Our Notable Cases

Gui Chien Cheong Martin v Facilit8te Pte Ltd and Anor [2021] 4 SLR 1449

Case Summary

This case is regarding a minority oppression claim made for a sum of $200,000 against the 1st Defendant who was the Company, and the 2nd Defendant who was the sole director of the Company. The Plaintiff argued that he was unfairly prejudiced because the 2nd Defendant failed to convert his $50,000 loan to the Company into equity. However, the High Court held that based on the evidence and testimonies from witnesses, the $50,000 loan had in fact been converted into equity.
The Court also held that taken as a whole, the 2nd Defendant’s conduct was unfairly prejudicial to the Plaintiff. This is because the Plaintiff had a legitimate expectation that his investments would be used for operating expenses rather than paying off loans. The Court also stated that just because the 2nd Defendant agreed to repay the funds, it did not eliminate the unfair prejudice to the plaintiff as the repayment was only partial.
However, the Court finally held that even though the 2nd Defendant’s conduct was unfairly prejudicial to the Plaintiff, it is the 1st Defendant’s failure that brought an end to the prejudicial state of affairs. Even if the 2nd Defendant did not act in the prejudicial manner, the business of the 1st Defendant would nonetheless still have failed. Hence, the Court held that the Plaintiff’s suggested buyout price was not fair or appropriate as it would have penalised the 2nd Defendant and overcompensated the Plaintiff, which would essentially make the 2nd Defendant shoulder the burden of the failure of the 1st Defendant on both his and the Plaintiff’s behalf.

Conclusion

The Plaintiff’s claim was dismissed. The unfairly prejudicial conduct of the Plaintiff had already ended by the failure of the 1st Defendant. As such, there was no present state of affairs that the claimed buyout order would remedy.

View Reported Judgement

https://www.elitigation.sg/gd/gd/2021_SGHC_105/pdf