Chng Kheng Chye v Kaefer Integrated Services: Statutory Derivative Action & Oral Loan Arrangement Dispute
In Chng Kheng Chye (in a representative capacity on behalf of Kaefer Prostar Pte Ltd) v Kaefer Integrated Services Pte Ltd, the General Division of the High Court of Singapore heard a statutory derivative action brought by Chng Kheng Chye on behalf of Kaefer Prostar Pte Ltd against Kaefer Integrated Services Pte Ltd, concerning a disputed sum of S$1,544,142.47 from the Yamal Supply Subcontract. The Plaintiff claimed the sum was owed to Kaefer Prostar and had been loaned to Kaefer Integrated Services under an oral agreement. The Defendant denied the oral agreement and entitlement. The court, presided over by Tan Siong Thye J, found in favor of the Plaintiff, determining that Kaefer Prostar was entitled to the disputed sum.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Derivative action by Chng Kheng Chye on behalf of Kaefer Prostar against Kaefer Integrated Services for a disputed sum. The court found in favor of the plaintiff.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Chng Kheng Chye (in a representative capacity on behalf of Kaefer Prostar Pte Ltd) | Plaintiff | Individual | Judgment for Plaintiff | Won | |
| Kaefer Integrated Services Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Siong Thye | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Chng Kheng Chye, representing Kaefer Prostar, sued Kaefer Integrated Services for S$1,544,142.47, alleging it was owed for the Yamal Supply Subcontract.
- Kaefer Prostar performed work under the Yamal Supply Subcontract, but Kaefer Integrated Services was the contracting party.
- Kaefer Integrated Services paid Kaefer Prostar S$1,931,291.95 but allegedly still owed S$1,544,142.47.
- Chng claimed Kaefer Prostar loaned the disputed sum to Kaefer Integrated Services via an oral agreement.
- Kaefer Integrated Services denied the oral agreement, stating any profit entitlement would be documented.
- The disputed sum was used to pay off some of the liabilities of the Defendant.
- Kaefer Germany intended to buy over the Plaintiff’s remaining 20% shares in the Company and the Company and the Defendant would merge as one entity.
5. Formal Citations
- Chng Kheng Chye (in a representative capacity on behalf of Kaefer Prostar Pte Ltd) v Kaefer Integrated Services Pte Ltd, Suit No 318 of 2021, [2023] SGHC 30
6. Timeline
| Date | Event |
|---|---|
| HC/OS 227/2020 filed | |
| Suit No 318 of 2021 filed | |
| Share Purchase Agreement executed | |
| Shareholders’ agreement executed | |
| Date the Company’s financial statements for the financial year ended were laid before the Company’s annual general meeting | |
| Yamal Project completed | |
| Insulation Supply Subcontract executed | |
| Trial began | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the Defendant breached an oral agreement (loan arrangement) with the Plaintiff.
- Category: Substantive
- Statutory Derivative Action
- Outcome: The court allowed the Plaintiff to bring a derivative action on behalf of Kaefer Prostar Pte Ltd.
- Category: Procedural
- Formation of Oral Contract
- Outcome: The court found that an oral agreement (loan arrangement) existed between the Plaintiff and the Defendant.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Statutory Derivative Action
10. Practice Areas
- Commercial Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd | High Court | Yes | [2011] 2 SLR 232 | Singapore | Cited for the principle that the court must ascertain whether a document was intended by the parties to operate as a legally valid and binding contract. |
| MCST Plan No 1933 v Liang Huat Aluminium Ltd | High Court | Yes | [2001] 2 SLR(R) 91 | Singapore | Cited for the principle that the court must ascertain whether a document was intended by the parties to operate as a legally valid and binding contract. |
| Browne v Dunn | Unknown | Yes | (1893) 6 R 67 | Unknown | Cited for the rule that it is essential to direct a witness's attention to the fact that they are not speaking the truth on a particular point. |
| Britestone Pte Ltd v Smith & Associates Far East, Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 855 | Singapore | Cited for the principle that a plaintiff in a civil claim bears the legal burden of proving the existence of any relevant fact necessary to make out its claim on a balance of probabilities. |
| Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd | Court of Appeal | Yes | [2011] 2 SLR 63 | Singapore | Cited for the principle that the defendant will have a legal burden of proving a pleaded defence, unless the defence is a bare denial of the claim. |
| Chan Tam Hoi (alias Paul Chan) v Wang Jian and other matters | High Court | Yes | [2022] SGHC 192 | Singapore | Cited for the principle that the legal burden of proof is always placed on the plaintiff and does not shift. |
| Tan Swee Wan and another v Johnny Lian Tian Yong | High Court | Yes | [2018] SGHC 169 | Singapore | Cited for the principle that whether an oral agreement amounts to a binding contract depends on whether the elements are established. |
| Tan Li Yin Michel v Avril Rengasamy | High Court | Yes | [2018] SGHC 274 | Singapore | Cited for the principle that in ascertaining the existence of an oral agreement, the court has to consider the relevant documentary evidence and contemporaneous conduct of the parties at the material time. |
| Tribune Investment Trust Inc v Soosan Trading Co Ltd | Court of Appeal | Yes | [2000] 2 SLR(R) 407 | Singapore | Cited for the principle that in ascertaining the existence of an oral agreement, the court has to consider the relevant documentary evidence and contemporaneous conduct of the parties at the material time. |
| OCBC Capital Investment Asia Ltd v Wong Hua Choon | Court of Appeal | Yes | [2012] 4 SLR 1206 | Singapore | Cited for the principle that the court should look to the relevant documentary evidence first as they would be more reliable than a witness’ oral testimony. |
| Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal | Court of Appeal | Yes | [2009] 2 SLR(R) 332 | Singapore | Cited for the principle that where there is little or no documentary evidence, the court will attempt its level best by examining closely the precise factual matrix. |
| ARS v ART | High Court | Yes | [2015] SGHC 78 | Singapore | Cited for the guiding principles that a court ought to bear in mind when examining the reliability of oral testimony. |
| Jian Li Investment Holdings Pte Ltd and others v Healthstats International Pte Ltd and others | High Court | Yes | [2019] 4 SLR 825 | Singapore | Cited for the principle that one facet of the “good faith” requirement is that the complainant seeking to bring the derivative action cannot be doing so for a collateral purpose. |
| Pang Yong Hock and another v PKS Contracts Services Pte Ltd | Court of Appeal | Yes | [2004] 3 SLR(R) 1 | Singapore | Cited for the principle that one facet of the “good faith” requirement is that the complainant seeking to bring the derivative action cannot be doing so for a collateral purpose. |
| Ang Thiam Swee v Low Hian Chor | Court of Appeal | Yes | [2013] 2 SLR 340 | Singapore | Cited for the principle that the fact that the complainant may have a personal interest in pursuing the derivative action is not necessarily fatal to the finding of good faith. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 216A of the Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Evidence Act 1893 (2020 Rev Ed) | Singapore |
| s 32 of the Evidence Act 1893 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Yamal Project
- Insulation Supply Subcontract
- Disputed Sum
- Loan Arrangement
- Management Agreements
- Payment Arrangement
- Statutory Derivative Action
- Oral Agreement
15.2 Keywords
- derivative action
- oral contract
- loan arrangement
- construction
- Kaefer
- Yamal Project
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Statutory derivative action | 80 |
| Company Law | 75 |
| Contract Law | 70 |
| Oral contracts | 65 |
| Commercial Disputes | 60 |
| Arbitration | 30 |
| Misrepresentation | 25 |
| Fraud and Deceit | 20 |
16. Subjects
- Contract Law
- Companies Law
- Breach of Contract
- Statutory Derivative Action