Tan Bee Hong Blossom and another v Tan Seng Keow Doreen and others

• Jurisdiction: Singapore
• Judge: Mavis Chionh Sze Chyi JC
• Judgment Date: 30 April 2020
• Neutral Citation: [2020] SGHC 89
• Court: High Court (Singapore)
• Docket Number: Suit No 925 of 2018
• Year: 2020
• Published date: 07 May 2020
• Hearing Date: 31 July 2019,27 September 2019,30 July 2019,15 August 2019,13 August 2019,08 August 2019,02 August 2019,07 August 2019,14 August 2019,06 August 2019,18 October 2019,16 August 2019,01 August 2019,05 August 2019
• Plaintiff Counsel: Foo Maw Shen and Mark Jerome Seah Wei Hsien (Dentons Rodyk & Davidson LLP)
• Defendant Counsel: Sim Chong and Joan Tee (Sim Chong LLC) (instructed), Singh Ranjit and Ravleen Kaur Khaira (Francis Khoo & Lim)
• Subject Matter: Companies,Winding up,"Just and equitable" jurisdiction,Section 254(1)(i) Companies Act
• Citation: [2020] SGHC 89

Mavis Chionh Sze Chyi JC: Introduction

This was an action brought by the Plaintiffs to seek the winding-up of the 3rd to the 6th Defendants under s 254(1)(i) of the Companies Act (Cap 50, 2006 Rev Ed) (“CA”). These are four companies whose shares are held by the Plaintiffs as well as the 1st and the 2nd Defendants. In the alternative, the Plaintiffs asked for an order for the buy-out of their shares in the four companies “on terms to the satisfaction of the Court”. At the conclusion of the trial, I dismissed the Plaintiffs’ action. As they have appealed, I now set out in writing the grounds for my decision.

The undisputed facts The key persons involved in the trial

I will start by setting out the undisputed facts in this case. The Plaintiffs and the 1st and the 2nd Defendants are sisters. The 1st Defendant (“Doreen”) is the oldest sister, followed by the 2nd Plaintiff (“Ivy”), then by the 1st Plaintiff (“Blossom”), and finally by the 2nd Defendant (“Julie”). I refer to them collectively as “the Sisters” in these written grounds. Among themselves, the Sisters are accustomed to calling each other by their childhood nicknames: Doreen is usually referred to as “Sis”; Ivy as “V”, Blossom as “Pi”, and Julie as “Nan”. Of the Sisters, Blossom and Julie are married, but only Julie’s husband, Tang Siew Kwong (“Alan”), featured as a witness in the trial.

The parents were Mr Tan Hock Chong (“Father”) and Mdm Poh Kim Lian (“Mother”). Father passed away on 18 April 2003 and Mother passed away on 27 June 2016.

The Sisters also had three other siblings: Charlie Tan Seng Hup (“Charlie”), Victor Tan Seng Lee (“Victor”), and Lena Tan Kiat Kee (“Lena”). These other siblings did not give evidence at the trial, although some reference was made to them by the Sisters during their testimonies.

The companies

The companies which form the subject of the Plaintiffs’ winding-up application in this case (the 3rd to the 6th Defendants) are as follows: Chiap Chuan Management Pte Ltd (“CCM”); Yong Peng Realty (Pte) Limited (“YP”); Tan Boon Liat And Company (Singapore) Private Limited (“TBL”); and Chiap Chuan Holdings Pte Ltd (“CCH”).

In these written grounds, when all of these four companies are referred to collectively, I will refer to them as “the Companies”.

The number of shares in each company, as well as the amount of issued and paid-up capital, are as follows:

Name of Company	Issued and paid up capital amount (S$)	Number of shares
YP	Issued – 170,122.00 Paid-up – 170,122.00	170,122
CCM	Issued – 100,000.00 Paid-up – 100,000.00	100,000
TBL	Issued – 426,100.00 Paid-up – 426,100.00	4,261
CCH	Issued – 1,000,000.00 Paid-up – 1,000,000.00	100,000

The properties owned by CCH, YP and TBL

CCH, YP and TBL are all property holding companies, while CCM provides management services to these three. CCH, YP and TBL derive their main source of revenue from rental collected from the tenants of units in their buildings, while CCM’s main source of revenue comes from service management payments which it receives from the other three companies. Only CCM employs staff.

It is not disputed that the various properties owned by the Companies were acquired by Father during his lifetime as investment properties.

Within Singapore, CCH, YP and TBL own freehold strata titles in the following properties: The RV Building. This is a mixed residential and commercial development located at 460/A/B/C to 484/A/B/C (even numbers) River Valley Road, Singapore 248345 to 248369 (“RV Building”). The building comprises 56 units, of which CCH owns 44 units (11 stacks of 4 units per stack) and YP owns 12 units (3 stacks of 4 units per stack). The RV Building is managed by Management Corporation Strata Title 325 (“MCST 325”). Blossom and Ivy are the Council members of the MCST 325 Council. The MCST 325 Council has a physical office at the RV Building. CCM served as the Managing Agent for MCST 325 until on or about 30 April 2017. The Plaintiffs and the Defendants presented opposing explanations as to how and why CCM ceased to be the Managing Agent, with Blossom and Ivy pointing the finger of blame at Doreen and Julie, and vice versa. Suntec Real Estate Consultants Pte Ltd was appointed as interim Managing Agent after 30 April 2017 and as Managing Agent with effect from 1 June 2017. CCM also managed the accounts in respect of the RV Building until on or about 1 June 2017, following which Suntec Real Estate Consultants Pte Ltd took on the management of the accounts. It is not disputed that the Companies share the same principal place of business and physical office at a unit in the RV Building (though Blossom and Ivy have asserted that Doreen and Julie later “unilaterally” moved “TBL or part of TBL” out to another unit in the RV Building). TBL Building This is a commercial mixed-development consisting of a main building at 315 Outram Road, Singapore 169074 and a canteen located separately at 313 Outram Road, Singapore 169073 (collectively, “TBL Building”). The main building has 150 units, while the canteen is a double-storey building comprising 2 units. Of the 150 units in the main building, TBL owns 33 units; CCH owns 4 units; and YP owns 1 unit. The remaining units are owned by various sub-proprietors who hold strata title. As to the canteen, CCH owns one storey of the canteen building while the other storey is owned by another sub-proprietor. Management Corporation Strata 641 (“MCST 641”) oversees the estate management of the TBL Building. MCST 641 Council has 9 council members. They include Doreen, who is the Chairperson of the MCST and who represents TBL; Blossom, who represents CCH; and Choy Nam Chew (“Chua”), a relative of the Sisters,¹ who represents YP. Other individuals representing other sub-proprietors also sit on MCST 641.

At the time of Father’s death in June 2003, CCH also owned properties in Johor Bahru (”JB”) (“JB Properties”), Kuala Lumpur (“KL”) (“KL Properties”), Melaka (“Melaka Properties”) and Ipoh.² The JB Properties and the KL Properties were subsequently sold. Indeed, the sale of the JB Properties – as well as the abortive sale of the Melaka Properties – became contentious issues which were canvassed by Blossom and Ivy on the one hand and Doreen and Julie on the other, in their respective bids to demonstrate the other side’s unreasonable or even underhanded behaviour.

The Sisters’ shareholdings

The respective shareholding of each of the Sisters in the Companies is as follows:

NAME OF SHARE-HOLDER	CCM	YP	TBL	CCH
No. of Shares Owned	Shares Owned (%)	No. of Shares Owned	Shares Owned (%)	No. of Shares Owned	Shares Owned (%)	No. of Shares Owned	Shares Owned (%)
Doreen	25,000	25	42,531	25.000	1,066	25.018	25,000	25
Ivy	25,000	25	42,530	24.999	1,065	24.994	25,000	25
Blossom	25,000	25	42,531	25.000	1,065	24.994	25,000	25
Julie	25,000	25	42,530	24.999	1,065	24.994	25,000	25

The Sisters acquired the bulk of their shareholding in the Companies via inheritance.³ Prior to Father’s death, he was the majority shareholder in each of the Companies, and Mother was the minority shareholder, but none of the children held any shares.⁴ In his will,⁵ Father gave cash gifts to Mother, the Sisters, and their three other siblings (Charlie, Victor, and Lena). The residue of his estate – including shares in the Companies – was given to the Sisters “in equal shares absolutely”. Mother and the three other siblings did not receive any shares of the Companies under Father’s will. The Sisters were appointed as the trustees and executors of Father’s will.

It will be seen that after Father’s death, the Sisters each hold 25% of the shares in each company, subject to the following minor differences. In TBL, Doreen holds one more share than the other Sisters; and in YP, Doreen and Blossom each hold one share more than Ivy and July. These differences in the TBL and YP shareholdings came about through the following events.

In the case of TBL, the company has an odd number of shares in TBL (4,261 shares). After 1,065 shares were apportioned to each sister, the extra share ended up with Doreen. It is Blossom’s and Ivy’s case that Doreen had represented to them that ownership in the extra TBL share could not be divided between shareholders; and that on the basis that each sister would have an equal one-quarter share in the extra TBL share, they had “entrusted” Doreen with their respective one-quarter shares for her to hold on their behalf.⁶ It is Doreen’s and Julie’s case that Blossom, Ivy and Julie had unanimously and unconditionally agreed to let Doreen have the extra TBL share because she was the eldest sibling. According to Doreen and Julie, there was never any understanding or agreement that each sister would own a one-quarter interest in this extra TBL share: Doreen has at all material times been (and continues to be) the sole legal and beneficial owner of the extra TBL share.⁷

In the case of YP, Doreen and Blossom had each purchased one of Mother’s YP Shares. Prior to her death, Mother held 3,000 shares in CCH; 2,000 shares in CCM; 100 shares in TBL; and 2 shares in YP. Sometime in late 2013 or early 2014, Mother sold her shares to the Sisters in equal proportions - save for her YP shares. Ivy and Julie had declined to purchase Mother’s YP shares; and eventually, it was Doreen and Blossom who each purchased one of Mother’s YP Shares.

The directorships of the Companies

Prior to his death, Father was a director of all four Companies. Up to the point of her death on 27 June 2016, Mother too was a director of each of the Companies;⁸ and specific to CCH, Father had appointed her as “Life Director” pursuant to Article 77 of CCH’s...