Tang Kin Fei and others v Chang Benety and others
Jurisdiction | Singapore |
Court | High Court (Singapore) |
Judge | Woo Bih Li J |
Judgment Date | 29 September 2010 |
Neutral Citation | [2010] SGHC 286 |
Citation | [2010] SGHC 286 |
Plaintiff Counsel | Thio Shen Yi, SC and Karen Teo (TSMP Law Corporation) |
Docket Number | Originating Summons No 590 of 2010 |
Subject Matter | Companies,Meeting |
Published date | 01 October 2010 |
Defendant Counsel | George Lim, SC and Foo Say Tun (Wee, Tay & Lim LLP) |
Hearing Date | 11 August 2010,03 August 2010,15 July 2010 |
Date | 29 September 2010 |
The plaintiffs and defendants were at all material times directors of PPL Shipyard Pte Ltd (“PPLS”) except for Anthony Sabastian Aurol (“Aurol”) who was purportedly removed as a director on 8 June 2010. The shareholders of PPLS were Sembcorp Marine Ltd (“SCM”) on the one hand and PPL Holdings Pte Ltd (“PPLH”) and E-Interface Holdings Ltd (“E-Interface”) on the other hand. E-Interface is a wholly-owned subsidiary of PPLH. The plaintiffs were nominated as directors of PPLS by SCM and the defendants were nominated as directors of PPLS by PPLH.
As a result of a dispute between the shareholders concerning the beneficial ownership of some shares in PPLS, various board resolutions were proposed at various board meetings convened by or at the instance of one or more of the SCM nominated directors. The PPLH nominated directors however declined to attend these board meetings. Under Art 98 of PPLS’articles of association, at least one PPLH nominated director must be present to constitute a quorum for a board meeting. Consequently, there was no quorum at these board meetings. Notwithstanding the absence of a quorum, the SCM nominated directors proceeded to pass resolutions at these board meetings. They then filed the present application for a declaration to validate the resolutions under s 392 of the Companies Act (Cap 50, 2006 Rev Ed). The primary reliefs sought under the application, as amended, were as follows:
are valid.
i. do all such things arising from or related to the Suit to protect the interests of [PPLS]; and
ii. provide advice to [PPLS] on how it should respond to the allegations made against it in the Suit.
The application was resisted by the PPLH nominated directors who were the defendants. After hearing arguments, I made no order on prayer 1. I granted an order in terms of prayers 2, 3(c) and (d), 4 and 5. I dismissed prayers 3(a) and (b). I also ordered the defendants to pay costs of $5,000 to the plaintiffs.
The defendants have appealed against my decision to grant an order in terms of prayers 2, 3(c) and (d), 4 and 5 and to order costs to be paid by them.
BackgroundPPLH is a wholly-owned subsidiary of Baker Technology Ltd (“Baker Tech”).
On 16 April 2010, Yangzijiang Shipbuilding (Holdings) Ltd (“Yangzijiang”) issued a binding letter of offer to Baker Tech to acquire the entire issued and paid-up share capital of PPLH. In its disclosure to the market on 17 April 2010, Yangzijiang stated that the purchase consideration was arrived at by taking into account,
Following the acceptance of the offer by Baker Tech, SCM sent a letter of complaint to the board of PPLS. The complaint alleged that two of the defendants, Aurol and Benety Chang (“Chang”) had breached their duty to PPLS by disclosing confidential information of PPLS to Yangzijiang,
According to Tang Kin Fei (“Tang”), the chairman of the board of directors of PPLS, the SCM complaint made serious allegations against Aurol and Chang. Yangzijiang was a potential competitor of PPLS. He thought it was in the best interest of PPLS to deal with the allegations immediately and had a discussion with the other plaintiffs thereon. Thereafter, one of them, Don Lee Fook Kang, sent an email to all directors of PPLS on 10 May 2010 to convene a board meeting at 11.00am the next day at SCM’s office to appoint a law firm to advise PPLS on the SCM complaint.
At 11.00am of 11 May 2010, Tang arrived for the board meeting. He was handed letters from Wee, Tay & Lim acting for the defendants and from Straits Law Practice acting for PPLH. The Wee, Tay & Lim letter objected to the meeting as inadequate notice was given and a list of possible lawyers had not been circulated before the board meeting. The Straits Law Practice letter stated that Aurol had not committed any breach of confidentiality and even if there was, it was
Subsequently, WongPartnership themselves suggested to Wee, Tay & Lim that another board meeting be convened to discuss and decide on the matter about the appointment of a law firm to advise PPLS.
Another board meeting was then convened on 3 June 2010. However, by a letter dated 31 May 2010, the defendants requested for confirmation that the 3rd June 2010 meeting would be conducted in accordance with a shareholders’ agreement dated 9 April 2001...
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