Wee Ewe Seng v True Yoga: Breach of Employment Contract & Fiduciary Duty

In Wee Ewe Seng Patrick John v True Yoga Pte Ltd and others, the Appellate Division of the High Court of Singapore dismissed Mr. Wee's appeal regarding the breach of his employment contract and fiduciary duty as a director. The court found that Mr. Wee, as Group CEO, failed to properly manage the closure of True Yoga's related companies, True Yoga Thailand and True Yoga Malaysia, leading to reputational and financial damage. The respondents brought a claim for breach of contract and breach of fiduciary duty. Mr. Wee's counterclaim for unpaid salary was also dismissed.

1. Case Overview

1.1 Court

Appellate Division of the High Court of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Director Wee Ewe Seng breached his employment contract and fiduciary duty by mismanaging True Yoga's related companies' closure. Appeal dismissed.

1.7 Decision Date

25 July 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
True Yoga Pte Ltd	Respondent	Corporation	Judgment for Respondent	Won	Angela Phoon Yan Ling of Oon & Bazul LLP Tan Zhengxian Jordan of Audent Chambers LLC Leong Hoi Seng Victor of Audent Chambers LLC
True Fitness (STC) Pte Ltd	Respondent	Corporation	Judgment for Respondent	Won	Angela Phoon Yan Ling of Oon & Bazul LLP Tan Zhengxian Jordan of Audent Chambers LLC Leong Hoi Seng Victor of Audent Chambers LLC
True Fitness Pte Ltd	Respondent	Corporation	Judgment for Respondent	Won	Angela Phoon Yan Ling of Oon & Bazul LLP Tan Zhengxian Jordan of Audent Chambers LLC Leong Hoi Seng Victor of Audent Chambers LLC
Wee Ewe Seng Patrick John	Appellant	Individual	Appeal Dismissed	Lost	Rai Vijay Kumar of Arbiters Inc Law Corporation Jasleen Kaur of Arbiters Inc Law Corporation Joavan Christopher Pereira of Arbiters Inc Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Kannan Ramesh	Judge of the Appellate Division	Yes
Aedit Abdullah	Judge of the High Court	No
Quentin Loh	Senior Judge	No

4. Counsels

Counsel Name	Organization
Angela Phoon Yan Ling	Oon & Bazul LLP
Tan Zhengxian Jordan	Audent Chambers LLC
Leong Hoi Seng Victor	Audent Chambers LLC
Rai Vijay Kumar	Arbiters Inc Law Corporation
Jasleen Kaur	Arbiters Inc Law Corporation
Joavan Christopher Pereira	Arbiters Inc Law Corporation

4. Facts

Mr. Wee was the Group CEO of CJ Group and a director of True Yoga, True Fitness (STC), and True Fitness.
Mr. Wee was assigned the duty to manage the business of True Yoga Thailand (TT) and True Yoga Malaysia (TM).
TT and TM experienced serious cash flow issues in late 2016 and early 2017.
Mr. Wee explored selling TT and TM to other fitness groups but was unsuccessful.
A restructuring occurred in May 2017, transferring shares in the respondents to a new holding company.
Mr. Wee resigned as director of TT and TM in May 2017.
TT and TM ceased operations in June 2017, generating negative publicity.
Mr. Wee's employment was terminated in May 2018.

5. Formal Citations

Wee Ewe Seng Patrick John v True Yoga Pte Ltd and others, Civil Appeal No 67 of 2022, [2023] SGHC(A) 26
True Yoga Pte Ltd and others v Wee Ewe Seng Patrick John, , [2022] SGHC 155

6. Timeline

Date	Event
2008-03-19	Employment Agreement signed
2008-03-13	Mr. Wee appointed Group CEO for a term of five years
2012-06-01	Mr. Wee’s monthly salary increased
2013-02-01	Mr. Wee offered an extension of the initial five-year term under the Employment Agreement
2016-11-24	CFO Mr. Alvin Chen provided Mr. Wee with a bleak assessment of TT
2017-02-01	Negotiations with Jatomi Fitness Group for the sale of TT and TM began
2017-03-01	Negotiations with Evolution Wellness for the sale of TT and TM began
2017-04-01	Mr. Wee sought legal advice on insolvency proceedings for TT and TM
2017-05-06	Sale and purchase agreement entered into for the acquisition of the respondents and True Yoga Holdings Ltd, and the “True” brand by Tongfang
2017-05-03	Mr Xing Hu wrote an email regarding Executive Team Pay Allocation
2017-05-19	Restructuring of the CJ Group took place
2017-05-29	Acquisition completed
2017-05-30	Mr. Wee resigned as director of TT and TM
2017-06-09	TT ceased operations
2017-06-10	TM ceased operations
2017-07-27	TM was ordered to be wound up
2018-05-09	Mr. Wee’s employment as Group CEO was terminated
2019-04-08	Respondents brought action against Mr. Wee
2023-02-10	Judgment reserved
2023-07-26	Judgment delivered

7. Legal Issues

Breach of Employment Contract
- Outcome: The court held that Mr. Wee breached his employment contract by mismanaging the closure of TT and TM.
- Category: Substantive
- Sub-Issues:
  - Failure to faithfully and diligently perform duties
  - Mismanagement of company closure
Breach of Fiduciary Duty
- Outcome: The court held that Mr. Wee breached his fiduciary duty by failing to act in the best interests of the respondents.
- Category: Substantive
- Sub-Issues:
  - Failure to act in the best interests of the company
  - Prioritizing personal interests over company interests
Standing to Bring Claims
- Outcome: The court held that the respondents had standing to bring the claims.
- Category: Procedural

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation
Corporate Governance

11. Industries

Fitness
Wellness

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Fu Loong Lithographer Pte Ltd and others v Mok Wing Chong (Tan Keng Lin and others, third parties)	High Court	Yes	[2018] 4 SLR 645	Singapore	Distinguished; cited regarding the proper plaintiff rule and whether the respondents have standing to bring the Fiduciary Claim.
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	Cited regarding the reflective loss principle and the proper plaintiff rule.
OOPA Pte Ltd v Bui Sy Phong	High Court	Yes	[2022] 4 SLR 537	Singapore	Cited regarding breach of duty to another principal does not negate or limit the first principal’s rights against the defaulting fiduciary.
Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal	Court of Appeal	Yes	[2017] 2 SLR 592	Singapore	Distinguished; cited regarding the Fiduciary Claim pursued by the respondents is grounded in legal rights and liabilities separate from those owed to TT and TM.
Regentcrest v Cohen	N/A	Yes	[2001] BCLC 80	N/A	Cited regarding the test for whether a director has exercised his fiduciary duty in good faith and in the best interests of a company.
Extrasure Travel Insurances v Scattergood	N/A	Yes	[2003] BCLC 598	N/A	Cited regarding the test for whether a director has exercised his fiduciary duty in good faith and in the best interests of a company.
Ho Kang Peng v Scintronix Corp Ltd (formerly known as TTL Holdings Ltd)	Court of Appeal	Yes	[2014] 3 SLR 329	Singapore	Cited regarding the test for whether a director has exercised his fiduciary duty in good faith and in the best interests of a company.
Tan Woo Thian v PricewaterhouseCoopers Advisory Services Pte Ltd	High Court	Yes	[2021] 1 SLR 1166	Singapore	Cited regarding the loss occasioned by the breach.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act 1967	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Employment Agreement
Fiduciary Duty
Group CEO
Restructuring
True Brand
Related Corporations
Associated Corporations
Closure of Business
Director's Duties

15.2 Keywords

Breach of Contract
Fiduciary Duty
Director
Employment
True Yoga
Singapore
Appeal
Mismanagement
Closure

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	85
Breach of Contract	75
Director's Duties	70
Contract Law	60
Corporate Law	60
Employment Law	50
Business Litigation	40
Civil Litigation	30

16. Subjects

Contract Law
Corporate Law
Employment Law
Fiduciary Duty