Lee Seng Eder v Wee Kim Chwee: Striking Out Application for Breach of Fiduciary Duty and Minority Oppression
Lee Seng Eder, a shareholder of Neu-Movers Logistics Pte Ltd, brought a suit against Wee Kim Chwee, Tien Shin, Goh York Quee Bernard, and N M Solution Pte Ltd, alleging breach of fiduciary duties, minority oppression, and conspiracy. The Defendants applied to strike out the Plaintiff's Statement of Claim. The High Court heard the application and struck out parts of the claim, ordering the Plaintiff to amend the Statement of Claim to properly particularize the contractual claim against the 2nd Defendant and the oppression claim against the 1st and 2nd Defendants.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application to strike out parts of the Statement of Claim granted in part; Plaintiff ordered to amend the Statement of Claim.
1.3 Case Type
Civil
1.4 Judgment Type
Written Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Application to strike out Plaintiff's Statement of Claim for abuse of process, disclosing no reasonable cause of action, and being scandalous, frivolous or vexatious. The court struck out parts of the claim and ordered amendments.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lee Seng Eder | Plaintiff | Individual | Claims Struck Out in Part; Ordered to Amend Statement of Claim | Partial | |
| Wee Kim Chwee | Defendant | Individual | Application to Strike Out Granted in Part | Partial | |
| Tien Shin | Defendant | Individual | Application to Strike Out Granted in Part | Partial | |
| Goh York Quee Bernard | Defendant | Individual | Application to Strike Out Granted in Part | Partial | |
| N M Solution Pte Ltd | Defendant | Corporation | Application to Strike Out Granted in Part | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Justin Yeo | Assistant Registrar | Yes |
4. Counsels
4. Facts
- The Plaintiff is a 40% shareholder of Neu-Movers Logistics Pte Ltd.
- The Plaintiff was the managing director of the Company until February 2012.
- The 1st and 2nd Defendants are directors and shareholders of the Company who approved the Plaintiff's removal as managing director.
- The 3rd Defendant is a former employee of the Company and the sole director and shareholder of the 4th Defendant.
- The Company allegedly assigned its goodwill and assets to the 4th Defendant.
- The Plaintiff claimed the 2nd Defendant agreed the Company would pay him $36,000 and purchase his shares in return for relinquishing his position as managing director.
- The Plaintiff alleged the Defendants conspired to cause the Company to become insolvent.
5. Formal Citations
- Lee Seng Eder v Wee Kim Chwee and others, Suit No 134 of 2014 (Summons No 4833 of 2014 and Summons No 4860 of 2014), [2015] SGHCR 2
- Lee Seng Eder v Wee Kim Chwee and others, , [2014] 2 SLR 56
6. Timeline
| Date | Event |
|---|---|
| Originating Summons 407 of 2013 filed | |
| Judgment issued dismissing Originating Summons 407 of 2013 | |
| Present suit taken out by the Plaintiff | |
| Suit No 134 of 2014 filed | |
| Judgment rendered for both Summonses | |
| Written decision issued |
7. Legal Issues
- Abuse of Process
- Outcome: The court found that the Statement of Claim did not constitute an abuse of process.
- Category: Procedural
- Sub-Issues:
- Re-litigation of issues
- Collateral attack on previous decision
- Related Cases:
- [2014] 3 SLR 381
- [2007] 1 SLR(R) 453
- [2000] 1 AC 615
- Breach of Fiduciary Duty
- Outcome: The court struck out the claim for diminution of the value of shares, finding that it was more properly brought by the Company.
- Category: Substantive
- Sub-Issues:
- Directors' duties to the company
- Duties owed to minority shareholders
- Minority Oppression
- Outcome: The court ordered the Plaintiff to amend the Statement of Claim to properly particularize the oppression claim.
- Category: Substantive
- No Reasonable Cause of Action
- Outcome: The court struck out several paragraphs of the Statement of Claim for revealing no reasonable cause of action.
- Category: Procedural
- Sub-Issues:
- Proper plaintiff rule
- Reflective loss principle
- Related Cases:
- [2007] 2 SLR(R) 597
- [2014] SGCA 47
- [2002] 2 AC 1
- [2002] 2 SLR(R) 454
8. Remedies Sought
- Damages
- Account of Monies Misappropriated
- Account of Secret Profits
- Order for Payment to the Company
9. Cause of Actions
- Breach of Contract
- Breach of Fiduciary Duty
- Conspiracy by Unlawful Means
- Minority Oppression
10. Practice Areas
- Commercial Litigation
- Shareholder Disputes
11. Industries
- Logistics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lee Seng Eder v Wee Kim Chwee and others | High Court | Yes | [2014] 2 SLR 56 | Singapore | Cited for the dismissal of OS 407, the earlier proceedings related to the present suit, and the reasons for the dismissal. |
| Arthur JS Hall v Simmons, Barratt v Ansell (t/a Seddon (a firm)), Harris v Scholfield Roberts & Hill (a firm) | N/A | Yes | [2000] 1 AC 615 | N/A | Cited for the principle that the law discourages re-litigation of the same issues except by means of an appeal. |
| Burgundy Global exploration Corp v Transocean Offshore International Ventures Ltd and another appeal | Court of Appeal | Yes | [2014] 3 SLR 381 | Singapore | Cited for the three aspects of the umbrella doctrine of res judicata. |
| Goh Nellie v Goh Lian Teck | High Court | Yes | [2007] 1 SLR(R) 453 | Singapore | Cited for the three aspects of the umbrella doctrine of res judicata. |
| Thoday v Thoday | N/A | Yes | [1964] P 181 | N/A | Cited for the principle of cause of action estoppel. |
| Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd and another and another appeal | Court of Appeal | Yes | [2009] 2 SLR(R) 814 | Singapore | Cited for the requirements to establish issue estoppel. |
| Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan No 301 | High Court | Yes | [2005] 3 SLR(R) 157 | Singapore | Cited for the requirements to establish issue estoppel. |
| Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation) | Court of Appeal | Yes | [2007] 2 SLR(R) 597 | Singapore | Cited for the basis of the 'proper plaintiff' rule. |
| Ng Kek Wee v Sim City Technology Ltd | Court of Appeal | Yes | [2014] SGCA 47 | Singapore | Cited for the reflective loss principle. |
| Giles v Rhind | Court of Appeal | Yes | [2003] Ch 618 | England and Wales | Cited for the principle that two distinct causes of actions owed to two different parties can arise from the same breach of duty. |
| Johnson v Gorewood & Co | House of Lords | Yes | [2002] 2 AC 1 | United Kingdom | Cited for the principle that two distinct causes of actions owed to two different parties can arise from the same breach of duty and for an overview of who the proper plaintiff would be in three scenarios. |
| Hengwell Development v Thing Chiang Ching | High Court | Yes | [2002] 2 SLR(R) 454 | Singapore | Cited for the principle that a shareholder can bring a claim in his personal capacity even if the company has no cause of action. |
| The “Bunga Melati 5” | High Court | Yes | [2012] 4 SLR 546 | Singapore | Cited for the fact-law distinction in striking out applications. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court O 18 r 19(1)(a) |
| Rules of Court O 18 r 19(1)(b) |
| Rules of Court O 18 r 19(1)(d) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 216A | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Statement of Claim
- Striking Out Application
- Res Judicata
- Abuse of Process
- Reasonable Cause of Action
- Fiduciary Duty
- Minority Oppression
- Derivative Action
- Proper Plaintiff Rule
- Reflective Loss Principle
- Suspect Transactions
15.2 Keywords
- striking out
- statement of claim
- abuse of process
- fiduciary duty
- minority oppression
- company law
- shareholder
- director
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Company Law | 70 |
| Fiduciary Duties | 65 |
| Minority Oppression | 60 |
| Conspiracy by Unlawful Means | 55 |
| Commercial Disputes | 50 |
| Civil Procedure | 40 |
16. Subjects
- Civil Procedure
- Company Law
- Shareholder Rights
- Directors' Duties