Re Ah Yee Contractors (Pte) Ltd

CourtHigh Court (Singapore)
Judgment Date23 July 1987
Docket NumberCompanies Winding Up No 740 of
Date23 July 1987
Re Ah Yee Contractors (Pte) Ltd

[1987] SGHC 29

L P Thean J

Companies Winding Up No 740 of 1986

High Court

Companies–Winding up–Application–Petitioner as fully paid shareholder and creditor of company–Whether petitioner had locus standi to bring petition–Companies–Winding up–Just and equitable ground–Company owing petitioner contributory sum of money drawn to meet company's liabilities–Company paying moneys received to company's overdraft account–Overdraft account secured by property belonging to estate of former managing director–Whether deadlock existed between shareholders in management of company–Whether just and equitable to order winding up

This action concerned a petition for the winding up of Ah Yee Contractors (Pte) Ltd (“the company”), on the ground that it was just and equitable for the company to be wound up.

The company had been incorporated in 1969 by Boey Chun Heng (“Boey”) to take over the business of his sole proprietorship. The petitioner had been given a minority share in the company and took care of its day-to-day operations. Boey was chairman and managing director of the company until his death in 1983. Boey's second wife, Mdm Goh, held shares in the company and was subsequently appointed chairman after Boey's death.

Disputes arose between the petitioner and Mdm Goh when there was a decline in the company's business. The petition was based on two complaints. First, the petitioner claimed that the company owed him a sum of $151,034.65. The petitioner alleged that these moneys had been drawn from his personal banking account to meet the company's liabilities, and demanded their repayment. Second, the petitioner alleged that various amounts owed by a customer of the company had been paid to the company's overdraft account with Chung Khiaw Bank Ltd (“the bank”), which account was secured by the property belonging to Boey's estate. The petitioner objected to these repayments, and claimed that such payments would effectively discharge the security provided for by the estate.

The petitioner claimed that these two points of disputes evidenced a complete deadlock between him and Mdm Goh in the management of the company, such that it was just and equitable for the company to be wound up.

Held, dismissing the petition:

(1) A petitioner for the winding up of a company, in which he was a fully paid shareholder, had to show that he had a tangible interest in the relief sought, ie the winding up. Where it was not shown that, upon the winding up, after full payment of all the company's debts and liabilities, there existed a surplus divisible among the shareholders, the petitioner would have no interest sufficient to induce the court to interfere on his behalf: at [11].

(2) The petitioner had a tangible interest upon the winding up of the company. Apart from being a fully paid shareholder, the petitioner was a creditor of the company. He thus had locus standi to present this petition: at [11].

(3) In so far as the first complaint was concerned, the petitioner was at liberty to institute a suit against the company for recovery of the amount owing to him plus interest. It was thus wrong for him to have recourse to winding up proceedings to compel the company to discharge or acknowledge the debt owing to him: at [12].

(4) As for the second complaint, the company was indebted to the bank on the overdraft account. In the circumstances of the case, the company was thus entitled to use its funds to pay up the overdraft account, despite the fact that such payment would go towards discharging the security provided for the overdraft account: at [12].

(5) These differences did not really amount to a deadlock in the management of the company. If the petitioner was minded to do so, he could still continue to conduct the day-to-day management of the company's business. There was no suggestion that he was prevented in any way from so doing: at [13].

(6) Additionally, there was no evidence of bad faith or a lack of probity on Mdm Goh's part such that it would be just and equitable to order a winding up. There was no attempt made by Mdm Goh to exclude the petitioner from participation in the management of the company or oust him from the board: at [14] and [15].

(7) There was no loss of substratum on the facts as well. There was no evidence to support the petitioner's contention that he had withdrawn from the company since the end of 1986 or that the company had no contracting business since 1986 such as to be an empty shell: at [16].

Expanded Plugs Ltd, In re [1966] 1 WLR 514 (folld)

Othery Construction Ltd, In re [1977] 1 WLR 69; [1966] 1 All ER 145 (folld)

Rica Gold Washing Co, In re (1879) 11 Ch D 36 (folld)

Westbourne Galleries Ltd, In re [1973] AC 360 (distd)

Wee Han Kim (Wee Eng Lock & Son) for the petitioner

Stanley Wong Hoong Hooi (Chee & Teo) for the respondent.

L P Thean J

1 This is a petition by Lieu Poh Toon, as a contributory, for the winding up of Ah Yee Contractors (Pte) Ltd (“the company”) on the ground that it is just and equitable that the company should be wound up. The petition is opposed by the company and another contributory, Goh Ah Aun (“Mdm Goh”), who holds more than 50% of the issued shares of the company.

2 The material facts leading to the presentation of the petition are these. The company was incorporated on 16 June 1969 with an authorised capital of $200,000 divided into 200,000 shares of $1 each. The company was incorporated at the instance of one Boey Chun Heng (“Boey”), and the subscribers to the memorandum and articles of association of the company were Boey and the petitioner, both of whom were also named in the articles as the first directors. The issued capital of the company at that time was only $2 comprising the...

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5 cases
  • Tang Choon Keng Realty (Pte) Ltd and Others v Tang Wee Cheng
    • Singapore
    • High Court (Singapore)
    • 1 June 1991
    ... ... The following authorities were cited to me: Tench v Tench Bros Ltd [1936] NZLR 403 Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 [1972] 2 All ER 492 [1972] 2 WLR 1289 Tay Bok Choon `s case, Re Lundie Bros [1965] 2 All ER 692 [1965] 1 WLR 1051 Re Ah Yee Contractors (Pte) Ltd [1987] 2 MLJ 590 The ingredients of this ground and the considerations that are relevant are set out in the speech of Lord Wilberforce in Westbourne Galleries [1973] AC 360 [1972] 2 All ER 492 [1972] 2 WLR 1289 as follows (at pp 379-380): ... My Lords, in my opinion ... ...
  • Summit Co (S) Pte Ltd v Pacific Biosciences Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 19 October 2006
    ...a winding up would unlock and be distributed to enable each of the two parties to go its own way. In Re Ah Yee Contractors (Pte) Ltd [1987] SLR 383, L P Thean J in that case pointed out that a petitioner who is a shareholder of fully paid-up shares had to show that he had a tangible interes......
  • Koh Say Chong v Two Oceans Film Company Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 29 August 2016
    ...did not show an interest sufficient to induce the court to wind up the Company. They rely on Re Ah Yee Contractors (Pte) Ltd [1987] SLR(R) 396 in support of their claim that the plaintiff, as a shareholder, has to show the Court that there is a surplus divisible among the shareholders, post......
  • Re Projector SA
    • Singapore
    • High Court (Singapore)
    • 12 December 2008
    ...this, it referred to cases where shareholders of a company have tried to wind up the company, including Re Ah Yee Contractors (Pte) Ltd [1987] SLR 383. In my view, creditors are in a different position from shareholders and the cases involving attempts by shareholders to wind up a company a......
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3 books & journal articles
  • Case Note - SHARE BUY-OUT IN A DEADLOCK SITUATION
    • Singapore
    • Singapore Academy of Law Journal No. 2020, December 2020
    • 1 December 2020
    ...the parties' inability to work together had crippled the company's business. 12 See, for instance, Re Ah Yee Contractors (Pte) Ltd [1987] SLR 383; Tien Ik Enterprises Sdn Bhd v Woodsville Sdn Bhd [1995] 1 MLJ 769; Chua Kien How v Goodwealth Trading Pte Ltd [1992] 1 SLR(R) 870; and Chan Siew......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2016, December 2016
    • 1 December 2016
    ...Ch 589. 19 Insolvency Rules 1986 (UK) ch 2 r 7.47. 20 Corporations Act 1989 (Aust) s 482. 21 [2016] 3 SLR 1156. 22 [2016] SGHC 171. 23 [1987] SLR(R) 396. 24 See Re Ah Yee Contractors Pte Ltd [1987] SLR(R) 396 at [11]. 25 See Re Ah Yee Contractors Pte Ltd [1987] SLR(R) 396 at [11]. 26 [2016]......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2006, December 2006
    • 1 December 2006
    ...to yield a surplus divisible among the contributories after paying all its debts and liabilities. In Re Ah Yee Contractors (Pte) Ltd[1987] SLR 383 (‘Re Ah Yee Contractors’), L P Thean J (as he then was) accepted this common law rule as part of the law of Singapore. 15.6 In Re HL Sensecurity......

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