Swiss Butchery Pte Ltd v Huber Ernst and others and another suit
Jurisdiction | Singapore |
Court | High Court (Singapore) |
Judge | Woo Bih Li J |
Judgment Date | 27 April 2010 |
Neutral Citation | [2010] SGHC 129 |
Citation | [2010] SGHC 129 |
Subject Matter | Companies |
Docket Number | Suit No 245 of 2008/V consolidated with Suit No 222 of 2008/W |
Date | 27 April 2010 |
Defendant Counsel | Kirpal Singh (Kirpal & Associates),Muthu Arusu (Tan Rajah & Cheah),Johnny Cheo Chai Beng (Cheo Yeoh and Associates LLC ) |
Plaintiff Counsel | Hee Theng Fong, Noelle Seet, James Lim and Clare Lin (KhattarWong) |
Published date | 04 May 2010 |
Hearing Date | 02 February 2010,06 July 2009,15 January 2010,11 January 2010,28 January 2010,29 January 2010,18 January 2010,20 January 2010,19 February 2010,27 January 2010,26 January 2010,21 January 2010,10 July 2009,01 July 2009,13 January 2010,14 January 2010,01 February 2010,09 July 2009,08 July 2009,12 January 2010,19 January 2010,22 January 2010,03 July 2009,25 January 2010,02 July 2009,07 July 2009 |
The plaintiff Swiss Butchery Pte Ltd (“SB”) was in the business of retail and wholesale butchery and production operations. In Suit No 245 of 2008/V (“Suit No 245”), SB claims against the first defendant, Huber Ernst, and second defendant, Huber Ryan Ernst, for breach of their duties as a director and an executive of SB respectively and for the tort of conspiracy. Further, SB claims against the other four defendants for,
SB made numerous allegations in Suit No 245 which centred around SB’s allegation that Huber Ernst diverted SB’s wholesale and production operations to Huber’s Pte Ltd for the benefit of Huber Ernst and his two children. There was also a claim for defamation against Huber Ernst and the sixth defendant, Thomas Norbert Kreissl, but this was withdrawn during the proceedings.1 Further, the defendants in Suit No 222 have offered to buy out Huber Ernst’s shares in SB without admission of liability in respect of the allegations of oppression2 and it became unnecessary to go into such allegations which, in any event, overlapped with the allegations in Suit No 245. I will be giving directions separately on matters pertaining to the valuation of Huber Ernst’s shares for the buy-out.
The relevant law and legal principles Before considering the facts, I will set out the applicable legal principles pertaining to the various causes of action
Section 157 of the Companies Act provides for the general duties owed by a director as follows:
157—(1) A director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office.
It is trite that the courts will not interfere with a management decision which is exercised in a
Their lordships accept that such a matter as the raising of finance is one of management, within the responsibility of the directors: they accept that it would be wrong for the court to substitute its opinion for that of the management, or indeed to question the correctness of the management’s decision, on such a question, if bona fide arrived at. There is no appeal on merits from management decisions to courts of law: nor will courts assume to act as a kind of supervisory board over decisions within the powers of management honestly arrived at.
The above passage in
In the House of Lords decision of
… The general rule of equity is that no one who has duties of a fiduciary nature to perform is allowed to enter into engagements in which he has or can have a personal interest conflicting with the interests of those whom he is bound to protect. If he holds any property so acquired as trustee, he is bound to account for it to his
cesti que trust . The earlier cases are concerned with trusts of specific property:Keech v Sandford per Lord King LC. The rule, however, applies to agents, as, for example, solicitors and directors, when acting in a fiduciary capacity. …
In the same case, Lord Russell of Killowen similarly stated the strict rule of equity at 144 as follows:
The rule of equity which insists on those, who by use of a fiduciary position make a profit, being liable to account for that profit, in no way depends on fraud, or absence of bona fides; or upon such questions or considerations as whether the profit would or should otherwise have gone to the plaintiff, or whether the profiteer was under a duty to obtain the source of the profit for the plaintiff, or whether he took a risk or acted as he did for the benefit of the plaintiff, or whether the plaintiff has in fact been damaged or benefited by his action. The liability arises from the mere fact of a profit having, in the stated circumstances, been made. The profiteer, however honest and well-intentioned, cannot escape the risk of being called upon to account.
In
Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to the exact circumstances of each case. The relevant rule for the decision of this case is
the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict . …[emphasis added]
In
Similarly, in
It is thus clear that while the court will not question a management decision which was exercised in a
As held by the Court of Appeal in
The tort of conspiracy comprises two types: conspiracy by unlawful means and conspiracy by lawful means. A conspiracy by unlawful means is constituted when two or more persons combine to commit an unlawful act with the intention of injuring or damaging the plaintiff, and the act is carried out and the intention achieved. In a conspiracy by lawful means, there need not be an unlawful act committed by the conspirators. But there is the additional requirement of proving a “predominant purpose” by all the conspirators to cause injury or damage to the plaintiff, and the act is carried out and the purpose achieved.
In
In order for the claim of conspiracy to succeed, the elements that have to be satisfied are the following:
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