Sing Eng (Pte) Ltd v PIC Property Ltd

JudgeLai Kew Chai J
Judgment Date23 August 1990
Neutral Citation[1990] SGCA 8
Citation[1990] SGCA 8
Defendant CounselPhilip N Pillai and Susan Kong (Shook Lin & Bok)
Published date19 September 2003
Plaintiff CounselTan Jing Quee and Lim Heng Chye (Jing Quee, Chin Joo & Teck Hui)
Date23 August 1990
Docket NumberCivil Appeal No 12 of 1988
CourtCourt of Appeal (Singapore)
Subject MatterTransferor to give notice,Words and Phrases,Shares,Companies,Rectification of share register,Requirement for compliance with articles,Memorandum and articles of association,'Person aggrieved',Whether equitable mortgagee transferring shares to nominee entitled to apply for rectification,Registration,'Transfer of shares',s 194 Companies Act (Cap 50),Pre-emptive rights of members in respect of share transfers

Cur Adv Vult

The appellant, Sing Eng (Pte) Ltd (the company), is a company incorporated in Singapore and has an authorized capital of $2,500,000 divided into 2,500,000 shares of $1 each, of which 1,894,278 shares have been issued and are fully paid. Amongst its shareholders are Lie Mo Meng (Mo Meng) and Lie Mo Kwang (Mo Kwang), each holding 514,930 shares in the company. They are also two of the directors of the company.

By two instruments, namely, a guarantee executed under seal and a memorandum of charge on stock and are shares executed under hand, both dated 16 March 1986, Mo Meng charged all the 514,930 shares held by him to Xiamen International Bank (XIB) as security for the due payment and discharge of his obligations under the guarantee.
Similarly, by two instruments, namely, a guarantee executed under seal and a memorandum of charge of stock and shares executed under hand, both dated 21 March 1986, Mo Kwang also charged all the 514,930 shares held by him to XIB as security for the due payment and discharge of his obligations under the guarantee. The terms of the two guarantees are identical; so are the terms of the two memoranda of charges. Pursuant to the instruments executed by them, Mo Meng and Mo Kwang in April or May 1986 each deposited with XIB the certificates relating to the shares held by them, and further, in or about October 1986, they each executed and delivered to XIB blank transfers of the shares.

In February 1987, XIB intended to register all the shares in the name of its nominee, XIB (Nominees) Ltd (XIB Nominees).
Accordingly, the blank transfers were completed by XIB and were each expressed to be made pursuant to the memorandum of charge and to transfer 514,930 shares to XIB Nominees as nominee for XIB. Sometime on or about 14 April 1987, a circular resolution of the board of directors of the company was signed by three directors approving the transfers of the shares to XIB Nominees and authorizing the issue of new share certificates to XIB. Subsequently, on 9 May 1987, Shook Lin & Bok, as solicitors for XIB, forwarded to the company the two transfers and the share certificates for registration and requested for the issue of new share certificates to XIB Nominees. No action, however, appeared to have been taken by the company in relation to these transfers. Nor did it give any response to Shook Lin & Bok. XIB and Shook Lin & Bok also did not pursue further the matter of registration of the transfers of the shares to XIB Nominees.

About three weeks later, on 26 May 1987, XIB by letters addressed to Mo Meng and Mo Kwang respectively demanded payment by them of the amounts due under the guarantees.
Presumably, no payment was made by them or either of them. In consequence, XIB proceeded to enforce the charges on the shares. As a first step, Shook Lin & Bok on instructions from XIB served on the company a notice dated 22 June 1987 under art 34 of the articles of association of the company. The material part of this notice is as follows:

Our clients as persons entitled to transfer (hereinafter referred to as the proposing transferor) and acting with the full authority of the registered member in respect of the following identified shares, hereby give notice to Sing Eng (Private) Limited that our clients desire to transfer the same.

The fair value of such shares as computed by our valuers is HK$10m (S$2,745,000).

Our clients hereby constitute the company as their agent for the sale of the share to any member of the company at the price so fixed or at the option of the purchaser, at the fair value to be fixed by the auditors of the company.



There was, again, no response by the company to this notice.
XIB then pursuant to the power of sale contained in the guarantees and the memoranda of charges entered into a sale agreement on 31 July 1987 with PIC Property Ltd, the above-named respondents (PIC), whereby XIB sold to PIC all the shares charged to them for a total consideration of HK$10m. After the sale, Shook Lin & Bok on behalf of XIB wrote to the company on 20 August 1987 and forwarded two transfers, each of 514,930 shares, for registration; they also enclosed together with the transfers certified true copies of the memoranda of charges as evidence of the right of XIB to transfer the shares. The material part of the letter enclosing the documents is as follows:

As you have failed to give us notice of a purchasing member pursuant to art 35, within the 14 days of our notice, we now pursuant to art 36 notify you that our clients have sold and transferred the shares for HK $10m.

We now forward herewith two share transfers duly stamped, each for 514,930 shares.

The share certificates, in respect of such transfers, are in your possession having been forwarded to you on 9 May 1987. We also forward herewith certified true copies of the memorandum of charge as evidence of the right of Xiamen International Bank to transfer the shares.

Kindly register the transfer and let us have the new share certificates in favour of XIB Nominees Ltd.



To this letter the company through its solicitors, Jing Quee, Chin Joo & Teck Hui, on 25 August 1987, replied stating that the shares comprised in the two transfers were registered in the names of Mo Meng and Mo Kwang respectively, and that neither XIB nor XIB Nominees was ever registered as holder of the shares or any part thereof and that in those circumstances the company was unable to register the two share transfers and enter the name of PIC or its nominee in its register.


On 12 November 1987, PIC took out an application under s 194 of the Companies Act (Cap 50) (the Act) for an order that the share register of the company be rectified by striking out the names of Mo Meng and Mo Kwang respectively and substituting therefor the name of XIB Nominees as holder as nominee of PIC, the owner of all the shares, and further an order that the company deliver to PIC certificates for 1,029,860 shares of $1 each in the capital of the company.
The application was resisted by the company. It was heard by the High Court, and an order was made in terms thereof. Against the decision of the High Court, this appeal is now brought.

There are essentially two issues before us: first, whether PIC is entitled to apply under s 194 of the Act for an order of rectification of the share register of the company and the consequential order, and, secondly, whether XIB in relation to the transfers submitted to the company for registration has complied with the pre-emption provisions of the articles of association of the company.
The first issue turns on the construction of s 194(1) and the second issue on the construction of art 33 of the articles of association of the company.

We now deal with the first issue, and it is convenient at this stage to set out, insofar as relevant, the provisions of s 194, which are as follows:

(1) If -

(a) the name of any person is without sufficient cause entered in or omitted from the register; or

(b) default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be a member,

the person aggrieved or any member or the company may apply to the Court for rectification of the register, and the Court may refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party to the application.

(2) On any application under subsection (1), the Court may decide -

(a) any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members or between members or alleged members on the one hand and the company on the other hand; and

(b) generally, any question necessary or expedient to be decided for the rectification of the register.

...



The case which PIC seeks to make out is one under para (a) of s 194(1).
In this connection, it is necessary to examine the contents of the two transfers submitted to the company for registration. Each was expressed to be a transfer by XIB of 514,930 shares of the company to XIB Nominees as nominee of PIC, the owner of the shares, and for consideration paid by PIC; each was executed by XIB as the transferor and XIB Nominees as the transferee. Hence, it is XIB Nominees whose name the company has refused to enter in the share register. XIB Nominees, therefore, falls squarely within the words, `the person aggrieved`, in s 194(1) of the Act. However, XIB Nominees is not the party who brought the application; it is not a party to these proceedings at all. The application was brought by PIC and the question is whether PIC is also the person aggrieved within the meaning of s 194(1) of the Act.

Counsel for PIC submits that s 194 provides a summary procedure for a person aggrieved or a member or the company to apply to court to rectify the share register, and that such a person aggrieved could be one who has sold his shares in the company or one who has bought shares in the company.
A person who has bought shares is entitled to have the shares registered either in his own name or in the name of a nominee as nominee for him, and if he chooses the latter and that is denied to him, then he is the person aggrieved within the meaning of s 194(1) and is entitled to apply under that section for rectification of the share register of the company. The person aggrieved in s 194(1), in so far as para (a) thereof is concerned (as para (b) is not relevant in this appeal), does not mean only the person whose name has been entered in or omitted from the share register; if this were so, the appropriate words used in s 194(1) would be `such person` and not `the person aggrieved`, as in such a case the word `aggrieved` would be superfluous. The meaning of the words, `the...

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8 cases
  • Xiamen International Bank and Others v Sing Eng (Pte) Ltd
    • Singapore
    • High Court (Singapore)
    • June 7, 1993
    ... ... order of the High Court of the Republic of Singapore made on 24 April 1992 in Originating Summons No 1305 of 1990 declaring that I, the said [here again the name of the relevant Lie appeared] hold 514,930 shares in the capital of Sing Eng (Pte) Ltd registered in my name upon trust for PIC Property Ltd, now acting by its nominees, XIB Nominees (hereinafter called `the said transferee`) do hereby bargain, sell, assign and transfer to the said transferee five hundred and fourteen thousand nine hundred and thirty (514,930) shares ... of and in the undertaking called Sing Eng (Pte) Ltd ... ...
  • State Bank of India Singapore v Rainforest Trading Ltd
    • Singapore
    • High Court (Singapore)
    • August 4, 2011
    ...Claire [2008] 2 SLR (R) 898; [2008] 2 SLR 898 (folld) Rossage v Rossage [1960] 1 WLR 249 (folld) Sing Eng (Pte) Ltd v PIC Property Ltd [1990] 1 SLR (R) 792; [1990] SLR 81 (folld) Stubbs v Slater [1910] 1 Ch 632 (folld) Xiamen International Bank v Sing Eng (Pte) Ltd [1993] 2 SLR (R) 176; [19......
  • Khoh Chen Yeh Shane v Seng Realty & Development Pte Ltd
    • Singapore
    • High Court (Singapore)
    • April 12, 2012
    ...Safeguard Industrial Investments Ltd v National Westminster Bank Ltd [1982] 1 WLR 589 (distd) Sing Eng (Pte) Ltd v PIC Property Ltd [1990] 1 SLR (R) 792; [1990] SLR 81 (folld) Companies Act (Cap 50, 2006 Rev Ed) s 130 Hri Kumar Nair SC, Wendell Wong, Emmanuel Duncan Chua and Kueh Xiu Ying (......
  • State Bank of India Singapore v Rainforest Trading Ltd and another
    • Singapore
    • High Court (Singapore)
    • August 4, 2011
    ...in contravention of the Articles of Association of the company. Next, the defendants relied on Sing Eng (Pte) Ltd v PIC Property Ltd [1990] 1 SLR(R) 792 (“Sing Eng (Pte) Ltd”). In that case, there were two principal issues before the court. The first concerned the definition of “the person ......
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