Duke Bakery v Lin Liming: Breach of Director's Duties, Contract, Unjust Enrichment

Duke Bakery Pte Ltd sued its former director, Mr. Lin Liming, former Managing Director, Mr. Zhang Yongqiang, and former Finance Manager, Mdm. Chng Chee Hong, in the General Division of the High Court of Singapore. Duke Bakery claimed breach of director's duties, breach of contract, and unjust enrichment against Mr. Lin and Mr. Zhang, and breach of duties and misappropriation against Mdm. Chng. Mdm Chng filed a counterclaim for unjust enrichment. The court dismissed the claims against Mr. Lin and Mr. Zhang, partially dismissed the claim against Mdm. Chng, and dismissed Mdm. Chng's counterclaim.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Claims against Mr. Lin and Mr. Zhang dismissed; claim against Mdm Chng partially dismissed; Mdm Chng's counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Duke Bakery sues former directors for breach of duties and contract, and a finance manager for misappropriation. The court dismissed claims against the directors and part of the claim against the finance manager.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Duke Bakery Pte LtdClaimant, Defendant in counterclaimCorporationClaims against Mr. Lin and Mr. Zhang dismissed; claim against Mdm Chng partially dismissed; Mdm Chng's counterclaim dismissed.Partial
Lin LimingDefendantIndividualClaim DismissedWon
Zhang YongqiangDefendantIndividualClaim DismissedWon
Chng Chee HongDefendant, Claimant in counterclaimIndividualClaim Partially Dismissed, Counterclaim DismissedPartial

3. Judges

Judge NameTitleDelivered Judgment
Hri Kumar NairJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Cai Enhuai AmosYuen Law LLC
Teo Ying Ying DeniseYuen Law LLC
Lim Yun HengYuen Law LLC
Jolene Song Zhu YiYuen Law LLC
Tan Cheng KiongCK Tan Law Corporation
Phua Hoon Chong JustinJustin Phua Tan & Partners
Che Wei ChinFervent Chambers LLC

4. Facts

  1. Duke Bakery claimed Mr. Lin and Mr. Zhang conspired to have Mdm. Chng transfer $150,000 from Duke Bakery to Mr. Lin.
  2. Duke Bakery claimed Mr. Lin breached the Transfer Agreement by causing Duke Bakery to repay him the Loan.
  3. Duke Bakery claimed Mdm Chng breached her duties as Finance Manager and/or breach of trust and/or breach of her employment contract.
  4. Mr. Lin claimed the Loan was a temporary one, and that he was entitled to repayment.
  5. The Loan was documented in a Letter of Agreement dated 11 January 2017, and its clear terms required Duke Bakery to repay the Loan by 10 February 2017.
  6. Mdm Chng admitted to misappropriating $339,730.20 from Duke Bakery.
  7. Duke Bakery claimed damages of $405,898, being the loss of profits suffered by Duke Bakery on account of it being unable to use the misappropriated funds to open new stores.

5. Formal Citations

  1. Duke Bakery Pte Ltd v Lin Liming and others, Originating Claim No 100 of 2023, [2024] SGHC 318
  2. Alwie Handoyo v Tjong Very Sumito and another and another appeal, , [2013] 4 SLR 308
  3. Benzaline Auto Pte Ltd v Supercars Lorinser Pte Ltd and another, , [2018] 1 SLR 239

6. Timeline

DateEvent
Mr Lin made a loan of $150,000 to Duke Bakery.
Letter of Agreement signed requiring Duke Bakery to repay the Loan by 10 February 2017.
Date by which Duke Bakery was required to repay the Loan according to the Letter of Agreement.
Mdm Lee transferred her 8% shares in Junhao to Mr Cai.
Mdm Chng sent a WeChat message stating that a loan of $200,000 was required from Junhao’s shareholders.
Mdm Chng misappropriated monies from 2015 to 2018.
Mdm Chng paid $244,955 in restitution in 2018.
Mdm Chng's employment with Duke Bakery was terminated.
Mr Cai applied Duke Bakery’s funds towards repaying some of the loans from Junhao’s shareholders.
Duke Bakery's amendments to its statement of claim allowed.
Statement of Claim (Amendment No. 3) dated 14 October 2024.
Defence of the 2nd Defendant (Amendment No. 4) dated 16 October 2024.
Defence of the 3rd Defendant (Amendment No. 2) dated 16 October 2024.
Counterclaim of the 3rd Defendant (Amendment No. 1) dated 16 October 2024.
Supplemental AEIC of Chng Chee Hong dated 16 October 2024.
1st Defendant’s Defence (Amendment No. 3) dated 17 October 2024.
Supplementary AEIC of Cai Duanhong dated 22 October 2024.
Claimant’s Opening Statement dated 28 October 2024.
Transcript (30 October 2024).
Trial began.
Transcript (5 November 2024).
Transcript (6 November 2024).
Transcript (7 November 2024).
Transcript (11 November 2024).
Transcript (13 November 2024).
Transcript (14 November 2024).
Claimant’s Closing Submissions dated 6 December 2024.
Judgment issued.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that Mr. Lin did not breach the Transfer Agreement because the Transfer Agreement did not exist.
    • Category: Substantive
    • Sub-Issues:
      • Wrongful breach of contract
  2. Breach of Director's Duties
    • Outcome: The court found that Mr. Lin and Mr. Zhang did not breach their duties to Duke Bakery.
    • Category: Substantive
    • Sub-Issues:
      • Failure to disclose information
      • Authorising repayment of loan
  3. Unjust Enrichment
    • Outcome: The court dismissed Mdm Chng's counterclaim for unjust enrichment.
    • Category: Substantive
    • Sub-Issues:
      • Failure of consideration
      • Mistake
      • Exploitation of weakness
  4. Misappropriation
    • Outcome: The court found that Duke Bakery failed to prove that Mdm Chng had misappropriated the monies in respect of the remaining Category B transactions.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Breach of Director's Duties
  • Unlawful Means Conspiracy
  • Breach of Trust
  • Unjust Enrichment

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Food and Beverage

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Alwie Handoyo v Tjong Very Sumito and another and another appealCourt of AppealYes[2013] 4 SLR 308SingaporeCited for the burden of proving that the Letter Agreement was fabricated.
Benzaline Auto Pte Ltd v Supercars Lorinser Pte Ltd and anotherHigh CourtYes[2018] 1 SLR 239SingaporeCited for the inquiry for a failure of basis.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Transfer Agreement
  • Periodic Deposits
  • Loan
  • Letter Agreement
  • Misappropriation
  • Category B transactions
  • Proven Amount
  • Excess Sum

15.2 Keywords

  • Duke Bakery
  • Lin Liming
  • Zhang Yongqiang
  • Chng Chee Hong
  • Breach of Contract
  • Breach of Director's Duties
  • Unjust Enrichment
  • Misappropriation

17. Areas of Law

Area NameRelevance Score
Breach of Contract80
Fiduciary Duties75
Unjust Enrichment70
Commercial Disputes65
Director's Liability60
Damages Assessment60
Civil Litigation60
Corporate Law50

16. Subjects

  • Contract Law
  • Company Law
  • Restitution
  • Unjust Enrichment
  • Breach of Fiduciary Duty