Khan Aisanullah v Rajib Kumar Dhali: Breach of Contract & Fiduciary Duty Claims by Shareholder
In Khan Aisanullah v Rajib Kumar Dhali, the High Court of Singapore addressed claims by Plaintiff Khan Aisanullah against Defendant Rajib Kumar Dhali for breach of an oral agreement and breach of fiduciary duties. The Plaintiff, the sole shareholder of Secur Credentials Logistics & Services Pte Ltd, alleged that the Defendant, a nominee director, improperly removed him as a director, transferred his shares, and misappropriated company funds. The Defendant counterclaimed for unpaid salary and compensation. The court, presided over by Senior Judge Chan Seng Onn, found that the Defendant breached the oral agreement but dismissed the Plaintiff's claim based on the reflective loss principle, which prevents shareholders from claiming for losses that reflect losses suffered by the company. The court also dismissed the Defendant's counterclaim.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Plaintiff's claim and Defendant's counterclaim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court case involving breach of contract and fiduciary duty claims by a shareholder against a nominee director. The court dismissed both claims.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Khan Aisanullah | Plaintiff | Individual | Claim Dismissed | Dismissed | |
| Rajib Kumar Dhali | Defendant | Individual | Counterclaim Dismissed | Dismissed |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Senior Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Cephas Yee Xiang | Aquinas Law Alliance LLP |
| Kieran Martin Singh Dhaliwal | Aquinas Law Alliance LLP |
4. Facts
- The Plaintiff and Defendant were directors of a company, with the Plaintiff as the sole shareholder.
- An oral agreement existed between the Plaintiff and Defendant regarding their roles in the company.
- The Defendant removed the Plaintiff as a director without authorization.
- The Defendant transferred the Plaintiff’s shares to himself without consideration or consent.
- The Defendant took control of the Company’s bank account.
- The Defendant lodged an Application for Striking Off form with ACRA to strike off the Company.
- The Plaintiff claimed the Defendant breached the oral agreement and fiduciary duties.
5. Formal Citations
- Khan Aisanullah v Rajib Kumar Dhali, Suit No 977 of 2021, [2024] SGHC 313
6. Timeline
| Date | Event |
|---|---|
| Company incorporated in Singapore | |
| Plaintiff purchased the Company and became its sole shareholder | |
| Plaintiff and Defendant appointed as directors of the Company | |
| Oral agreement entered into between Plaintiff and Defendant | |
| Defendant lodged a Change in Company Information form with ACRA | |
| Defendant applied to OCBC to remove the Plaintiff’s access to the OCBC Bank Account | |
| Defendant lodged a Transfer of Shares form with ACRA to transfer all of the Plaintiff’s shares in the Company to the Defendant | |
| Defendant filed two applications to change the activity of the Company with ACRA | |
| Defendant filed an application to change the registered address of the Company to the Defendant’s residential address with ACRA | |
| Defendant filed an application to change the name of the Company with ACRA | |
| Defendant filed two applications to change the activity of the Company with ACRA | |
| Defendant lodged an Application for Striking Off form with ACRA to strike off the Company | |
| Trial began | |
| Trial continued | |
| Plaintiff’s Closing Submissions filed | |
| Defendant’s Closing Submissions filed | |
| Defendant wrote to OCBC requesting information | |
| OCBC responded to Defendant's request | |
| Defendant’s Letter to Court filed | |
| Defendant made payment of the retrieval charge | |
| OCBC provided the Defendant with only the Business Account Maintenance Forms of the OCBC Bank Account | |
| Defendant’s Letter to Court filed | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the Defendant breached the oral agreement.
- Category: Substantive
- Breach of Fiduciary Duty
- Outcome: The court found that the Defendant did not owe any fiduciary duties to the Plaintiff, and therefore there was no breach.
- Category: Substantive
- Reflective Loss Principle
- Outcome: The court held that the reflective loss principle applied to preclude the Plaintiff’s recovery in respect of the losses pleaded.
- Category: Substantive
- Illegality
- Outcome: The court held that the doctrine of illegality is of no assistance to the Defendant.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Diminution of share value
- Loss of goodwill and reputation
- Loss of profits
- Special damages
9. Cause of Actions
- Breach of Contract
- Breach of Fiduciary Duty
10. Practice Areas
- Commercial Litigation
11. Industries
- Logistics
- Management Consultancy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal | Court of Appeal | Yes | [2018] 2 SLR 655 | Singapore | Cited for the definition of a fiduciary relationship as someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. |
| Susilawati v American Express Bank Ltd | High Court | Yes | [2009] 2 SLR(R) 737 | Singapore | Cited for the three common features of a fiduciary relationship and that the relationship between the parties was one of agent and principal, which falls within the settled categories of fiduciary relationships. |
| Hospital Products Ltd v United States Surgical Corporation | High Court of Australia | Yes | (1984) 156 CLR 41 | Australia | Cited for the principle that the relationship between the parties was one of agent and principal, which falls within the settled categories of fiduciary relationships. |
| Tonny Permana v One Tree Capital Management Pte Ltd and another | High Court | Yes | [2021] 5 SLR 477 | Singapore | Cited for the principle that the extent of fiduciary duties owed by an agent depends on the extensiveness of the agency relationship. |
| Axis Megalink Sdn Bhd v Far East Mining Pte Ltd | General Division of the High Court | Yes | [2024] 4 SLR 1760 | Singapore | Cited to support the conclusion that the Defendant did not owe any fiduciary duties to the Plaintiff because the Defendant’s scope of responsibilities was restricted to “minor administrative matters”, without control over the day-to-day operations of the Company. |
| Axis Megalink Sdn Bhd and another v Far East Mining Pte Ltd | Appellate Division of the High Court | No | [2024] SGHC(A) 15 | Singapore | Cited to note that the GDHC’s findings in this regard were not the subject of the appeal. |
| Daniel Fernandez v Edith Woi and another | High Court | No | [2021] SGHC 117 | Singapore | Cited as the Plaintiff relies on the case, but the facts there are clearly distinguishable from the present case. |
| Ting Siew May v Boon Lay Choo and another | Court of Appeal | Yes | [2014] 3 SLR 609 | Singapore | Cited for the circumstances in which the court may invoke illegality of its own motion. |
| Edler v Auerbach | English High Court | Yes | [1950] 1 KB 359 | England and Wales | Cited for the circumstances in which the court may invoke illegality of its own motion. |
| 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 for the reflective loss principle, that claims by shareholders for the diminution in the value of their shareholdings or in distributions they receive as shareholders as a result of actionable loss suffered by their company cannot be maintained. |
| Giles v Rhind | Court of Appeal | No | [2003] BCC 79 | England and Wales | Cited as the Plaintiff relies on the exception to the reflective loss principle in Giles v Rhind, which applies where a wrongdoer’s actions disabled the company from pursuing its cause of action against the said wrongdoer. |
| How Weng Fan and others v Sengkang Town Council and other appeals | Court of Appeal | Yes | [2023] 2 SLR 235 | Singapore | Cited for the principle that the court may determine an unpleaded point where there is no irreparable prejudice caused to the other party in the trial that cannot be compensated by costs or where it would be clearly unjust for the court not to do so. |
| Burnford and others v Automobile Association Developments Ltd | Court of Appeal | Yes | [2022] EWCA Civ 1943 | England and Wales | Cited for the principle that a shareholder cannot circumvent the reflective loss principle merely by asserting an independent cause of action against the defendant; the shareholder must also have suffered a loss that is separate and distinct from the loss of the company. |
| Marex Financial Ltd v Sevilleja (All Party Parliamentary Group on Fair Business Banking intervening) | Supreme Court | Yes | [2021] AC 39 | United Kingdom | Cited for the principle that the reflective loss principle was a “rule of company law, applying specifically to companies and their shareholders” and that its application was “limited to claims by shareholders that, as a result of actionable loss suffered by their company, the value of their shares, or of the distributions they receive as shareholders, [had] been diminished”. |
| Wilson v Dodd and others | High Court of Justice | Yes | [2012] EWHC 3727 (Ch) | England and Wales | Cited for the principle that the Company can be restored to the register. |
| Sharp and others v Blank and others | High Court of Justice | Yes | [2015] EWHC 3220 (Ch) | England and Wales | Cited for the principle that although a director of a company can owe fiduciary duties to the company's shareholders, he does not do so by the mere fact of being a director, but only where there is on the facts of the particular case a “special relationship” between the director and the shareholders. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 344(5) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Nominee director
- Oral agreement
- Fiduciary duty
- Reflective loss principle
- Shareholder
- Director
- ACRA
- OCBC Bank Account
- Illegality
15.2 Keywords
- Breach of contract
- Fiduciary duty
- Reflective loss
- Shareholder
- Director
- Singapore
- Company law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 90 |
| Fiduciary Duties | 85 |
| Reflective Loss Principle | 75 |
| Nominee Director | 65 |
| Corporate Law | 60 |
| Illegality and public policy | 50 |
16. Subjects
- Contract Law
- Company Law
- Fiduciary Duty
- Reflective Loss