Goh Tze Chien v Tan Teow Chee: Validity of Company Winding Up Resolution & Mental Capacity

In Goh Tze Chien v Tan Teow Chee and Teh Kwang Hwee, the Singapore High Court dismissed Mr. Goh's application (OA 637/2023) to invalidate a special resolution to wind up Land & Marine Private Limited and appoint Mr. Teh as liquidator. Mr. Goh also sought an order (SUM 2196/2023) for the assessment of his mother's mental capacity and to prevent the respondents from using estate assets for their defense. The court, presided over by Valerie Thean J, found no basis to invalidate the resolutions or question the mother's mental capacity at the time of signing relevant documents. The court also dismissed allegations of fraud. The decision was made on 19 October 2023, with grounds issued on 9 January 2024.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Originating Application No 637 of 2023 and Summons No 2196 of 2023 were dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court judgment regarding the validity of a company winding up resolution and the mental capacity of a shareholder. The court dismissed the application.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Goh Tze ChienApplicantIndividualApplication DismissedLost
Tan Teow CheeRespondentIndividualJudgment in favor of Respondent, Judgment in favor of RespondentWon, WonMarina Chin Li Yuen, Lee Pei Hua Rachel, Teo Su Ning Gillian
Teh Kwang HweeRespondentIndividualJudgment in favor of Respondent, Judgment in favor of RespondentWon, WonTan Cheng Kiong

3. Judges

Judge NameTitleDelivered Judgment
Valerie TheanJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Marina Chin Li YuenTan Kok Quan Partnership
Lee Pei Hua RachelTan Kok Quan Partnership
Teo Su Ning GillianTan Kok Quan Partnership
Tan Cheng KiongCK Tan Law Corporation

4. Facts

  1. The applicant's father died on 3 August 2022.
  2. The first respondent was the sole executor and trustee of the Father’s estate in Singapore.
  3. The applicant brought OA 637 to invalidate a special resolution to wind up the Company.
  4. The applicant also filed SUM 2196 seeking an order for the assessment of the mental capacity of his mother.
  5. The Father held 36% of the shares of the Company, the Mother held 19%, while the Goh Siblings each held 15%.
  6. The directors of the Company were the Mother, Mr Goh, and Ning.
  7. The Mother signed a letter and a directors’ resolution in writing, appointing Mr Tan as her alternate director.

5. Formal Citations

  1. Goh Tze Chien v Tan Teow Chee and another, Originating Application No 637 of 2023 and Summons No 2196 of 2023, [2024] SGHC 1

6. Timeline

DateEvent
Land & Marine Private Limited incorporated by the Father.
The Father executed a will in respect of his assets in Singapore.
The Father and Mother moved to Penang.
MRI scan conducted by Dr Dennis Tan.
Dr Looi administered Montreal Cognitive Assessment test.
Mr Goh Swee Boh @ Goh Cheng Kin died.
Goh Siblings met with Malaysian solicitors.
The Will was read.
The Mother renounced her rights to the probate and execution of the Will.
Application for grant of probate to Mr Tan as the sole executor was filed.
Mr Goh wrote to the Malaysian solicitors to revoke all the documents he had previously signed.
Mr Goh alleged that the Mother was “unable in her state of mind at the material time to consent to the documents”.
Probate was extracted.
Mr Goh was informed that probate was extracted.
Mr Tan wrote to the Goh Siblings about 23 Thomson View.
Mr Goh responded to Mr Tan's email.
Mr Goh responded to Mr Tan's email.
Mr Tan emailed the Goh Siblings, proposing that the Company be voluntarily wound up.
The Sisters informed Mr Tan via email that the Sisters and the Mother agreed that the Company be wound up.
Mr Tan asked for Mr Goh’s consent to wind up the Company.
Mr Goh replied to Mr Tan, alleging that Mr Tan had “failed to discharge [his] duty as executor with due care and due diligence”.
The Mother signed a letter and a directors’ resolution in writing, appointing Mr Tan as her alternate director for the Company during her absence.
Due notice of the requisition was forwarded to each member of the board, including Mr Goh.
Dr Prem issued a medical report.
Mr Goh filed HCF/SUM 123/2023 to HCF/P 525/2022.
A board meeting of the Company was held.
A proxy form was signed by the Mother.
Extraordinary general meeting of the Company was held.
Mr Goh filed OA 637.
Mr Tan filed DC/OA 113/2023.
Mr Goh filed HCF/SUM 192/2023 to P 525.
Mr Goh filed DC/SUM 1856/2023 to OA 113.
Both applications were struck out.
Mr Goh filed FC/OSM 310/2023.
Default judgment was entered against Mr Goh in OA 113 and his application under SUM 1856.
Mr Goh filed HCF/OSP 15/2023.
I dismissed SUM 2196 and OA 637.
Mr Goh applied to set aside the default judgment vide DC/SUM 2660/2023.
Grounds of Decision issued.

7. Legal Issues

  1. Validity of Special Resolution
    • Outcome: The court held that the special resolution to wind up the company was validly passed.
    • Category: Substantive
    • Sub-Issues:
      • Compliance with statutory provisions
      • Compliance with company constitution
  2. Mental Capacity
    • Outcome: The court found that the applicant failed to prove that the Mother lacked mental capacity when she signed the relevant documents.
    • Category: Substantive
    • Sub-Issues:
      • Assessment of mental capacity
      • Impact of dementia on decision-making
    • Related Cases:
      • [2012] 1 SLR 549
  3. Breach of Trust
    • Outcome: The court found no basis for the applicant's assertions that Mr. Tan had breached any duties to the Estate.
    • Category: Substantive
  4. Fraud
    • Outcome: The court found no evidence to support the allegations of fraud against Mr. Tan and Mr. Teh.
    • Category: Substantive

8. Remedies Sought

  1. Invalidation of special resolution
  2. Invalidation of appointment of liquidator
  3. Assessment of mental capacity
  4. Indemnity for costs

9. Cause of Actions

  • Breach of Trust
  • Lack of Mental Capacity
  • Fraud

10. Practice Areas

  • Commercial Litigation
  • Trust Litigation
  • Insolvency
  • Company Meetings
  • Mental Health Law

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Wong Meng Cheong and another v Ling Ai Wah and anotherHigh CourtYes[2012] 1 SLR 549SingaporeCited for the principle that the Mental Capacity Act emphasizes an individual’s autonomy and the right to decide for himself.
Re BKRHigh CourtYes[2015] 4 SLR 81SingaporeCited for the functional and clinical components of the test for capacity in s 4(1) of the MCA.
In re Beddoe; Downes v CottamChancery DivisionYes[1893] 1 Ch 547England and WalesCited for the principle that a trustee is entitled to full indemnity out of his trust estate against all his costs, charges and expenses in an action respecting the trust estate so long as they were properly incurred.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed)Singapore
Companies Act 1967 (2020 Rev Ed)Singapore
Mental Capacity Act 2008 (2020 Rev Ed)Singapore
Supreme Court of Judicature Act 1969 (2020 Rev Ed)Singapore
Trustees ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Special resolution
  • Winding up
  • Mental capacity
  • Alternate director
  • Proxy form
  • Executor
  • Trustee
  • Dementia
  • Board resolution
  • Extraordinary general meeting

15.2 Keywords

  • company winding up
  • mental capacity
  • special resolution
  • trustee duties
  • Singapore High Court

16. Subjects

  • Company Law
  • Mental Capacity Law
  • Trust Law
  • Insolvency Law

17. Areas of Law

  • Company Law
  • Mental Capacity Law
  • Trust Law
  • Civil Procedure
  • Insolvency Law