Haco Far East Pte Ltd v Ong Heh Lai Francis

• Judge: Choo Han Teck JC
• Judgment Date: 01 June 1999
• Neutral Citation: [1999] SGHC 152
• Citation: [1999] SGHC 152
• Court: High Court (Singapore)
• Plaintiff Counsel: Christopher Wong [Harry Elias Partnership]
• Defendant Counsel: P Suppiah and Elengovan Krishnan [P Suppiah & Co]
• Published date: 06 March 2013

Judgment:

GROUNDS OF DECISION

1. This is a summons taken out by Haco Far East Pte Ltd ("Haco") seeking the following declarations. First, "that the defendant ("Ong") had acted dishonestly whilst an employee of [Haco], and secondly, ‘that accordingly, [Ong’s] shares in [Haco] are to be transferred to the other shareholder [Haco N.V.]". Haco was incorporated in 1984 with two directors, one of whom was Ong who shortly thereafter, was employed as its managing director under a contract of employment exhibited in the supporting affidavit of Roger Havegeer to this summons as "RH-1". The contract begins with the following recital: "We are pleased to confirm your employment with us as Managing Director from 1984 May 1 or earlier if available on the following terms and conditions". Clause 13 states as follows: "If any dishonesty appears from one of the shareholder his share will automatically be transferred to the other shareholders". Thus the object of this summons seems straightforward and simple.

2. However, in 1994 Haco successfully sued Ong in Suit 403 of 1994 for breach of his duties as director of Haco. The trial judge Judith Prakash J. found Ong to be dishonest and in breach of his duties. In her Grounds of Decision dated 23 March 1998 the learned judge reiterated the allegations in Haco’s Statement of Claim. The foremost being, "as managing director of [Haco], [Ong] owed it duties to act honestly in the interest of [Haco]; not to place himself in a position where his duty to [Haco] and his personal interest might conflict". The learned judge recited the reliefs claimed by [Haco] as follows:

"(1) for damages to be assessed as a result of [Ong’s] breaches of duty;

(2) an account of the profit made by [Ong] through Amerfab System and Amerfab Pl in the sale of drum plants, Blue Valley flanges, Strippit machines and plate rolls; and

(3) payment of all sums found due to [Haco] on the taking of the above account".

3. No claim was made in that suit or trial by Haco for the transfer of the shares held by Ong to the other shareholders in Haco. After finding against Ong and awarding judgment to Haco Judith Prakash J. ordered damages to be assessed. Haco now seeks to enforce clause 13 of the employment contract which I referred to above through an order of court. The inherent problem with this application is that Haco is asking this court to declare what has already been declared by another court. At page 40 of her Grounds of Decision Judith Prakash J. held that "[Ong] had clearly acted in breach of his fiduciary duty and dishonestly". This declaration was readily acknowledged by Haco. Their solicitors wrote to Ong’s solicitors on 23 December 1998. That letter was exhibited by Haco’s director Roger Havegeer in his affidavit of 11 February 1999 as exhibit "RH-5". The material paragraph of the said letter reads:

"Pursuant to Clause 13 of the Contract, your client’s shares in the Haco F.E. are to be automatically transferred to Haco N.V. in the event of dishonesty on your client’s part. It has been confirmed in suit No 403 of 1994 that your client has acted dishonestly."

4. Haco’s solicitors enclosed transfer forms for Ong’s execution which the latter refused to do. The point here is whether this court ought to grant the declarations sought by Haco. Ong’s employment contract was admitted as an agreed document in Suit 403 of 1994 as "AB 43". It seems to me that this application before me was misconceived and must fail because the main prayer is res judicata. Mr Wong appearing on behalf of Haco before me submitted that this...