Leong Quee Ching Karen v Lim Soon Huat: Minority Oppression & Information Access Dispute
In Leong Quee Ching Karen v Lim Soon Huat, the General Division of the High Court of Singapore heard an appeal regarding the striking out of a minority oppression suit. Leong Quee Ching Karen sued Lim Soon Huat, Lim Soon Heng, Lim Kim Chong Investments Pte Ltd, Sin Soon Lee Realty Company (Private) Limited, Lim Yong Yeow, Thomas, and Seng Lee Holdings Pte Ltd, alleging that she was denied access to information as a minority shareholder. The defendants offered to buy out her shares, arguing that this would provide the same outcome as a trial. The court dismissed the appeals, finding that the suit was not an abuse of process and that the claimant was not precluded from seeking a special audit.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Appeals Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Minority shareholder Leong Quee Ching Karen sues Lim Soon Huat for minority oppression, alleging denial of information access. Court dismisses appeal to strike out the suit.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Leong Quee Ching Karen | Claimant | Individual | Appeals Dismissed | Won | Ng Ka Luon Eddee |
| Lim Soon Huat | Defendant, Appellant | Individual | Appeal Dismissed | Lost | Sarbjit Singh Chopra |
| Lim Soon Heng | Defendant, Appellant | Individual | Appeal Dismissed | Lost | Tan Teng Muan |
| Lim Kim Chong Investments Pte Ltd | Defendant | Corporation | Appeal Dismissed | Lost | Sarbjit Singh Chopra |
| Sin Soon Lee Realty Company (Private) Limited | Defendant | Corporation | Neutral | Neutral | Eugene Jedidiah Low Yeow Chin |
| Lim Yong Yeow, Thomas | Defendant | Individual | Appeal Dismissed | Lost | Sarbjit Singh Chopra |
| Seng Lee Holdings Pte Ltd | Defendant | Corporation | Neutral | Neutral | Tan Kheng Ann Alvin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ng Ka Luon Eddee | Tan Kok Quan Partnership |
| Sarbjit Singh Chopra | Selvam LLC |
| Tan Teng Muan | Mallal & Namazie |
| Eugene Jedidiah Low Yeow Chin | Ark Law Corporation |
| Tan Kheng Ann Alvin | Wong Thomas & Leong |
4. Facts
- The claimant, Ms Leong Quee Ching Karen, and the first and second defendants, Mr Lim Soon Huat and Mr Lim Soon Heng, are siblings.
- Their father was the late Dato Lim Kim Chong, who passed away on 19 November 2021.
- The third, fourth, and sixth defendants are companies incorporated in Singapore and are part of a group of companies owned by the Lim Family.
- The claimant is a minority shareholder of Seng Lee Holdings Pte Ltd with 10.41% shareholding.
- The claimant alleges that Soon Huat, Soon Heng, and LKCI have acted oppressively against her and disregarded her legitimate expectations and interests as a minority shareholder of SLH.
- The claimant commenced the Suit primarily for a special audit to be conducted in respect of SLH’s accounts and affairs.
- Soon Huat made several offers to purchase the claimant’s shares in SLH, which the claimant rejected.
5. Formal Citations
- Leong Quee Ching Karen v Lim Soon Huat and others, Originating Claim No 158 of 2022(Registrar’s Appeal No 297 of 2022)(Registrar’s Appeal No 298 of 2022), [2022] SGHC 309
6. Timeline
| Date | Event |
|---|---|
| Dato Lim Kim Chong passed away | |
| Seng Lee Holdings Pte Ltd incorporated | |
| Lim Family entered into Original Deed of Family Arrangement | |
| Lim Family entered into Amended Deed of Family Arrangement | |
| Dato Lim purportedly gave his 100% stake in Lim Kim Chong Investments Pte Ltd to Soon Huat | |
| Dato Lim purportedly gave Soon Huat his personal stake of 31.25% in Seng Lee Holdings Pte Ltd | |
| Seng Lee Holdings Pte Ltd issued letters to Group A beneficiaries | |
| Soon Huat offered to purchase the claimant’s shares in Seng Lee Holdings Pte Ltd | |
| Soon Huat offered to purchase the claimant’s shares in Seng Lee Holdings Pte Ltd | |
| Claimant rejected Soon Huat's offer | |
| Claimant was removed as director of the Group B subsidiaries | |
| Claimant requested a comprehensive breakdown of the Administrative Expenses | |
| Soon Huat made a revised offer to purchase the claimant’s shares in Seng Lee Holdings Pte Ltd | |
| Claimant rejected the offer | |
| Soon Huat put forth a third offer | |
| Claimant replied stating that the offer does not address her concerns | |
| Soon Huat and Soon Heng filed applications to strike out the Suit | |
| Judgment reserved | |
| Judgment delivered |
7. Legal Issues
- Minority Oppression
- Outcome: The court found that the claimant's suit for minority oppression should not be struck out.
- Category: Substantive
- Sub-Issues:
- Breach of legitimate expectations
- Denial of access to information
- Striking Out
- Outcome: The court dismissed the appeals to strike out the claimant's suit.
- Category: Procedural
- Sub-Issues:
- Abuse of process
- Reasonable cause of action
8. Remedies Sought
- Special Audit
- Order for Soon Huat, Soon Heng, and/or LKCI to purchase the claimant’s shares in SLH
9. Cause of Actions
- Minority Oppression
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Kroll, Daniel v Cyberdyne Tech Exchange Pte Ltd and others | High Court | Yes | [2022] SGHC 231 | Singapore | Established the two-stage framework for assessing striking out applications in the context of a buy-out offer in minority oppression claims. |
| O’Neill v Phillips | House of Lords | Yes | [1999] 1 WLR 1092 | United Kingdom | Laid down the requirements to determine what constitutes a reasonable buy-out offer in shareholder disputes. |
| Iskandar bin Rahmat and others v Attorney-General and another | Court of Appeal | Yes | [2022] SGCA 58 | Singapore | Referred to authorities pre-dating the Rules of Court 2021 to interpret O 9 r 16(1) of the Rules of Court 2021. |
| Eurogreen Building Products Private Limited v Savourer Pte Ltd | Magistrate’s Court | Yes | [2022] SGMC 53 | Singapore | Authorities pre-dating the Rules of Court 2021 remain relevant in assessing the merits of a striking out application under the new regime. |
| Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd and another and another appeal | Court of Appeal | Yes | [2009] 2 SLR(R) 814 | Singapore | The power to strike out is very sparingly exercised, and only applied in very exceptional cases. |
| Ko Teck Siang v Low Fong Mei | Court of Appeal | Yes | [1992] 1 SLR(R) 22 | Singapore | Endorsed the English Court of Appeal case of Wenlock v Moloney [1965] 1 WLR 1238, that the power to strike out is very sparingly exercised. |
| Wenlock v Moloney | English Court of Appeal | Yes | [1965] 1 WLR 1238 | United Kingdom | The power to strike out is very sparingly exercised. |
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others | Court of Appeal | Yes | [1997] 3 SLR(R) 649 | Singapore | It is only in plain and obvious cases that the power of striking out should be invoked. |
| Hubbuck & Sons, Limited v Wilkinson, Heywood & Clark, Limited | N/A | Yes | [1899] 1 QB 86 | United Kingdom | It is only in plain and obvious cases that the power of striking out should be invoked. |
| Koh Kim Teck v Credit Suisse AG, Singapore Branch | High Court | Yes | [2015] SGHC 52 | Singapore | The applicant in a striking out application bears the burden of proving that the claim is obviously unsustainable. |
| Bank of China Ltd, Singapore Branch v BP Singapore Pte Ltd and others | High Court | Yes | [2021] 5 SLR 738 | Singapore | The applicant in a striking out application bears the burden of proving that the claim is obviously unsustainable. |
| Kim Hok Yung and others v Cooperative Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank) (Lee Mon Sun, third party) | High Court | Yes | [2000] 2 SLR(R) 455 | Singapore | There would be an abuse of process if a claimant knowingly pursues a case that is doomed to fail. |
| Chee Siok Chin and others v Minister for Home Affairs and another | High Court | Yes | [2006] 1 SLR(R) 582 | Singapore | Proceedings which are manifestly groundless or without foundation or which serve no useful purpose is an abuse of process. |
| Lim Swee Khiang and another v Borden Co (Pte) Ltd and others | High Court | Yes | [2005] 4 SLR(R) 141 | Singapore | Endorsed Lord Hoffmann’s seminal guidelines for determining a reasonable offer in O’Neill v Phillips. |
| Lim Swee Khiang and another v Borden Co (Pte) Ltd and others | Court of Appeal | Yes | [2006] 4 SLR(R) 745 | Singapore | The Court of Appeal allowed the plaintiffs’ appeal and ordered the defendants to purchase the plaintiffs’ shares, but it did not address the High Court’s findings that the plaintiffs were guilty of an abuse of process. |
| Re a Company (No 00836 of 1995) | N/A | Yes | [1996] 2 BCLC 192 | United Kingdom | Motion to strike out a petition under s 459 of the Companies Act 1985 on the basis that an offer had been made to buy over the petitioner’s shares, which would give the petitioner all the relief that he could realistically expect to obtain on his petition. |
| Re a Company No 003096 of 1987 | N/A | Yes | (1988) 4 BCC 80 | United Kingdom | The crucial question for determination was which of the two sides should go, and whether it is plain and obvious, even without a hearing of the petition, that the petitioners should go. |
| Re a Company (No 006834 of 1988) | N/A | Yes | [1989] BCLC 365 | United Kingdom | Petition by the minority shareholder under s 459 of the Companies Act 1985. |
| North Holdings Ltd v Southern Tropics Ltd and others | English Court of Appeal | Yes | [1999] 2 BCLC 625 | United Kingdom | The first respondent company, Southern Tropics, was acquired by the second and third respondents to carry on the business of a high-class hairdressing salon in London. |
| Harborne Road Nominees Ltd v Karvaski | English High Court | Yes | [2012] 2 BCLC 420 | United Kingdom | Two individuals set up a joint-venture company for the supply and installation of alarms and security services for building projects. |
| Loveridge and another v Loveridge (No 2) | English Court of Appeal | Yes | [2022] 2 BCLC 340 | United Kingdom | Judges have counselled against treating the reasonableness of an offer as being a trump card in the hands of the majority shareholder, and the question remains whether the conditions for striking out are made out under the traditional standard. |
| Re Sprintroom Ltd; Prescott v Potamianos and another; Potaminaos v Prescott and another | N/A | Yes | [2019] 2 BCLC 617 | United Kingdom | Judges have counselled against treating the reasonableness of an offer as being a trump card in the hands of the majority shareholder, and the question remains whether the conditions for striking out are made out under the traditional standard. |
| Ok Tedi Fly River Development Foundation Ltd and others v Ok Tedi Mining Ltd and others | High Court | Yes | [2022] SGHC 83 | Singapore | The mere fact that a case is weak and not likely to succeed (on a balance of probabilities) is not a ground for striking it out. |
| Ng Chee Weng v Lim Jit Bryan and another | High Court | Yes | [2012] 1 SLR 457 | Singapore | The mere fact that a case is weak and not likely to succeed (on a balance of probabilities) is not a ground for striking it out. |
| PlanAssure PAC (formerly known as Patrick Lee PAC) v Gaelic Inns Pte Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 513 | Singapore | An exercise to value the shares is very different from a special audit into the company’s affairs. |
| Teelek Realty Pte Ltd and others v Ng Tang Hock | Court of Appeal | Yes | [2021] 2 SLR 719 | Singapore | An order for a special audit would allow the aggrieved party to investigate the extent of the alleged wrongdoer’s financial management of the Company’s affairs and provide him with all the information that the alleged wrongdoer had kept from him over the years. |
| Kumagai Gumi Co Ltd v Zenecon Pte Ltd and others and other appeals | Court of Appeal | Yes | [1995] 2 SLR(R) 304 | Singapore | A court has a wide range of discretion to grant a wide range of reliefs in a minority oppression claim, it does so with the aim of bringing an end to the matters complained of. |
| DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd and others and another suit | Singapore International Commercial Court | Yes | [2018] 5 SLR 1 | Singapore | In most cases, the most practical remedy is to order a buy-out. |
| Ang Xing Yao Lionel and another v Lew Mun Hung Joseph and others | High Court | Yes | [2022] SGHC 277 | Singapore | Whether an offer should be accepted in the context of a minority oppression action is ultimately a fact-sensitive exercise. |
| Summit Co (S) Pte Ltd v Pacific Biosciences Pte Ltd | High Court | Yes | [2007] 1 SLR(R) 46 | Singapore | The evidentiary requirement to justify a finding of mismanagement of a company or the misappropriation of a company’s asset should go beyond mere suspicion. |
| Chow Kwok Chuen v Chow Kwok Chi and another | Court of Appeal | Yes | [2008] 4 SLR(R) 362 | Singapore | The evidentiary requirement to justify a finding of mismanagement of a company or the misappropriation of a company’s asset should go beyond mere suspicion. |
| Tan Eck Hong v Maxz Universal Development Group Pte Ltd and others | High Court | Yes | [2019] 3 SLR 161 | Singapore | A special audit can be done concurrently with the share valuation exercise. |
| Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters | Court of Appeal | Yes | [2018] 2 SLR 333 | Singapore | The reflective loss principle was a rule of company law specifically arising from the unique status of shareholders. |
| Miao Weiguo v Tendcare Medical Group Holdings Pte Ltd (formerly known as Tian Jian Hua Xia Medical Group Holdings Pte Ltd) (in judicial management) and another | Court of Appeal | Yes | [2022] 1 SLR 884 | Singapore | Claims by shareholders for the diminution in the value of their shareholdings or in distributions they receive as shareholders as a result of actionable loss suffered by their company cannot be maintained. |
| Low Peng Boon v Low Janie and others and other appeals | Court of Appeal | Yes | [1991] 1 SLR(R) 337 | Singapore | Although the minority did not take issue with certain doubtful practices of the majority for many years and did not immediately initiate proceedings, it was held that this did not preclude the minority from subsequently mounting the complaints. |
| Thio Syn Kym Wendy and others v Thio Syn Pyn and others | High Court | Yes | [2017] SGHC 169 | Singapore | The fact that the claimants had signed off on certain documents and approved them is also not a strict bar to the claimant later raising concerns about the matter. |
| Birchfield v Birchfield Holdings Ltd | New Zealand Court of Appeal | Yes | [2022] 2 NZLR 123 | New Zealand | Whether the refusal to accept an offer is unreasonable and renders an action in minority oppression an abuse of process turns on whether the said offer cures any unfairness that has been suffered by the complainant shareholder. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (2021 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act 1967 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Minority oppression
- Legitimate expectation
- Special audit
- Buy-out offer
- Abuse of process
- Striking out
- Kroll Framework
- Reasonable offer
- Administrative Expenses
- Deed of Family Arrangement
15.2 Keywords
- Minority oppression
- Shareholder dispute
- Information access
- Striking out application
- Singapore High Court
16. Subjects
- Company Law
- Civil Procedure
- Minority Rights
17. Areas of Law
- Civil Procedure
- Pleadings
- Companies Law
- Minority Oppression