Thio Keng Poon v Thio Syn Pyn and Others and Another Suit

• Judge: Lai Siu Chiu J
• Judgment Date: 04 June 2009
• Neutral Citation: [2009] SGHC 135
• Citation: [2009] SGHC 135
• Published date: 08 June 2009
• Court: High Court (Singapore)
• Plaintiff Counsel: Vinodh Coomaraswamy SC and Arvind Daas Naaidu (Shook Lin & Bok LLP)
• Defendant Counsel: Davinder Singh SC and Adrian Tan (Drew & Napier LLC)
• Subject Matter: Companies

4 June 2009

Lai Siu Chiu J:

Introduction

1 This was a case where one Thio Keng Poon (“the Plaintiff”) sued his entire family comprising of his six children and his wife Kwik Poh Leng (“Madam Kwik”) as well as four family companies over his removal from the offices of Director, Chairman and Managing-Director of those companies between 20 November 2007 and 25 November 2008.

2 In Suit 734 of 2008, the Plaintiff’s case was that he was removed as Director, Managing Director and Chairman from Malaysia Dairy Industries Pte Ltd (“MDI”) and Modern Dairy International Pte Ltd (“Modern Dairy”) in a manner not in accordance with the Articles of Association of the abovementioned companies.

3 In Suit 10 of 2008, the Plaintiff’s case was for oppression, breach of contract and breach of an understanding and assurance.

4 After the Plaintiff had closed his case, the court was informed that the defendants elected not to give any evidence on the basis that they had no case to answer. Submissions were then presented by the parties on that premise at the conclusion of which, I accepted the defendants’ argument and dismissed the Plaintiff’s claims in both suits. The Plaintiff has now appealed (in Civil Appeal No 64 of 2009 and Civil Appeal 71 of 2009) against my decision.

The facts

5 The Plaintiff as well as Madam Kwik were both 77 years old. The names and ages of their three sons and three daughters were as follows:

	Name	Age	Relationship with the Plaintiff
1st Defendant	Thio Syn Pyn (“Syn Pyn”)	51	Second child
2nd Defendant	Thio Syn Wee (“Patrick”)	44	Sixth child
3rd Defendant	Thio Syn Kym Wendy (“Wendy”)	49	Third child
4th Defendant	Thio Syn Ghee (“Michael”)	47	Fourth child
5th Defendant	Thio Syn San Serene (“Serene”)	46	Fifth child
6th Defendant	Vicki Thio Syn Luan (“Vicki”)	52	First child

6 In Suit 10 of 2008, the 1^st to 6^th Defendants were the above children of the Plaintiff, the 7^th Defendant was Madam Kwik, while Thio Holdings (Private) Limited, MDI, Modern Dairy and United Realty (Singapore) Private Limited were the 8^th to 11^th Defendants respectively.

7 The Plaintiff’s family owned and managed a group of companies (the “Thio Group”). The Thio Group comprised the following companies:

In Singapore

a. Thio Holdings (Private) Limited (“Thio Holdings”);

b. MDI;

c. Modern Dairy;

d. United Realty (Singapore) Private Limited (“United Realty”); and

e. Cotra Enterprises Pte Ltd.

In Malaysia

a. Malaysia Milk Sdn Bhd (“MMSB”); and

b. Cotra Enterprises Sdn Bhd (“Cotra”).

In Hong Kong

a. Premier Enterprise Limited; and

b. Pertama Investment Limited.

In Myanmar

a. Myanmar Dairy International Pte Ltd.

In Brunei

a. Modern Dairy Industries (B) Sdn Bhd.

8 The Plaintiff incorporated and ran companies in the Thio Group beginning from the early 1960s. Thereafter, over the years, the Plaintiff transferred his shares in and procured the issuance of bonus shares of various companies in the Thio Group to his family members for no consideration. According to the Plaintiff, he started giving Syn Pyn (who is also known as Ernest) and Patrick shares when they were aged 12 and 5 respectively, in or around 1970. From 1983, Syn Pyn helped the Plaintiff in the running of the Thio Group and the Plaintiff eventually handed over the management of the day-to-day business of the Thio Group to Syn Pyn when the latter was appointed Deputy Managing-Director of MDI in December 1995.

9 Even after giving his shares in the Thio Group to his family members, the Plaintiff undertook numerous restructuring exercises in relation to the shares. In 1991, when Michael encountered problems in his personal business affairs, Madam Kwik with the approval of the Plaintiff asked Michael to transfer all his shares in the Thio Group to Syn Pyn and Patrick. In 2002, the Plaintiff adjusted the shareholdings of Thio Holdings, MDI and United Realty by way of bonus issues in order to provide for the 3rd, 4th, 5th, 6th and 7th Defendants. In May 2005, upon the birth of Michael’s twin sons (who were the Plaintiff’s only grandsons), the Plaintiff again wanted to restructure the respective shareholdings of his children to provide for his grandsons. This resulted in the execution of a Deed of Settlement dated 23 December 2005 (“Deed of Settlement”) which bound the Plaintiff (who was legally represented) and the 1st to 9th Defendants.

10 Clause 10 of the Deed of Settlement provided:

Each of the Parties to this Deed hereby confirms and accepts that upon Completion, each of the Parties’ full legal, registered and beneficial shareholdings in the Companies shall be as set out in Columns 5 and 6 of the Schedules, and: -

(a) none of them shall have any further right or claim to any other shareholding or equity interest in the Companies, save for interests in shares arising from subscriptions or investments or rights arising after the date of this Deed; and

(b) their respective shareholdings stated in Column 5 and 6 of the Schedules represent their respective full legal and beneficial interests and none of them: -

(i) is holding any shares in the Companies on trust or on behalf of any other person; or

(ii) has any claim to or beneficial interest in any shares in the Companies that are registered in the name of any other person.

11 Clause 13 of the Deed of Settlement stated:

The Parties agree that the Companies will be managed and operated for profit and in accordance with best corporate practices to return to shareholders maximum returns.

12 Clause 15 of the Deed of Settlement provided:

This Deed sets forth the entire agreement and understanding of the Parties with respect to the subject matter contained herein and supersedes all prior discussions and agreement, whether written or oral, relating to the subject matter herein.

13 Amongst other provisions, the Deed of Settlement settled the distribution of shares in the Thio Group. As a result of the Deed of Settlement, the Plaintiff received shares from Syn Pyn, Patrick and Thio Holdings which had a total net tangible asset value in excess of S$24m as at 31 December 2005. Syn Pyn and Patrick jointly retained majority control over Thio Holdings and MDI. The shareholdings of the various parties at the time of the trial were as follows:

Name of Shareholder	Thio Holdings (%)	MDI (%)	United Realty (%)
Syn Pyn	25.50	10.50	8.75
Patrick	25.50	10.50	8.75
Madam Kwik	21.75	12.50	10.00
Michael	9.00	10.00	8.75
Vicki	4.50	5.00	2.50
Wendy	4.50	5.00	2.50
Serene	4.50	5.00	2.50
Thio Holdings	-	30.00	26.25
MDI	-	-	20.00
Plaintiff	4.75	11.50	10.00

14 After the Deed of Settlement was signed, friction between the Plaintiff, on the one hand, and Syn Pyn and Patrick, on the other, arose whenever they did not follow his instructions. One example was when the Plaintiff wanted a birthday present of S$10m in May 2006, Syn Pyn and Patrick objected to the Plaintiff’s proposal to obtain this sum by having MDI declare dividends and for the 1^st to 6^th Defendants to renounce their rights to the dividends. Instead, the 1^st to 6^th Defendants received their dividends and gave the Plaintiff a birthday gift of S$10m free of tax in June 2006 by making a contribution of S$1.67m each. After receiving his birthday gift, the Plaintiff wanted to restructure the shareholding in the Thio Group again. The proposed restructuring would have deprived Syn Pyn and Patrick of majority control of the Thio Group. Syn Pyn and Patrick did not agree to the Plaintiff’s restructuring proposal.

15 The removal of the Plaintiff from his offices in Thio Holdings, United Realty, MDI and Modern Dairy came about as a result of the discovery around October 2007 that the Plaintiff had been making improper double claims on his travel expenses from MDI and Cotra. MDI engaged Ernst & Young (“EY”) to conduct an independent review of the travel expenses incurred by the Plaintiff as recorded in the accounting books and records of MDI, MMSB and Cotra. The EY report dated 16 November 2007 (see AB843-870) revealed that on nine occasions between 1 January 2005 and 30 September 2007, the Plaintiff claimed reimbursement for the cost of 17 different airline tickets from both MDI and Cotra. This amounted to a double claim of about S$45,000 from MDI and Cotra. According to the Plaintiff, the reason for the double claim was that on each of those occasions, the Plaintiff travelled with a female companion.

16 Having reviewed the EY Report, Syn Pyn called for an emergency meeting of the board of directors of MDI to be held on 20 November 2007. Notice of the emergency board meeting was sent on 19 November 2007 to all directors (except the Plaintiff) together with a copy of the EY Report. The Plaintiff was then in Canada for the purpose of receiving eye treatment. Having reviewed the EY report, the board of directors of MDI unanimously approved the removal of the Plaintiff as a Director, Managing-Director and Chairman of MDI, pursuant to Article 88(c) of MDI’s Articles of Association (“MDI Articles”), and as an authorised signatory of MDI’s bank accounts on 20 November 2007. A members’ resolution at the 44th Annual General Meeting (“AGM”) of MDI held on 21 November 2007 approved and ratified MDI board’s removal of the Plaintiff from his positions in MDI.

17 The Plaintiff’s privileges which attached to his three offices were removed on 30 December 2008 and he was barred from the premises of MDI with effect from 16 February 2009 (after being involved in an altercation at the company’s premises on 4 February 2009 with Syn Pyn, Patrick and Lim Choo Peng, a director and general manager of MDI. The Plaintiff had insulted Lim Choo Peng calling him inter alia a dirty dog and had threatened Syn Pyn with a golf stick).

18 The Plaintiff was removed as an authorised bank...