Bit Baltic v Wee See Boon: Director's Duties & Unfair Preference Payments
In Bit Baltic Investment & Trading Pte Ltd (in compulsory liquidation) v Wee See Boon, the High Court of Singapore dismissed an application by the Plaintiff, Bit Baltic Investment & Trading Pte Ltd (in compulsory liquidation), against the Defendant, Mr. Wee See Boon, its former director, for damages related to alleged breaches of fiduciary and statutory duties arising from alleged unfair preference payments. The court, presided over by Hoo Sheau Peng J, found that the Plaintiff failed to demonstrate that the Defendant was aware or should have been aware of the payments in question. The primary claim was for breach of fiduciary duty.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Application dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
The High Court dismissed a claim against a director for breach of duties related to unfair preference payments, finding no evidence of his knowledge.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| BIT Baltic Investment & Trading Pte Ltd (in compulsory liquidation) | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Wee See Boon | Defendant | Individual | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Hoo Sheau Peng | Judge | Yes |
4. Counsels
4. Facts
- The Plaintiff sought damages from the Defendant for alleged breaches of fiduciary and statutory duties.
- The claim arose from alleged unfair preference payments amounting to US$1,472,500.
- The Defendant was a local resident director of the Plaintiff from April 8, 2011, to March 26, 2020.
- Payments were made by the Plaintiff to HARPA and HPS between December 12, 2018, and December 27, 2018.
- The Plaintiff was in compulsory liquidation.
- HARPA and HPS refunded the Principal Sum to the Plaintiff on December 23, 2021.
- The Plaintiff sought recovery of interests and costs incurred by the liquidator.
5. Formal Citations
- Bit Baltic Investment & Trading Pte Ltd (in compulsory liquidation) v Wee See Boon, Originating Summons No 667 of 2021, [2022] SGHC 110
6. Timeline
| Date | Event |
|---|---|
| Plaintiff incorporated | |
| HPSH partially repaid a loan from the Plaintiff to HPSH | |
| HPSH partially repaid a loan from the Plaintiff to HPSH | |
| Winding up application made by OIG | |
| Luther LLP sent letter | |
| I.N.C Law LLC sent letter | |
| Luther LLP sent letter | |
| HARPA and HPS refunded the Principal Sum to the Plaintiff | |
| Hearing date | |
| Hearing date | |
| Letter from Defendant | |
| Judgment reserved |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that the Defendant did not breach his fiduciary duty to act bona fide in the best interests of the Plaintiff and its creditors.
- Category: Substantive
- Sub-Issues:
- Failure to act bona fide in the best interests of the company
- Failure to exercise care, skill, and diligence
- Related Cases:
- [2021] SGCA 35
- [2014] 1 SLR 425
- [2020] 1 SLR 1199
- [2017] 2 SLR 592
- [2018] 2 SLR 333
- [2016] 3 SLR 621
- [2020] SGHC 193
- [2017] 3 SLR 839
- Unfair Preference
- Outcome: The court found that the payments constituted unfair preference payments.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Interests for the loss on the Principal Sum
- Legal costs on an indemnity basis
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Statutory Duty
10. Practice Areas
- Commercial Litigation
- Insolvency Litigation
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ho Soo Fong and another v Ho Pak Kim Realty Co Pte Ltd (in liquidation) | Singapore Court of Appeal | Yes | [2021] SGCA 35 | Singapore | Cited for the principle that there is a minimum standard required from all directors, executive or otherwise. |
| Then Khek Koon and another v Arjun Permanand Samtani and another and other suits | High Court | Yes | [2014] 1 SLR 425 | Singapore | Cited to distinguish between core fiduciary duties and the duty of care, skill and diligence. |
| Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals | High Court | Yes | [2020] 1 SLR 1199 | Singapore | Cited for the principle that the Plaintiff is entitled to equitable compensation. |
| Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal | High Court | Yes | [2017] 2 SLR 592 | Singapore | Cited for the test to assess whether a director has breached his duty to act bona fide in the best interests of the company. |
| Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters | High Court | Yes | [2018] 2 SLR 333 | Singapore | Cited for the standard expected of a director in respect of the duty to act with care, skill and diligence. |
| Living the Link Pte Ltd (in creditors’ voluntary liquidation) and others v Tan Lay Tin Tina and others | High Court | Yes | [2016] 3 SLR 621 | Singapore | Cited for the principle that unfair preference payments ipso facto lead to the conclusion that the director breached her fiduciary duty. |
| Ho Pak Kim Realty Co Pte Ltd (in liquidation) v Ho Soo Fong and another | High Court | Yes | [2020] SGHC 193 | Singapore | Cited for the principle that a 'sleeping' or 'nominee' director is not absolved of liability. |
| Prima Bulkship Pte Ltd (in creditor’s voluntary liquidation) and another v Lim Say Wan and another | High Court | Yes | [2017] 3 SLR 839 | Singapore | Cited for the principle that the fact that the defendants were appointed to fulfil the statutory requirement of a local resident director impacted the extent to which the defendants were expected to be informed of the company’s affairs. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Unfair preference payments
- Fiduciary duty
- Statutory duty
- Compulsory liquidation
- Local resident director
- Additional Damages
- Principal Sum
15.2 Keywords
- director duties
- unfair preference
- insolvency
- liquidation
- companies act
- bankruptcy act
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fiduciary Duties | 90 |
| Insolvency Law | 85 |
| Avoidance of transfer | 80 |
| Company Law | 75 |
| Corporate Law | 60 |
16. Subjects
- Insolvency
- Company Law
- Directors' Duties