New Ping Ping Pauline v Eng’s Noodles House: Common Law Derivative Action & Fiduciary Duty

New Ping Ping Pauline, a minority shareholder in Eng’s Noodles House Pte Ltd, appealed the dismissal of her claims against Eng’s Noodles House Pte Ltd, Ng Weng San, Teng Chai Hai, Ng Mui Hong, Ng Mei Ling, and Eng’s Char Siew Wantan Mee Pte Ltd. The claims included unlawful means conspiracy and breach of fiduciary duties. The Appellate Division of the High Court dismissed the appeal on 19 July 2021, finding that Pauline was not entitled to rely on a common law derivative action as the action was not filed in good faith in the interest of the company.

1. Case Overview

1.1 Court

Appellate Division of the High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Ex-Tempore Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding dismissal of claims for unlawful means conspiracy and breach of fiduciary duties. The court dismissed the appeal, finding the derivative action was not brought in good faith.

1.7 Decision Date

18 July 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Eng’s Char Siew Wantan Mee Pte Ltd	Respondent, Defendant	Corporation	Judgment in favor	Won	Leo Cheng Suan of Infinitus Law Corporation Lee Shu Xian of Infinitus Law Corporation Teh Ee-Von of Infinitus Law Corporation
New Ping Ping Pauline	Appellant, Plaintiff	Individual	Appeal Dismissed	Lost	Yeo Choon Hsien Leslie of Sterling Law Corporation Tan Shu Ann, Jolene of Sterling Law Corporation
Eng’s Noodles House Pte Ltd	Respondent, Defendant	Corporation	Judgment in favor	Won	Ong Ziying Clement of Damodara Ong LLC Ning Jie of Damodara Ong LLC Leonard Chua Jun Yi of Damodara Ong LLC
Ng Weng San	Respondent, Defendant	Individual	Judgment in favor	Won	Leo Cheng Suan of Infinitus Law Corporation Lee Shu Xian of Infinitus Law Corporation Teh Ee-Von of Infinitus Law Corporation
Teng Chai Hai	Respondent, Defendant	Individual	Judgment in favor	Won	Ong Ziying Clement of Damodara Ong LLC Ning Jie of Damodara Ong LLC Leonard Chua Jun Yi of Damodara Ong LLC
Ng Mui Hong	Respondent, Defendant	Individual	Judgment in favor	Won	Leo Cheng Suan of Infinitus Law Corporation Lee Shu Xian of Infinitus Law Corporation Teh Ee-Von of Infinitus Law Corporation
Ng Mei Ling	Respondent, Defendant	Individual	Judgment in favor	Won	Leo Cheng Suan of Infinitus Law Corporation Lee Shu Xian of Infinitus Law Corporation Teh Ee-Von of Infinitus Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge of the Appellate Division	No
Woo Bih Li	Judge of the Appellate Division	Yes
Quentin Loh	Judge of the Appellate Division	No

4. Counsels

Counsel Name	Organization
Leo Cheng Suan	Infinitus Law Corporation
Lee Shu Xian	Infinitus Law Corporation
Teh Ee-Von	Infinitus Law Corporation
Yeo Choon Hsien Leslie	Sterling Law Corporation
Tan Shu Ann, Jolene	Sterling Law Corporation
Ong Ziying Clement	Damodara Ong LLC
Ning Jie	Damodara Ong LLC
Leonard Chua Jun Yi	Damodara Ong LLC

4. Facts

Pauline is a 47.5% shareholder of Eng’s Noodles House Pte Ltd, holding shares as a nominee for her husband, Jason Sim Chong Ang.
Eng’s Noodles House Pte Ltd was incorporated on 27 February 2012 as a collaboration between Mr. Ng Ba Eng and Jason.
The Company ceased business on 28 February 2018.
Pauline's husband, Jason, helped Eng’s Wantan Noodle secure the lease of the 287 Premises after Eng’s Noodles House Pte Ltd ceased operations.
Pauline and Jason were involved in setting up Eng’s Wantan Noodle, which is operating a similar business.
Eng’s Wantan Noodle is using the “ENG’S” name as part of its corporate name and business.

5. Formal Citations

New Ping Ping Pauline and othersvEng’s Noodles House Pte Ltd, Civil Appeal No 8 of 2021, [2021] SGHC(A) 4

6. Timeline

Date	Event
2012-02-27	Eng’s Noodles House Pte Ltd incorporated
2015-08-12	Additional shares issued in Eng’s Noodles House Pte Ltd
2018-02-28	Eng’s Noodles House Pte Ltd ceased business
2018-02-28	Eng’s Wantan Noodle Pte Ltd incorporated
2018-03-05	Eng’s Char Siew Wantan Mee Pte Ltd incorporated
2018-05-01	Eng’s Wantan Noodle Pte Ltd commenced business at 287 Tanjong Katong Road
2018-05-01	Eng’s Char Siew Wantan Mee Pte Ltd opened for business at 248/250 Tanjong Katong Road
2019-01-01	Suit No 20 of 2019 filed
2021-07-19	Judgment issued

7. Legal Issues

Common Law Derivative Action
- Outcome: The court held that the appellant was not entitled to rely on a common law derivative action because the action was not brought in good faith in the interest of the company.
- Category: Procedural
- Sub-Issues:
  - Good faith requirement
  - Best interest of the company
Breach of Fiduciary Duty
- Outcome: The court did not make a determination on the breach of fiduciary duty because the appellant was not entitled to bring the claim.
- Category: Substantive
Unlawful Means Conspiracy
- Outcome: The court did not make a determination on the unlawful means conspiracy because the appellant was not entitled to bring the claim.
- Category: Substantive

8. Remedies Sought

Damages
Restraint from using intellectual property

9. Cause of Actions

Unlawful Means Conspiracy
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
Sinwa SS (HK) Co Ltd v Nordic International Ltd and another	N/A	Yes	[2016] 4 SLR 320	Singapore	Cited for the substantive requirements for relying on a common law derivative action.
Sinwa SS (HK) Co Ltd v Morten Innhaug	N/A	No	[2010] 4 SLR 1	Singapore	Cited regarding the requirements for a common law derivative action and the court's discretion.
Foss v Harbottle	N/A	No	(1843) 2 Hare 461; 67 ER 189	N/A	Cited for the rule that the proper plaintiff in an action for a wrong done to a company is the company itself.
Prudential Assurance Co Ltd v Newman Industries Ltd (No 2)	N/A	No	[1982] Ch 204	N/A	Cited for the rule in Foss v Harbottle.
Ang Thiam Swee v Low Hian Chor	N/A	No	[2013] 2 SLR 340	Singapore	Cited for the overlap between the prima facie threshold and the requirement of good faith in a derivative action.
Ting Sing Ning v Ting Chek Swee	N/A	No	[2008] 1 SLR(R) 197	Singapore	Cited regarding the availability of alternative remedies in a derivative action.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Common law derivative action
Fiduciary duty
Unlawful means conspiracy
Good faith
Minority shareholder
Nominee shareholder
Usurpation of business
Intellectual property
Licence agreement
Goodwill

15.2 Keywords

Company
Shareholder
Director
Noodles
Restaurant
Singapore

17. Areas of Law

Area Name	Relevance Score
Common law derivative action	80
Company Law	75
Fiduciary Duties	60
Minority Oppression	60
Conspiracy by Unlawful Means	50
Civil Procedure	30
Passing Off	20
Estoppel	20

16. Subjects

Company Law
Civil Procedure
Tort Law