Loh Sing Cher v Tan Ah Chow

• Jurisdiction: Singapore
• Judge: L P Thean J
• Judgment Date: 17 May 1990
• Neutral Citation: [1990] SGHC 37
• Docket Number: Suit No 6713 of 1983
• Date: 17 May 1990
• Published date: 19 September 2003
• Year: 1990
• Plaintiff Counsel: Cheong Yuen Hee and Belinda Ang (YH Cheong)
• Citation: [1990] SGHC 37
• Defendant Counsel: B Ganesh and Chakraborty Trinel (Lim Ganesh & Liu)
• Court: High Court (Singapore)
• Subject Matter: Sale of shares,Proper price at which shares were sold,Share price,Contract,Proper party,Sale of shares by beneficial owner,Civil Procedure,Contractual terms,Implied terms,Parties,Whether need to join nominees as party to suit,Shares registered in names of nominees,Suit against purchaser

Cur Adv Vult

On 29 December 1983, the plaintiff, Loh Sing Cher, commenced this action against the then defendant, Ng Ching Leong, claiming the sum of $221,000 representing the balance of the purchase price of 260,000 shares of $1 each in Lian Bee Credit Pte Ltd (Lian Bee) which he, the plaintiff, had sold to Ng Ching Leong (NCL). The plaintiff claimed that at all material times he was the beneficial owner of the 260,000 shares, and in December 1981 he agreed to sell to NCL the shares at the price of $1.85 per share. On completion of the sale, which took place on or about 14 January 1982, the plaintiff delivered to NCL certificates and blank transfers of the 260,000 shares, and NCL paid to him $260,000 (at $1 per share) and promised to pay the balance sum of $221,000 at a later date; this sum, however, NCL failed or refused to pay subsequently.

The plaintiff`s claim was resisted, and by his defence NCL averred that the sale of the 260,000 shares was between the then registered holders of diverse lots of shares comprising the 260,000 shares and the subsequent registered holders of those lots of shares; that the purchase price for all the 260,000 shares was $1 per share and hence the total purchase price `had been fully paid to the respective sellers by the respective purchasers`; and that the plaintiff was not the proper party to institute and maintain the action.

Unfortunately, while this action was in progress, NCL, on 16 January 1988, passed away. Subsequently, on 11 November 1988, upon application by the plaintiff, the abovenamed Tan Ah Chow and Ng Bee Huat as administrators of the estate of NCL deceased were substituted as the defendants in this action.

Eventually, the action came on for trial, and at the conclusion of the hearing on 29 January 1990, I found that the plaintiff had established his claim and gave judgment to him in the sum of $221,000 with interest and costs.

On the basis of the pleadings, the issues raised before me were as follows: (i) who were the parties to the agreement for the sale of the 260,000 shares; (ii) what was the price at which the shares were sold; and (iii) whether the plaintiff was the proper party to institute and maintain this action. The first two issues are essentially questions of fact and the last issue is one of law and also turns substantially on the facts established in the first issue.

I now turn to the evidence adduced before me. The plaintiff testified that Lian Bee was formed in 1969 and he and NCL were founders of the company. At the first board meeting, NCL proposed to have four to five directors on his side and the plaintiff therefore on his side proposed his brothers to be directors of the company; hence, some of his shares were allotted to his brothers. He owned altogether 260,000 shares; of these, 104,000 shares were held by him and the balance of 156,000 shares were held as follows:

(i) 65,000 shares by his brother, Loh Sze Hup,

(ii) 65,000 shares by another brother, Low Sim Bok, and

(iii) 26,000 shares by his sister-in-law, Lim Gek Kim.

These 156,000 shares were held by his brothers and sister-in-law as nominees and they belonged to him.

The plaintiff said that in 1980 Lian Bee was not doing well and NCL proposed to split: either all the shares should be transferred to and held by him, NCL, or all the shares be transferred to and held by the plaintiff. The plaintiff`s response was that since NCL had been running Lian Bee, whilst the plaintiff himself had been involved in his own business, he would sell his shares to NCL. NCL accepted the offer, and they negotiated on the price of the shares. The discussions and negotiations took place in or about October or November 1981. The plaintiff said that the shares of Lian Bee were worth about $1.85 per share. At the time of negotiation they had the audited balance sheet and profit and loss accounts of the company and the valuation report of property known as Nos 10/A/B, 12/A/B, 14/A/B and 16/A/B, Lorong 19, Geylang, which was owned by a company, Lian Holding Pte Ltd, in which Lian Bee held 25% of the shares. There was also produced to the plaintiff by NCL a trial balance of Lian Bee as at 15 November 1981. On the basis of these documents they negotiated and agreed on a price of $1.85 per share. The negotiations were held only between him and NCL. NCL subsequently handed to him blank transfers for signing by him and his nominees. He distributed the transfers to his brothers and sister-in-law for signing, and they were all duly signed. At a meeting in January 1982 he handed to NCL the transfers duly signed together with the share certificates. The transfers were in blank, that is, they did not contain the typewritten words: the names of the transferors and transferees, the number of shares transferred and the consideration for the shares. NCL gave him cheques for various sums totalling $260,000 and proposed to pay the balance of 85 cents per share, ie the balance of $221,000, at a later date. The plaintiff agreed to accept this part-payment and to payment of the balance at a later date. The reason why he was so agreeable was that some years ago, in 1977, he borrowed a sum of $100,000 from NCL a nd repaid NCL the amount only about one year later without any interest. While the loan was outstanding NCL never pressed him for repayment of the loan or payment of any interest.

The plaintiff said that some time after the sale of the shares he asked NCL for payment, but the latter...