Goh Heng Tee v Tiong Hin Engineering: Statutory Derivative Action & Company's Best Interests
In Goh Heng Tee v Tiong Hin Engineering Pte Ltd, the plaintiff, Goh Heng Tee, sought leave from the General Division of the High Court of Singapore to commence a statutory derivative action against the defendants, Tiong Hin Engineering Pte Ltd, Goh Swee Hin, Goh Swee Hock, and Goh Meng Hong. The application was dismissed by Justice Philip Jeyaretnam, who found that the proposed action was not prima facie in the interests of the company and that the plaintiff was not acting in good faith. The plaintiff's claims related to alleged breaches of duty by the second defendant, Goh Swee Hin, concerning payments, diversion of business, salaries, and sale of machinery.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Originating summons dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Shareholder seeks leave for statutory derivative action against directors. Court dismisses application, finding it not in company's best interests.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Goh Heng Tee | Plaintiff | Individual | Application Dismissed | Lost | |
| Tiong Hin Engineering Pte Ltd | Defendant | Corporation | Judgment in favour of Defendant | Won | |
| Goh Swee Hin | Defendant | Individual | Judgment in favour of Defendant | Won | |
| Goh Swee Hock | Defendant | Individual | Judgment in favour of Defendant | Won | |
| Goh Meng Hong | Defendant | Individual | Judgment in favour of Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Jeyaretnam | Judge of the High Court | Yes |
4. Counsels
4. Facts
- The plaintiff sought leave to commence a statutory derivative action against the second to fourth defendants.
- The plaintiff and the second to fourth defendants are directors of the first defendant, Tiong Hin Engineering Pte Ltd.
- The plaintiff previously filed an application to wind up the company, which he later discontinued.
- The company had ceased business operations and sold off its assets.
- The plaintiff alleged several breaches of duty by the second defendant, including improper payments, diversion of business, and undervalue sale of machinery.
- The other directors and shareholders did not support the plaintiff's complaints about the second defendant.
- The plaintiff is involved in litigation in China with Xiamen Tonghin.
5. Formal Citations
- Goh Heng Tee v Tiong Hin Engineering Pte Ltd and others, Originating Summons No 508 of 2021, [2022] SGHC 34
6. Timeline
| Date | Event |
|---|---|
| Father of the plaintiff and the second to fourth defendants passed away. | |
| Tiong Hin Light Furniture Industries Pte Ltd registered as a business. | |
| Board meeting of the company was held; it was agreed that the company would cease business operations with effect from 2018-12-31. | |
| Tiong Hin Light Furniture Industries Pte Ltd incorporated. | |
| Xiamen Tonghin issued a letter of demand. | |
| The company gave notice of a board meeting to discuss the operation of the first defendant after it ceased business on 2019-05-31 and discuss the winding up of the first defendant. | |
| Xiamen Tonghin commenced a suit in China. | |
| Plaintiff filed an application to wind up the company. | |
| Plaintiff included the matter in a requisition notice for an extraordinary general meeting. | |
| Extraordinary general meeting was held. | |
| At an EGM of the first defendant, the sale of the first defendant’s remaining substantial asset, a property in Changi, was approved at the price of $4.2m. | |
| Plaintiff’s affidavit dated. | |
| 1st Defendant’s affidavit dated. | |
| Sale of property in Changi completed. | |
| Oral hearing. | |
| Plaintiff’s solicitors letter to court dated. | |
| Judgment reserved. | |
| Judgment. |
7. Legal Issues
- Whether the proposed statutory derivative action is prima facie in the interests of the company
- Outcome: The court found that the proposed action was not prima facie in the interests of the company.
- Category: Substantive
- Whether the complainant is acting in good faith
- Outcome: The court found that the plaintiff was not acting in good faith.
- Category: Procedural
8. Remedies Sought
- Leave to commence a statutory derivative action
9. Cause of Actions
- Breach of Director's Duties
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ang Thiam Swee v Low Hian Chor | Court of Appeal | Yes | [2013] 2 SLR 340 | Singapore | Cited for the principle that the court should consider whether it would be in the practical and commercial interests of the company for the action to be brought when considering an application for leave to commence a statutory derivative action. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act 1967 | Singapore |
| s 216A of the Companies Act 1967 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Statutory derivative action
- Prima facie interests of the company
- Good faith
- Winding up
- Director's duties
- Related party transaction
15.2 Keywords
- statutory derivative action
- companies act
- directors duties
- corporate governance
- singapore
17. Areas of Law
16. Subjects
- Companies Law
- Corporate Governance
- Civil Procedure