Retrospect Investment (S) Pte Ltd v Lateral Solutions Pte Ltd and another

• Jurisdiction: Singapore
• Judge: Steven Chong JA
• Judgment Date: 06 March 2020
• Neutral Citation: [2020] SGCA 15
• Plaintiff Counsel: Boey Swee Siang, Lee Wei Han Shaun and Teo Yi Hui (Bird & Bird ATMD LLP)
• Docket Number: Civil Appeal Nos 147 and 148 of 2019
• Date: 06 March 2020
• Hearing Date: 06 March 2020
• Subject Matter: Oppression,Companies,Courts and Jurisdiction,Powers,Jurisdiction
• Published date: 12 March 2020
• Defendant Counsel: Kok Chee Yeong Jared and Kwong Kam Yin (Rajah & Tann Singapore LLP)
• Court: Court of Appeal (Singapore)
• Citation: [2020] SGCA 15
• Year: 2020

Steven Chong JA (delivering the judgment of the court ex tempore): Introduction

Does the court have the jurisdiction or power to substantively amend a consent order after the action has been discontinued? This is an issue which was raised by this court arising from the circumstances which led to the present appeals. Before we turn to that issue, we begin by setting out the procedural history which gave rise to this issue in these appeals.

Procedural history

In Suit No 236 of 2017 (“Suit 236”), the Appellant commenced a minority oppression action under s 216 of the Companies Act (Cap 50, 2006 Rev Ed) against the Respondents, among other defendants. The parties were shareholders in Sei Woo Technologies Pte Ltd (“SWTPL”).

Prior to the commencement of the trial, the Respondents agreed to buy out the Appellant’s shares in SWTPL. Accordingly, Suit 236 was compromised and a consent order was recorded before the High Court judge (“the Judge”) on 20 August 2018 (“the Consent Order”). On the same day, leave was also granted to the Appellant to discontinue Suit 236 with no order as to costs. The Notice of Discontinuance was served by the Appellant on 27 August 2018 and filed on 31 August 2018. The Respondents and the other defendants in Suit 236 consented to the discontinuance. Suit 236 was thus discontinued under those circumstances.

However, it later transpired that the parties could not agree on the reference date for the valuation of the Appellant’s shareholding in SWTPL (“the valuation date”). The parties thus filed cross-applications ie, Originating Summons Nos 1350 (“OS 1350”) and 1409 of 2018 (“OS 1409”), for the court to determine the applicable valuation date. The Respondents’ position was that the valuation date ought to be the date of the Consent Order, 20 August 2018. The Appellant, on the other hand, contended that the valuation date ought to be 31 December 2015. In essence, the Appellant’s case was that the Respondents had on 8 April 2016 set up another company, LSW Pte Ltd (“LSW”) which competed with a wholly-owned subsidiary of SWTPL, Sei Woo Polymer Technologies Pte Ltd (“SWP”). It was alleged that this oppressive conduct damaged the value of the Appellant’s shareholding in SWTPL and that in all the circumstances, it would be unfair for the valuation date to be the date of the Consent Order.¹

The parties appeared before the Judge on 10 January 2019. On that occasion, the Judge pointed out to the parties that the Consent Order did not provide for any right to enable the parties to seek the court’s determination on the valuation date. The parties agreed to amend the Consent Order.

Accordingly, the parties, by way of a consent summons, filed an application to amend the Consent Order in Suit 236. Specifically, the parties sought to include the following paragraph in the Consent Order:

In the event that parties are unable to come to an agreement on the reference date for the valuation of the [Appellant’s] shares in [SWTPL], the parties shall be at liberty to refer the matter to the Court for determination, which determination shall be final.

On 29 January 2019, the Assistant Registrar granted the application in terms. Unfortunately, neither party addressed their mind to the issue of whether the Consent Order could be amended in this manner in light of the discontinuance.

Thereafter, on 8 March 2019, the parties appeared before the Judge for directions. It was agreed that for the purposes of the cross-applications, the valuation date would either be the date of the Consent Order, or the date when the first customer was allegedly siphoned to LSW from SWP or SWTPL. The parties were to file further affidavits and their witnesses were to be cross-examined. The parties also agreed that the issues would be limited in scope and the cross-applications were not intended to be a re-litigation of Suit 236. It is thus clear that the court’s jurisdiction to hear OS 1350 and OS 1409 was premised on the amended Consent Order which was granted in the discontinued Suit 236.

Having considered the evidence, the Judge found no reason on the facts to depart from the general rule that the date of the Consent Order was the valuation date. The Judge found that the incorporation of LSW did not cause a drop in or negatively affected the value of SWTPL’s shares. The Appellant failed to show how LSW was in competition with SWP’s business as LSW was not doing what SWP was doing, and there was no evidence that SWP or SWTPL intended or would have entered into the business that LSW was involved in.² She accordingly granted the Respondents’ application in OS 1350 and dismissed the Appellant’s application in OS 1409.

The Appellant appealed against the Judge’s decisions in OS 1350 and OS 1409. While the parties had agreed that this was the sole issue in the appeals, in the course of reviewing the record, this court observed that the Consent Order, which formed the very premise of the cross-applications, was amended after Suit 236 was discontinued. In the circumstances we directed the parties to address us on the following issue:

Whether the High Court had the jurisdiction or power to amend the consent order in [Suit 236] notwithstanding the discontinuance of the Suit and if not, what are the orders that the Court should make in the circumstances.

Whether the High Court had the jurisdiction or power to amend the Consent Order in Suit 236 after its discontinuance

In our judgment, the starting point is that the High Court was functus officio once Suit 236 was discontinued (see Tan Kim Hai and Sons Enterprises Sdn Bhd & Ors v Tam Kim San and Sons Sdn Bhd & Ors (Hiap Lee (Choong Leong & Sons) Brickmakers Sdn Bhd & Anor, Interveners) [1996] 5 MLJ 593 at 600).

Nonetheless, it is well established that the court possesses the inherent jurisdiction and power to clarify the terms of its orders and to give consequential directions (see Godfrey Gerald QC...