Ong Heng Chuan v Ong Teck Chuan and others

CourtHigh Court (Singapore)
JudgeMavis Chionh Sze Chyi JC
Judgment Date30 July 2020
Neutral Citation[2020] SGHC 161
Citation[2020] SGHC 161
Docket NumberSuit No 1086 of 2017
Hearing Date12 September 2019,02 April 2020,20 September 2019,18 September 2019,11 September 2019,31 January 2020,04 September 2019,09 September 2019,16 September 2019,31 March 2020,29 August 2019,13 September 2019,27 August 2019,26 August 2019,03 September 2019,05 September 2019,30 August 2019,06 September 2019,17 September 2019,28 August 2019,10 September 2019,19 September 2019
Plaintiff CounselPradeep Pillai, Simren Kaur Sandhu and Caleb Tan (PRP Law LLC)
Defendant CounselTan Gim Hai Adrian, Ong Pei Ching, Hari Veluri, Yeoh Jean Ann, David Aw and Lim Jian Wei Joel (TSMP Law Corporation),Andy Chiok Beng Piow and Margaret Lee Hui Zhen (JHT Law Corporation),The third defendant in person.
Subject MatterCompanies,Accounts,Directors,De facto,Shadow directors,Oppression,Minority shareholders
Published date20 October 2020
Mavis Chionh Sze Chyi JC: Introduction

The plaintiff (“OHC”), the first defendant (“OTC”), the second defendant (“OBC”) and the third defendant (“OSA”) are siblings. They are the current shareholders of the fourth defendant, an exempt private company (the “Company”). The Company is currently in compulsory liquidation pursuant to an order of court made on 12 July 2018 for its winding up.

OHC and OTC each hold 520,000 shares, which amount to about 17.33% of the total shares in the Company; OBC holds 1,760,000 shares (58.6%); and OSA holds 200,000 shares (6.67%). Currently, according to the Company’s business profile on the Accounting and Corporate Regulatory Authority (“ACRA”) website, the only director of the Company is OTC: the ACRA profile shows that he was appointed as director on 30 December 2015. It is not disputed that prior to OTC’s appointment on 30 December 2015, he was appointed as a director of the Company between 3 July 1984 and 14 April 2001. In the present suit, OHC alleged that OTC also acted as a de facto and/or shadow director of the Company in the period between 14 January 2008 and 29 December 20151. This allegation was disputed by OTC.

In respect of OBC, it is not disputed that he was previously appointed as a director of the Company from 16 August 1980 to 8 December 1983, and subsequently from 1 September 1999 until his resignation on 30 December 2015. It is not disputed that for most of the period when OBC served as a director of the Company from the late 1990s to 30 December 2015, he was also running his own property development business, which was unrelated to the Tong Garden business. In so far as the running of the Company was concerned, OHC alleged in the present suit that OBC was “accustomed to act[ing] on the directions and/or instructions and/or influence and/or wishes” of OTC in the period between 14 January 2008 and 29 December 20152. This allegation was disputed by OBC and OTC.

OSA was a director of the Company from 10 April 1999 to 15 July 2009 (although OHC has alleged that she was “removed” sometime in 2008).

As for OHC, he was a director of the Company from 16 August 1980 until 7 May 2003. During this period, he was also the managing director of the Company from 31 July 1999 until 7 May 2003. An Extraordinary General Meeting (“EGM”) of the Company on 7 May 2003 voted not to re-elect him as director. He was declared a bankrupt on 3 December 2004 and obtained a discharge from bankruptcy on 16 September 2016.

OHC brought the present suit against OTC and OBC pursuant to s 216 of the Companies Act (Cap 50, 2006 Rev Ed). His Statement of Claim (Amendment No 2) made it clear that he had no complaint against OSA and had added her as a defendant only because of her shareholding in the Company3. As against OTC and OBC, it was pleaded that “the affairs of the Company [had] been conducted and/or the powers of [OTC] and/or [OBC] as directors … and/or collectively as majority shareholders [had] been exercised in a manner oppressive to [OHC] and/or in disregard of and/or … prejudicial to [OHC’s] interests as a shareholder of the Company”4. OHC sought an order for OTC and OBC to buy out his shares “without discount” and at a price which would factor in “appropriate adjustments to offset the effects of the oppressive conduct”; or in the alternative, an order for OTC to transfer to him shares (the number “to be determined”) in two Thai entities controlled by OTC (Tong Garden Co Ltd and NOI Food Industry Co Ltd) and in two other companies set up by OTC (Tong Garden Food (Singapore) Pte Ltd and Tong Garden Food (Malaysia) Sdn Bhd).

At the end of the trial, I dismissed OHC’s claims against OTC and OBC and ordered him to pay them costs. As OHC has appealed against my decision, I set out my reasons in these written grounds. I start by setting out the undisputed facts which form the background to the dispute between the parties.


OHC, OTC, OBC and OSA are four of the ten children of the late Mr Ong Tong Guan (“the late Mr Ong”) and his wife, the late Mdm Chai Ah Hee. The late Mr Ong set up a sole proprietorship, Tong Garden Product Services, in the 1960s, to sell snack food under the “Tong Garden” brand (“Tong Garden Business”). In 1980, the Company – Tong Guan Food Products Pte Ltd – was incorporated. It grew to become the ultimate holding company for a number of subsidiaries and associated companies (which the parties have referred to collectively as the “Tong Garden Group”) involved in the manufacture, marketing and sale of various snack products such as nuts, seeds and dried fruits.

Over the years, several of the siblings joined the Tong Garden Business – including OHC, OTC, OBC, OSA, and their eldest brother Ong Leong Chuan (“OLC”). It is not disputed that the late Mr Ong remained in sole control of the business until he became ill in early 1984. He passed away on 24 July 1984. OHC, OTC, OBC and OSA are currently the only four shareholders of the Company after multiple changes in shareholdings over the years, these changes having resulted from “a multitude of legal actions between the siblings” and from sales by siblings uninvolved in running the Company of their shares to other siblings5.

The subsidiaries and associated companies

In his statement of claim, OHC has asserted – and the other three siblings agree – that the Company “is a pure holding company. It does not conduct any business. It derives revenue via its investments in the businesses of its subsidiaries and associated companies”6. For the purposes of the present action, the relevant subsidiaries and associated companies were the following.

The Singapore subsidiary

Within the Tong Garden Group, Tong Garden Food Products Singapore Pte Ltd (“Food Products (S)”) was the main operating entity in Singapore. It handled the manufacturing, sales and marketing of Tong Garden snack products in Singapore. Incorporated in Singapore in 1994, it was a wholly-owned subsidiary of Tong Garden Holdings Pte Ltd (“TGHPL”) which was in turn a wholly-owned subsidiary of the Company.

Food Products (S) was wound up by way of a members’ voluntary liquidation on 8 July 2013.

The Malaysian subsidiaries

Tong Garden Food Products Sdn Bhd (“Food Products (M)”) was the manufacturing arm of the Tong Garden Group in Malaysia while Tong Garden Snack Food Sdn Bhd (“Snack Food (M)”) took care of sales and marketing in Malaysia. Both were subsidiaries of Tong Garden Holdings Sdn Bhd, itself a subsidiary of TGHPL (which in turn was wholly owned by the Company).

Food Products (M) and Snack Food (M) are presently in liquidation.

The Thai entities

As to the Thai entities, it was OHC’s case in these proceedings that the Company had interests in the following three Thai companies prior to 20 July 20097: Tong Garden Co Ltd (“Tong Garden (T)”); Nut Candy House Co Ltd (“Nut Candy (T)”); and NOI Food Industry Co Ltd (“NOI (T)”).

According to OHC:8

The Company owned 39.99% of the issued shareholding of Tong Garden (T), with the remaining shares being held by NOI(T) and the Company’s nominees. Accordingly, the Company effectively controlled and owned Tong Garden (T). Nut Candy (T) was a subsidiary of Tong Garden (T). The Company had an interest in NOI (T) through N.O.I. Food Products Pte Ltd which was wholly owned by [TGHPL], which is in turn wholly owned by the Company.

While OTC agreed that Tong Garden (T) was the main operating entity of the Tong Garden Group in Thailand and that NOI (T) was its subsidiary, it was OTC’s case that the Company had sold him its 39.99% shareholding in Tong Garden (T) via a sale and purchase agreement on 4 January 2001. According to OTC, the “beneficial interest in the remaining 60.01% of the shareholding in Tong Garden (T)” belonged to him. As for NOI (T), OTC asserted that it “was never a subsidiary or an associated company of the Company, and the Company has never had any direct or indirect interest in it”9.

The corporate structure of the Tong Garden Group prior to March 2008 is set out in the chart contained in exhibit P1. The corporate structure of the Tong Garden Group after March 2008 is set out in the chart in exhibit P2. These two charts were tendered by OHC’s counsel. The reason why OHC drew up the corporate structure charts prior to and after March 2008 was because on 15 March 2008, OTC and OBC had entered into an agreement concerning, inter alia, the transfer of OBC’s shares in the Tong Garden Group to OTC: OHC has alleged that this agreement was relevant to the acts of oppression he suffered.

OHC’s allegations of minority oppression

I will next summarise OHC’s case in respect of his claims of minority oppression. At this juncture I will confine myself for the most part to what OHC has pleaded in his statement of claim. It should be noted that in his evidence at trial, he deviated in a number of instances from the case pleaded in his statement of claim. I will address the relevance and the effect of these deviations in the later part of these written grounds.

According to OHC, he had “legitimate expectations” as to how the Company should be run, which expectations were breached by OTC and OBC in their treatment and disposal of the trademarks, assets and business of subsidiaries and associated companies in Singapore, Malaysia and Thailand. It should be highlighted that OHC’s case was not based on the Company being (or being akin to) a quasi-partnership: he accepted that it was not. Instead, he pleaded that his “legitimate expectations” as to how the Company should be run were “based on his strict legal rights under the Articles of Association of the Company, Section 157 of the Companies Act (Cap 50), common law and/or equity”10. According to OHC, “[t]hese legal rights were derived from and/or based on the duties owed by [OTC] as a de jure, de facto and/or shadow director and/or [OBC] as a de jure director at the material time”. In his...

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1 cases
  • Ong Heng Chuan v Ong Teck Chuan and others
    • Singapore
    • Court of Appeal (Singapore)
    • 5 May 2021
    ...The present appeal arises out of the decision of the High Court Judge (the “Judge”) in Ong Heng Chuan v Ong Teck Chuan and others [2020] SGHC 161 (the “Judgment”) dismissing the claim of the appellant, Ong Heng Chuan (“OHC”), of minority oppression under s 216 of the Companies Act (Cap 50, ......
1 books & journal articles
  • Company Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2021, December 2021
    • 1 December 2021
    ...Ong Teck Chuan [2021] 2 SLR 262 at [10]. 50 Ong Heng Chuan v Ong Teck Chuan [2021] 2 SLR 262 at [28]. 51 Ong Heng Chuan v Ong Teck Chuan [2020] SGHC 161 at [270]–[271]. 52 [2018] 2 SLR 333. 53 Ong Heng Chuan v Ong Teck Chuan [2020] SGHC 161 at [293]–[298]. 54 Ong Heng Chuan v Ong Teck Chuan......

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