
- Sub-Issues:
  - Usurpation of corporate opportunity
  - Breach of fiduciary duty
Proper Plaintiff
- Outcome: The court held that OOPA was the proper plaintiff, as the claim was in respect of what it asserted to be its asset and in respect of loss directly suffered by it.
- Category: Procedural
Excuse under Companies Act s 391(1)
- Outcome: The court found that Bui did not act honestly or reasonably and therefore the question of exercising a discretion to relieve him from liability under Companies Act s 391(1) did not arise.
- Category: Substantive
- Sub-Issues:
  - Honesty
  - Reasonableness

8. Remedies Sought

Declaration of Constructive Trust
Transfer of Shares
Account of Profits

9. Cause of Actions

Breach of Fiduciary Duty
Breach of Trust

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Venture Capital
Technology
Retail

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Tokuhon (Pte) Ltd v Seow Kang Hong and others	Court of Appeal	Yes	[2003] 4 SLR(R) 414	Singapore	Approved the principle from Canadian Aero Services Ltd v O’Malley regarding the disqualification of a director from usurping a maturing business opportunity.
CMS Dolphin Ltd v Simonet	N/A	No	CMS Dolphin Ltd v Simonet [2001] 2 BCLC 704	N/A	Cited for the principle that a director who exploits a maturing business opportunity after resignation is accountable as a constructive trustee.
Guy Neale v Nine Squares Pty Ltd	Court of Appeal	No	[2015] 1 SLR 1097	Singapore	Cited as a case with similar facts where a partner incorporated a company and registered trademarks for a business opportunity belonging to the partnership, leading to a constructive trust declaration.
Mona Computer Systems (S) Pte Ltd v Singaravelu Murugan	Court of Appeal	No	[2014] 1 SLR 847	Singapore	Cited for the principle that the power to grant an allowance to a fiduciary in breach should be exercised sparingly.
Canadian Aero Services Ltd v O’Malley	Canadian Supreme Court	Yes	Canadian Aero Services Ltd v O’Malley (1974) 40 DLR (3d) 371	Canada	Cited for the principle that a director is disqualified from usurping a maturing business opportunity of the company.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed) s 391(1)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Fiduciary Duty
Corporate Opportunity
Central Supply Business
Constructive Trust
Express Trust
Telio
OnOnPay
OOPA
Directors' Duties
Nominee
Companies Act

15.2 Keywords

fiduciary duty
corporate opportunity
directors duties
constructive trust
express trust
companies act
singapore

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	90
Breach of Fiduciary Duty	85
Trust Law	80
Corporate Law	75
Company Law	75

16. Subjects

Company Law
Trusts
Fiduciary Duty