Beyonics Asia Pacific Ltd and others v Goh Chan Peng and another

JudgeSimon Thorley IJ
Judgment Date28 May 2020
Neutral Citation[2020] SGHC(I) 14
Citation[2020] SGHC(I) 14
Defendant CounselDavinder Singh s/o Amar Singh SC, Lin Xianyang Timothy, Tan Mao Lin, Gerald Paul Seah Yong Sing and Joshua Chia Sheng Rong (Davinder Singh Chambers LLC)
Published date03 June 2020
Hearing Date05 February 2020,30 January 2020,28 January 2020,17 January 2020,03 February 2020,15 January 2020,20 March 2020,22 January 2020,13 January 2020,20 January 2020,29 January 2020,21 January 2020,04 February 2020,14 January 2020,16 January 2020
Plaintiff CounselChin Li Yuen Marina, Alcina Lynn Chew Aiping, Siew Guo Wei, Aditi Ravi and Darren Ng Zhen Qiang (Tan Kok Quan Partnership)
Docket NumberSuit No 10 of 2018
CourtHigh Court (Singapore)
Date28 May 2020
Subject MatterAbuse of Process,Termination,Employment Law,Henderson v Henderson doctrine,Contract of service,Directors,Duties,Companies
Simon Thorley IJ: Background

Mr Kyle Arnold Shaw Junior (“Mr Shaw”) is a successful private equity investor. He is a graduate of the University of Virginia and of the Wharton School of the University of Pennsylvania. Some 30 years ago, he was involved, together with two colleagues, Mr S. L. Choi and Mr Andy Kwei, in the purchase of the Asian business of a company called Flextronics. The chief financial officer of that business was Mr Goh Chan Peng, the first defendant (“Mr Goh”). Mr Shaw worked closely with Mr Goh and the business flourished. Mr Shaw concluded as a result that Mr Goh was a “straightforward guy”.1

In early 2000, Mr Goh was approached by Mr Chay Kwong Soon (“Mr Chay”), the Chairman of the parent company of the Beyonics group of companies (the “Beyonics Group” or “Beyonics”) of which the five plaintiffs are subsidiaries. Mr Chay invited Mr Goh to become the chief executive officer (“CEO”) of the Beyonics Group. Mr Goh left Flextronics and on 1 May 2000 was appointed CEO of the Beyonics Group. He remained CEO until 30 April 2013.

The Beyonics Group consisted of two manufacturing divisions, the Precision Engineering Services (“PES”) Division and the Electronic Manufacturing Services (“EMS”) Division. Amongst other things, the PES Division manufactured and sold baseplates for hard disk drives (“HDDs”) destined for end customers, such as Seagate, Hitachi and Western Digital. The dispute in this action concerns the PES Division, specifically, the baseplate manufacturing business.

At the time of the matters giving rise to the dispute, the parent company of Beyonics was called Beyonics Technology Ltd (“BTL”). The first plaintiff (“BAP”), the fourth plaintiff (“BTEC”), the fifth plaintiff (“BPM”) and a further subsidiary, Beyonics Technology (Thailand) Co Ltd (“BTT”), were part of the PES Division. BTEC owned and operated a baseplate manufacturing facility in Changshu, China; BPM owned and operated a baseplate facility in Tampoi, Malaysia; and BTT owned and operated a baseplate facility in Ayutthaya, Thailand. BAP did not own or operate any such facility but was the sales company for the baseplates manufactured by BTEC, BPM and BTT. The second and third plaintiffs (“BIL” and “BTS”) are also subsidiary companies of BTL but are not part of the PES division. I refer to these companies collectively as the “Plaintiffs”.

By 2010, Mr Shaw had become a partner in an independent private equity fund manager, Shaw Kwei & Partners (“SKP”), based in Hong Kong. One of the managing directors was Mr Tsui Sung Lam (“Mr Tsui”), who had worked with Mr Goh at Flextronics. In late 2010 or early 2011, Mr Tsui and Mr Goh met and Mr Goh indicated that Beyonics was considering the sale of its business. Mr Tsui informed Mr Shaw and, as a result, SKP proposed that its investment vehicle, Bayport Capital Ltd (“Bayport”) should consider acquiring the Beyonics Group through a BVI company, Channelview Investments Ltd (“Channelview”). This led to an Implementation Agreement dated 5 October 2011, followed by due diligence which resulted in a formal offer to take over the Beyonics Group. This was approved in a shareholders meeting on 30 December 2011 and the scheme was sanctioned by the High Court of Singapore and completed on 2 February 2012. Mr Shaw then became chairman of Channelview with both Mr Goh and Mr Chay being directors as well as not insubstantial shareholders.

As was apparent in the witness box, both Mr Shaw and Mr Goh are powerful personalities, used to being the directing minds of commercial operations and accustomed to being leaders rather than followers. Mr Shaw expected Mr Goh to follow his lead and Mr Goh expected Mr Shaw to allow him, with his more than ten years in the business, to continue to run Beyonics with the freedom he had been given by the previous board of directors. A falling out was perhaps inevitable and it duly occurred. I shall have to consider in some details the factual background leading up to the fall out. It is sufficient for present purposes to record that it occurred, with the result that on 9 January 2013 Mr Goh resigned his directorships in the various companies in the Beyonics Group. Resignation agreements (the “Resignation Agreements”) were signed with a number of those companies (including BAP, BIL and BTS) and Mr Goh ceased to be employed on 30 April 2013.2

Following Mr Goh’s resignation in January, Mr Shaw became aware that he had left behind no documents relating to ongoing business at Beyonics and Mr Shaw informed me that he needed to understand more fully what the company’s business was. He therefore asked Mr Goh to return the notebook computer he had been using and discovered that all files had been deleted before it was returned. The same was true of a desktop computer. Later in January 2013 Mr Shaw engaged FTI Consulting to carry out a full forensic investigation into the contents of the deleted files. During the course of a lengthy piece of cross-examination,3 Mr Shaw emphasised that his motivation in ordering this investigation was not with a view to finding out anything he could in order to get back at Mr Goh but to find out what was going on in the business, as summed up during cross-examination:4

… And I reiterate, the purpose was not to fish. The purpose was to -- he took all the records with him. There was nothing left. He was the only person. He did not have a personal secretary. There was no HR person. No chief operating officer. No chief marketing officer. He took everything with him.

So we simply thought we need to basically reconstruct a filing of what's been going on, and our primary interest was customers and, in this case, you would be concerned are there customers that are asking for more business; are there customers saying they want to terminate business; are there customer complaints, and so on and so forth, so a variety of things and I think this was just actually the prudent thing that anybody would do in my case.

Be that as it may, following a lengthy investigation, FTI identified a number of documents which gave Mr Shaw reason to believe that Mr Goh had not been acting in the best interests of the Beyonics Group in his dealings with a competitor, Nedec/Kodec (see below at [134(b)]), and indeed that he had accepted bribes from that competitor. In particular, three agreements between the second defendant, Pacific Globe Enterprises Ltd, a company owned and controlled by Mr Goh which, at the relevant time, was named Wyser International Ltd, (“Wyser”), and Nedec/Kodec were discovered which indicated that Wyser had been paid substantial sums by Nedec/Kodec.

FTI’s final report5 (the “FTI Report”) was issued on 23 July 2013 and proceedings were brought on 25 July 2013 by BTL and one subsidiary company (Beyonics International Pte Ltd or “BIPL”) against Mr Goh, his wife and Wyser in Singapore in High Court Suit No 672 of 2013. I shall refer to this action as “the 672 Action” and to the Plaintiffs in that action as BTL and BIPL or, together, as “the 672 Plaintiffs”, and to Mr Goh, his wife, and Wyser as “the 672 Defendants”.

The 672 Plaintiffs alleged that Mr Goh had breached various duties owed to them and further had engaged in a conspiracy with Wyser and Nedec/Kodec to injure the Plaintiffs. Mr Goh’s wrongdoings were alleged to have resulted in the diversion of certain business from a customer of the Beyonics Group, Seagate, to Nedec/Kodec which culminated in the loss of its entire baseplate business with Seagate. For the role Mr Goh played, he allegedly received two payments from the Nedec/Kodec via Wyser, which dishonestly assisted in Mr Goh’s breach of duties. BTL’s claims related to the loss of the Seagate’s business and it also sought an order that the payments be disgorged to BTL. Additionally, BIPL raised claims against Mr Goh for the return of unjustified expenses and salary.

Mr Goh denied that he was in breach of duties and maintained that he acted in the best interests of the 672 Plaintiffs at all times. He did not deny that he received payments from Nedec/Kodec, but claimed that they were legitimate payments for consultancy services. Hence, there was no conspiracy between Mr Goh, Wyser and Nedec/Kodec to injure the Plaintiffs and Wyser did not dishonestly assist in the breach of his duties. The loss of Seagate’s business, in whole or in part, was not caused by them. Finally, Mr Goh contended that the expenses and salary were justified.

The action was heard by Hoo Sheau Peng JC (as she then was) (“the 672 Trial Judge”) over a period of 19 days in August and September 2015 which, following written closing submissions, resulted in a judgment on 28 June 2016 ([2016] SGHC 120, reported as [2016] 4 SLR 472) (“the 672 Judgment”). The 672 Plaintiffs were almost entirely successful although the damages awarded for the loss of the Seagate business were less than those claimed. Mr Goh and Wyser appealed and, whilst the Court of Appeal did not reverse any of the findings of fact, by its judgment of 27 June 2017 ([2017] SGCA 40, reported as [2017] 2 SLR 592) (“the 672 Appeal Judgment”) it held that BTL was not entitled to recover certain of the losses that it had claimed and which had been awarded by the 672 Trial Judge, as those losses had not been suffered by BTL, the parent company, but had in fact been suffered by various subsidiary companies which are now the plaintiffs in this action.

The Court of Appeal’s reasoning was as follows: The third point is the most important point. It appears from [37] of the [672 Judgment] that the Judge considered that the holding company in a group of companies could claim for loss suffered by a subsidiary in the group because as a holding company it was in a position to direct and control the application of the cash and profits of its subsidiaries. This, however, is not the law. The well-established doctrine that each incorporated entity is a separate legal...

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3 cases
  • Beyonics Asia Pacific Ltd v Goh Chan Peng
    • Singapore
    • Court of Three Judges (Singapore)
    • 2 June 2021
    ...The appellants then appealed against the Judge's decision. [Editorial note: The decision from which these appeals arose is reported at [2020] 4 SLR 215.] Held, allowing the appeal in part: (1) The claims in S 10 were not brought in abuse of process. Abuse of process was a concept which info......
  • Beyonics Asia Pacific Ltd and others v Goh Chan Peng and another and another appeal
    • Singapore
    • Court of Appeal (Singapore)
    • 2 June 2021
    ...appeal against the decision of the International Judge (“the Judge”) in Beyonics Asia Pacific Ltd and others v Goh Chan Peng and another [2020] 4 SLR 215 (“the Judgment”), in which the Judge struck out the appellants’ claims in SIC/S 10/2018 (“S 10”) for being in abuse of process. The Judge......
  • Beyonics Asia Pacific Ltd and others v Goh Chan Peng and another
    • Singapore
    • International Commercial Court (Singapore)
    • 30 September 2020
    ...Thorley IJ: Judgment in this action was given on 28 May 2020 in Beyonics Asia Pacific Limited and others v Goh Chan Peng and another [2020] SGHC(I) 14 and terms not defined here shall have the same meaning as in that judgment. Two separate issues arose for consideration, the Henderson v Hen......
1 books & journal articles
  • Case Note
    • Singapore
    • Singapore Academy of Law Journal No. 2022, March 2022
    • 1 March 2022
    ...SGCA(I) 2 (“2021 CA”) upon which this case note is built. Immediately preceding 2021 CA were Beyonics Asia Pacific Ltd v Goh Chan Peng [2020] 4 SLR 215 (“2020 SICC”) and Beyonics Asia Pacific Ltd v Goh Chan Peng [2020] 5 SLR 235 (“SICC Cost Order”). For the purpose of this case note, SICC C......

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