Teelek Realty Pte Ltd and others v Ng Tang Hock

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 22 July 2021
• Neutral Citation: [2021] SGCA 70
• Published date: 27 July 2021
• Docket Number: Civil Appeal No 106 of 2020 and Summons No 18 of 2021
• Year: 2021
• Hearing Date: 01 March 2021
• Plaintiff Counsel: Anthony Wee and Pang Weng Fong (Titanium Law Chambers LLC)
• Citation: [2021] SGCA 70
• Defendant Counsel: Lee Eng Beng SC, Sim Jek Sok Disa, Cheong Tian Ci Torsten (Rajah & Tann Singapore LLP) (instructed), Ang Chee Kwang Andrew, Tan Jinjia Andrea (Chen Jinjia) and Chan Ejia Sabrina (PK Wong & Nair LLC),and Ong Ziying Clement, Suresh s/o Damodara, S.M. Sukhmit Singh and Ning Jie (Damodara Ong LLC)
• Court: Court of Appeal (Singapore)
• Subject Matter: Companies,Oppression

Judith Prakash JCA (delivering the judgment of the court): Introduction

The appeal before us concerns an oppression action under s 216 of the Companies Act (Cap 50, 2006 Rev Ed) (“Companies Act”) and the winding up of Teelek Realty Pte Ltd (“the Company”), the first appellant. This rather banal description belies the passions that had led to the action which was the last salvo in the breakdown of an intimate relationship that had lasted more than 20 years. The main protagonists in these legal proceedings, Mr Ng Tang Hock (“Mr Ng”), the respondent, and Mdm Chew Kar Lay, Wendy (“Mdm Chew”), the second appellant, were married from 1995 to 2012. During this period, they owned and ran the Company jointly. After the divorce, however, their daughter and son (“the children”) became involved in the management of the Company under the direction of Mdm Chew. Mdm Chew and the children were found by the High Court judge (the “Judge”) to have conducted the affairs of the Company in a manner that was oppressive to Mr Ng. The children are the third and fourth appellants in the appeal.

The present appeal is a contained one. It concerns only the Judge’s findings in Ng Tang Hock v Teelek Realty Pte Ltd and others [2020] SGHC 214 (“GD”) that: Mdm Chew had misappropriated $12.564m from the Company; Mdm Chew and the children had conducted the Company’s affairs in a manner that was oppressive to Mr Ng; and the Company ought to be wound up to remedy the oppression.

The Company is a nominal party in the appeal and did not put forward any arguments. Accordingly, all references to “the appellants” are references to Mdm Chew and the children only. Where it is necessary to refer to the children individually, we will refer to them as “Shirlyn Ng” and “Eugene Ng” respectively.

We heard the parties on 1 March 2021 and reserved judgment. We indicated to the parties that while we were not inclined to overturn the Judge’s findings of misappropriation and oppression on the part of Mdm Chew, we were prepared to look into the question of remedies. We therefore adjourned the appeal to allow the parties, and the previously appointed liquidator for the Company (“the Liquidator”), to explore whether it would be possible to arrive at an agreed set of directions that would secure the orderly separation of the parties’ interests in the Company while allowing the Company to continue as a going concern.

The parties subsequently wrote to the court on 19 April 2021 putting forward a partial agreement on a buyout proposal (“Buyout Proposal”) pursuant to which Mr Ng was to buy all of Mdm Chew’s shares in the Company.

For completeness, we add that the appeal was heard together with CA/SUM 18/2021 (“SUM 18”) – an application by the appellants to strike out the parts of the Respondent’s Case and Respondent’s Skeletal Arguments which deal with the appellants’ rejection of Mr Ng’s offer to settle.

Background The parties

Mdm Chew and Mr Ng were married in 1995. Unfortunately, over the years, their relationship deteriorated, and the marriage broke down sometime in 2011.

On 11 September 2011, Mdm Chew left the matrimonial home taking the children with her. At that point, both spouses were already legally represented and the correspondence between their lawyers reveals that they were actively negotiating a divorce settlement in August and September 2011. On 28 September 2011, the spouses arrived at an agreement as to the division of their matrimonial assets. On 14 November 2011, Mdm Chew commenced divorce proceedings against Mr Ng. On 1 August 2012, a consent ancillaries order was made in the divorce proceedings (“Ancillaries Order”) and the final judgment of divorce was granted on 21 August 2012.

The Company is an investment holding company that owns numerous real estate properties in Singapore. From the time the Company was incorporated in 1996 up to the time of the divorce, Mr Ng and Mdm Chew were the only shareholders of the Company, each holding 4.3m shares. During that period, they were also the only two directors of the Company.

Mr Ng resigned his directorship on 7 August 2012 (shortly after the Ancillaries Order was made) as he did not wish to have any further management interaction with Mdm Chew. In his place, Shirlyn Ng was appointed a director of the Company on the same day. Eugene Ng became the third director on 1 September 2014.

Over the years, Mr Ng made various loans to the Company. As of 15 August 2011, the loans totalled $12.564m (“Loans”). On 1 October 2011, Mdm Chew caused the Loans to be reclassified in the Company’s general ledger as amounts owing from the Company to herself. She subsequently withdrew $12.564m from the Company’s accounts. Mr Ng contended that this withdrawal constituted misappropriation. In her defence, Mdm Chew asserted that Mr Ng had agreed to transfer the Loans to her.

In July 2015, Mdm Chew transferred one share in the Company from herself to each of the children. Mr Ng subsequently challenged these transfers. The Judge invalidated both transfers on the basis that they had been made in breach of the Company’s Articles of Association (“Articles”) (GD at [139]). No appeal was brought against the invalidation.

On 26 May 2017, notice was given for the Company’s 20th Annual General Meeting (“AGM”) to be held on 12 June 2017. Mr Ng attended the AGM through his proxy. The meeting was adjourned without any resolution being voted upon. A subsequent notice dated 3 August 2017 was issued for the adjourned meeting to be held on 22 August 2017. This notice included a new proposed resolution to authorise the Company’s directors (ie, the appellants) to allot and issue shares (“Resolution 6”). Mr Ng objected to Resolution 6 as it had not been proposed or considered at the AGM on 12 June 2017. The appellants refused to remove Resolution 6 from the agenda for the adjourned meeting.

The proceedings

On 17 August 2017, Mr Ng commenced HC/S 758/2017 (“Suit 758”) against the Company and the appellants. He immediately applied for an injunction to restrain the appellants from, inter alia, holding any meeting in his absence and/or holding any meeting for the purposes of considering and passing resolutions to alter the share capital of the Company, pending the determination of Suit 758.

On 21 August 2017, parties recorded a consent order under which the 20th AGM would be adjourned to a date after Mr Ng’s application for an injunction had been heard. An injunction was subsequently granted by the Judge on 6 October 2017. This restrained the appellants from holding the adjourned 20th AGM with an agenda that differed from that set out in the notice of the 20th AGM dated 26 May 2017.

A summary of the main claims advanced by the parties in Suit 758, as well as the Judge’s decision in the GD, appears in the table below. The boxes in blue represent issues that remain live on appeal.

Party advancing the claim	Claim	Judge’s decision	GD references
Mr Ng	Repayment of the Loans which Mr Ng had advanced to the Company and which had thereafter been misappropriated by Mdm Chew	Dismissed Mr Ng’s claim for the repayment of the Loans to himself	[138(a)]–[138(b)]
Mr Ng	Cancellation of the transfers of shares in the Company to the children as the transfers were contrary to the Company’s Articles	Allowed	[139]
Mr Ng	Striking off Mdm Chew and the children as directors of the Company	Allowed the children to be struck off	[138(c)]
Mr Ng	Oppression action against the appellants in relation to their conduct of the Company’s affairs	Allowed	[140]
Wound up the Company, ordered Mdm Chew to return $12.564m she had misappropriated from the Company and directed that the Company’s accounts be rectified
The appellants	Transfer of Mr Ng’s shares in the Company to the children on the basis that Mr Ng was holding the shares on trust for them pursuant to a Trust Agreement (as defined below at [46]) or that the doctrine of estoppel prevented Mr Ng from claiming that he was the beneficial owner of the shares in the Company which were registered in his name	Dismissed as the Trust Agreement was found to be a complete fabrication and the estoppel claim was not proved	[116], [132] and [138(d)]

Issues

The appellants appeal against three aspects of the Judge’s decision (see the blue boxes in the table above) leading to the following main issues: Whether Mdm Chew had misappropriated $12.564m from the Company. Whether Mdm Chew and the children had conducted the affairs of the Company in a manner that was oppressive in relation to Mr Ng. Whether the Company ought to be wound up.

The Judge’s decision in Suit 758

The Judge disallowed Mr Ng’s claim for the repayment of the Loans to himself as he found that the claims for the individual loans making up the Loans were time barred under s 6(1) of the Limitation Act (Cap 163, 1996 Rev Ed) (GD at [37]–[47], [138(a)]). Further, Mr Ng had waived the Loans as between the Company and himself by signing an audit confirmation dated 12 July 2012 (“12 July 2012 Audit Confirmation”). This document stated that nothing was due and owing between them (GD at [56]–[57]).

However, the Judge found that Mr Ng had not “waived the Loans in Mdm Chew’s favour”. The appellants were unable to provide any contemporaneous documentary evidence to support the reclassification of the Loans as amounts owing to Mdm Chew instead of to Mr Ng (GD at [50]). The Judge disbelieved Mdm Chew’s evidence in relation to the Trust Agreement which she claimed formed the basis of the “waiver” (GD at [49], [51]–[55]). Furthermore, the Judge did not think that the available documentary evidence in the form of the Company’s Annual Reports and the audit confirmations signed by Mdm Chew and Mr Ng sufficed to show that the Loans had been “waived in favour of Mdm Chew” (GD at [56]–[59]).

The...