1 HC/S 703/2020 is a shareholder oppression action for relief under s 216 of the Companies Act (Cap 50, 2006 Rev Ed) (“s 216”).

2 The second defendant, Avitar Enterprises Pte Ltd (the “Company”), was incorporated in 1999 by the plaintiff, Mr Tarun Hotchand Chainani (“Mr Chainani” or the “Plaintiff”), and the first defendant, Mr Avinderpal Singh s/o Ranjit Singh (“Mr Singh” or the “1st Defendant”), as equal shareholders. ¹ The Company was in the business of general wholesale trade, in particular, of electronic products and mobile phones. ² The Company is presently dormant. ³

3 The third defendant, Avitar Holdings Pte Ltd (the “Holding Company”), was incorporated in 2004 by Mr Chainani and Mr Singh, who transferred their respective shares in the Company to the Holding Company. Mr Chainani and Mr Singh are equal shareholders in the Holding Company, which in turn wholly owns the Company. ⁴ The Holding Company is presently dormant and owns no other subsidiary companies. ⁵

4 Mr Chainani and Mr Singh are the only two directors in both the Company and the Holding Company. ⁶

5 The Company and the Holding Company are not legally represented in, and were absent at the trial of, this action. Mr Singh had proposed in August 2020, after the commencement of this action, that a law firm be appointed to represent the interests of the Company and the Holding Company in this action, but this was opposed by Mr Chainani. ⁷

6 Mr Chainani pleads that the Company and the Holding Company were run as “a quasi-partnership based on mutual trust and confidence” between Mr Singh and himself. ⁸

7 The centrepiece of Mr Chainani’s case is that he and Mr Singh reached an understanding in 2005 to use the Company’s funds to invest in stocks and/or real estate on behalf of the Company. They were to account to each other and to the Company for the principal sums invested and the profits made from such investments, with such profits to be distributed equally between Mr Chainani and Mr Singh as equal shareholders of the Holding Company (the “Understanding”). ⁹ Mr Chainani identifies nine specific Singapore properties, ¹⁰ listed shares in two specific counters, ¹¹ and ten specific overseas properties, ¹² which he claims had been acquired by Mr Singh in part and/or entirely with the Company’s funds pursuant to the Understanding, and in respect of which Mr Singh failed to account to the Company and to him (ie, Mr Chainani). ¹³

8 Mr Chainani further claims that:

(a) Mr Singh took unauthorised loans and/or payments from the Company and failed to account to the Company and Mr Chainani for these loans and/or payments; ¹⁴

(b) Mr Singh failed to account to the Company and to Mr Chainani for Mr Singh’s insertion of a credit entry dated 1 January 2011 for a sum of US$1,634,217.17 (the “US$1.6m Entry”) in Mr Singh’s ledger with the Company; ¹⁵ and

(c) Mr Singh procured a declaration of a S$1.5m dividend by the Company for the year ending 31 December 2009 (the “Dividend”) but there is no record of the Holding Company’s receipt of the Dividend. Mr Chainani has not received a sum of S$750,000, being half of the Dividend, as the holder of half of the shares in the Holding Company. ¹⁶

9 These acts constitute breaches of Mr Singh’s duties as a director of the Company and/or a violation of Mr Chainani’s trust, and, consequently, Mr Chainani was subjected to oppression within the meaning of s 216, and the relationship between Mr Chainani and Mr Singh has irretrievably broken down. ¹⁷ As confirmed by Mr Chainani’s counsel, Mr Chainani has not brought any trust claims against Mr Singh; ¹⁸ Mr Chainani’s primary case is for relief under s 216. ¹⁹

10 Mr Chainani seeks orders for (a) various accounts to be taken from Mr Singh; (b) the payment by Mr Singh to the Company and Mr Chainani of all sums found due upon the taking of accounts; and (c) the winding up of the Company and the Holding Company upon such payment. ²⁰ On 15 October 2023, shortly before the trial of this action was scheduled to begin, Mr Chainani submitted that the accounts for the assets acquired pursuant to the Understanding should be taken on a wilful default basis. ²¹

11 At the commencement of this action, Mr Singh denied the existence of the Understanding. However, following Mr Chainani and Mr Singh’s entry into a settlement agreement dated 26 July 2021 (the “Settlement Agreement”), Mr Singh changed his position and accepted that the Understanding applied to all but one of the disputed properties identified by Mr Chainani. ²² To be clear, the parties are ad idem that the Settlement Agreement does not affect, exclude or limit the claims in this action. ²³ Mr Singh attempts to provide certain accounts in his AEIC filed in this action. However, he opposes the taking of accounts on a wilful default basis and submits that accounts should be taken on a common basis. ²⁴

12 With respect to the entries in his ledger with the Company described as loans or payments to Mr Singh, Mr Singh denies that these were performed without Mr Chainani’s knowledge and/or consent, that the entries were false, or that the entries were made as afterthoughts. ²⁵ Mr Singh also denies having a duty to account to Mr Chainani for matters concerning the Company’s business. ²⁶

13 In respect of the US$1.6m Entry, Mr Singh denies that he was obliged to provide Mr Chainani with an explanation. ²⁷ Having said that, Mr Singh explains the transaction in his AEIC.

14 In respect of the Dividend, Mr Singh avers that it was declared with Mr Chainani’s knowledge and consent. The Company declared the Dividend to the Holding Company to set off amounts due from the Holding Company for new shares issued by the Company. Neither Mr Chainani nor Mr Singh received any moneys from this declaration of the Dividend. ²⁸ Mr Singh further elaborates on this transaction in his AEIC.

15 Mr Singh further avers that Mr Chainani (a) continues to be a director and the corporate secretary of both the Company and the Holding Company; (b) was never prevented from accessing information that Mr Chainani would have had access to in that capacity; and (c) signed off on the financial statements of the Company and the Holding Company every year until the year ending 2015. ²⁹

16 Finally, Mr Singh claims that, should he be found due to pay any sums to Mr Chainani, he (ie, Mr Singh) is entitled to set off the amount of S$263,654.85 (which Mr Singh says is due from Mr Chainani to him) against such sums. ³⁰

17 For completeness, limitation and laches are pleaded in Mr Singh’s defence as grounds for not having to account, ³¹ but these defences were abandoned as they were not raised in the 1st Defendant’s Opening Statement, at trial, or in the 1st Defendant’s written Closing Submissions dated 12 January 2024 (the “1st Defendant’s Closing Submissions”). I therefore say nothing further about this.

18 The main issues arising for my determination in this action are:

19 It is apposite to first address Mr Chainani’s case that:

20 Mr Singh denies that the Company and the Holding Company were run as a quasi-partnership. He avers that they were run as incorporated private companies limited by shares. ³³

21 The relevance of whether a company is a “quasi-partnership” must first be situated in the context of a s 216 action.

22 A shareholder who brings a s 216 action must demonstrate that the conduct complained of amounts to commercially unfair conduct. Such unfairness will generally be found where there has been “a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect”: Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters [2018] 2 SLR 333 (“Sakae”) at [81]. In deciding whether to grant relief under s 216, the court takes into account not only the legal rights, but also the legitimate expectations of the parties: Sakae at [82]. The understanding between the shareholders of a company, whether contained in a formal agreement or in the form of an informal understanding, will generally form the backdrop against which the court determines whether there has been commercial unfairness: Sakae at [172]. Put another way, “[t]he commercial agreement between the parties sets the frame against which commercial unfairness is to be judged”: Oon Swee Gek and others v Violet Oon Inc Pte Ltd and others and other matter [2024] SGHC 13 at [26]. The breach of an informal understanding may amount to commercial unfairness under s 216: see, eg, Anita Hatta v Lee Siow Kiang Georgia and others [2020] 5 SLR 304 (“Anita Hatta”) at [148]–[150].

23 Whether a company is characterised as a “quasi-partnership” is not determinative of whether there may be informal understandings giving rise to legitimate expectations: Anita Hatta at [69] and [71]; The Wellness Group Pte Ltd and another v OSIM International Ltd and others and another suit [2016] 3 SLR 729 at [181]. Instead, it is more pertinent to focus on determining the substance of the commercial agreement between the shareholders as demonstrated by the evidence, keeping in mind the essential context of their personal relationship: Deniyal bin Kamis v Mapo Engineering Pte Ltd and others [2023] SGHC 183 at [85]–[91]. It is not the mutual trust and confidence between the shareholders which determines the content of the legitimate expectations; that content depends on the commercial agreement between the parties: Anita Hatta at [72].

24 Although the “quasi-partnership” label is not determinative, I would accept that it applies to describe the form of association between Mr Chainani and Mr Singh in the Company and the Holding Company in the present case. The key characteristic of a quasi-partnership is that the shareholders agree to associate on the basis of a personal relationship involving mutual trust and confidence: Thio Syn Kym Wendy and others v Thio Syn Pyn and others [2017] SGHC 169 at [45], citing Lim Kok Wah and others v Lim Boh Yong and others and other matters [2015] 5 SLR 307 (“Lim Kok Wah”) at [105]. In this connection, Mr Chainani gave evidence that he and Mr Singh were former schoolmates who had decided to start a business venture trading in consumer electronics and had incorporated the Company in November 1999 for that purpose; ³⁴ and that the business was run informally and based on mutual trust and consultation between shareholders. ³⁵ Mr Singh did not dispute this. In fact, his counsel put it to Mr Chainani that the trust between Mr Chainani and Mr Singh was deep and they were not just business partners, but also friends. ³⁶

25 However, that adds little to the s 216 analysis. Where a “quasi-partnership” exists, that frame forms a convenient label where a common understanding is implicit within the course of conduct and expectations appurtenant to partners: Anita Hatta at [72]. Nevertheless, the content of the common understanding within the “quasi-partnership” must still be ascertained. As I explain below, the only common understanding I find in the present case, that was capable of giving rise to legitimate expectations against which any commercial unfairness under s 216 is to be assessed, is the Understanding.

26 The Understanding is pleaded by Mr Chainani in the following terms:

27 I highlight three features of the pleaded Understanding:

(a) First, any investments made by either Mr Chainani or Mr Singh using the Company’s funds were considered investments made on behalf of the Company. To my mind, it follows that any asset acquired by Mr Chainani or Mr Singh in their (or their nominees’) respective names would, to the extent that they were acquired with the Company’s funds, be held by them on behalf of and on trust for the Company.

(b) Second, the party who made the investments would have to account to the Company and to the other party for the principal amount of the Company’s funds used for, and the profits made from, the said Company’s investments.

(c) Third, the profits (if any) from the Company’s investments would be distributed equally between Mr Chainani and Mr Singh in their capacity as “equal shareholders of the [Holding Company]”. To my mind, profits made on the Company’s investments legally belong to the Company. The proper way of effecting this third limb of the Understanding would be for the Company to upstream to the Holding Company any profits made by the Company further to its investments; and in turn, for the Holding Company to pay available profits, in equal proportions, to Mr Chainani and Mr Singh as “equal shareholders of the [Holding Company]” by way of a declaration of dividends. I return to this point at [126] below.

28 It is undisputed that, from around 2005, Mr Chainani and Mr Singh used the Company’s funds to invest in ten properties and conducted themselves in accordance with the Understanding in respect of these investments. ³⁸

29 For the purposes of the present dispute, Mr Chainani’s case is that, pursuant to the Understanding, Mr Singh also acquired (in his and/or his nominees’ names) the following properties enumerated in the SOC3 at paras 10, 11 and 13(a) to (j) (the “Properties”) in part and/or entirely with the Company’s funds:

30 In his pleaded defence, Mr Singh admits that the Understanding applied to the Properties (a) save for BD Blvd 39; and (b) in so far as 35 lots of FEO shares and 20 lots of YHS shares were concerned. ⁶⁰

31 In the 1st Defendant’s Opening Statement at para 2, Mr Singh further conceded that the Understanding applied to all the Properties save for BD Blvd 39 (which is listed in the SOC3 at para 13(j)), stating: ⁶¹

32 In opening Mr Singh’s case at trial, his counsel confirmed that the position taken by Mr Singh in the 1st Defendant’s Opening Statement at para 2 supersedes any previous statements that may be inconsistent with that position. ⁶²

33 In cross-examination, Mr Singh confirmed at the outset that the position stated in the 1st Defendant’s Opening Statement at para 2 represents his evidence. ⁶³

34 In the 1st Defendant’s Closing Submissions, Mr Singh again conceded the existence of the Understanding since in or around 2005 and that it applied to all the Properties save for BD Blvd 39. ⁶⁴ He stated, once again and unequivocally, in the 1st Defendant’s Closing Submissions at para 2 that:

35 In oral closing submissions, Mr Singh’s counsel reiterated that Mr Singh was not resiling from his admissions as to the Understanding. ⁶⁵

36 In the face of these overwhelming admissions by Mr Singh (see [30]–[35] above), it would be unreasonable for me to find otherwise than that Mr Chainani and Mr Singh did enter into the Understanding in or around 2005, and further, that the Understanding applied to the Properties enumerated at [29(a)]–[29(t)] above.

37 As for BD Blvd 39 (at [29(u)] above), which is not identified in the express admissions made by Mr Singh in his pleadings, the 1st Defendant’s Opening Statement and the 1st Defendant’s Closing Submissions (see [30]–[35] above), I find that the Understanding applied to BD Blvd 39 as well, for two reasons. First, Mr Singh does not dispute that he purchased and sold BD Blvd 39. ⁶⁶ Pursuant to Mr Singh’s instructions, his personal assistant, Ms Kristin Callang (“Ms Callang”), ⁶⁷ sent Mr Chainani an email dated 14 September 2016 enclosing a spreadsheet titled “DUBAI PROPERTY PAYMENT MADE FROM AVITAR” (the “14 September 2016 Dubai Spreadsheet”) which showed that the Company’s funds had been used for the purchase of, among other properties, BD Blvd 39. ⁶⁸ The fact that Mr Singh had used moneys from the Company to purchase BD Blvd 39 and had seen fit to inform Mr Chainani of the same supports the view that BD Blvd 39 was a property acquired pursuant to the Understanding. Second, although Mr Singh stated in his AEIC at para 136 that he did not agree that he had any duty to account for the moneys used to purchase BD Blvd 39, when he was taken to para 136 of his AEIC in cross-examination and asked whether or not he had a duty to account for BD Blvd 39, he admitted that he did have a duty to account for BD Blvd 39. ⁶⁹

38 I therefore find (a) that Mr Chainani and Mr Singh had entered into the Understanding in or around 2005; and further, (b) that the Understanding applied to all the Properties enumerated at [29] above, including BD Blvd 39.

39 For completeness, Mr Singh had, in the 1st Defendant’s Closing Submissions, suggested that certain Properties had been acquired by way of “loans” taken by him from the Company. ⁷⁰ To the extent that Mr Singh suggests that any of the Properties had been acquired by him for his own benefit using “loans” he obtained from the Company, it would not, in my view, be open to him to run such a contradictory case. The implication of Mr Singh’s admissions is that the Properties were acquired by him (or his nominees) on behalf of the Company using the Company’s funds. His admissions are further reinforced by the fact that he provided Mr Chainani with some information on some of the Properties from around 2013 to before the commencement of this action (see [43], [44], [46], [48] and [51]–[55] below): there would have been no reason for him to do so had the Properties not been acquired on behalf of the Company. Any so-called “loan” sums taken by Mr Singh from the Company to invest in the Properties should therefore properly be regarded as moneys of the Company applied by Mr Singh towards investment in the Properties on the Company’s behalf.

40 I further find that Mr Singh owes a duty to account to the Company for the investments (including principal sums invested and any profits made on the investments) made with the use of the Company’s funds. This duty to account to the Company arises given that, in accordance with the Understanding, the investments were made by Mr Singh on behalf of, and correspondingly would be held by Mr Singh on trust for, the Company.

41 I find that Mr Singh also owes a duty to account to Mr Chainani for the investments (including principal sums invested and any profits made on the investments) made with the use of the Company’s funds. This duty to account to Mr Chainani was assumed by Mr Singh according to the terms of the Understanding. The Understanding provided for the investing party to account to the other party for the principal sums and any profits in respect of an investment made with the Company’s funds. By entering into the Understanding which provided for the parties to account in this manner to each other, Mr Singh had “voluntarily place[d] himself in a position where the law can objectively impute an intention on his … part to undertake” a fiduciary obligation to account to Mr Chainani for the investments made with the use of the Company’s funds (see Tan Teck Kee v Ratan Kumar Rai [2022] 2 SLR 1250 (“Tan Teck Kee”) at [69] and [77], citing Tan Yok Koon v Tan Choo Suan and another and other appeals [2017] 1 SLR 654 at [194]). In light of this finding, it is unnecessary for me to address the other bases proffered by Mr Chainani for why Mr Singh should be found to owe him (ie, Mr Chainani) a duty to account in respect of the investments, namely, that such a duty had arisen by reason of proprietary estoppel or a constructive trust over profits attained pursuant to the Understanding. ⁷¹ I make only the following brief comments as to why those alternative bases would fail:

(a) Mr Chainani’s claim that Mr Singh is his fiduciary by reason of proprietary estoppel fails because, among other reasons: (i) Mr Chainani has not pleaded proprietary estoppel (V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and another [2015] 5 SLR 1422 at [43]–[44]); (ii) the representation required to found a proprietary estoppel must be made by the landowner (Hong Leong Singapore Finance Ltd v United Overseas Bank Ltd [2007] 1 SLR(R) 292 (“Hong Leong”) at [170]), which, on Mr Chainani’s own case in respect of properties acquired with the Company’s funds, Mr Singh is not; and (iii) Mr Chainani has not shown that he incurred any detriment in reliance on Mr Singh’s alleged representation under the Understanding. ⁷² Mr Chainani has not explained what change of position, which is causally related to the alleged representation, there is in his case (Hong Leong at [208]; In re Basham, decd [1986] 1 WLR 1498 at 1504).

(b) Mr Chainani’s claim that Mr Singh owes him fiduciary duties because “a common intention constructive trust arises over [Mr Chainani’s] share of the profits and the principal sums to be returned to the [Company], such that [Mr Singh] is liable to [Mr Chainani] and the [Company] as a constructive trustee” ⁷³ fails because, among other reasons: (i) Mr Chainani has not pleaded that there was a common intention constructive trust (UJT v UJR and another matter [2018] 4 SLR 931 at [47]); (ii) in any event, the Understanding was not about how Mr Chainani and Mr Singh’s beneficial interests in any property or moneys was to be held and it is not Mr Chainani’s pleaded case that he had, under the Understanding, any proprietary interest or beneficial ownership in any properties acquired or profits made from the property transactions conducted pursuant to the Understanding (Er Kok Yong v Tan Cheng Cheng (as co-administratrix of the estate of Spencer Tuppani, deceased) and others [2023] SGHC 58 at [18]; Chan Yuen Lan v See Fong Mun [2014] 3 SLR 1048 at [96]–[97]; Ong Chai Soon v Ong Chai Koon and others [2022] 2 SLR 457 (“Ong Chai Soon”) at [34]; Wong Shu Kiat and another v Chen Jinping Michelle (personal representative of the estate of Tin Koon Ming, deceased) and another [2023] SGHC 105 (“Wong Shu Kiat”) at [91]–[92]); and (iii) Mr Chainani has not established any detrimental reliance on the purported common intention (Ong Chai Soon at [39] and [41]; Wong Shu Kiat at [93]). ⁷⁴

42 I find that Mr Singh persistently breached the Understanding from around 2013 onwards by failing to account for multiple Properties, contrary to his obligation to do so under the Understanding. He (a) evaded, ignored, or delayed his responses to Mr Chainani’s requests for accounts of the investments; and/or (b) provided plainly inadequate information as part of purported attempts to provide accounts. It was only in Mr Singh’s AEIC filed on 21 July 2023 in this action that a more serious attempt was made to account for the investments in the Properties (although there remain deficiencies with these accounts, as explained at [110] below). I elaborate on the evidence giving rise to my findings.

43 Mandarin Gardens was sold in late 2012 and sale proceeds of S$295,496.97 were received by Mr Singh on completion of the sale. ⁷⁵ When Mr Chainani asked Mr Singh about the profits from the investment, Mr Singh told Mr Chainani that he (ie, Mr Singh) had paid S$200,000 in property tax incurred in previous years. ⁷⁶ On 28 September 2013, Mr Chainani sent Mr Singh an email asking for the statement of accounts for Mandarin Gardens and inquiring about the balance sale proceeds. On 28 September 2013, Mr Singh replied: “Mandarin Gardens: 200k+ was the property tax incurred and as of now no recourse; funds had deposited in HSBC; but wil chk n revert”. ⁷⁷ There was, however, no follow up from Mr Singh. On 7 January 2014, Mr Chainani sent Mr Singh another email seeking Mr Singh’s confirmation of his (ie, Mr Chainani’s) calculation of the profit made from the sale of Mandarin Gardens. ⁷⁸ Mr Chainani did not receive any response from Mr Singh. ⁷⁹

44 Evelyn Road was sold in November 2014. ⁸⁰ However, it was only on 4 December 2017 that Mr Singh sent Mr Chainani a spreadsheet purporting to account for the Evelyn Road transaction. ⁸¹ This three-year delay is hardly reasonable. Further, I accept Mr Chainani’s position that the purported account was inadequate because (a) it showed that Mr Singh’s wife, Ms Simrit Kaur Dang, was given S$40,000 without any explanation why; (b) it showed that a sum of S$37,222 was paid to Myanma Food For Thought Pte Ltd (“MFFT”), a business run by Mr Singh, without any explanation why; and (c) there were no supporting documents provided to substantiate the figures set out in the purported account. ⁸²

45 Meadows was sold in August 2015, but Mr Singh did not provide Mr Chainani with any account in relation to this investment. ⁸³

46 Spring Grove was sold in August 2016. ⁸⁴ On 23 August 2016, Ms Callang sent Mr Chainani an email purporting to set out “payments done from the proceeds of the sales from Spring Grove”, as follows: ⁸⁵

In my view, the information in this email does not constitute a proper account of the principal sums invested in and the profits made from the sale of Spring Grove, as was required of Mr Singh under the Understanding. There was no explanation for the various items and amounts stated in the email, and I accept that Mr Chainani could not make sense of certain entries. ⁸⁶

47 Parc Olympia was sold in January 2017, but Mr Singh did not provide Mr Chainani with any account regarding this investment. ⁸⁷

48 Archipelago was sold in December 2017, but Mr Singh did not provide Mr Chainani with any account regarding this investment. ⁸⁸ In fact, when Mr Chainani asked Mr Singh (via WhatsApp messages in March and October 2017) about the net equity in Archipelago after paying off the mortgage and the cost of Archipelago, Mr Chainani did not receive any substantive response. ⁸⁹ On 13 April 2018, Mr Singh sent Mr Chainani a spreadsheet referring to various properties. One line entry stated “SPOTTISWOOD/ARCHI” with the figure “8,668.00” in the column immediately beside it, and another line entry stated “ARCHIPELAGO” with the figure “465,000.00” in the second column beside it. ⁹⁰ It is impossible to make sense of what these figures mean in relation to the Archipelago (or Spottiswoode) investment.

49 Spottiswoode was sold in July 2019, but Mr Singh did not provide Mr Chainani with any account regarding this investment. ⁹¹ In fact, when Mr Chainani asked Mr Singh (via a WhatsApp message in March 2017) about the net equity in Spottiswoode after paying off the mortgage, Mr Chainani did not receive any substantive response. ⁹²

50 In relation to the Properties in Dubai, Burj Vista was sold in July 2013. ⁹³ FV-21-2105, The Hills 1401, The Hills 505 and Mira were sold in 2014. ⁹⁴ The Hills 702, The Hills 1204, BD Blvd 44 and BD Blvd 39 have also been sold. ⁹⁵

51 On 15 July 2015, Mr Chainani asked Mr Singh via a WhatsApp message to remind his (ie, Mr Singh’s) brother, Mr Davinderpal Singh s/o Ranjit Singh (“Mr Davinderpal”), to provide “the accounts for the Dubai properties”. Mr Singh responded “Ok”. ⁹⁶ However, no accounts were forthcoming. On 12 February 2016, Mr Chainani requested via a WhatsApp message that Mr Singh provide “the final accounts for the Dubai properties”. Mr Singh did not respond to Mr Chainani. ⁹⁷ On 12 June 2016, Mr Chainani requested via a WhatsApp message that Mr Singh “[p]lease bring back all Dubai property accounts. They are long overdue”. Mr Singh replied “Yes ok”; but did not do so. ⁹⁸ On 21 July 2016, Mr Chainani requested via a WhatsApp message that Mr Singh “please email the Dubai accounts”. Mr Singh replied that he was “chasing” Mr Davinderpal. ⁹⁹ On 19 August 2016, Mr Chainani created a WhatsApp chat group named “DXB Accounts” with Mr Singh, Mr Davinderpal and himself as the chat group members. He sent a message to the group on the same day asking Mr Davinderpal for a “complete account for ALL Dubai property transactions” by 26 August 2016. He sent chaser messages to the group on 25 and 29 August 2016. On 29 August 2016, Mr Singh responded that he had sent certain information to Ms Callang. ¹⁰⁰

52 On 14 September 2016, Ms Callang sent Mr Chainani the 14 September 2016 Dubai Spreadsheet (see [37] above). The spreadsheet refers to eight Properties in Dubai, being all the Properties in Dubai save for Burj Vista. ¹⁰¹ However, while the spreadsheet states the amounts paid for these Dubai Properties, it is wholly unclear how or why other line entries in the spreadsheet relate to the Dubai Properties, and I do not consider the spreadsheet to be a proper account of these Dubai Properties. On 15 September 2016, Mr Chainani informed Mr Singh via a WhatsApp message that the spreadsheet merely showed cash flows between the Company and Mr Singh and were “not accounts”. Mr Chainani added that he needed, among other things, “a complete statement of accounts of all properties purchased and sold” and “to see where the proceeds have gone and who has been paid and why”. Mr Singh replied: “Wil chk when back”. ¹⁰² However, there was no follow up on Mr Chainani’s request for the accounts for the Dubai Properties.

53 It was only on 10 July 2018 and 31 July 2018 that Mr Singh sent Mr Chainani updated spreadsheets referring to the eight Dubai Properties. ¹⁰³ These spreadsheets contained more line entries (as compared to the 14 September 2016 Dubai Spreadsheet) pertaining to, among other things, apparent transfers of moneys to the Company. However, they still did not constitute proper accounts of the Dubai Properties. I accept Mr Chainani’s objections that Mr Singh failed to (a) state the purchase and sale price of the Dubai Properties; (b) identify the property to which the amounts purportedly received by the Company were linked; and (c) provide supporting documents. ¹⁰⁴

54 On 10 July 2018, Mr Singh sent Mr Chainani a spreadsheet setting out payments made in 2014, 2015 and 2016 for the purchase of Marina 19 and Marina 20. ¹⁰⁵ These two Properties are presently unsold. ¹⁰⁶

55 On 31 July 2018, Mr Singh also sent Mr Chainani spreadsheets containing references to the Marina Properties, Spottiswoode, Archipelago, Spring Grove, Mandarin Gardens, shares, Parc Olympia and Meadows. ¹⁰⁷ These spreadsheets do not constitute proper accounts of the aforementioned Properties. I accept Mr Chainani’s objections that (a) there is no indication of the purchase and sale price or rental income; (b) it is not possible to tell what several line entries, described vaguely as “COSTS RELATED TO DOCUMENTATION”, “UOB HSE LOAN REPAYMENT”, “SPRING GROVE EXPENSES”, “OCBC – HOME LOAN”, “SPRING GROVE”, “MEADOWS@PIERCE”, “CHKING ON THE NATURE OF TRANSACTION”, “OLYMPIA”, were for; and (c) no supporting documents were provided. ¹⁰⁸

56 Mr Chainani finally commenced this action on 3 August 2020. ¹⁰⁹

57 In my view, the foregoing evidence of Mr Singh’s conduct from 2013 up to the commencement of this action shows clear and persistent breaches by Mr Singh of his obligation to account under the Understanding. In the course of this action, Mr Singh sought to provide an account of the Properties in his AEIC. Leaving aside that there remain some deficiencies in those accounts (see [110] below), his belated effort to provide accounts after the commencement of this action cannot and does not change the fact that he did breach the Understanding.

58 In the 1st Defendant’s Closing Submissions, Mr Singh submitted that he had not breached the Understanding for the following reasons: ¹¹⁰

(a) He had, at various times, provided Mr Chainani with spreadsheets containing the purchase prices, expenses related to the purchase, selling price and expenses related to the sale of various properties, as well as the profits from the sale of the properties.

(b) Further, the documents evidencing the purchase prices, selling prices, and expenses related to the sale and/or purchase were kept in the office premises of the Company and the Holding Company and made available to Mr Chainani at all material times.

(c) At all material times when Mr Singh was requested to provide an account by Mr Chainani, he had not denied his obligation to provide the same and had attempted to render an account to the best of his recollection.

59 However, the evidence does not bear out Mr Singh’s first and third assertions. I also reject Mr Singh’s second argument because Mr Chainani’s access to documents kept in the office premises of the Company and the Holding Company does not absolve Mr Singh of his obligation under the Understanding to provide accounts. Where the investments were undertaken by Mr Singh (as opposed to by Mr Chainani) on the Company’s behalf, Mr Singh cannot realistically expect Mr Chainani to piece together the accounts on his (ie, Mr Chainani’s) own simply by reviewing documentary records, without more.

60 In the present case, the Understanding was an informal commercial agreement setting out the legitimate expectations of Mr Chainani and Mr Singh as to how the Company’s funds would be invested for the benefit of the Company, and ultimately, themselves as shareholders of the Holding Company. In my judgment, applying the legal principles set out at [22] above, Mr Singh’s breaches of the Understanding disrupted Mr Chainani’s legitimate expectations and amount, under s 216, to commercial unfairness to Mr Chainani in the conduct of the affairs of the Holding Company.

61 Mr Singh argues that: ¹¹¹

(a) First, Mr Chainani is not a shareholder of the Company and any unlawful conduct in relation to the Company’s affairs cannot amount to oppression against Mr Chainani.

(b) Second, even if the court considers Mr Chainani and Mr Singh as the ultimate shareholders of the Company through their shareholdings in the Holding Company, Mr Chainani and Mr Singh are “shareholders of equal shares in the [Holding Company] and there would not be a minority shareholder in such a situation” [emphasis in original].

62 I find no merit in either argument.

63 In respect of the first argument, commercially unfair conduct in the management of a subsidiary is relevant where such conduct affected or impacted the holding company whose shareholder is the party claiming relief from oppression: Ng Kek Wee v Sim City Technology Ltd [2014] 4 SLR 723 (“Ng Kek Wee”) at [42]. In Ng Kek Wee, the Court of Appeal held that Singalab International (the company that was the subject of the s 216 action) had been incorporated as a holding company and its sole assets were shares in its wholly-owned subsidiary companies. The business of the holding company was therefore, in practical terms, comprised wholly of the businesses of its subsidiaries. Thus, the way in which the appellant-shareholder of Singalab International conducted the business of Singalab International’s subsidiary, SPL, would undoubtedly have impacted Singalab International. The trial judge thus did not err when she took into account the appellant’s misconduct of SPL’s affairs in assessing whether the appellant’s conduct of Singalab International’s affairs was such as to amount to commercial unfairness (at [26] and [43]). Similarly, in the present case, the Holding Company was incorporated by Mr Chainani and Mr Singh in 2004 for the specific purpose of holding the Company. The Holding Company did not conduct its own business. Mr Chainani and Mr Singh transferred their shares in the Company to the Holding Company and remained the ultimate shareholders of the Company. ¹¹² In these circumstances, Mr Singh’s conduct of the Company’s affairs in breach of the Understanding (and hence in breach of Mr Chainani’s legitimate expectations) undoubtedly resulted in commercial unfairness to Mr Chainani as a shareholder of the Holding Company.

64 In respect of the second argument, there is no requirement under s 216 that only minority shareholders are entitled to bring an action for relief. The touchstone is whether the shareholder bringing the action is unable to stop the allegedly oppressive acts through the ordinary powers he possesses by virtue of his position: Ng Kek Wee at [48]. In Ascend Field Pte Ltd and others v Tee Wee Sien and another appeal [2020] 1 SLR 771, the Court of Appeal held that the claimant, a 50% shareholder of the company, lacked the shareholder power to stop the allegedly oppressive acts and was thus not disbarred from claiming relief under s 216 (at [34]). Similarly, in the present case, I accept Mr Chainani’s submission that, as a 50% shareholder of the Holding Company, he did not have the requisite shareholder power to stop the commercially unfair conduct by Mr Singh which Mr Chainani complains of (ie, breach of the Understanding). ¹¹³ Mr Singh has not shown otherwise. I therefore find that Mr Chainani is entitled to pursue (and has made out a case for) a s 216 action in respect of Mr Singh’s commercially unfair conduct in breaching the Understanding.

65 The “14 December 2015 Ledger” and the “12 April 2019 Ledger” are Mr Singh’s ledger accounts with the Company from 30 June 2008 to those dates respectively. ¹¹⁴ Mr Chainani alleges that the 14 December 2015 Ledger and the 12 April 2019 Ledger reflect various entries described as loans to Mr Singh or payments to Mr Singh, which were taken or made without Mr Chainani’s knowledge and/or consent. ¹¹⁵ Mr Chainani’s case in respect of these loans and payments appears to be two-fold:

(a) First, Mr Chainani contends that Mr Singh had a duty to account to him (ie, Mr Chainani) for the monies drawn out from the Company, ¹¹⁶ and that Mr Singh’s failure to do so somehow violated Mr Chainani’s “legitimate expectation” as a shareholder and was “commercially unfair”. ¹¹⁷

(b) Second, Mr Chainani contends that Mr Singh breached his duties as a director of the Company in a way that “subjected [Mr Chainani] to oppression within the meaning of [s 216]” as Mr Singh had “utilize[d] the [Company’s] funds in a manner which is oppressive to [Mr Chainani] and which is prejudicial to [Mr Chainani’s] interests as a shareholder of the [Holding Company]”. ¹¹⁸ The loans Mr Singh took were allegedly unauthorised and illegal. ¹¹⁹

66 Mr Chainani seeks, as a remedy, an order for Mr Singh to render “a complete account of all ‘loans’, as reflected in the 14 December 2015 Ledger and the 12 April 2019 Ledger”. ¹²⁰

67 Mr Singh denies that the entries described as loans reflect transactions undertaken without Mr Chainani’s knowledge and/or consent or that the entries were false or made as afterthoughts. ¹²¹ Mr Singh also denies that he was under a duty to account to Mr Chainani for matters concerning the conduct of the Company’s business. ¹²² Mr Singh further argues that any claims in relation to alleged wrongs committed by him, in his capacity as a director of the Company, against the Company, are for the Company, and not Mr Chainani, in his personal capacity, to bring. ¹²³

68 I observe, to begin with, that in so far as Mr Singh used the Company’s funds to acquire the Properties pursuant to the Understanding, he would have to account to the Company and to Mr Chainani for the use of such funds in accordance with the Understanding (and I make orders to such effect at [132] below). However, I disagree that Mr Singh is under a duty to account to Mr Chainani personally for all sums drawn by Mr Singh from the Company outside of the Understanding.

69 First, I find that there was no commercial agreement or informal understanding between Mr Chainani and Mr Singh capable of giving rise to a legitimate expectation on Mr Chainani’s part for Mr Singh to account to Mr Chainani personally for all sums paid from the Company to Mr Singh. Most fundamentally, no such commercial agreement, informal understanding or legitimate expectation was pleaded (in contrast to Mr Chainani’s case on the Understanding, which was both pleaded and borne out on the evidence).

70 Neither, in my view, did the parties’ evidence bear out any agreement for Mr Singh to render such an account. Mr Chainani’s evidence on a “mutual understanding” on how the Company was to be run related to both parties having “a say in the management and direction of the business”: ¹²⁴

There is no mention of the parties having to account to each other personally for any and all sums paid from the Company to them, much less Mr Singh having the singular obligation to account to Mr Chainani personally for any and all sums paid from the Company to Mr Singh. Indeed, it is undisputed that Mr Chainani himself had drawn funds from the Company and had his own ledger accounts with the Company. ¹²⁵ It is illogical that the parties would have agreed that only Mr Singh had to account to Mr Chainani personally for all moneys taken from the Company, but not vice versa.

71 Mr Chainani also asserts that he (a) entrusted Mr Singh with maintaining the Company’s accounts and records ¹²⁶ and handling payments to suppliers; ¹²⁷ (b) handed over his electronic banking token(s) for the Company’s bank accounts to the Company’s accounts department employees, who took instructions from Mr Singh in effecting payments of cash out of the Company’s bank accounts; ¹²⁸ (c) left pre-signed cheques for the Company with Mr Singh when he (ie, Mr Chainani) travelled; ¹²⁹ and (d) expected and believed that Mr Singh would handle the Company’s bank accounts and affairs with honesty. ¹³⁰ However, this is insufficient to found a mutual understanding between the parties that Mr Singh would account to Mr Chainani personally (as opposed to accounting to the Company) for all sums drawn from the Company. Mr Chainani cannot rely on any subjective expectation he might have harboured; he must show an informal agreement or a clear understanding shared by the parties in order to establish a legitimate expectation (Lim Kok Wah at [121]).

72 In my view, Mr Singh’s evidence supports only the Understanding, but not a further mutual understanding or agreement of having to account to Mr Chainani for all sums drawn by Mr Singh from the Company. Mr Singh stated in his AEIC at para 12:

While Mr Singh suggested that the shareholders had been permitted to borrow moneys from the Company to make investments on their own behalf, he effectively repudiated this narrative by admitting to the Understanding (see [30]–[35] above) which is premised on the Company’s funds being used for the Company’s investments. As I have found at [41] above, Mr Singh has to account to Mr Chainani for the investments made with the use of the Company’s funds. That being so, Mr Singh’s evidence at para 12 of his AEIC should not be interpreted to mean that the parties also informally agreed that Mr Singh was to account to Mr Chainani for any and all sums drawn by Mr Singh from the Company outside of the Understanding.

73 The evidence simply does not reveal any practice or course of conduct by the parties where Mr Singh accounted to Mr Chainani for any and every sum paid from the Company to Mr Singh, or loans he took from the Company, apart from or in addition to the Understanding.

74 Second, I do not accept Mr Chainani’s argument (relying on the test in Tan Teck Kee at [69]) that Mr Singh had voluntarily placed himself in a position which gave rise to him owing a fiduciary duty to account to Mr Chainani for all sums paid from the Company to Mr Singh. ¹³¹

75 In making this argument, Mr Chainani relies heavily on certain statements made by Mr Singh in para 19 of Mr Singh’s AEIC regarding the parties reposing trust in each other and being answerable to each other as the ultimate owners of the Company. ¹³² However, these statements must be read and understood in the context of the entire paragraph. What Mr Singh stated was:

In context, far from suggesting that Mr Chainani was in a vulnerable position vis-à-vis Mr Singh where management of the Company’s funds were concerned, Mr Singh’s point was that both he and Mr Chainani had control over the Company’s funds.

76 In cross-examination on para 19 of his AEIC, Mr Singh accepted that what he stated “[came] back to” parties having a duty to account to each other for what they intended to do with the Company’s moneys. However, the questions posed in cross-examination addressed the use of the Company’s moneys to make investments pursuant to the Understanding, and I do not take Mr Singh to have conceded that he had a duty to account to Mr Chainani for any and all sums drawn by Mr Singh from the Company even when it did not relate to the Understanding: ¹³⁴

77 Although Mr Chainani left pre-signed cheques with Mr Singh, ¹³⁵ that was Mr Chainani’s choice. In 2017, Mr Chainani removed himself as a co-signatory for the Company’s bank account with Standard Chartered Bank because he decided to transfer his shares in the Company to Mr Singh (although that did not materialise). Mr Chainani removed himself as a co-signatory after informing Mr Singh that no moneys were supposed to be removed from the Company without his (ie, Mr Chainani’s) consent. ¹³⁶ This was again an independent choice on Mr Chainani’s part. The circumstances do not lend to an objective imputation that Mr Singh had intended to undertake fiduciary obligations to Mr Chainani in respect of the use of the funds of the Company. All this is not to say, however, that Mr Singh did not owe the Company a duty to account. Rather, the point is that Mr Singh did not voluntarily place himself in a position to have to account to Mr Chainani personally for any and all sums drawn from the Company (outside of funds used to invest in properties pursuant to the Understanding).

78 It follows that there was no commercial unfairness to or oppression of Mr Chainani arising from Mr Singh not accounting to him (ie, Mr Chainani) personally for all sums taken by Mr Singh from the Company.

79 Third, in so far as Mr Chainani’s allegation, that Mr Singh utilised the Company’s funds in a manner “oppressive” and “prejudicial” to Mr Chainani, ¹³⁷ is in fact an insinuation that Mr Singh misappropriated the Company’s funds, I find that this would be a corporate wrong by Mr Singh against the Company and not a personal wrong against Mr Chainani under s 216. In Suying Design Pte Ltd v Ng Kian Huan Edmund and other appeals [2020] 2 SLR 221 (“Suying”), the Court of Appeal explained that misappropriation of a company’s assets would by nature reduce the assets of the company, but, in the absence of evidence to the contrary, the “injury” to the minority shareholder in that situation is merely a reflection of the loss to the company and s 216 should not be used to vindicate such a corporate wrong (at [30] and [34]):

80 In Suying, the plaintiff, Mr Ng, a 35% shareholder of the company (“SMSPL”), alleged that the third defendant, Ms Tan, a 40% shareholder of SMSPL, had acted in an oppressive manner by, among other things, withdrawing moneys from SMSPL’s bank account as her gratuity and adjusted pay (“Gratuity Payments”). Mr Ng disputed the propriety of the Gratuity Payments (at [7]–[8]). The Court of Appeal held that Mr Ng could not rely on the Gratuity Payments, which were alleged corporate wrongs committed by Ms Tan, as acts of shareholder oppression (at [113]–[114]):

81 In the present case, it is for the Company to pursue any alleged misappropriation by Mr Singh of its funds, by way of unauthorised or illegal loans or otherwise, and any corporate wrong done to the Company in this regard will be adequately remedied. As I make orders at [102] below for the winding up of the Company (and the Holding Company), the liquidators (when appointed) may consider what, if any, appropriate action should be taken in respect of Mr Chainani’s allegations that Mr Singh took unauthorised loans and other payments from the Company. However, Mr Chainani is not able to claim that these are acts of commercial unfairness or oppression, under s 216, against him personally.

82 Mr Chainani points to the following entries in relation to the Company’s accounts:

(a) The Company’s Journal Entry No 30409 dated 1 January 2011 contains a credit entry described as “AUDIT ENTRIES 2010” for the sum of US$1,634,217.17 in relation to Mr Singh’s account (ie, the US$1.6m Entry). ¹³⁸

(b) In the 14 December 2015 Ledger, there is a corresponding credit entry dated 1 January 2011 titled “AUDIT ENTRIES 2010” for the same sum of US$1,634,217.17. The origin of this entry is stated as “JE” “30409”. ¹³⁹

(c) As a result of this credit entry, the cumulative balance in the Company’s accounts reduced from US$1,119,099.44 on 31 December 2010 ¹⁴⁰ to a deficit of US$515,117.73 on 1 January 2011. ¹⁴¹

83 Mr Chainani complains that Mr Singh did not provide to the Company or to him (ie, Mr Chainani) any basis for the insertion of the US$1.6m Entry and the corresponding reduction of the Company’s cumulative balance to a deficit of US$515,117.73. ¹⁴² Mr Chainani further alleges that Mr Singh’s failure to justify and account to the Company and him (ie, Mr Chainani) for the insertion of the US$1.6m Entry was a breach of Mr Singh’s duties as a director of the Company and/or “a violation of the trust which [Mr Chainani] had reposed in [Mr Singh]”. ¹⁴³ As a result of Mr Singh’s alleged breach of director’s duties, Mr Chainani was allegedly “subjected to oppression within the meaning of [s 216]” in that Mr Singh had “utilize[d] the [Company’s] funds in a manner which is oppressive to [Mr Chainani] and which is prejudicial to [Mr Chainani’s] interests as a shareholder of the [Holding Company]”. ¹⁴⁴ Mr Chainani seeks “[a]n order that [Mr Singh] accounts for the insertion of the [US$1.6m Entry]”. ¹⁴⁵

84 Mr Singh gave the following evidence to explain the US$1.6m Entry:

(a) The US$1.6m Entry comprised two separate transactions. ¹⁴⁶

(b) The first transaction involved bringing Mr Singh’s director’s loan balance of US$1,119,099.44 ¹⁴⁷ to zero for the year ending 31 December 2010 by transferring that debt from the Company to the Holding Company. ¹⁴⁸ This exercise of transferring, to the Holding Company’s books, amounts due from the Company’s directors to the Company, was not new. It was (a) previously undertaken in 2009, and (b) undertaken in both 2009 and 2010 by Mr Chainani, in respect of amounts due from him (ie, Mr Chainani) to the Company. ¹⁴⁹

(c) The second transaction involved a reduction of US$515,117.73 in Mr Singh’s loan ledger with the Company. Mr Chainani and Mr Singh had decided to transfer doubtful receivables from the Company’s customers to Mr Singh’s loan ledger with the Company and to write off the bad debts; these totalled US$607,678.10. ¹⁵⁰ The write-off of US$607,678.10 entitled Mr Singh to a tax credit of US$81,000, which was recorded in his loan ledger. ¹⁵¹ These, along with some minor adjustments, resulted in a recorded reduction of US$515,117.73 in his loan ledger on 1 January 2011, as the bad debts were only posted to his loan ledger on 31 December 2011. ¹⁵²

(d) The sums of US$1,119,099.44 and US$515,117.73 (totalling US$1,634,217.17) together made up the US$1.6m Entry. ¹⁵³

85 As I understood Mr Singh’s evidence in respect of the first transaction (at [84(b)] above), the transfer to the Holding Company of the debts owed by Mr Chainani and Mr Singh to the Company (the “Director’s Company debt”) resulted in (a) the Holding Company owing the Company the amount of Mr Chainani and Mr Singh’s Director’s Company debt, and (b) Mr Chainani and Mr Singh in turn owing the Holding Company (the “Director’s Holding Company debt”) the respective sums they had owed the Company prior to the debt transfer. Mr Singh further explained that, in 2009 and 2010, the Company and the Holding Company declared dividends. The dividends declared by the Company were used to set off amounts owed by the Holding Company to the Company. The dividends declared by the Holding Company were equally allocated to Mr Chainani and Mr Singh and applied towards setting off amounts owed by them to the Holding Company. ¹⁵⁴

86 In response, Mr Chainani argues that this was unfair to him because:

(a) A larger proportion of the Director’s Company debt that was allegedly transferred to the Holding Company comprised Mr Singh’s (rather than Mr Chainani’s) Director’s Company debt. ¹⁵⁵

(b) The dividends declared by the Company went towards payment of the amounts owed by the Holding Company to the Company. The amounts owed by the Holding Company to the Company arose in part as a result of the transfer of the Director’s Company debt. ¹⁵⁶

(c) Mr Singh allegedly had no intention of paying his Director’s Holding Company debt. Thus, “by a sleight of hand achieved by the [US$1.6m Entry]”, Mr Singh procured the Company, through the dividend declared in 2009, to pay off his liability, which he transferred to the Holding Company. ¹⁵⁷

87 I find, first, that Mr Chainani’s claim for Mr Singh to account for the insertion of the US$1.6m Entry in the 14 December 2015 Ledger is academic, since Mr Singh gave evidence to explain the transactions underlying the US$1.6m Entry. Indeed, Mr Chainani takes issue with the substance of the transactions explained by Mr Singh, implicitly acknowledging that explanations have been provided.

88 Second, in my view, Mr Chainani’s apparent dissatisfaction with the transactions underlying the US$1.6m Entry relates to corporate wrongs, if any.

(a) In respect of the first transaction (at [84(b)] above), it pertains to moneys owed by Mr Singh to the Company and/or the Holding Company, and it is for the Company and/or the Holding Company to pursue any alleged wrongdoing in this connection. There is no commercial unfairness to Mr Chainani within the meaning of s 216. Following the transfer of the Director’s Company debt to the Holding Company, Mr Singh owed the Holding Company the same amount of debt he had owed the Company prior to the transfer. Dividends declared by the Company to the Holding Company and applied by the Holding Company to set off amounts owed by the Holding Company to the Company would not affect the quantum of Mr Singh’s Director’s Holding Company debt. If Mr Singh failed or refused to repay his Director’s Holding Company debt, that would be a corporate wrong for the Holding Company to pursue.

(b) In respect of the second transaction (at [84(c)] above), it is unclear that there was even any wrong done to the Company. Based on Mr Singh’s explanation, the ledger record appeared as it did due to a difference in the timing of when the relevant entries were posted to Mr Singh’s loan ledger; there was no net outflow from the Company to Mr Singh.

89 For completeness, there was also brief speculation by Mr Chainani’s counsel in oral closing submissions that Mr Singh might have “violated or breached” the Understanding by “carrying out” the US$1.6m Entry, ¹⁵⁸ but as neither evidence nor substantiation of this assertion was provided, I say no more about it.

90 In summary, I find that Mr Chainani’s allegations in relation to the US$1.6m Entry do not constitute any act of commercial unfairness against him under s 216.

91 The minutes of a meeting of the Company’s board of directors on 19 November 2009 (“19 November 2009 Minutes”), signed by Mr Chainani and Mr Singh, record that the directors had resolved that an interim dividend of S$1.5m for the year ending 31 December 2009 (ie, the Dividend) would be paid to the Company’s shareholders (ie, the Holding Company). ¹⁵⁹

92 On 20 November 2009, the Company issued a notice to the Holding Company advising that the Dividend was declared and payable to the Holding Company. The notice was signed by Mr Singh. ¹⁶⁰

93 Mr Chainani’s case is that:

(a) It was Mr Singh who “procured” the Company to declare the Dividend. ¹⁶¹

(b) There was no record of the Dividend being received by the Holding Company. ¹⁶²

(c) As a 50% shareholder of the Holding Company, he should have received, but did not receive, half of the Dividend, ie, S$750,000. ¹⁶³

(d) Mr Singh failed and/or refused to account to the Company and Mr Chainani for the Dividend. ¹⁶⁴ This is a breach of Mr Singh’s duties as a director of the Company and/or is “a violation of the trust which [Mr Chainani] had reposed in [Mr Singh]”. ¹⁶⁵

(e) Mr Singh’s aforesaid conduct is in disregard of and/or prejudicial to the Company’s interests as well as Mr Chainani’s interests as a shareholder of the Company. ¹⁶⁶ Mr Chainani was allegedly “subjected to oppression within the meaning of [s 216]” in that Mr Singh had “utilize[d] the [Company’s] funds in a manner which is oppressive to [Mr Chainani] and which is prejudicial to [Mr Chainani’s] interests as a shareholder of the [Holding Company]”. ¹⁶⁷

(f) Mr Chainani seeks “[a]n order that [Mr Singh] renders a complete account of the Dividend”. ¹⁶⁸

94 Mr Singh gave evidence explaining that:

(a) Sometime in 2005, the Company issued 500,000 new shares at S$1 per share and the Company’s total number of shares increased to 1m shares. In 2008, the Company issued 1m new shares at S$1 per share and its total number of shares increased to 2m shares. ¹⁶⁹ The Holding Company thus owed the Company S$1.5m for the new shares issued in 2005 and 2008. ¹⁷⁰ The moneys that were to be paid by the Company to the Holding Company were reflected in the financial statements of the Company as “amount due from holding company”: ¹⁷¹ in the financial statements for the year ending 31 December 2007, this amount was S$502,800 (of which S$500,000 was owed by the Holding Company to the Company for the Company’s 500,000 new shares in 2005); ¹⁷² and in 2008, the amount increased to US$1,061,067. ¹⁷³

(b) In 2009, Mr Chainani’s Director’s Company debt in the amount of US$450,935 ¹⁷⁴ and Mr Singh’s Director’s Company debt in the amount of S$55,398 ¹⁷⁵ were transferred to the Holding Company’s books, increasing the amount due from the Holding Company to Company to US$1,566,618 (from US$1,061,067). ¹⁷⁶

(c) In 2009, the Company declared a dividend of S$1.5m (equivalent to about US$1.068m), ie, the Dividend. This reduced the amount due from the Holding Company to the Company to about US$0.498m, as reflected in the financial statements of the Company for the year ending 31 December 2009. ¹⁷⁷

(d) The Dividend is reflected in the Company’s financial statements for 2009 and 2010. ¹⁷⁸ Mr Singh also asserted that Mr Chainani had signed off on both sets of financial statements declaring them to be true and correct. ¹⁷⁹

(e) Mr Singh never received any moneys by way of the Dividend. ¹⁸⁰

95 I find, first, that Mr Chainani’s claim for Mr Singh to render an account for the Dividend is academic, since Mr Singh gave evidence to explain the declaration and application of the Dividend.

96 Second, I find that Mr Chainani has not proven any wrongdoing on Mr Singh’s part in connection with the Dividend. In cross-examination, Mr Chainani struggled and failed to articulate what was supposedly wrong with the Dividend transaction in light of Mr Singh’s account of the transaction. ¹⁸¹ For example:

(a) Despite claiming not to recall signing the 19 November 2009 Minutes, Mr Chainani expressly confirmed in cross-examination that he did not dispute the authenticity of his signatures in the document. ¹⁸² I do not see how Mr Chainani can dispute the bona fides of the declaration of the Dividend which he had himself approved as a director of the Company.

(b) Mr Chainani accepted in cross-examination that, because the Holding Company did not have a bank account, the declaration of the Dividend was not followed by payment. ¹⁸³ This coheres with Mr Singh’s explanation that the Dividend was not paid, but instead set off against amounts owed by the Holding Company to the Company.

(c) Mr Chainani also conceded that it was “[p]robably not” his case that Mr Singh had received the Dividend moneys. ¹⁸⁴ To begin with, the Dividend was declared by the Company in favour of the Holding Company, and there was no basis for Mr Chainani to claim a direct entitlement to half of the Dividend amount. Leaving that aside, the point is that Mr Chainani conceded that Mr Singh had not received the Dividend moneys either. This is consistent with Mr Singh’s explanation that the Dividend was set off against amounts owed by the Holding Company to the Company.

(d) The Company’s financial statements for the years ending 31 December 2009 and 2010 reflect that the Dividend was declared by the Company to the Holding Company. ¹⁸⁵ Although the copy of the former adduced by Mr Singh is unsigned ¹⁸⁶ and the copy of the latter adduced by Mr Singh is an incomplete document, ¹⁸⁷ the Holding Company’s financial statements for the years ending 31 December 2009 and 2010 also reflect that the Dividend was received by the Holding Company in 2009. ¹⁸⁸ Mr Chainani signed off on both sets of financial statements as a director of the Holding Company, confirming that they gave a true and fair view of the state of the group and of the Holding Company as at 31 December 2009 and 2010 respectively. ¹⁸⁹ Further, Mr Chainani agreed in cross-examination that the Dividend was reflected in the financial statements of the Holding Company and the Company, and that he had signed off on the financial statements containing this record. ¹⁹⁰ I do not accept Mr Chainani’s self-serving explanation that he signed the financial statements only because Mr Singh signed them too. ¹⁹¹ Mr Chainani has been a businessman since around 1999. He has been most punctilious in demanding from Mr Singh accounts of the investments made with the Company’s funds and what he (ie, Mr Chainani) considers to be his share of the profits. I do not accept that Mr Chainani would have thoughtlessly signed off on financial statements if he truly had a concern with the Dividend (or any other matters) recorded in the financial statements.

I therefore find that Mr Chainani has not shown any wrongdoing on Mr Singh’s part in relation to the Dividend.

97 Third, even if there was any wrongdoing, it would be a corporate wrong for the Company (which declared the Dividend) or the Holding Company (to whom the Dividend was declared) to pursue. I find that Mr Chainani’s allegations in relation to the Dividend do not constitute any act of commercial unfairness against him under s 216.

98 Having found that Mr Singh’s breaches of the Understanding constitute commercial unfairness within the meaning of s 216, I must determine the appropriate relief. Subject to the limitation that any order made under s 216 must be made with a view to bringing to an end or remedying the matters which rightly form the subject of complaint, the court’s power to make an order under s 216 is very wide and much depends on the matters complained of and the circumstances prevailing at the time of hearing: Kumagai Gumi Co Ltd v Zenecon Pte Ltd and others and other appeals [1995] 2 SLR(R) 304 (“Kumagai Gumi”) at [71]. The court has a wide discretion to fashion such relief as it considers just: Sakae at [118].

99 Section 216(2)(f) expressly states that the court may make an order that a company be wound up. Section 216(3) adds that, where an order that the company be wound up is made pursuant to subsection (2)(f), the legislative provisions relating to the winding up of a company apply, with such adaptations as are necessary, as if the order had been made upon an application duly made to the court by the company.

100 An order for winding up would be an appropriate remedy when winding up is a realistic means of securing to a plaintiff in a s 216 action his share of the value of the company. This may be the case where, for example, the company is in large measure non-trading or not running a business and/or where its corporate assets are substantially realisable: Snell v Glatis (No 2) [2020] NSWCA 166 at [39]–[40] and [42].

101 The court’s power also extends to making an order that the company’s subsidiary company be wound up. This may be appropriate where, for example, the subsidiary company is a mere vehicle of the parent company and has been used to further a defendant’s oppressive conduct. In Kumagai Gumi, the plaintiff-shareholder (“Kumagai”) of a joint venture company (“KZ”) alleged oppression against the defendant-shareholder (“Zenecon”) in KZ. KZ owned a majority stake in a subsidiary company (“KPM”). The remaining stake in KPM was held by one Low, who was the controller of Zenecon (at [3] and [7]). Kumagai sought, among others, orders that KZ and KPM be wound up (at [21]). The Court of Appeal found that, as the nominee director of KZ on the board of KPM, Low had carried on the business of KPM in a manner that served only his and/or Zenecon’s interest, in disregard of the interest of KZ. Such conduct on his part was conduct in the affairs of KZ and oppressive to Kumagai as a shareholder of KZ (at [57]). The Court of Appeal observed that some subsidiaries are truly independent of their parent company, while others are not. In that case, KPM was used by Low as a mere vehicle of KZ (at [59]). The trial judge below had seen fit to order that both KZ and KPM be wound up, and these orders were not disturbed on appeal (at [72]).

102 In the present case, I order that the Holding Company and the Company be wound up. I consider these orders appropriate for three reasons. First, it is undisputed that the Holding Company and the Company are dormant (see [2]–[3] above). Second, Mr Chainani desires that the Holding Company and the Company be wound up, ¹⁹² and Mr Singh does not object to the winding up per se. ¹⁹³ Third, both companies should be wound up as the Company is a mere vehicle for the Holding Company and its ultimate shareholders, Mr Chainani and Mr Singh.

103 I will hear parties regarding the appointment of liquidators and any other consequential orders or directions as may be necessary further to my orders at [102] above.

104 Having found that, in light of the Understanding, Mr Singh owes a duty to account to the Company and to Mr Chainani for the investments (including principal sums invested and any profits made on the investments) made with the use of the Company’s funds (see [40]–[41] above), and that Mr Singh had not provided certain accounts as required (see [57] above), I consider it appropriate to make an order against Mr Singh for the taking of accounts. The taking of accounts is a procedure for the accounting of funds and is not in itself a remedy for wrongdoing: UVJ and others v UVH and others and another appeal [2020] 2 SLR 336 (“UVJ”) at [24]. I therefore order him to give an account of the principal sums from the Company used to acquire stocks and/or real estate pursuant to the Understanding and the profits made from these investments of the Company (the “Account”).

105 Issues arise as to:

106 I address these issues in turn.

107 In my view, the Account should include all the Properties. I do not accept Mr Singh’s suggestions otherwise.

108 First, Mr Singh submits that he had led evidence to show that no Company funds had been used for the purchase of Parc Olympia and that there should thus be no order for the Account to include Parc Olympia. ¹⁹⁵ He also asserted in his AEIC that there was nothing for him to account for in relation to the Shares as he “believe[d] that these shares were not procured with [the Company’s] funds”. ¹⁹⁶ There are, however, two difficulties with his position. One, by admitting that the Understanding applied to the Properties, Mr Singh implicitly admitted that the Properties (including Parc Olympia and the Shares) had been acquired using the Company’s funds. Two, the trial of this action was to determine Mr Singh’s liability as regards Mr Chainani’s s 216 claim and the appropriate relief (if liability was established), and not for the taking of accounts. The order for the taking of the Account should therefore include Parc Olympia and the Shares. If Mr Singh maintains his present position with respect to Parc Olympia and the Shares, that will be dealt with at the stage when the Account is taken.

109 Second, Mr Singh submits that “the accounts have been settled by [Mr Singh’s AEIC] … and [Mr Chainani] does not have a right to an account”, ¹⁹⁷ referring to his attempt to provide accounts of the Properties in his AEIC filed in this action. I do not accept his submission. A defendant who contends that he has been released from his duty to account by a settlement bears the burden of establishing that the accounts have been settled: Chng Weng Wah v Goh Bak Heng [2016] 2 SLR 464 at [24]. Mr Singh has not established this.

110 To the contrary, Mr Singh’s counsel conceded in oral closing submissions that there were “gaps” in the information provided by Mr Singh in his AEIC; that the “opportunity to account ought to be afforded to [Mr Singh]”; and that Mr Singh “ha[d] not discharged his duty to account fully on all the categories”. ¹⁹⁸ Examples of gaps in the information provided by Mr Singh in his AEIC include:

(a) In respect of Mandarin Gardens, Mr Singh provided an estimated amount of rent collected in 2012, claiming that there was no record of the actual rent collected. ¹⁹⁹ However, he agreed in cross-examination that, based on contemporaneous documentary records, the actual amount of rent collected from the start of 2012 until 2 November 2012 was higher. ²⁰⁰ Mr Singh also stated in his purported account that he had paid interest of S$11,897.63 on a loan taken from Standard Chartered Bank for the property. ²⁰¹ However, the bank’s statement showed that interest of only S$4,013.90 was paid in 2011 prior to redemption of the loan in April 2011. ²⁰² Mr Singh was unable to explain the discrepancy between his figure and the figure stated in the bank’s statement. ²⁰³

(b) In respect of Evelyn Road, the property was mortgaged to OCBC Bank in 2011 for a housing loan in the amount of S$1,702,741 and a term loan in the amount of S$563,659. ²⁰⁴ In his purported account for this property, Mr Singh aggregated the interest on the term loan in 2014 (S$5,660.08) ²⁰⁵ and the interest on the housing loan in 2014 (S$16,981.15), ²⁰⁶ and claimed “LOAN INTEREST 2014” in the amount of S$22,641 as an expense item. ²⁰⁷ He agreed in cross-examination that this was “not correct”, ²⁰⁸ although he purported not to have details on what the term loan was used for. ²⁰⁹

(c) In respect of Spring Grove, Mr Singh indicated that “LEGAL FEES ON SALES (ESTIMATED)” in the amount of S$2,500 was an expense incurred on the investment. ²¹⁰ In cross-examination, however, Mr Singh conceded that, based on the contemporaneous documents relating to the sale of Spring Grove provided by conveyancing lawyers, the legal fees incurred were only S$2,000. ²¹¹ Further, questions remain as to whether Mr Singh properly accounted for all sums taken from the Company to finance the purchase of Spring Grove, such as the option fee of S$18,500. ²¹²

(d) In respect of Archipelago, Mr Singh indicated that “LEGAL FEES ON SALE (ESTIMATED)” in the amount of S$3,000 was an expense incurred on the investment. ²¹³ In cross-examination, however, Mr Singh conceded that, based on the contemporaneous documents relating to the sale of Archipelago provided by the conveyancing lawyers, the legal fees incurred were only S$2,200. ²¹⁴

(e) In respect of Parc Olympia, Mr Singh indicated that “LEGAL FEES ON SALES ( APPROX)” in the amount of S$3,000 was an expense incurred on the investment. ²¹⁵ In cross-examination, however, Mr Singh conceded that the completion account he received on the sale of Parc Olympia shows that the legal fees incurred were only S$2,000. ²¹⁶

(f) In respect of Marina 19, Mr Singh stated in his AEIC “TOP UP FROM AEPL 447,616.58” ²¹⁷ as well as “TOP UP FROM AEPL 410,004.72”. ²¹⁸ It is unclear on the face of these statements whether S$447,616.58 or S$410,004.72 of the Company’s funds had been used for the investment, although Mr Singh stated in cross-examination that it “look[ed] like” the former amount had been used. ²¹⁹

(g) In respect of Spottiswoode, Mr Singh stated in his AEIC “AEPL FUNDS USED 367,951.43” ²²⁰ as well as “AEPL FUNDS USED 386,925.43”. ²²¹ Mr Singh was unable to explain the discrepancy between the figures, ²²² and the amount of the Company’s funds used for the investment remains unclear.

111 Further, although the parties touched on the information provided in Mr Singh’s AEIC in the course of the trial, accounts were not taken at the trial. It is premature to conclude at this stage that Mr Singh has settled the accounts for any of the Properties.

112 For these reasons, the Account is to cover all the Properties.

113 Whether an account is to be provided on a common or wilful default basis has to be decided by the court before the account is ordered to be given: Innovative Corp Pte Ltd v Ow Chun Ming and another [2023] 3 SLR 1488 at [12].

114 An account may be ordered on a wilful default basis where the past misconduct of the fiduciary is such as to give rise to a reasonable prima facie inference that there may be other instances of wilful default which have yet to be uncovered: Tan Teck Kee at [90]; Cheong Soh Chin and others v Eng Chiet Shoong and others [2015] SGHC 173 at [40]. Examples of misconduct which have been found to warrant the taking of accounts on a wilful default basis include concealing or misrepresenting information in breach of the duty to account (see Cheong Soh Chin and others v Eng Chiet Shoong and others [2019] 4 SLR 714 at [96]), and making improper deductions from payouts due to an investor (see Ratan Kumar Rai v Seah Hock Thiam and others [2021] SGHC 276 at [121]–[132]; Tan Teck Kee at [92], [94] and [98]).

115 In the present case, I find that Mr Singh’s conduct exhibits the following instances of wilful default.

116 First, as I have found at [42]–[57] above, Mr Singh persistently breached his obligation to account under the Understanding, from 2013 and until the commencement of this action. His failure to account took the form of (a) evading, ignoring, or delaying his responses to, Mr Chainani’s requests for accounts of the investments; and/or (b) providing plainly inadequate information as part of purported attempts to provide accounts. These failures to account constitute wilful default on his part.

117 Second, Mr Singh improperly denied that the Company’s funds were used to invest in the Shares. In his AEIC, he asserted that the Shares which he had purchased, including 20,000 YHS shares and 35,000 FEO shares he had sold in May 2013 and 50,000 FEO shares he had sold in April 2015, ²²³ were not procured with the Company’s funds. ²²⁴ Not only is this position contrary to his admission of the Understanding (see [30]–[35] above), it is contrary to the contemporaneous evidence showing that Mr Singh did not deny having to account for the sale of the Shares:

(a) In an email dated 28 September 2013, Mr Chainani asked Mr Singh about the “[s]ales proceeds from YHS”. ²²⁵ Mr Singh replied via email on the same day that “YHS: shud be in my account in Posb; wil chk on monday and settle it..”. ²²⁶ Mr Singh’s reply implicitly accepted that he had to account for and “settle” the sale of YHS shares. There was no necessity for him to do so unless the YHS shares had been purchased with the Company’s funds as an investment made on behalf of the Company.

(b) In an email dated 7 January 2014, Mr Chainani asked Mr Singh to confirm that the sale proceeds from the disposal of 35 lots of FEO shares and 20 lots of YHS shares were S$77,115.83 and S$61,623.11 respectively. ²²⁷ Mr Singh did not respond. If he genuinely disputed that the Shares had been purchased with the Company’s funds, such that he had to account for the proceeds when the Shares were sold, he would have made some contemporaneous protest against Mr Chainani’s request.

(c) In a series of WhatsApp messages on 8 April 2015, Mr Singh informed Mr Chainani: “Cleared 50k far east orchard@1.675”; “Earlier today”; and “Tomo wil chk bal and clear”. ²²⁸ There was no need for Mr Singh to inform Mr Chainani about the sale of 50,000 FEO shares unless those shares had been purchased with the Company’s funds.

118 It is not credible for Mr Singh to now deny (as he does in his AEIC) that he had purchased the Shares with the Company’s funds. His denial in this regard is of concern and, in my view, amounts to a wilful default. For completeness, Mr Chainani maintains that, when the Shares were sold, neither the principal sums used nor the profits made were accounted for by Mr Singh. ²²⁹

119 Third, there are instances of Mr Singh understating the amount of rental income earned (see [110(a)] above), overstating the amount of expenses incurred (see [110(a)]–[110(e)] above), and equivocating on the amount of the Company’s funds used (see [110(f)] and [110(g)] above), in the accounts of various Properties he attempted to provide in his AEIC. Mr Singh’s counsel submitted that Mr Singh had been candid, at trial, about the errors in his rendition of the accounts in his AEIC, and that these do not rise to the level of misconduct that warrants the taking of accounts on a wilful default basis. ²³⁰ I do not accept this submission. The effect of inaccurately stated principal sums, understated income, and overstated expenses, is that there are moneys of the Company that have not been accounted for. These lapses on Mr Singh’s part thus give rise to a reasonable prima facie inference that there may be other instances of wilful default which have yet to be uncovered.

120 In light of these instances of wilful default, the Account should be rendered by Mr Singh on a wilful default basis.

121 The Account should be rendered by Mr Singh to both the liquidators of the Company (following the winding up of the Company, as I have ordered at [102] above) and Mr Chainani. This is appropriate for three related reasons.

122 First, Mr Singh’s duty to account under the Understanding is owed to both the Company and Mr Chainani; not to Mr Chainani alone (see [40] –[41] above).

123 Second, it is only right and proper that the liquidators of the Company be involved in the taking of the Account when it is the Company’s funds that have been used to make investments made on the Company’s behalf. Indeed, Mr Singh appeared to recognise the propriety of this as he suggested in August 2020, after the commencement of this action, that lawyers be appointed to represent the interests of the Company and the Holding Company in this action. ²³¹ Mr Chainani opposed this, purportedly because “[his] case was largely against Mr Singh”, although he also admitted that he had taken positions against the Company and the Holding Company in this action. ²³² In my view, there is no good basis for Mr Chainani to seek to shut out (the liquidators of) the Company or their lawyers (if appointed) from the process of taking the Account. Whether Mr Singh’s account of the use of the Company’s funds is satisfactory should be for the liquidators of the Company, and not Mr Chainani alone, to take a view on.

124 Third, the involvement of the Company’s liquidators will preserve objectivity in the process of taking the Account. The relationship between Mr Chainani and Mr Singh has undisputedly broken down and is, at present, plainly acrimonious. I have concerns about whether Mr Chainani will take extreme positions if the Account is rendered only to him. The following incidents stand out for giving rise to such concerns:

(a) One, Mr Chainani claimed that, in April 2018, he came across a cheque dated 15 March 2010 in the amount of S$70,217 issued from the Company to UOL Development Pte Ltd bearing a forgery of his signature. ²³³ He agreed that the payment made by that cheque was to the developer for Meadows and was a legitimate payment. ²³⁴ Notwithstanding that, in September 2019 (ie, more than a year after purportedly discovering the cheque), he made a police report stating that he suspected that Mr Singh had forged his signature on the cheque. ²³⁵ There were no developments following his police report. ²³⁶ When asked in cross-examination why he had made the police report instead of inquiring with Mr Singh about the cheque, Mr Chainani stated that his relationship with Mr Singh had broken down and he “just wanted to see how far that would go with the police” and “effectively to get [Mr Singh] in hot soup”. ²³⁷ To be clear, whether Mr Chainani’s signature on the cheque was forged is not an issue for determination in this action, and no handwriting expert evidence was adduced. I also do not suggest that it is wrong for one to make a police report if they truly believe that their signature has been forged. Rather, it is Mr Chainani’s intention behind his action, expressed in strong emotive terms of wanting to get Mr Singh into “hot soup”, that is of concern.

(b) Two, it was unreasonable for Mr Chainani to persist in pursuing an allegation of wrongdoing against Mr Singh in relation to the Dividend, when Mr Chainani was contemporaneously involved in the declaration of the Dividend and conceded that it was “[p]robably not” even his case that Mr Singh had received the Dividend moneys ²³⁸ (see [96] above).

These incidents reinforce the need to ensure that the taking of the Account is kept on an even keel. This will be ensured by the participation of the liquidators of the Company, on behalf of which the investments were made, in the taking of the Account.

125 Mr Chainani prayed for an order that, upon “payment of all sums found due to the [Company] and Mr Chainani by [Mr Singh]” pursuant to the taking of accounts, the Company and the Holding Company be wound up. ²³⁹ For reasons explained above, I consider it more appropriate to order the winding up of the Company and the Holding Company presently (at [102] above), and for Mr Singh to render the Account to the liquidators of the Company and Mr Chainani (at [121] above).

126 While consequential orders will be made after the process of taking the Account has been completed (UVJ at [28]), I foreshadow that it is, in my view, inappropriate for any profits made on the investments in the Properties, as may be found due from Mr Singh on the taking of the Account, to be paid by Mr Singh directly to Mr Chainani, and I decline to make any order to such effect. Instead, any principal sums or profits as may be found due from Mr Singh should be paid to the Company. Any distributions subsequently made by the liquidators of the Company and the Holding Company will impact Mr Chainani and Mr Singh equally given their equal shareholding in the Holding Company, in keeping with the third feature of the Understanding (see [27(c)] above). I consider this to be the proper course for the following reasons.

127 The Understanding was that investments were made on behalf of the Company using the Company’s funds (at [7] above). Mr Chainani’s own evidence was that the properties acquired pursuant to the Understanding were thus held by him or Mr Singh, as the Company’s directors, on trust for the Company: ²⁴⁰

128 The following implications flow from this.

129 First, the fundamental principle that a company has a separate legal personality from its shareholders means that, even if one owns all of the shares in a company, one does not own the company’s assets; instead, those assets belong to the company alone: Jhaveri Darsan Jitendra and others v Salgaocar Anil Vassudeva and others [2018] 5 SLR 689 at [34]. Therefore, even though Mr Chainani and Mr Singh own all of the shares in the Holding Company, and the Holding Company owns all of the shares in the Company, the Properties held on trust for the Company remain the Company’s assets. That being so, the proceeds, including profits, from the sale of the Company’s assets logically remain owned by the Company as well.

130 Second, while Mr Chainani asserts that, upon the sale of the Company’s assets or investments, Mr Singh holds 50% of the profits derived from the said sale on trust for Mr Chainani, ²⁴¹ the legal basis for this assertion is unclear and not established. Indeed, the furthest Mr Chainani goes in his pleadings is to plead that Mr Singh holds funds taken from the Company on trust for the Company. ²⁴² The assertion that Mr Singh holds profits on trust for Mr Chainani is also factually incongruent with the terms of the pleaded Understanding, which refers to Mr Chainani and Mr Singh having to “account to each other and the [Company] for the principal sums so invested as well as the profits made from such investments” [emphasis added] (see [26] above). It is understandable that Mr Chainani and Mr Singh agreed to account to each other for the profits since, as the ultimate shareholders of the Company, they would be interested to know the quantum of the profits. However, there is no reason for Mr Chainani and Mr Singh to have to account to the Company for the profits (as well as the principal sums invested) unless the profits also belonged to the Company.

131 I circle back to the principle that the court has a wide discretion to make orders under s 216 as it considers just (see [98] above). It comports with legal principle and is just for any principal sums or profits as may be found due from Mr Singh on the taking of the Account to be paid to the Company. Any distributions subsequently made by the liquidators of the Company and the Holding Company will impact Mr Chainani and Mr Singh equally given their equal shareholding in the Holding Company.

132 I therefore order that Mr Singh is to render the Account (which covers the Properties) to the Company’s liquidators and Mr Chainani. Such Account is to be taken on a wilful default basis.

133 In the alternative to his claims for accounts to be taken and for the payment of sums found due upon the taking of accounts, Mr Chainani claims damages to be assessed for the breach of the Understanding. ²⁴³ Mr Chainani submits that his alternative claim for damages is intended to “remedy” the “losses” caused by Mr Singh’s “oppressive conduct” in breaching the Understanding. ²⁴⁴ Given the order made on Mr Chainani’s primary claims for accounts (see [132] above), and given also that Mr Chainani did not expound on his alternative claim for damages in his closing submissions, I decline to make any order for damages.

134 It is undisputed that: ²⁴⁵

(a) Pursuant to the Understanding, Mr Chainani acquired a 50% share in three units at 76 Shenton Way (the “Shenton Way Properties”) using the Company’s funds. The other 50% share was held by one Mr Sayed Tahir.

(b) The Shenton Way Properties were sold between 2017 and 2019.

(c) Mr Chainani’s 50% of the net sale proceeds amounted to S$527,309.68.

135 In this action, Mr Singh claims that, should he be found due to pay Mr Chainani any sum of moneys, such payment should be set off against the sum of S$263,654.84 (being half of the sum of S$527,309.68 at [134(c)] above) to which he (ie, Mr Singh) was entitled. ²⁴⁶ As I am of view that any sums found due on the taking of the Account should be paid by Mr Singh to the Company (and not to Mr Chainani directly) (see [126] above), the set-off pleaded by Mr Singh does not arise. I observe, however, that it is only proper that Mr Chainani should pay the net sale proceeds of S$527,309.68 he obtained from the sale of the Shenton Way Properties to the Company presently, since Mr Chainani had acquired 50% of the Shenton Way Properties with the Company’s funds and on the terms of the Understanding.

136 In response to the set-off pleaded by Mr Singh, Mr Chainani admits that Mr Singh is entitled to the sum of S$263,654.84 from the Shenton Way Properties, ²⁴⁷ but argues that this sum should be further set off against the sum of S$168,047.50 allegedly owed by Mr Singh to Mr Chainani pursuant to a purported agreement between them for Mr Chainani to take over Mr Singh’s stake in Costcutters Pte Ltd (“Costcutters”) and Mr Singh to take over Mr Chainani’s stake in MFFT. ²⁴⁸ Given my decision in [135] above, the further set-off alleged by Mr Chainani does not arise. The sum of S$527,309.68 which Mr Chainani ought properly to pay the Company presently is unaffected by any purported agreement between Mr Chainani and Mr Singh relating to Costcutters and MFFT. Given that Mr Chainani makes no claim in this action for Mr Singh to pay him the sum of S$168,047.50 pursuant to the purported agreement relating to Costcutters and MFFT, I make no finding in respect of this purported agreement.

137 In summary:

(a) I find that Mr Chainani has established a case of commercial unfairness within the meaning of s 216 against Mr Singh in respect of Mr Singh’s breaches of the Understanding; but not in respect of the other acts of oppression alleged.

(b) I order that the Holding Company and the Company be wound up. I will hear the parties regarding the appointment of liquidators and any other consequential orders or directions as may be necessary.

(c) I further order that Mr Singh is to render the Account (which covers the Properties) to the Company’s liquidators and Mr Chainani. The Account is to be taken on a wilful default basis.

138 I will hear the parties on costs.