Hengwell Development Pte Ltd v Thing Chiang Ching

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 18 July 2003
• Neutral Citation: [2003] SGHC 154
• Date: 18 July 2003
• Subject Matter: Summons in chambers,Summons-in-chambers as subsidiary process drawing life from originating summons,Whether further applications of fresh and substantial nature may be made by way of summons-in-chambers once originating summons fully heard and finally disposed of,Civil Procedure
• Docket Number: Originating Summons No 601182 of
• Defendant Counsel: John Nagulendran (Rajah & Tann),Andrew Ang (Rajah & Tann)
• Court: High Court (Singapore)
• Published date: 03 October 2003
• Plaintiff Counsel: Tay Wee Chong (Hee Theng Fong & Co),Yu Siew Fun (Hee Theng Fong & Co)

1 The plaintiff applied by way of a summons-in-chambers in Originating Summons No. 601182 of 2001 for leave under s 216A of the Companies Act, Ch 50 to sue in the name of a company called Far East-Hengwell Pte Ltd (‘the JV company’). The plaintiff is a shareholder holding 51% of the shares in the JV company and a company called Far East Packaging Industrial Pte Ltd (‘FEP’) is the other shareholder. There is a deadlock in the board of directors of the JV company that eventually compelled the plaintiff to make this present application. The only business of FEP is to hold shares in a company in China called Quanzhou Factory (‘QF’). The business of QF is the manufacture of cardboard boxes and shoe boxes.

2 QF is managed by FEP who appointed the first defendant Thing Chiang Ching (‘Thing’) as a director of QF, one Wu Yuqin (‘Wu’) as a manager of QF, and one Lim Seng Kwee (‘Lim’) as a director and manager of QF. By this summons-in-chambers the plaintiff prayed for leave of court to sue Thing, Wu, Lim and FEP on the ground that these parties had diverted money belonging to the JV company to themselves. The plaintiff alleged that a payment of US$1,206,292 by a Hong Kong debtor of the JV company was not paid into the account of the JV company. The plaintiff gave notice to the directors of the JV company who were nominated by FEP to join a directors’ resolution of the Board of Directors of the JV company in order to sue for the recovery of this sum of money. The directors nominated by FEP did not attend the meeting and there was therefore no quorum for the intended purpose. Hence the plaintiff made this application to enable it to sue in the name of the JV company for the recovery of the specified sum of US$1,033,788.80 as well as for damages for breach of fiduciary duty in respect of the directors and officers in question.

3 It transpired in the course of the hearing before me that this originating summons (Originating Summons 601182 of 2001) was heard by the Honourable Justice Lai Kew Chai on 27 November 2002 who granted the plaintiff an order in terms of the prayers sought. The orders of Justice Lai are:

1. Leave of Court be granted to the Plaintiffs to bring an action in the name and on behalf of the Fourth Defendant against Far East Packaging Pte Ltd and Thing Chiang Ching (“the action”);

2. The Plaintiffs be authorised to have control over the conduct of the action generally;

3. The Fourth Defendant pays reasonable legal fees and disbursements incurred by the Plaintiffs in connection with the action;

4. The costs of this application be paid by the First to Third Defendants to the Plaintiffs; and

5. Parties are at liberty to apply regarding the future conduct and costs of the proceedings.

4 Consequently, the plaintiff commenced Suit 1233 of 2002 in which they sued in the name of the JV company. Thing and FEP were the defendants. Two other defendants namely Wu Yuqin and Lim Seng Kwee were subsequently added by way of an amendment to the writ. Mr Tay who appeared before me on behalf of the plaintiff submitted that since the amendment to the writ in Suit 1233 of 2002, the plaintiff had discovered the further instance of misappropriation...