True Yoga v Wee Ewe Seng: Director's Duties, Breach of Contract, and Wrongful Termination

True Yoga Pte Ltd, True Fitness (STC) Pte Ltd, and True Fitness Pte Ltd sued Wee Ewe Seng Patrick John in the General Division of the High Court of Singapore for breach of contractual and fiduciary duties related to the mismanagement of True Group (Malaysia) and True Group (Thailand) closures. Wee counterclaimed for wrongful termination and unpaid salary. The court found that Wee owed and breached his duties to the plaintiffs in managing the closures, but also found that the plaintiffs wrongfully terminated Wee's employment and were liable for unpaid salary. The quantification of the plaintiff’s losses would be determined at a later date unless parties are able to resolve that issue by agreement or mediation.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiffs on breach of duties; Judgment for Defendant on unpaid salary.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

True Yoga sues Wee Ewe Seng for breach of contract and fiduciary duties. The court found Wee liable for mismanagement but also liable for unpaid salary.

1.7 Decision Date

4 July 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
True Yoga Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff on breach of duties	Won	Jordan Tan of Audent Chambers LLC Victor Leong of Audent Chambers LLC Anthony Yvette Loretta of LVM Law Chambers
True Fitness (STC) Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff on breach of duties	Won	Jordan Tan of Audent Chambers LLC Victor Leong of Audent Chambers LLC Anthony Yvette Loretta of LVM Law Chambers
True Fitness Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff on breach of duties	Won	Jordan Tan of Audent Chambers LLC Victor Leong of Audent Chambers LLC Anthony Yvette Loretta of LVM Law Chambers
Wee Ewe Seng Patrick John	Defendant	Individual	Judgment for Defendant on unpaid salary	Partial	Rai Vijay Kumar of Arbiters Inc Law Corporation Jasleen Kaur of Arbiters Inc Law Corporation Joavan Christopher Pereira of Arbiters Inc Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Choo Han Teck	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Jordan Tan	Audent Chambers LLC
Victor Leong	Audent Chambers LLC
Anthony Yvette Loretta	LVM Law Chambers
Rai Vijay Kumar	Arbiters Inc Law Corporation
Jasleen Kaur	Arbiters Inc Law Corporation
Joavan Christopher Pereira	Arbiters Inc Law Corporation

4. Facts

Defendant was the Group CEO of True Group from 19 March 2008 until his termination on 9 May 2018.
Defendant was also the director of the three plaintiffs until 30 July 2021.
True Group (Malaysia) and True Group (Thailand) ceased operations on 10 June 2017 and 9 June 2017 respectively.
Defendant knew of impending closures of True Group (Malaysia) and True Group (Thailand) months in advance.
Defendant allowed sales of long-term memberships despite knowledge of impending closures.
Defendant abruptly closed True Group (Malaysia) and True Group (Thailand) without providing adequate alternative options for members.
Defendant reduced his monthly salary from S$120,000.00 to S$22,500.00 with effect from June 2017.

5. Formal Citations

True Yoga Pte Ltd and others v Wee Ewe Seng Patrick John, Suit No 376 of 2019, [2022] SGHC 155

6. Timeline

Date	Event
2008-03-19	Defendant appointed Group CEO of True Group
2008-03-31	Defendant signed employment contract with first plaintiff
2016-11-08	True Group (Malaysia) conducted pre-sales for a new club in Plaza Damas
2016-11-01	Defendant arranged for funds to be remitted from True Group Singapore to True Group (Thailand)
2016-11-30	S$3.25 million paid to defendant's beneficially owned company
2017-02-01	Defendant knew True Group (Malaysia) was facing grave financial difficulties
2017-03-01	Defendant entered into negotiations with Evolution Wellness regarding True Group (Malaysia) and True Group (Thailand)
2017-04-01	Defendant approached insolvency lawyers in Malaysia and Thailand
2017-04-10	Defendant asked Thai lawyers about refund of S$3.25m payment
2017-05-01	True Group (Malaysia) sold 43 new membership plans
2017-05-09	True Group (Thailand) ceased operations
2017-05-10	True Group (Malaysia) put up notice about Subang Club closure for renovations
2017-05-19	Restructuring exercise: CJ Group transferred shares in plaintiffs to True Fitness Holdings (Singapore) Pte Ltd
2017-05-29	Tongfang acquired majority shareholding in True Group (Singapore)
2017-05-30	Defendant resigned as director of True Group (Thailand)
2017-05-31	Defendant decided to cut funding to True Group (Thailand)
2017-06-09	Staff of True Group (Malaysia) informed about closure
2017-06-09	True Group (Thailand) staff staged a walk-out
2017-06-10	True Group (Malaysia) ceased operations
2018-01-01	Arrangement with CHI Fitness discontinued
2018-03-12	Defendant's employment extended to this date under Employment Contract
2018-04-12	Tongfang sent letter to defendant requesting resignation
2018-05-08	Tongfang sent letter to defendant requesting resignation
2018-05-09	Defendant terminated
2018-05-24	Minutes of Board of Directors' meeting of TFKT True Holdings acknowledged salary owed to defendant
2019-01-31	Warrant of Arrest issued by Taiwan Taipei District Prosecutor’s office
2021-07-30	Defendant ceased to be director of the three plaintiffs
2022-03-22	Trial began
2022-05-09	Judgment reserved
2022-07-05	Judgment delivered

7. Legal Issues

Breach of Contractual Duty
- Outcome: The court found that the defendant breached his contractual duty to the plaintiffs to properly manage the closures of True Group (Malaysia) and True Group (Thailand).
- Category: Substantive
- Sub-Issues:
  - Failure to faithfully and diligently perform duties
  - Mismanagement of related corporations
Breach of Fiduciary Duty
- Outcome: The court found that the defendant breached his fiduciary duty to the plaintiffs to manage the closure of regional groups within the True Group in a manner that serves the best interest of the plaintiffs.
- Category: Substantive
- Sub-Issues:
  - Failure to act in the best interests of the company
  - Damage to company's reputation
Wrongful Termination
- Outcome: The court found that the plaintiffs had sufficient grounds to terminate the defendant’s employment for the defendant’s mismanagement of the closures of True Group (Malaysia) and True Group (Thailand).
- Category: Substantive
- Sub-Issues:
  - Termination for cause
  - Salary in lieu of notice

8. Remedies Sought

Damages for breach of contract and fiduciary duty
Unpaid salary
Salary in lieu of notice

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty
Wrongful Termination

10. Practice Areas

Commercial Litigation

11. Industries

Fitness

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act 1967	Singapore

15. Key Terms and Keywords

15.1 Key Terms

True Group
Group CEO
Employment Contract
Fiduciary Duty
Wrongful Termination
Related Corporations
Associated Corporations
Restructuring Exercise
Long-Term Memberships
Closure of Business

15.2 Keywords

True Yoga
Wee Ewe Seng
Director Duties
Breach of Contract
Wrongful Termination
Singapore High Court
Fitness Industry

17. Areas of Law

Area Name	Relevance Score
Director's Duties	90
Fiduciary Duties	85
Company Law	75
Breach of Contract	70
Wrongful Termination	65
Termination	60
Commercial Disputes	50
Insolvency Law	40

16. Subjects

Company Law
Contract Law
Employment Law
Directors' Duties