Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals
Jurisdiction | Singapore |
Judge | Sundaresh Menon CJ |
Judgment Date | 09 April 2020 |
Neutral Citation | [2020] SGCA 35 |
Year | 2020 |
Date | 09 April 2020 |
Published date | 15 April 2020 |
Hearing Date | 21 October 2019 |
Plaintiff Counsel | Christopher Anand s/o Daniel, Harjean Kaur, Keith Valentine Lee Jia Jin and T Varshini (Advocatus Law LLP),Narayanan Sreenivasan SC, Ang Mei-Ling Valerie Freda and Hiren George Jonas (K&L Gates Straits Law LLC) |
Defendant Counsel | The sixth respondent in Civil Appeal No 220 of 2018 in person.,Lee Eng Beng SC, Cheng Wai Yuen, Mark, Chew Xiang, Ho Zi Wei, Lim Wee Teck, Darren (Rajah & Tann Singapore LLP) |
Court | Court of Appeal (Singapore) |
Citation | [2020] SGCA 35 |
Docket Number | Civil Appeals Nos 218, 219 and 220 of 2018 |
These are three related appeals arising out of the decision of the High Court judge (“the Judge”) in
We commence by observing that the
Not surprisingly, in so far as the
In so far as the
Winsta Holding Pte Ltd (“Winsta Holding”) is the holding company, and beneath it were seven subsidiaries (singly, a “Winsta Subsidiary” and collectively, “the Winsta Subsidiaries”). Six of these subsidiaries were primarily in the hostel business, and the last ran a serviced apartments business. Winsta Holding and its 51% shareholder, M Development Ltd (“M Development”), were the plaintiffs in the action below. Because cross-appeals have been brought against the Judge’s decision, we refer to Winsta Holding and M Development collectively as “the Winsta Companies” for convenience. We will also refer hereafter to Winsta Holding as well as the Winsta Subsidiaries as “the Winsta Group”.
The chief antagonists in the action were Mr Sim Poh Ping (“Mr Sim”), Ms Sim Pei Yee (“Ms Lynn Sim”) and Ms Sim Pei San (“Ms Joyce Sim”) (collectively, “the Sims” or the “Sim family”). Mr Sim is the father of Ms Lynn Sim and Ms Joyce Sim. Each of them was a director of Winsta Holding and of all of the Winsta Subsidiaries. The allegations were that they had breached their fiduciary duties by diverting opportunities away from the Winsta Group to their own corporate vehicles or by entering into interested party transactions between the Winsta Group and these corporate vehicles. These are the seven named corporate defendants in the suit below (which are separate and distinct from the Winsta Subsidiaries, and are therefore not to be confused with the latter; see also [17] below); we will refer to them as “the Corporate Defendants”. In addition, the Winsta Companies pursued claims against three other individuals, Mr Kong Weijia (“Mr Dave Kong”), Ms Ng Connie (“Ms Connie Ng”), and Mr Tan Choon Leong (“Mr Shawn Tan”). These individuals allegedly dishonestly assisted the Sims in breaching their fiduciary duties to the Winsta Group. The total value of the claims pursued was in the range of $16.3m to $39.8m, as quantified by the Winsta Companies’ expert. The thirteen defendants are collectively referred to as “the Defendants”.
The Judge explained his holdings in the Judgment. The Judge found that the Sims had committed a large number of breaches of fiduciary duty against the Winsta Group. Some of these included the diversion of corporate opportunities from a Winsta Subsidiary to their own vehicles, but most of them concerned interested party transactions where the Sim sisters (Ms Lynn Sim and Ms Joyce Sim) stood on both sides of the transaction. Although liability for breach of fiduciary duty was established, the Judge determined that the burden fell on the Winsta Companies to establish but-for causation, rejecting the rule in the Privy Council decision (on appeal from the Supreme Court of Canada) of
The Winsta Companies and some of the Defendants filed appeals against the Judge’s decision. We summarise the thrust of these three appeals briefly. Civil Appeal No 218 of 2018 (“CA 218”) is Mr Sim’s appeal against the Judge’s decision finding him liable for breaching his fiduciary duties towards the Winsta Group. The Judge accepted that the evidence did not show that Mr Sim had an interest or control in any of the corporate defendants which had benefited from the various breaches of fiduciary duty, apart from Overseas Students Placement Centre Pte Ltd (“OSPC”), but nevertheless found Mr Sim to have breached the no-conflict and no-profit rules. Mr Sim alleges that this is a “quantum leap” in reasoning and must be overturned on appeal.
Civil Appeal No 219 of 2018 (“CA 219”) is the appeal brought by the Sim sisters and their corporate vehicles OSPC and Jiu Mao Jiu Hotpot Pte Ltd (“JMJ Hotpot”). By this appeal, the Sim sisters seek to reduce the amount of equitable compensation and costs ordered to be paid to the Winsta Companies.
Civil Appeal No 220 of 2018 (“CA 220”) is the most legally complex of the three appeals. In this appeal, the Winsta Companies appeal against the Judge’s decision to reject
We now go into the facts in greater detail.
The parties The Plaintiffs Winsta Holding, the first respondent in CA 218 and CA 219 and the first appellant in CA 220, was the first plaintiff in the High Court. It is the holding company in a group of companies (
On 20 May 2015, Winsta Holding and the Winsta Subsidiaries commenced Suit No 491 of 2015 (“the Suit”) in the High Court claiming breach of fiduciary and other duties, knowing receipt, dishonest assistance, conspiracy to injure and/or deceit. The Winsta Subsidiaries were placed under creditors’ voluntary liquidation between 3 August 2015 and 4 August 2015.
M Development, the second respondent in CA 218 and CA 219 and the second appellant in CA 220, was the second plaintiff in the Suit. M Development holds 51% of the issued share capital of Winsta Holding and is a public company listed on the Singapore Exchange. M Development was assigned the claims by the Winsta Subsidiaries in the Suit on 29 October 2015.
The DefendantsMr Sim, the appellant in CA 218 and the first respondent in CA 220, was the first defendant in the Suit. His daughters, Ms Lynn Sim and Ms Joyce Sim, are the appellants in CA 219 and two of the respondents in CA 220. Mr Sim and Ms Joyce Sim, together with two related companies, held 34% of the shares in Winsta Holding. The remaining 15% of the shareholding was owned by various unrelated third parties.
The directorships of the Sims in the Winsta Group at all material times were as follows:
Seven companies were made defendants to the action below (
In addition (and as alluded to above), claims were brought against three other individuals who were alleged to have dishonestly assisted the Sims in their breaches of fiduciary duty:
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