Re Central Realty Co (Pte) Ltd

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 21 July 1998
• Neutral Citation: [1998] SGHC 250
• Citation: [1998] SGHC 250
• Year: 1998
• Published date: 19 September 2003
• Docket Number: Companies Winding Up No 155 of 1997
• Date: 21 July 1998
• Plaintiff Counsel: Davinder Singh SC, Rosalind Lazar and Jayanthi Sadanandan (Drew & Napier)
• Court: High Court (Singapore)

Two winding up petitions, one in respect of Central Realty Co (Pte) Ltd (`CR`) and the other in respect of The Central Construction Co (Pte) Ltd (`CC`), came up for hearing before me on 13 April 1998. They were presented pursuant to s 254(1)(i) of the Companies Act (Cap 50), on the ground that it was just and equitable to wind up those companies. The petitioners, altogether eight in number, were all members of one Tham family. The opposing faction comprised the Zee family. At the conclusion of the hearing, I granted the petitions and ordered that the two companies be wound up as I was of the opinion that it was not only just and equitable but also the only practical solution in view of the extreme bitterness which seemed to bedevil the relationship between the two factions, whose shareholdings were almost neck and neck, though not fifty fifty. An alternate remedy seriously pursued by the petitioners whereby they were willing either to sell their shareholdings to the Zees or buy-out the shareholdings of the Zees was not acceded to by the Zees.

Before I commence narrating the circumstances which led to the fall-out between the two factions, it would be useful to tabulate the parties` respective shareholdings in CR and CC as well as in a related Malaysian company known as Central Construction (Malaysia) Bhd (`CCM`) in the Central Group of Companies. The particulars are as follows:

CR(i) Shareholdings of the Zee family members in CR
	No of Shares	No of Shares
Estate of Zee Chuan	270
Estate of Fong Poh Choo	240
Fong Poh Yoke	234
Zee Kok Kwong	150
Zee Kok Onn	180
Zee Kok Meng	210
Zee Miow Ling	120
Zee Kok Nam	204
Estate of Mary Yeng Kim Noy	60
Yin Ngan Ying	60
Liew Shek Fong	60
		1,788 (49.66%)

(ii) Shareholdings of the Tham family members in CR
Estate of Tham Poh Leong	300
Wong Mee Chin	144
Tham Tuck Chong	354
Tham Lai Toa	90
Tham Lai Hong	90
Tham Tuck Keen	342
Tham Lai Tong	90
Tham Tuck Cheong	342
		1,752 (48.67%)

(iii) Shareholdings of the Estate of Tham Poh Low in CR
	60	(1.66%)
	3,600

CC
(i) Shareholdings of the Zee family members in CC
	No of Shares	No of Shares
Estate of Zee Chuan	2,424
Estate of Fong Poh Choo	1,380
Zee Kok Meng	1,200
Fong Poh Yoke	1,380
Zee Kok Onn	726
Zee Kok Nam	696
Zee Miow Ling	696
	8,502	(23.62%)

(ii) Shareholdings of the Tham family members in CC
Estate of Tham Poh Leong	1,338
Tham Tuck Chong	2,100
Wong Mee Chin	660
Tham Tuck Keen	2,100
Tham Tuck Cheong	2,100
Tham Lai Toa	180
Tham Lai Hong	180
Tham Lai Tong	180
		8,838 (24.55%)

(iii) Shareholdings of the Estate of Tham Poh Low in CC	660 (1.83.0%)
(iv) Shareholdings of CR in CC	18,000 (50%)
	36,000

CCM
(i) Shareholdings of the Zee family members in CCM
	No of Shares	No of Shares
Estate of Zee Chuan	162
Estate of Fong Poh Choo	50
Fong Poh Yoke	50
Zee Kok Meng	64
Zee Kok Onn	12
Zee Kok Nam	12
		350 (17.5%)

(ii) Shareholdings of the Tham family members in CCM
Estate of Tham Poh Leong	100
Tham Tuck Chong	168
Tham Tuck Keen	166
Tham Tuck Cheong	166
Wong Mee Chin	30
		630 (31.5%)

(iii) Shareholdings of the Estate of Tham Poh Low in CCM		60 (1%)
(iv) Shareholdings of CC in CCM (50%)		1,000
	2,000

It was not in dispute that CR and CC were incorporated on 6 April 1959 and 11 March 1963 respectively. The primary individuals involved from the outset in the formation of these companies were Mr Zee Chuan and Mr Tham Poh Leong. Before the incorporation of these two companies, there existed since about 1946 a firm known as the Central Construction Co in which Tham Sr and Zee Sr were partners (see PB-10 and PB-5).

The court was informed that Mr Zee Chuan (`Zee Sr`), the patriarch of the Zee family passed away on 4 September 1996. The patriarch of the Tham family, Mr Tham Poh Leong (`Tham Sr`), one of the petitioners herein, passed away on 4 November 1997, just over four months since the presentation of the petitions and after affirming the affidavits verifying the petitions. It would seem that disagreement and discord between the Thams and the Zees had started to surface almost immediately after the demise of Zee Sr, all in relation to the board composition in CR and CC and as to their individual designations in the two companies. It was also unfortunate that Mr Tham Poh Low, another contributory of CR, CC as well as CCM who was the younger brother of Tham Sr, had also pre-deceased both Zee Sr and Tham Sr on 6 June 1996. Even though the shareholdings of Tham Poh Low were somewhat miniscule in comparison to the others, the shares held by his estate became another bone of contention between the parties for the side that acquired those shares would invariably have majority control of CR, CC as well as CCM.

From the claims made, it would appear that for the time being, the Zees had managed to secure the shares of the late Tham Poh Low from his family and as a result the Zees do now enjoy a marginal majority in the shareholdings of both CR and CC. In CR the Zees now control 51.32% of the shareholdings as against the Thams` 48.67% and in CC, the Zees presently control 25.45% as against the Thams` 24.55%; the remaining 50% belongs to CR with the result that whoever controlled CR would have control of CC and whoever controlled CC would control CCM.

CR is reportedly an investment company. Its principal activity at present is collection of rentals and the maintenance of investment properties; it has no trading activity. CC which used to undertake development and construction work, had apparently ceased to be involved in any such activity. For all intents and purposes, it is reportedly dormant.

As mentioned earlier, the crack in the relationship between the Zees and the Thams started to appear shortly after the death of Zee Sr on 4 September 1996. The Thams` position as averred by Tham Sr in his affidavit verifying petition (see paras 11 to 19 of the petitions) was that the two founding shareholders of CR, CC and CCM, namely, Tham Sr and Zee Sr, had all along run their businesses as a partnership on the basis of the personal relationship and mutual trust and confidence between the two of them and this trust and confidence and the underlying character of the relationship between themselves as partners survived the incorporation of CR, CC and CCM respectively on 6 April 1959, 11 March 1963 and 8 August 1967. Tham Sr averred in particular that the understanding between Zee Sr and himself in relation to the three companies was that:

(a) Tham Sr and or his nominees would have management control with Tham Sr being the managing director of these companies;

(b) the Tham family would have one more director than the Zee family on the board of these companies; and

(c) the post of Chairman was to be non-executive and honorary and it was reserved for a founding member and/or for the most senior member of the board of these companies.

The younger Zees would not accept the foregoing assertions. Two amongst them, namely, Zee Kok Onn and his sister Zee Miow Ling, by their letter dated 2 November 1996 (PB-49) addressed to Tham Sr contested his claim. They asserted that, on the contrary, the long-standing tacit agreement between the parties was that both families should have equal representation on the board of each company. They also demanded that Zee Miow Ling - the daughter of Zee Sr and one who is very much younger than Tham Sr - be appointed chairman of CR and CC on the ground that the long-standing tacit agreement between the two families warranted that the chairman of both companies should come from the Zee family whilst the managing director from the Tham family. This letter was apparently written at the time when the Thams had a slight technical edge over the Zees and were contemplating the appointment of Tham Sr as the chairman; Tham Tuck Chong as the deputy chairman and managing director; Zee Kok Meng as the deputy managing director and Zee Kok Onn and Tham Tuck Keen as additional directors of CR and CC (see PB-51/52 and 55).

Chairman and director:	Tham Poh Leong
Deputy Chairman and Managing Director:	Tham Tuck Chong
Deputy Managing Director:	Zee Kok Meng
Director:	Tham Tuck Keen
Director:	Zee Kok Onn

(signed) (signed)

Tham Sr and Tham Tuck Chong replied to Zee Kok Onn and Zee Miow Ling on 22 November 1996. This letter (PB-55) insofar as is material reads as follows:

Mr Zee Kok Onn & Mdm Zee Miow Ling

...

We refer to your letter dated 2 November 1996.

On behalf of the THAM family shareholders in the Central Realty Co (Pte) Ltd and The Central Construction Co (Pte) Ltd, we are disappointed to be in receipt of your letter and would like to clarify that there is no tacit agreement between the late Zee Chuan and Mr Tham Poh Leong. The company is operated in a transparent manner and management decisions are made after mutual consultations. As you may be aware, for more than two decades until 1996, the directors of the companies consisted of:

Zee Family:

1 Late Zee Chuan

2 Zee Kok Meng

Tham Family:

3 Tham Poh Leong

4 Tham Tuck Chong

5 Late Tham Poh Low

This is the long accepted standing and undisputed arrangement of the companies with the ratio of three directors from the Tham family and two directors from the Zee family. This arrangement has served the company well in the past and therefore should be maintained.

Mr Tham Poh Leong and the late Zee Chuan were founding directors of the companies. They were also the first directors of the companies. As Mr Tham Poh Leong is

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