Mehta v Mehta: Director Resignation & Validity of Board Resolutions
In the Appellate Division of the High Court of Singapore, Mr. Bhavin Rashmi Mehta appealed against Mr. Chetan Mehta, Mr. Sanjiwan Sahni, Mr. Quek Hung Guan, and Arpee Gem Pte Ltd, concerning the validity of board resolutions. The central legal issue was whether Mr. Sahni had effectively withdrawn his resignation as a director of Arpee Gem, which would impact the validity of resolutions he voted on. The court dismissed the appeal, finding that Mr. Bhavin had consented to the withdrawal of Mr. Sahni's resignation.
1. Case Overview
1.1 Court
Appellate Division of the High Court of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding the withdrawal of a director's resignation and its impact on the validity of board resolutions. The court dismissed the appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Bhavin Rashmi Mehta | Appellant, Plaintiff | Individual | Appeal Dismissed | Lost | Jerald Foo, Luis Inaki Duhart Gonzalez |
| Chetan Mehta | Respondent, Defendant | Individual | Appeal Dismissed | Won | Koh Swee Yen, Ang Shunli Alanna Suegene Uy, Teo Wei Kiat Samuel |
| Sanjiwan Sahni | Respondent, Defendant | Individual | Appeal Dismissed | Won | Koh Swee Yen, Ang Shunli Alanna Suegene Uy, Teo Wei Kiat Samuel |
| Quek Hung Guan | Respondent, Defendant | Individual | Appeal Dismissed | Won | Koh Swee Yen, Ang Shunli Alanna Suegene Uy, Teo Wei Kiat Samuel |
| Arpee Gem Pte Ltd | Respondent, Defendant | Corporation | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge of the Appellate Division | Yes |
| Kannan Ramesh | Judge of the Appellate Division | No |
| Quentin Loh Sze-On | Senior Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Jerald Foo | Selvam LLC |
| Luis Inaki Duhart Gonzalez | Selvam LLC |
| Koh Swee Yen | WongPartnership LLP |
| Ang Shunli Alanna Suegene Uy | WongPartnership LLP |
| Teo Wei Kiat Samuel | WongPartnership LLP |
4. Facts
- Mr. Sahni submitted resignation notices in 2015 and 2018.
- Mr. Bhavin co-signed financial statements with Mr. Sahni as co-directors after the resignations.
- Mr. Sahni invoiced for and was paid director's fees until October 2021.
- Mr. Bhavin was aware of the director's fees paid to Mr. Sahni and did not object.
- Mr. Sahni signed an Indemnity as director, co-signed by Mr. Bhavin.
- Mr. Chetan sought to sell a property belonging to MIC, a subsidiary of Arpee Gem.
- Mr. Bhavin objected to the validity of resolutions signed by Mr. Sahni.
5. Formal Citations
- Bhavin Rashmi Mehta v Chetan Mehta, Civil Appeal No 49 of 2022, [2022] SGHC(A) 19
- Bhavin Rashmi MehtavChetan Mehta, , [2023] SGHC(A) 19
6. Timeline
| Date | Event |
|---|---|
| Mr. Sahni submitted a notice of resignation via email. | |
| Mr. Sahni gave a second notice of resignation by way of a letter. | |
| Mr. Chetan issued notices calling for board meetings of Kay Diamonds and MIC. | |
| Mr. Bhavin received notice of the October 2021 AGMs via email. | |
| Draft directors’ resolutions were dated. | |
| Mr. Bhavin received signed copies of the Draft Resolutions. | |
| Mr. Bhavin objected by email to the validity of the Purported Resolutions. | |
| The AGMs were fixed. | |
| OS 1267 was filed. | |
| The respondents passed a resolution to re-confirm Mr Sahni’s status as a director. | |
| Injunction orders granted in paragraphs 1(a) to 1(f) of HC/ORC 1009/2023, which were granted in HC/OA 342/2022. | |
| The court dismissed the appeal. | |
| Woo Bih Li JAD delivered the grounds of decision of the court. |
7. Legal Issues
- Validity of Director's Resignation Withdrawal
- Outcome: The court held that Mr. Bhavin had consented to the withdrawal of Mr. Sahni's resignation, rendering the resolutions valid.
- Category: Substantive
- Sub-Issues:
- Consent to withdrawal of resignation
- Effectiveness of resignation notice
- Re-appointment of director
- Related Cases:
- [2022] SGHC 173
- [1996] 3 SLR(R) 418
- [1981] 3 All ER 577
- [2005] 1 SLR(R) 379
- [2010] 1 All ER 174
- [1984] 1 WLR 251
- [2017] Ch 389
- [2021] 3 WLR 697
- [2008] 2 SLR(R) 474
- [1988] 2 Lloyd’s Rep 343
- [2002] 1 SLR(R) 418
- [2020] 5 SLR 514
- [2021] 2 SLR 67
- [1907] 2 Ch 370
- Estoppel by Convention
- Outcome: The court did not make a definitive ruling on estoppel by convention but suggested that Mr. Bhavin would be estopped from denying Mr. Sahni's directorship.
- Category: Substantive
- Sub-Issues:
- Shared assumption
- Reliance on assumption
- Detriment suffered
- Related Cases:
- [1996] 3 SLR(R) 418
- [1981] 3 All ER 577
- [2005] 1 SLR(R) 379
- [2010] 1 All ER 174
- [1984] 1 WLR 251
- [2017] Ch 389
- [2021] 3 WLR 697
- [2008] 2 SLR(R) 474
- [1988] 2 Lloyd’s Rep 343
- [2002] 1 SLR(R) 418
- [2020] 5 SLR 514
- [2021] 2 SLR 67
8. Remedies Sought
- Declarations regarding Mr. Sahni's directorship status
- Injunctions to prevent Mr. Sahni from acting as a director
9. Cause of Actions
- Breach of Companies Act
- Declaratory Relief
- Injunctive Relief
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Gem and Jewellery
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Bhavin Rashmi Mehta v Chetan Mehta and others | High Court | Yes | [2022] SGHC 173 | Singapore | Cited for the background facts of the case, including the shareholding structure of Arpee Gem and its subsidiaries. |
| Singapore Island Country Club v Hilborne | Court of Appeal | Yes | [1996] 3 SLR(R) 418 | Singapore | Cited for the three requirements for establishing estoppel by convention. |
| Amalgamated Investment and Property Co Ltd (in liquidation) v Texas Commerce International Bank Ltd | Court of Appeal | Yes | [1981] 3 All ER 577 | England and Wales | Cited as the authority for the three requirements for estoppel by convention, as adopted in Singapore Island Country Club v Hilborne. |
| MAE Engineering Ltd v Fire-Stop Marketing Services Pte Ltd | High Court | Yes | [2005] 1 SLR(R) 379 | Singapore | Cited for endorsing the Hilborne requirements for estoppel by convention. |
| Revenue and Customs Commissioners v Benchdollar Ltd and others | Not Available | Yes | [2010] 1 All ER 174 | England and Wales | Cited for the principles applicable to estoppel by convention arising out of non-contractual dealings. |
| Keen v Holland | Not Available | Yes | [1984] 1 WLR 251 | England and Wales | Cited in Revenue and Customs Commissioners v Benchdollar Ltd and others for principles applicable to estoppel by convention arising out of non-contractual dealings. |
| Blindley Heath Investments Ltd and another v Bass and others | High Court | Yes | [2017] Ch 389 | England and Wales | Cited for the principle that agreement to the common assumption for estoppel by convention may be inferred from conduct or silence. |
| Tinkler v Revenue and Customs Commissioners | UK Supreme Court | Yes | [2021] 3 WLR 697 | United Kingdom | Cited for affirming the Benchdollar and Blindley principles as the correct statement of estoppel by convention for both contractual and non-contractual dealings. |
| Travista Development Pte Ltd v Tan Kim Swee Augustine and others | Court of Appeal | Yes | [2008] 2 SLR(R) 474 | Singapore | Cited for laying out the elements for estoppel by convention to operate in Singapore. |
| The Vistafjord | Not Available | Yes | [1988] 2 Lloyd’s Rep 343 | England and Wales | Cited in Travista Development Pte Ltd v Tan Kim Swee Augustine and others for the requirement that parties must have acted on an assumed and incorrect state of fact or law. |
| Management Corporation Strata Title Plan No 473 v De Beers Jewellery Pte Ltd | High Court | Yes | [2002] 1 SLR(R) 418 | Singapore | Cited as a case where the court held that estoppel by convention operated only where parties were in a contractual relationship. |
| Day, Ashley Francis v Yeo Chin Huat Anthony and others | High Court | Yes | [2020] 5 SLR 514 | Singapore | Cited as a case where the court held that estoppel by convention operated only where parties were in a contractual relationship. |
| Chan Yun Cheong (trustee of the will of the testator) v Chan Chi Cheong (trustee of the will of the testator) | Court of Appeal | Yes | [2021] 2 SLR 67 | Singapore | Cited as a case where the parties were co-trustees appointed pursuant to a deed of appointment, and the court considered the application of estoppel by convention. |
| Glossop v Glossop | Not Available | Yes | [1907] 2 Ch 370 | England and Wales | Cited for the position that a director's resignation may be withdrawn with the consent of the company's directors. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act | Singapore |
| s 399(2) Companies Act | Singapore |
| s 409A Companies Act | Singapore |
| s 173A Companies Act | Singapore |
| s 39 Companies Act | Singapore |
| Supreme Court of Judicature Act 1969 | Singapore |
| s 18 Supreme Court of Judicature Act 1969 | Singapore |
| ss 145(4A) Companies Act | Singapore |
| ss 145(4B) Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Resignation
- Director
- Board Resolution
- Estoppel by Convention
- Companies Act
- Financial Statements
- Indemnity
- Shareholder Dispute
15.2 Keywords
- Director Resignation
- Board Resolutions
- Companies Act
- Estoppel
- Corporate Law
- Singapore
16. Subjects
- Company Law
- Directors
- Resignation
- Corporate Governance
17. Areas of Law
- Company Law
- Civil Procedure
- Directors' Duties
- Estoppel by Convention