Sunbreeze Group Investments Ltd and others v Sim Chye Hock Ron

[1] The appellants are three of the four defendants in Suit No 17 of 2017 (“Suit 17”). They commenced a third party action against the respondent, who applied to strike out that action. The striking out application came before a High Court judge (“the Judge”), who agreed with the respondent and struck out the third party proceedings pursuant to O 18 r 19(1)(a) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the Rules of Court”) on the grounds that they were redundant, disclosed no reasonable cause of action for an indemnity or contribution and were not required for the determination of common issues under O 16 r 1(1)(c) of the Rules of Court: see EQ Capital Investments Ltd v Sunbreeze Group Investments Ltd and others (Sim Chye Hock Ron, third party) [2017] SGHC 271 (“the GD”). The appellants filed the present appeal, Civil Appeal No 105 of 2017, against the Judge’s decision. They also applied directly to this court by way of Court of Appeal Summons No 31 of 2018 (“SUM 31”) for leave to amend their third party statement of claim in a further attempt to save the third party proceedings. After hearing the parties’ oral arguments, we dismissed SUM 31, but reserved our decision on the substantive appeal. In this judgment, we explain our reasons for dismissing SUM 31 as well as deliver our decision on the appeal.

[2] Suit 17, which has yet to be heard, is a minority oppression action brought by EQ Capital Investments Ltd (“EQ Capital”) against four defendants: (a) Sunbreeze Group Investments Ltd (“Sunbreeze”), the first appellant in this appeal; (b) Manoj Mohan Murjani (“Mr Murjani”), the second appellant; (c) his wife, Kanchan Manoj Murjani (“Mrs Murjani”), the third appellant; and (d) The Wellness Group Pte Ltd (“Wellness”). Sunbreeze and EQ Capital are shareholders of Wellness, holding 80.62% and 7.55% respectively of Wellness’ shares, with the remaining shares in Wellness being held by two private equity funds. Mr and Mrs Murjani are directors and shareholders of Sunbreeze as well as directors of Wellness. Wellness is a nominal party in Suit 17, having been joined only because the plaintiff, EQ Capital, seeks reliefs concerning it. The third party proceedings were instituted only by the first three defendants in Suit 17 (the appellants in this appeal), but not Wellness, and Wellness is not a party to this appeal.

[3] The claims in Suit 17 are closely related to a joint venture between Wellness, OSIM International Pte Ltd (“OSIM”) and Paris Investment Pte Ltd (“Paris”). These parties are now shareholders in a joint venture company known as TWG Tea Company Pte Ltd (“TWG”). TWG was originally incorporated as a wholly-owned subsidiary of Wellness in October 2007. In 2010, Paris acquired 15.8% of the shares in TWG. In early 2011, OSIM was considering investing in TWG. OSIM’s founder, chairman and Chief Executive Officer, Ron Sim Chye Hock (“Mr Sim”), is the respondent in this appeal as well as the ultimate sole beneficial owner of EQ Capital. During the negotiations with OSIM, Mr Murjani presented Mr Sim with profit projections showing that TWG expected to achieve profit before tax and minority interests (“PBT”) of $29m for the financial year ending 31 March 2013 (“FY2013”). OSIM decided to invest in TWG. This culminated in the signing of two agreements dated 18 March 2011:

(a) a sale and purchase agreement (“the SPA”), pursuant to which OSIM purchased a 35% stake in TWG from Wellness and Paris; and

(b) a shareholders’ agreement between Wellness, OSIM, Paris and TWG (“the SHA”), under which the parties agreed to operate TWG as a joint venture and envisaged the establishment of future joint ventures between TWG and OSIM in other countries in Asia.

[4] Following OSIM’s investment, Wellness, OSIM and Paris held TWG’s shares in the respective proportions of 54.7%, 35% and 10.3%. Clause 4.5 of the SPA (“the Profit Swing Clause”) provided for the following changes in shareholding depending on TWG’s audited PBT for FY2013:

(a) If the audited PBT was less than $17m, Wellness and Paris would transfer some of their shares in TWG (an aggregate of 1% of TWG’s shares per $1m shortfall, up to a maximum of 10%) to OSIM at a nominal price of $1.

(b) If the audited PBT exceeded $27m, OSIM would transfer some of its shares in TWG (1% of TWG’s shares per $1m excess, up to a maximum of 10%) to Wellness and Paris at a nominal price of $1.

[5] TWG’s audited PBT for FY2013 turned out to be about $5.5m. On 9 April 2013, OSIM invoked the Profit Swing Clause and acquired 10% of the total shares in TWG from Wellness and Paris for a nominal consideration of $1 to each of them. TWG’s shareholding after this transaction (“the Profit Swing Transaction”) was as follows: Wellness (46.3%), OSIM (45%) and Paris (8.7%). On 18 October 2013, OSIM purchased all the shares in Paris, thereby acquiring a majority of TWG’s shares. OSIM also appointed two persons as directors of TWG, thereby acquiring control of TWG’s board.

[6] In November 2013, TWG proposed a rights issue (“the Rights Issue”) to raise capital. This was approved by Paris and OSIM. Wellness did not subscribe for the Rights Issue. On 18 January 2014, OSIM and Paris together subscribed for the entire 77,000 shares available under the Rights Issue, as a result of which their combined shareholding in TWG became 69.9% (58.6% to OSIM and 11.3% to Paris), while Wellness’ shareholding was further diluted to 30.1%.

[8] On 10 January 2017, EQ Capital filed Suit 17. Its claims are fivefold:

(a) First, Mr and Mrs Murjani caused Wellness to breach its obligations under the SHA, its Memorandum and Articles of Association and the Companies Act (Cap 50, 2006 Rev Ed) (“the Companies Act”) by causing Wellness not to convene any Annual General Meeting (“AGM”); not to file any annual returns with the Registrar of Companies; and not to prepare, file and provide EQ Capital with Wellness’ audited accounts from the financial year ending 31 March 2011 (“FY2011”) to date. Consequently, EQ Capital has been and continues to be deprived of its right to attend and participate in AGMs and to review the audited accounts of Wellness. We refer to this as “the AGM/Accounts Claim”.

(b) Second, Mr Murjani caused Wellness’ shareholding in TWG to be diluted as a result of the Profit Swing Transaction. The Profit Swing Clause was based on the profit projections which Mr Murjani had presented to OSIM (see [3] above), and which he knew to be unreliable or unsupported. The dilution of Wellness’ shareholding in TWG as a result of the Profit Swing Transaction in turn damaged EQ Capital’s interest in TWG as a shareholder of Wellness. We refer to this as “the Profit Swing Claim”.

(c) Third, Mr and Mrs Murjani caused Wellness’ shareholding in TWG to be further diluted by failing to cause Wellness to subscribe for the Rights Issue. We refer to this as “the Rights Issue Claim”.

[9] On the basis of these claims, EQ Capital seeks the following reliefs:

[10] The appellants in turn commenced third party proceedings against Mr Sim for a contribution or an indemnity. Their position is that Mr Sim was the “alter ego and/or controlling mind and will” of EQ Capital as well as the “alter ego and/or controlling shareholder” of OSIM at the material time. In both their defence and their third party statement of claim (“TPSOC”), the appellants attribute various acts undertaken by EQ Capital and OSIM to Mr Sim. Their defence to the five claims set out above and their corresponding third party claims against Mr Sim may be stated briefly as follows.

[12] Second, the appellants’ defence to the Profit Swing Claim is that Mr Sim and/or OSIM brought about the dilution of Wellness’ shareholding in TWG by invoking the Profit Swing Clause. Moreover, as Mr Sim benefited from the Profit Swing Transaction through OSIM, it would be an abuse of the court’s process for him to bring the Profit Swing Claim through EQ Capital for the latter’s alleged loss arising from the same transaction. The appellants’ argument appears to be that any such loss should be attributed to Mr Sim as the alter ego of EQ Capital, while the corresponding gain from the Profit Swing Transaction was also made by Mr Sim, but this time as the alter ego of OSIM. In any event, any dilution of EQ Capital’s interest in TWG is not in itself unfairly prejudicial to EQ Capital’s interests as a shareholder of Wellness. The TPSOC repeats the allegation that Mr Sim and/or OSIM brought about the Profit Swing Transaction. According to the TPSOC, the Profit Swing Clause was based on profit projections which were in turn premised on TWG selling its products to the JV Company at a certain franchise price. However, Mr Sim and/or OSIM caused TWG to sell its products to the JV Company at levels which were substantially below that franchise price. This reduced TWG’s audited PBT for FY2013 to about $5.5m, thereby enabling OSIM to invoke the Profit Swing Clause.

[13] Third, the appellants’ defence to the Rights Issue Claim is that they honestly believed that it was not in Wellness’ interests to subscribe for the Rights Issue. Moreover, Mr Sim caused TWG to initiate the Rights Issue despite knowing that Wellness was not in a position to subscribe for any shares thereunder. Mr Sim also failed to provide Wellness with adequate notice of the extraordinary general meeting convened to approve the Rights Issue; did not address Wellness’ concerns in relation to the Rights Issue; and did not give Wellness adequate information pertaining to the Rights Issue. The appellants further contend that the Rights Issue ultimately benefited Mr Sim and was brought about by him and/or Paris and OSIM, and it would therefore be an abuse of the court’s process for Mr Sim to bring the Rights Issue Claim through EQ Capital for loss allegedly suffered by the latter arising from the Rights Issue. In any event, any dilution of EQ Capital’s interest in TWG is not in itself unfairly prejudicial to EQ Capital’s interests as a shareholder of Wellness. The appellants also argue that Mr and Mrs Murjani owed no duty to EQ Capital to cause Wellness to subscribe for the Rights Issue, and EQ Capital therefore lacks the standing to sue them. The TPSOC repeats each of these allegations in so far as they relate to Mr Sim.

[14] Fourth, the appellants’ defence to the Appointment Claim is that they did not cause Wellness to appoint a director to TWG’s board while Suit 187 was underway, and their attempts to have Wellness appoint a director after CA 64 concluded were obstructed by Mr Sim and/or OSIM, who refused to accept Wellness’ appointment of Mr Murjani in October 2016. In any event, any failure to cause Wellness to appoint a director to TWG’s board is not in itself unfairly prejudicial to EQ Capital’s interests as a shareholder of Wellness. The TPSOC repeats the allegation that Mr Sim and/or OSIM obstructed Wellness from appointing a director to TWG’s board following the disposal of CA 64.

[17] The Judge struck out the appellants’ third party proceedings for three principal reasons.

[19] Second, the Judge considered that the TPSOC disclosed no basis for any indemnity or contribution from Mr Sim for the following reasons:

(a) The TPSOC did not plead any express or implied contract, statute or other legal obligation pursuant to which Mr Sim would be liable to indemnify the appellants (see the GD at [64]–[65]).

(b) The Judge rejected the appellants’ submission that they would be entitled to a contribution from Mr Sim pursuant to s 15(1) of the Civil Law Act (Cap 43, 1999 Rev Ed) (“the CLA”). If the appellants succeeded in proving that Mr Sim and/or OSIM had caused the matters complained of by EQ Capital, their defence would succeed and they would not be “liable in respect of any damage suffered by [EQ Capital]” for the purposes of s 15(1) of the CLA. If they failed to prove this, then they would fail in their third party claim. Either way, given the nature of the allegations made by the appellants, it was impossible for both the appellants and Mr Sim to be liable to EQ Capital in respect of the same damage (see the GD at [69]).

[20] Third, the Judge held that the third party proceedings could not be justified on the basis of O 16 r 1(1)(c) of the Rules of Court. In this regard, the appellants had submitted that there were certain issues common to both EQ Capital’s claims against them in the main action and their third party claims against Mr Sim which should be decided not only as between EQ Capital and them, but also as between them and Mr Sim. These issues included: (a) whether Mr Sim was the alter ego and/or controlling mind and will of EQ Capital and OSIM; and (b) whether Mr Sim’s actions (either in his personal capacity or through OSIM) had caused the matters which EQ Capital complained of in Suit 17. In the Judge’s view, the determination of these issues as between EQ Capital and the appellants would obviate any need to determine them as between the appellants and Mr Sim (see the GD at [79]).

[21] In that light, we turn first to explain our reasons for dismissing SUM 31. This was the appellants’ application for leave to amend their TPSOC to: (a) include two new causes of action, namely, the tort of abuse of process and the tort of conspiracy; and (b) expressly plead ss 15 and 16 of the CLA. It seemed to us that these amendments were intended to overcome the Judge’s finding of redundancy, in that they appeared to raise allegations against Mr Sim that were seemingly distinct from the allegations made against the appellants in Suit 17. Specifically, the amendments made the following allegations:

(a) First, Mr Sim, EQ Capital and OSIM conspired and combined together wrongfully with the predominant intention of injuring the appellants and/or with the intention of causing loss to them by unlawful means, and/or conspired and combined together to abuse the civil process.

(b) Second, Mr Sim commenced or caused EQ Capital to commence Suit 17 in bad faith and for the collateral and/or improper purpose of: (i) unjustly enriching himself; (ii) putting improper pressure on Mr and Mrs Murjani and causing them annoyance by pursuing Suit 17 against them personally despite their not being shareholders of Wellness and therefore not proper parties to a minority oppression action; and (iii) putting improper pressure on the appellants to compel them to agree to sell Sunbreeze’s shares in Wellness and/or Wellness’ shares in TWG to EQ Capital and/or Mr Sim at an undervalue.

(c) Third, Mr Sim conspired and combined wrongfully with OSIM with the predominant intention of injuring EQ Capital and/or causing loss to it by unlawful means, and/or caused EQ Capital loss by lawful means. Mr Sim is therefore liable to EQ Capital for the same damage as the appellants, thereby entitling them to a contribution or an indemnity from him under ss 15 and 16 of the CLA.

[23] The appellants submitted that we had the jurisdiction to hear SUM 31 pursuant to s 29A(3) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“the SCJA”), which provides that the Court of Appeal shall, “[f]or the purposes of and incidental to … the hearing and determination of any appeal”, have “all the authority and jurisdiction of the [High Court]”. They also relied on s 37(2) of the SCJA and O 57 r 13 of the Rules of Court, which provide that the Court of Appeal has, “[i]n relation to” appeals, “all the powers and duties, as to amendment or otherwise, of the High Court”. Mr Sim, on the other hand, submitted that we had no jurisdiction to hear SUM 31 because it was not “incidental” to the present appeal within the meaning of s 29A(3) of the SCJA, and that in any event, we ought not to hear this summons because its filing constituted an abuse of process.

[25] In the present case, we did not think it was appropriate to allow SUM 31 for the following reasons.

[26] First, SUM 31 was an application that could and should have been made before the Judge at first instance. Section 35 of the SCJA and O 57 r 16(4) of the Rules of Court state that where an application may be made to either the High Court or the Court of Appeal, it shall be made in the first instance to the High Court, save where “special circumstances” make it “impossible or impracticable” to do so. The appellants did not suggest that there were any such circumstances in the present case; indeed, they offered no explanation at all for their failure to apply to the Judge for leave to amend their TPSOC. Even after the Judge decided to strike out the TPSOC, the appellants could have applied to make further arguments pursuant to s 28B of the SCJA, and in particular, they could have advanced the argument that the TPSOC ought not to be struck out because it could be cured by amendment. But they did not do so, and did not point us to any special circumstances that might have justified their failure to do so.

[30] The same is true here, in that because SUM 31 was brought before us in the first instance, we did not have the benefit of the Judge’s opinion on either its merits or the merits of the amended TPSOC. Given our decision to dismiss SUM 31 in these circumstances, we do not consider it appropriate to evaluate or otherwise comment on the merits of this application. We therefore say nothing about whether the amendments proposed by the appellants would have been effective to cure any redundancy in the TPSOC and/or would have enabled the real question between the parties to be determined, save to the extent that certain aspects of our reasoning on the matters which we deal with in this judgment might inevitably have an impact on the merits of any fresh attempt by the appellants to cure any such redundancy.

[31] Having explained our reasons for dismissing SUM 31, we now consider the appellants’ appeal against the Judge’s decision to strike out their third party action purely on the basis of the TPSOC as it stood before the Judge.

[32] A third party claim will not be allowed if it is redundant (see Singapore Civil Procedure at para 16/6/1). The test for redundancy is whether there is any conceivable scenario, not so fanciful or inherently improbable that it should not be taken into account, in which the defendants might fail in their defence in the main action and yet, on the same facts, succeed in their third party claim (see Airtrust (Singapore) Pte Ltd v Kao Chai-Chau Linda and another suit [2014] 2 SLR 673 at [49] and [53]). The appellants did not dispute the Judge’s holding (at [62] of the GD) that a third party claim which is redundant may properly be struck out pursuant to O 18 r 19(1)(a) of the Rules of Court. We agree. If a third party claim is redundant, there is no possibility of it being allowed: either the facts pleaded in support of the third party claim will vindicate the defence such that the third party claim does not arise, or the rejection of the defence will necessarily entail the failure of the third party claim. A redundant third party claim is therefore not a “cause of action which has some chance of success when only the allegations in the pleading are considered” (see Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others [1997] 3 SLR(R) 649 at [21]), and does not disclose a reasonable cause of action for the purposes of O 18 r 19(1)(a). In line with these authorities, in Nganthavee Teriya (alias Gan Hui Poo) v Ang Yee Lim Lawrence and others [2003] 2 SLR(R) 361, the High Court upheld the striking out of the third party proceedings for disclosing no reasonable cause of action on the basis, among others, that the proposed amendments to the third party statement of claim would be redundant (at [23]–[24]).

[33] Turning to the facts before us, we agree with the Judge that there is no reasonably conceivable situation in which the appellants might fail in their defence and yet have a viable basis for seeking relief against Mr Sim (see the GD at [56]–[57]). The appellants’ defence and their third party claims both rest on the same basis: namely, that Mr Sim (through OSIM) both brought about and benefited from the very matters which he (through EQ Capital) now complains of in Suit 17. The defence alleges on this basis that it would be an abuse of the court’s process in these circumstances for Mr Sim (through EQ Capital) to now bring this suit, having (through OSIM) procured and benefited from the very matters which are said to constitute minority oppression. At the same time, the allegation that Mr Sim (through OSIM) brought about and benefited from the matters complained of in Suit 17 is also the basis for the appellants’ third party claims against Mr Sim. It is alleged that given that he caused and/or benefited from these matters, his commencement of Suit 17 (through EQ Capital) is in bad faith and/or unconscionable and/or an abuse of the court’s process. There is also the fact, as the Judge noted, that the TPSOC did not plead the legal basis for an indemnity from Mr Sim (see the GD at [64]–[65]). But, leaving that aside, even if we take the appellants’ case at its highest and accept that the facts pleaded in their TPSOC would entitle them to an indemnity or contribution from Mr Sim, those same facts would also vindicate their defence, thereby obviating the need for them to claim any contribution or indemnity from Mr Sim. The fact that the TPSOC repeats many sections of the defence (see [11]–[15] above, as well as the GD at [39]–[40], [42]–[43], [45]–[46], [48]–[49] and [54]–[55]) reflects just how interconnected they are.

[34] When we asked counsel for the appellants, Mr Alvin Yeo SC (“Mr Yeo”), to identify the circumstances in which the appellants’ third party claims might succeed without vindicating their defence, he advanced two possible situations:

(a) The first would arise if the trial court were to find that Mr Sim was the controlling mind and will of EQ Capital, but the latter nonetheless retained its separate legal personality, such that the corporate veil is not pierced. In that situation, Mr Yeo submitted, the fact that Mr Sim had procured (through OSIM) the matters complained of by EQ Capital and/or had benefited (likewise through OSIM) from the dilution of Wellness’ shareholding in TWG might not necessarily afford the appellants a defence to EQ Capital’s claims as a matter of law. However, by virtue of Mr Sim’s procurement of EQ Capital (as its controlling mind and will) to commence Suit 17, the appellants would nonetheless be entitled to a contribution or an indemnity from Mr Sim pursuant to: (a) ss 15 and 16 of the CLA; (b) the doctrine of abuse of process; and/or (c) the principles which the appellants say were enunciated in Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others and other appeals [2013] 1 SLR 374 (“Raffles Town Club”).

(b) The second situation would arise if the trial court were to find that Mr Sim was neither the controlling mind and will of, nor the same legal person as, EQ Capital. Mr Yeo submitted that even in that scenario, the mere fact that Mr Sim had benefited from the dilution of Wellness’ shareholding in TWG and stood to benefit from a successful prosecution of Suit 17 would entitle the appellants to an indemnity or contribution from him on the grounds of unjust enrichment.

[35] We are not persuaded that either of these situations would afford the appellants any basis of recourse against Mr Sim. We will explain our reasons for so holding by addressing in turn each of the four possible bases for seeking an indemnity or contribution from Mr Sim identified in these situations, namely: (a) the doctrine of abuse of process; (b) the doctrine of unjust enrichment; (c) the principles said to have been articulated in Raffles Town Club; and (d) ss 15 and 16 of the CLA.

[36] Before we do so, however, we would highlight that a defendant should not have recourse to third party proceedings where his claim can be made by way of a counterclaim (see O 16 r 8(2) of the Rules of Court and Singapore Civil Procedure at para 16/0/2). The appellants claim that Mr Sim, as the alter ego and/or controlling mind and will of EQ Capital, is liable to them on the bases of abuse of process, unjust enrichment and the principles said to have been enunciated in Raffles Town Club for having procured EQ Capital to commence Suit 17 against them. As a procedural matter, it seems to us that the proper course of action for the appellants to take would have been to pursue these claims by way of a counterclaim, with Mr Sim joined as a defendant to the counterclaim. That said, for the reasons which we set out below, we are satisfied that none of these three bases of liability could give rise to any liability to the appellants on Mr Sim’s part.

[37] We first address the doctrine of abuse of process, which the appellants say entitles them to claim an indemnity or contribution from Mr Sim. It should first be noted that the appellants’ TPSOC does not plead the tort of abuse of process as a cause of action. Although the TPSOC contains various references to “abuse of process”, these contemplate “abuse of process” in the sense in which it usually arises in civil proceedings, that is, in the sense of commencing proceedings “for the predominant purpose of achieving something other than what the legal process was designed to achieve” (see Lee Tat Development Pte Ltd v Management Corporation Strata Title Plan No 301 [2018] SGCA 50 (“Lee Tat”) at [136]). Proof that a claim constitutes an abuse of process in this sense has long been recognised as a ground for striking out and for refusing the grant of equitable relief. Hence, if the facts pleaded by the appellants in their defence in Suit 17 are made out, it may be that this would defeat EQ Capital’s claims against them. But the question is whether, if the appellants fail to resist EQ Capital’s claims, they can nonetheless raise the doctrine of abuse of process as a basis for establishing liability on the part of Mr Sim. The problem which the appellants run into here is that, as we have just noted, the TPSOC does not allege tortious liability on Mr Sim’s part for committing an abuse of the court’s process and does not plead any damage arising from any such abuse. This presumably explains why the appellants felt the need to bring SUM 31, which, if allowed, would have seen them amend the TPSOC to include the allegation that Mr Sim is liable to them for the tort of abuse of process and a prayer for damages to be assessed in respect of that tort (see [21]–[22] above). Given that we dismissed SUM 31, the question of Mr Sim’s possible liability in tort for abuse of process is not before us. In any case, in view of our recent decision in Lee Tat at [161] not to recognise abuse of process as a tort in Singapore, Mr Sim cannot be tortiously liable to the appellants for having commenced Suit 17 (through EQ Capital) for a collateral purpose, even assuming the factual basis for such a finding were made out.

[38] Returning to the allegation of abuse of process in the sense in which it was originally pleaded in the appellants’ TPSOC, we do not see how the appellants can succeed on this basis. First, if abuse of process is not a basis on which a claim for relief can be mounted against Mr Sim, it cannot support a claim for an indemnity or contribution from him either. Second, and in any case, if the allegation of abuse of process is made out, it would constitute a defence to EQ Capital’s claims against the appellants, and there would then be no basis for the appellants to pursue their third party claims against Mr Sim. Mr Yeo suggested in this context that if the court were to find that Mr Sim was the controlling mind and will of EQ Capital but not the same legal person, then the appellants’ defence to EQ Capital’s claims might fail, but their third party claims against Mr Sim might nonetheless succeed (see [34(a)] above). We disagree. We do not see how the mere fact of EQ Capital’s separate legal personality can preserve the viability of the appellants’ third party claims against Mr Sim, but not their defence to EQ Capital’s claims. Either EQ Capital’s commencement of Suit 17 is so clearly attributable to Mr Sim and infected by his collateral purpose that it constitutes an abuse of process, or it is not. In deciding this question, the trial court will no doubt have regard to many of the factors that also have a bearing on whether the corporate veil should be pierced and whether Mr Sim was EQ Capital’s controlling mind and will. But a finding of separate legal personality does not enable the trial court to somehow find an abuse of process in relation to Mr Sim (such that the appellants’ third party claims succeed), but not in relation to EQ Capital (such that the appellants’ defence fails). Suit 17 either is or is not an abuse of process. If it is, EQ Capital’s claims against the appellants ought to be dismissed, and there would then be no occasion or need for the appellants to seek any contribution or indemnity from Mr Sim. But if Suit 17 is not an abuse of process, then EQ Capital’s claims against the appellants cannot be dismissed on this basis; nor would Mr Sim be liable to the appellants on the basis of their pleaded case on abuse of process for any involvement on his part in EQ Capital’s decision to commence Suit 17.

[39] The doctrine of abuse of process is even less likely to apply in Mr Yeo’s second scenario (see [34(b)] above), which involves the court finding that Mr Sim was neither the controlling mind and will of, nor the same legal person as, EQ Capital. If Mr Sim did not control EQ Capital, then still less would its commencement of Suit 17 be attributable to Mr Sim, and there would therefore be no basis for the appellants to allege abuse of process on Mr Sim’s part to begin with.

[40] We turn now to the appellants’ submission that Mr Sim would be liable for an indemnity or contribution on the basis of unjust enrichment. The problem with the appellants’ pleaded case in this regard is that neither their defence nor their TPSOC pleads unjust enrichment as a cause of action. Rather, what the appellants have pleaded is that Suit 17 is an abuse of process because it would, if allowed, unjustly enrich Mr Sim. The words “unjustly enrich” are included only to support the allegation of abuse of process. This can be seen from para 66 of the TPSOC, which states:

[41] Similarly, the Appellants’ Case states at para 54:

[42] It is evident from these passages that the appellants do not claim that Mr Sim should be liable in unjust enrichment in respect of the benefits that he received from past transactions. It is not, for example, pleaded that it was unjust for Mr Sim to benefit through OSIM from the Rights Issue and the Profit Swing Transaction. Rather, the appellants claim that Suit 17 is an abuse of process because it was commenced by Mr Sim through EQ Capital for an improper purpose (namely, to enrich himself unjustly). The true nature of the appellants’ claim is that it would be unjust for Mr Sim, having profited from the matters which EQ Capital complains of in Suit 17, to further profit from a successful prosecution of the suit; and on this basis, it is contended that Suit 17 constitutes an abuse of process to which Mr Sim is party by reason of his involvement in controlling and directing the affairs of EQ Capital. No cause of action in unjust enrichment is in fact mounted against Mr Sim in the appellants’ TPSOC. We therefore do not accept that Mr Sim could be liable to the appellants for any contribution or indemnity on the basis of unjust enrichment in either of the two scenarios outlined at [34] above.

[44] In our judgment, a close study of the decision in Raffles Town Club will reveal that it does not stand for the propositions advanced by the appellants. We first summarise the facts and the findings in that case before explaining why we reject the appellants’ interpretation of it.

[46] In their third party claims against the Current Directors, LA and WT argued that the court should lift RTC’s corporate veil and treat RTC’s claims against them as the personal claims of the Current Directors. They contended that the Current Directors were using RTC’s separate legal personality to advance claims which, in substance, were for the Current Directors’ own benefit. These were claims that the Current Directors could not have brought as purchasers of shares in RTC pursuant to the Share Agreement, under which the Current Directors undertook not to commence any action or proceedings against LA and WT in relation to RTC and/or the shares which were the subject of the agreement (see Raffles Town Club at [49]). The Current Directors had also executed a deed pursuant to which they irrevocably released and discharged LA and WT from (among other things) their entire obligations and liabilities howsoever arising from, related or connected to or under the Share Agreement (see Raffles Town Club at [50]). To allow the Current Directors to use RTC as a vehicle to recover damages or losses said to have been suffered by RTC as a result of the Former Directors’ alleged breaches of duty would, so LA and WT argued, unjustly enrich the Current Directors. We accepted this argument. In addition to this, we observed that the Current Directors had acquired their shares in RTC at prices which took into account the matters complained of by RTC. We thus held at [57]:

[47] We further added at [59]:

[48] We therefore held that RTC’s suit was “in substance an action by [the Current Directors] which ha[d] been disguised as an action by RTC” (at [60]). On the facts of the case, the Current Directors were indistinguishable from RTC, and we held on this basis that RTC should not be permitted to mount its action against LA and WT (at [59]–[60]).

[51] The second point to note about Raffles Town Club is that it did not treat unconscionability or unjust enrichment as the legal basis of any liability on the part of the third parties. The third parties were held to be liable to the defendants only for the tort of conspiracy. This is clear from Raffles Town Club at [68], [71] and [72], particularly the following passages:

[54] Given our finding that Mr Sim is not liable to the appellants on any of the foregoing bases discussed at [37]–[53] above, we turn to consider whether the appellants may nevertheless seek a contribution or an indemnity from him pursuant to ss 15 and 16 of the CLA. Mr Yeo described s 15 of the CLA as creating a statutory right of contribution. While that is true, s 15 creates a statutory right of contribution where the defendant and the third party are both liable to some other person in respect of the same damage. Section 15 of the CLA does not remove the need to identify some legal basis or cause of action in respect of which both the defendant and the third party are liable to the same person for the same damage. If and only if this can be shown may the defendant then seek a contribution from the third party notwithstanding that the third party is not liable to the defendant for any civil wrong.

[55] As we noted in Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters [2018] 2 SLR 333 (“Sakae”) at [214], although the person to whom both the defendant and the third party are liable (“the relevant person”) will usually be the plaintiff or the claimant in the main action, this need not necessarily be so. In the context of a minority oppression action under s 216 of the Companies Act, the defendants might not be able to avail themselves of s 15(1) of the CLA if they have to show liability to the plaintiff shareholder. In Sakae, we therefore construed the relevant person as extending to the company where the plaintiff shareholder seeks remedies for the benefit of the company (see [216]). The same applies in this case because, as can be seen from the reliefs sought by EQ Capital as summarised at [9] above, these reliefs are all sought for the benefit of Wellness. The three-step test applicable for the purposes of s 15(1) on the present facts would therefore be as follows:

[56] As regards this last requirement, s 15 of the CLA does not require identity in the legal basis of the defendant’s and the third party’s liability to compensate the relevant person (see Sakae at [220]). It would, for example, suffice if the defendant is liable to the relevant person in tort while the third party is liable to that person in contract. Notwithstanding that, we are not satisfied in this case that Mr Sim could be liable to Wellness “in respect of the same damage” as the appellants, whether on the basis of abuse of process or unjust enrichment.

[58] To recapitulate, Suit 187 was brought by Wellness and Mr Murjani against seven defendants, including Mr Sim and OSIM, for minority oppression, conspiracy to injure and breach of contract. They alleged, among other things, that the defendants had acted wrongfully to enable OSIM to take control of TWG through: (a) OSIM wrongfully exercising its rights under the Profit Swing Clause to obtain more shares in TWG; and (b) Mr Sim proposing and OSIM and Paris approving the Rights Issue, which was undertaken not for commercial reasons but with the intention of diluting Wellness’ shareholding in TWG.

[60] The appellants suggest that Mr Sim may be liable to Wellness on two grounds: abuse of process and unjust enrichment. We do not think that either of these can succeed. Where abuse of process is concerned, we have already pointed out above that it is not a recognised tort in Singapore. Even if it were, and even if Mr Sim is indeed found to have abused the court’s process in causing EQ Capital to commence Suit 17, Mr Sim could only be liable to the appellants, who are the defendants in that suit, but not to EQ Capital, which is the plaintiff, or to Wellness, which is the beneficiary of a successful prosecution of that suit. (We reiterate here that although Wellness is also a defendant in Suit 17, it is a nominal party and EQ Capital has not made any claim against it: see [2] above.) And even if Mr Sim could hypothetically be liable to Wellness for acting in abuse of the court’s process in procuring the commencement of Suit 17 by EQ Capital, he would be liable not for the types of damage said to have been suffered by Wellness, but for the wholly distinct damage of (for example) causing Wellness to incur fresh legal fees in defending the suit. Section 15 of the CLA is therefore inapplicable because there is no reasonably conceivable scenario in which Mr Sim could be liable to Wellness on the basis of abuse of process for the same damage as the appellants.

[62] For these reasons, the TPSOC simply does not disclose any basis on which both Mr Sim and the appellants could be liable to Wellness in respect of the same damage for the purposes of s 15(1) of the CLA. The appellants therefore cannot rely on ss 15 and 16 of the CLA to claim any contribution or indemnity from Mr Sim.

[63] Since none of the four bases advanced by Mr Yeo in support of the appellants’ third party claims could possibly lead to success in the third party proceedings without simultaneously vindicating the appellants’ defence, thereby obviating the need for the appellants to claim any indemnity or contribution from Mr Sim, we agree with the Judge that the third party proceedings are redundant. It follows that there is no need for the issues which have to be determined as between EQ Capital and the appellants in the main action to be determined as between the appellants and Mr Sim (see the GD at [79]). We therefore affirm the Judge’s decision to strike out the third party proceedings.