Goh Seng Heng v RSP Investments and others and another matter

• Judge: Lai Siu Chiu SJ
• Judgment Date: 12 December 2016
• Neutral Citation: [2016] SGHC 275
• Citation: [2016] SGHC 275
• Defendant Counsel: N Sreenivasan, SC, Rajaram Muralli Raja, Heng Wui-Kee Andrew, Lim Jie, Nicole Cheah Shen-Li and Tan Kai Ning Claire (Straits Law Practice LLC),Suresh S/O Damodara (Damodara Hazra LLP),Pereira Kenetth Jerald, Sujatha Selvakumar and Wee Jia Min (Aldgate Chambers LLC)
• Published date: 06 May 2017
• Hearing Date: 09 March 2016,04 February 2016,11 March 2016
• Plaintiff Counsel: Goh Chee Hsien, Joel, Lim Siok Khoon, Ong Pei Ching, Tan Gim Hai Adrian and Yeoh Jean Wern (Morgan Lewis Stamford LLC)
• Docket Number: Suit No 546 of 2015 (Summons No 1124 of 2016) and Suit No 111 of 2016 (Summonses Nos 554, 754 and 934 of 2016)
• Court: High Court (Singapore)
• Date: 12 December 2016
• Subject Matter: Mareva injunctions,Injunctions,Civil Procedure

Lai Siu Chiu SJ: Introduction

These two suits involve a power struggle between the shareholders and investors of a company that owns and operates outlets in Singapore which provide aesthetic laser services and skincare-related products and services.

In Suit No 546 of 2015 (“the 2015 Suit”), the plaintiff is Dr Goh Seng Heng (“Dr Goh”) a dermatologist by training, who was the managing director and is still a shareholder of Aesthetic Medical Partners Pte Ltd (“the Company”), a Singapore company which was incorporated in August 2008. Dr Goh’s daughters Dr Michelle Goh (“Michelle”) and Melissa Goh (“Melissa”) were directors of the Company while Michelle is also still a shareholder. Together with his company Dr Goh Seng Heng Pte Ltd (“GSHPL”), Dr Goh and Michelle own 13.31% of the shares in the Company.

Dr Goh sued the following defendants in the 2015 Suit: the first defendant, RSP Investments (“RSP”), a company incorporated in the Cayman Islands and a shareholder of the Company; the second defendant, Terence Loh (“Terence”), and the third defendant, his cousin Nelson Loh (“Nelson”), who together control RSP; the fourth defendant, Motcombe Holdings Limited (“Motcombe”), a BVI company which, until 23 July 2014, was a shareholder of the Company; and the fifth defendant, Justin Demetrio Reis (“Justin”) and the sixth defendant, his father Peter Anthony Reis (“Peter”), who together owned and/or controlled Motcombe. Justin was a shareholder of the Company until about 22 February 2015 while Peter is a shareholder of the Company. A Chinese national Wang Xiaopu (“Lucy”), also a shareholder of the Company, was the seventh defendant to the 2015 Suit until Dr Goh discontinued the action against her on 10 June 2015.

Between them, the six defendants and Lucy hold and/or control 63.47% shares in the Company. There are other shareholders of the Company besides Dr Goh, Michelle, Lucy and the six defendants. 20 of these other shareholders, who control 20.88% of the shares in the Company, all agreed with Dr Goh to vote their shares as directed by him and to give him and Michelle their requisite proxies to vote their shares.

In Summons No 1124 of 2016 (“Dr Goh’s Application”) filed in the 2015 Suit, Dr Goh applied for an injunction to restrain the first to sixth defendants from calling any meeting of the Company for the purpose of considering and passing resolutions to alter the share capital of the Company including allotting and/or issuing shares of the Company and/or voting to alter the share capital of the Company.

I dismissed Dr Goh’s Application against which decision Dr Goh has filed a notice of appeal (in Civil Appeal No 114 of 2016).

The first and second plaintiffs respectively in Suit No 111 of 2016 (“the 2016 Suit”) are the Company and its wholly owned subsidiary Aesthetic Medical Holdings Pte Ltd (“AMH”) which owns and operates about 12–13 aesthetic medicine clinics all over Singapore under the PPP laser brand (“PPP brand”). PPP stands for “pimples, pores and pigmentation.” Henceforth, the Company and AMH will be referred to collectively as “the AM group”.

In the 2016 Suit, the AM group sued Dr Goh, Michelle and a company called Quikglow Pte Ltd (formerly known as Dr Michelle Goh Pte Ltd) (‘Quikglow”) as the first, second and third defendants respectively. The AM group alleged that Quikglow’s business is to provide aesthetic medical treatment similar to and in competition with what is being offered by the PPP brand of clinics. Quikglow was incorporated by Dr Goh and Michelle on 5 March 2013.

The AM group’s cause of actions in the 2016 Suit are for breaches of fiduciary and/or contractual duties by Dr Goh and Michelle, and conspiracy by lawful and/or unlawful means carried out by Dr Goh, Michelle and Quikglow.

In Summons No 754 of 2016 (“the Mareva application”), the AM group applied and obtained a Mareva Injunction against the three defendants in the 2016 Suit to restrain them from disposing of their assets. By an order of court dated 19 February 2016, Dr Goh was restrained from disposing of his assets up to the value of $10m; an order requiring him to disclose his assets in Singapore was also granted against him.

By an order of court dated 7 March 2016 made in Summons No 755 of 2016 (“the joinder application”) in the 2016 Suit, the AM group was granted leave to add PPP Investments Pte Ltd (“PPP Investments”) as the third plaintiff. Leave was also granted to join Lee Kin Yun (“Lee”), Dr Goh’s wife Koh Mui Lee (“Koh”) and his daughter Melissa as the fourth, fifth and sixth defendants respectively to the 2016 Suit.

PPP Investments is a wholly owned subsidiary of AMH and its business is principally that of an investment company. The sole director of PPP Investments between 5 October 2012 and 17 February 2016 was Lee.

Lee was employed by Dr Goh as the Chief Operating Officer (‘CEO”) of AMH from 6 August 2012 to 30 June 2015 after the dismissal of his predecessor Tim Lee by Dr Goh, allegedly for “whistleblowing” on Dr Goh. On 1 July 2015, Lee was transferred to the Company where he assumed the role of Interim/Acting CEO. In the affidavit filed by Nelson in support of the joinder application, he described Lee as the right hand man of Dr Goh who does the latter’s biding. Lee is a shareholder both of the AM group and the Company. He is also a business partner of Dr Goh, whose partnership includes operating a yacht business for the latter.

In Summons No 554 of 2016 (“AM’s application”) the plaintiffs to the 2016 Suit applied for an injunction against Dr Goh and Michelle to restrain them from joining Quikglow and engaging in the same or similar business as the AM group. The injunction against Quikglow was to restrain it from employing/engaging the services of Dr Goh and Michelle. This court granted the injunction and the three defendants have appealed against the same in Civil Appeal No 116 of 2016.

In Summons No 934 of 2016 (“the setting aside application”), Dr Goh, Michelle and Quikglow applied to set aside the injunction obtained by the AM group in the Mareva application (at [10] above) as well as against the grant of the AM application (at [14] above). This court dismissed the setting aside application and the three defendants have similarly appealed against the dismissal in Civil Appeal No 116 of 2016.

The facts and parties’ evidence

The genesis of the dispute between the parties goes back to December 2013. A fund called Lion Rock Capital (“Lion Rock”) wanted to invest in the Company. Nelson as a director of RSP was tasked with structuring a deal between the Company and Lion Rock.

Dr Goh alleged that he discovered Nelson had, without the approval of the Company’s board of directors, sought to arrange for Lion Rock to buy Nelson and Justin’s shares in the Company. As a result, disagreements arose between Dr Goh, RSP and Justin.

On 24 January 2014, a settlement agreement (“the Settlement Agreement”) was reached between Dr Goh, the Company, AMH, GSHKML Pte Ltd (a company owned by Dr Goh and his family) and the six defendants to the 2015 Suit (ie, RSP, Terence, Nelson, Motcombe, Justin and Peter).

Under the terms of the Settlement Agreement, Motcombe agreed to transfer 18,696 of the 62,319 shares it held in the Company to RSP (which already held 50,000 shares). It was further agreed that RSP, Terence and Nelson would appoint Dr Goh or Michelle as their proxies or representatives at all general meetings of the Company and sign on their behalf all resolutions of shareholders passed by the Company from time to time.

Besides the 68,696 shares it held following the transfer by Motcombe, RSP bought another 32,895 shares in the Company by exercising an option to purchase that had been granted to Justin; he transferred the option to RSP when he could not afford to exercise the option. As a result, RSP owned 101,591 shares in the Company.

Under the Settlement Agreement, Justin and Peter similarly agreed to appoint Dr Goh and Michelle as their proxies and representatives at general meetings of the Company and to sign on their behalf all resolutions of shareholders passed by the Company.

The Settlement Agreement provided for Motcombe to transfer its balance 43,623 shares (after deducting the 18,696 shares transferred to RSP) to “the [Motcombe] transferee”, an individual acceptable to Dr Goh. Peter became the Motcombe transferee in February 2014.

In late 2014, Dr Goh bought 18,679 shares of the 43,623 shares held by Peter leaving Peter with 24,994 shares. By an agreement dated 17 September 2014, Dr Goh agreed to purchase 20,318 shares from RSP in the event of an Initial Public Offering (“IPO”) or a trade sale of the Company.

Dr Goh also entered into agreements with 22 other shareholders of the Company (to whom he had sold shares from 2012), including Lucy, for him and/or Michelle to hold their voting rights as proxies. The reason for these agreements was to ensure that Dr Goh retained control of the Company notwithstanding that he and his family were no longer the majority shareholders from September 2013 onwards. Dr Goh also sold shares to a company called Oriental Bay Holdings Inc for $1.425m and similarly secured proxy voting rights from that company.

Despite the agreements the six defendants and Lucy had signed with him, Dr Goh alleged that they refused to provide him with executed proxy forms for the Company’s extraordinary general meeting scheduled for 9 June 2015 (“the June EGM”), despite letters from his solicitors to their solicitors. Instead, accusations of wrongdoings and breaches of agreements were levelled against him (which he denied). Hence, Dr Goh’s application referred to in [5] above was brought.

The affidavit filed on 9 March 2016 in support of Dr Goh’s application deposed that he and Michelle were in grave danger of being removed from the board of the Company if the defendants were not restrained from calling the...