Lim Tong Zhen Kevryn v Cheo Jean Sheng: Minority Shareholder Oppression & Share Dilution Dispute
In Lim Tong Zhen Kevryn v Cheo Jean Sheng, the Plaintiff, Lim Tong Zhen Kevryn, sued the Defendants, Cheo Jean Sheng and Ching Sheue Siant Joey, in the General Division of the High Court of Singapore, alleging minority oppression under Section 216 of the Companies Act. The Plaintiff claimed that the Defendants unfairly diluted her shareholding in H.S.Y.3 Bistro Pte Ltd. The court, presided over by Judicial Commissioner Goh Yihan, dismissed the Plaintiff's claim, finding that the Plaintiff had not established any grounds of oppression.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Claim Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Minority shareholder Lim Tong Zhen Kevryn sued Cheo Jean Sheng for oppression and unfair share dilution. The court dismissed the claim, finding no oppression.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lim Tong Zhen Kevryn | Plaintiff | Individual | Claim Dismissed | Dismissed | Victor David Lau Dek Kai |
| Cheo Jean Sheng | Defendant | Individual | Judgment for Defendant | Won | Cai Enhuai Amos, Tian Keyun, Kieran Jamie Pillai |
| Ching Sheue Siant Joey | Defendant | Individual | Judgment for Defendant | Won | Cai Enhuai Amos, Tian Keyun, Kieran Jamie Pillai |
| H.S.Y.3 Bistro Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Victor David Lau Dek Kai | Drew & Napier LLC |
| Cai Enhuai Amos | Yuen Law LLC |
| Tian Keyun | Yuen Law LLC |
| Kieran Jamie Pillai | Yuen Law LLC |
4. Facts
- Plaintiff invested $30,000 in the Company.
- Plaintiff alleges an oral agreement for 85.7% shareholding.
- Deposit Receipt stated Plaintiff's shareholding as 10%.
- Shareholder Agreement provided for 30,000 shares for the Plaintiff.
- Company executed a share split, diluting Plaintiff's shareholding to 10%.
- Plaintiff claimed the Defendants failed to hold AGMs in a timely manner.
- Plaintiff alleged the Defendants misused company resources.
5. Formal Citations
- Lim Tong Zhen Kevryn v Cheo Jean Sheng and others, Suit No 844 of 2021, [2022] SGHC 315
6. Timeline
| Date | Event |
|---|---|
| Plaintiff invested $30,000 in the Company | |
| H.S.Y.3 Bistro Pte Ltd incorporated | |
| Shareholder Agreement signed | |
| Share split executed | |
| Annual General Meeting held | |
| Cheo transferred 81,000 shares to Ching | |
| Annual General Meeting held | |
| Company’s financial year ended | |
| Annual General Meeting held | |
| Plaintiff’s Statement of Claim filed | |
| Company booked losses of $127,979 | |
| Annual General Meeting held | |
| Trial began | |
| Plaintiff’s Closing Submissions dated | |
| Plaintiff’s Reply Submissions dated | |
| Judgment reserved |
7. Legal Issues
- Minority Oppression
- Outcome: The court found that the Plaintiff had not established any grounds of oppression.
- Category: Substantive
- Sub-Issues:
- Unfair dilution of shares
- Failure to hold Annual General Meetings
- Improper use of company resources
- Attempt to strike off company
- Related Cases:
- [2010] 2 SLR 776
- Share Dilution
- Outcome: The court found that the share split did not amount to an unfair dilution of the Plaintiff's shares.
- Category: Substantive
- Breach of Contract
- Outcome: The court noted that the Plaintiff did not sue the Defendants for breach of contract.
- Category: Substantive
8. Remedies Sought
- Relief under s 216 of the Companies Act
9. Cause of Actions
- Minority Oppression
10. Practice Areas
- Commercial Litigation
- Corporate Law
- Shareholder Disputes
11. Industries
- Food and Beverage
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Over & Over Ltd v Bonvests Holdings Ltd and another | Court of Appeal | Yes | [2010] 2 SLR 776 | Singapore | Cited as the locus classicus on minority oppression, outlining the need to consider legal rights, legitimate expectations, and commercial unfairness. |
| Ebrahimi v Westbourne Galleries Ltd | N/A | Yes | [1973] AC 360 | United Kingdom | Cited for the principle that a limited company may have underlying personal relationships and equitable considerations that affect the exercise of legal rights. |
| Leong Chee Kin (on behalf of himself and as a minority shareholder of Ideal Design Studio Pte Ltd) v Ideal Design Studio Pte Ltd and others | High Court | Yes | [2018] 4 SLR 331 | Singapore | Cited to define a quasi-partnership as a company whose affairs are conducted with a degree of informality. |
| Lim Kok Wah and others v Lim Boh Yong and others and other matters | High Court | Yes | [2015] 5 SLR 307 | Singapore | Cited for the principle that a plaintiff must show that the company is subject to equitable considerations. |
| Sim Yong Kim v Evenstar Investments Pte Ltd | Court of Appeal | Yes | [2006] 3 SLR(R) 827 | Singapore | Cited with approval from Ebrahimi for elements that may justify the superimposition of equitable considerations. |
| Lim Swee Khiang and another v Borden Co (Pte) Ltd and others | Court of Appeal | Yes | [2006] 4 SLR(R) 745 | Singapore | Cited for the principle that the court will insist upon a high standard of corporate governance in a quasi-partnership. |
| O'Neill v Phillips | N/A | Yes | [1999] 1 WLR 1092 | United Kingdom | Cited for the principle that fairness depends on the context and background. |
| Re Cumana Ltd | English Court of Appeal | Yes | [1986] BCLC 430 | England and Wales | Cited with approval for the principle that the dilution of the minority’s shares would constitute a case of oppression or unfair prejudice. |
| Poh Fu Tek and others v Lee Shung Guan and others | High Court | Yes | [2018] 4 SLR 425 | Singapore | Cited for the principle that where there was no commercial justification for the dilution of shares, such conduct would be a visible departure from the standards of fair dealing and amounted to oppression. |
| Lee Chee Wei v Tan Hor Peow Victor and others and another appeal | Court of Appeal | Yes | [2007] 3 SLR(R) 537 | Singapore | Cited for the principle that the effect of the entire agreement clause is to preclude any attempt to qualify or supplement the Shareholder Agreement by reference to pre-contractual representations. |
| Lim Anthony v Gao Wenxi and another | High Court | Yes | [2020] SGHC 67 | Singapore | Cited for the principle that the share split exercise that was conducted is not an illegitimate conduct, in the sense that it was done with a collateral motive to dilute the shareholding and control of the Plaintiff rather than for a legitimate business purpose. |
| Guan Seng Co Sdn Bhd v Tan Hock Chuan | N/A | Yes | [1990] 2 CLJ 761 | Malaysia | Cited for the principle that the minority’s interest was being oppressively disregarded as no AGM had been held for six years. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Minority oppression
- Share dilution
- Share split
- Legitimate expectation
- Quasi-partnership
- Annual General Meeting
- Shareholder Agreement
- Deposit Receipt
15.2 Keywords
- minority oppression
- share dilution
- companies act
- shareholder dispute
16. Subjects
- Corporate Law
- Shareholder Rights
- Commercial Litigation
17. Areas of Law
- Companies Law
- Minority Shareholder Rights
- Oppression
- Corporate Governance