Dynasty Line Ltd (in liquidation) v Sia Sukamto and another
| Judge | Lai Siu Chiu J |
| Judgment Date | 31 July 2013 |
| Neutral Citation | [2013] SGHC 146 |
| Citation | [2013] SGHC 146 |
| Court | High Court (Singapore) |
| Published date | 14 August 2013 |
| Docket Number | Suit No 256 of 2010 |
| Plaintiff Counsel | Philip Jeyaretnam SC, Siraj Omar, Alexander Lee and Patrick Wong (Rodyk & Davidson LLP/ Premier Law LLC) |
| Defendant Counsel | Samuel Chacko, Angeline Soh and Christopher Yeo (Legis Point LLC),Alvin Yeo SC, Joy Tan, Adeline Ong and Yin Juon Qiang (WongPartnership LLP),Siraj Omar and Alexander Lee (Premier Law LLC),and Celeste Ang, Liu Zeming and Jennifer Fong (Wong & Leow LLC) |
| Subject Matter | Companies,Directors,Duties,Tort,Conspiracy |
| Hearing Date | 16 January 2013,24 January 2013,05 February 2013,17 January 2013,31 January 2013,22 January 2013,21 January 2013,23 January 2013,25 January 2013,01 February 2013,20 March 2013,04 February 2013 |
These proceedings consist of a claim (“the Original Action”) and a counterclaim (“the Counterclaim”). The Original Action involves a claim by Dynasty Line Limited (“Dynasty”) as the plaintiff against Sukamto Sia (“Sia”) and Lee Howe Yong (“Lee”) for breaches of fiduciary duties owed to Dynasty while they were its directors. The Counterclaim involves Sia suing Low Tuck Kwong (“Low”) for an alleged breach of the terms of a settlement agreement, and against Dynasty, Low, William Tacon (“Tacon”) and Lau Wu Kwai King Lauren (“Lauren”) for,
The expert witnesses who testified on foreign law were:
Dynasty, a company now in liquidation, was incorporated under the laws of the BVI in 1994. Sia and Lee were appointed directors of Dynasty on 6 May 1996. At all material times, Sia was the sole shareholder of Dynasty although Lee was promised 20% of the profits of Dynasty without any equity contribution from him.
Dynasty served as a corporate vehicle for Sia’s investments. It did not have any business operations nor did it engage in any trading. The only investment made by Sia through Dynasty was the acquisition of 29,537,367 shares (“the Sale Shares”) in China Development Corporation Limited (“CDC”), a company listed on the Hong Kong Stock Exchange and which was formerly known as Sum Cheong International Limited. Those shares were acquired from Low and the following parties (the “Remaining Vendors” and collectively the “Vendors”) under seven sale and purchase agreements (the “S&P Agreements”) dated 5 February 1996:
The total purchase price of the shares was HK$230,391,463 (the “Purchase Price”). However, the total sum paid by Sia was only HK$64,459,317.16. Prior to the intended completion date on 2 May 1996, the Vendors voluntarily transferred all their shares to Dynasty between March 1996 and May 1996.
Between April 1996 and November 1997, Sia, on behalf of Dynasty, entered into transactions with various financial institutions (collectively the “Security Transactions”), pursuant to which the Sale Shares owned by Dynasty were pledged as security for loan facilities granted to Sia and other third parties as follows:
Sia and the other two borrowers subsequently defaulted on the loan facilities whereupon the financial institutions exercised their right to sell the Sale Shares under the Security Transactions and applied the proceeds towards the satisfaction of the debts owed to the respective financial institutions by Sia and the other borrowers.
After the above event of default, the following actions were instituted in Singapore, BVI and Hong Kong:
On 17 June 1998, Low filed Suit 960 of 1998 (“Suit 960”) against Sia seeking payment of HK$71,836,580.31, being the alleged unpaid balance of the Purchase Price of the Sale Shares due to him under the S&P Agreements. Dynasty was not a party to Suit 960. Low’s claim was that Sia had orally guaranteed full payment of the Purchase Price. Low settled this claim with Sia on 5 November 1998.
HCA 10075 of 1998On 19 June 1998, Sia, through Dynasty, brought an action in HCA 10075 of 1998 (“HCA 10075”) against Low and the Remaining Vendors for misrepresentation in relation to the Sale Shares. Dynasty claimed that Low and the Remaining Vendors had made various misrepresentations to Dynasty relating to the business, affairs and financial position of CDC and its subsidiaries. This action was struck out on 16 December 1998 as Dynasty lacked the funds to continue the proceedings.
On 22 December 1998, five of the Remaining Vendors sued Sia in Suit 2333 of 1998 (“Suit 2333”) for the alleged unpaid balance of the Purchase Price of the Sale Shares owed to them under their respective S&P Agreements. Suit 2333 was discontinued on 26 May 1999.
HCA 9505 of 1999On 10 June 1999, Low and the Remaining Vendors commenced fresh proceedings against Dynasty in HCA 9505 of 1999 (“HCA 9505”) for the alleged unpaid balance of the Purchase Price of the Sale Shares due to them under the S&P Agreements. The Hong Kong High Court entered judgment against Dynasty for the sum of HK$113,633,160.51, being the unpaid balance of the Purchase Price of the Sales Shares along with interest (the “HK Judgment”).
HCCW 382 of 2007On 23 August 2007, Low presented a petition in the Hong Kong High Court in HCCW 382 of 2007 for the appointment of provisional liquidators, pursuant to which Lauren and Kennic Lai Hang Hui (“Lai”) were appointed as joint provisional liquidators of Dynasty (the “Provisional Liquidators”).
HCA 2057 of 2007 On 27 September 2007, the Provisional Liquidators commenced proceedings on Dynasty’s behalf against Sia and Lee in HCA 2057 of 2007 (“HCA 2057”) for,
Dynasty’s appeal against the decision of the Hong Kong Court was dismissed (in FAMV 39 of 2009).
BVI Application No 2009/0376On 29 October 2009, Low filed a petition in the BVI High Court (via BVI Application No 2009/0376) to wind up Dynasty and to have liquidators appointed. On 22 December 2009, Low’s application was granted and Tacon and Lauren were appointed as joint liquidators of Dynasty (the “Liquidators”).
The Original Action On 14 April 2010, the Liquidators commenced the Original Action against Sia and Lee for,
The issues to be decided in the Original Action are as follows:
With regard to the Counterclaim, the issues are:
Sia and Lee both argued that Dynasty’s claims are time-barred by reason of ss 6 and 24A of the Limitation Act (Cap 163, 1996 Rev Ed). Section 6 of the Limitation Act states:
Limitation of actions of contract and tort and certain other actions 6. ―(1) Subject to this Act, the following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued:- actions founded on a contract or on tort;
- actions to enforce a recognizance;
- actions to enforce an award;
- actions to recover any sum recoverable by virtue of any written law other than a penalty or forfeiture or sum by way of penalty or forfeiture.
...
Section 24A of the Limitation Act states:
Time limits for negligence, nuisance and breach of duty actions in respect of latent injuries and damage 24A. ―(1) This section shall apply to any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of a provision made by or under any written law or independently of any contract or any such provision).
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Dynasty Line Ltd v Sia Sukamto
...Line Ltd (in liquidation) Plaintiff and Sia Sukamto and another Defendant [2013] SGHC 146 Lai Siu Chiu J Suit No 256 of 2010 High Court Companies—Directors—Duties—Company directors pledging company property without benefiting company—Memorandum of association and articles of association of ......