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Grounds publishedDecided 6 Jul 2022
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General Division of the High Court

Dways International Pte Ltd (formerly known as D’way International Pte Ltd and as Longevite Pte Ltd) v Lim Seow Hui Ratna Irene and others

[2022] SGHC 158Case no. Suit No 447 of 2020

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Grounds of decision

Official text from eLitigation

  1. Introduction

  2. [1] The plaintiff, (“Dways”), sells nutritional products, which at the material time were “HL Span”, “Purity” and “B’Glo” (“Product(s)”). It engaged individuals to distribute the Products via a direct-selling distribution method with a multi-tier compensation scheme.

  3. [2] In this suit (“the Suit”), Dways claims in the main against:

  4. (a) the first defendant (“Irene”), its former director, for breaches of duty as a director and of loyalty and fidelity as an employee;

  5. (b) the second defendant (“Justin”) for breaches of duty as Dways’ Chief Financial Officer (“CFO”) (which position of appointment he disputes);

  6. (c) Irene and Justin (collectively “the Lims”) for conspiracy to injure Dways by their acts;

  7. (d) Irene for defamation; and

  8. (e) the third and fourth defendants (“Karen” and “Steven”, collectively “the Chuas”) for the return of $30,000 which Dways had lent to them.

  9. Background and Dways’ claims

  10. [3] Dways was incorporated in November 2018 with Nancy Long (“Nancy”) as its director, and Nancy and Zulkifli bin Othman Curran (“Zul”) as its shareholders. On 8 March 2019, Irene became a director of Dways and the Lims became shareholders around the same period of time. Where appropriate, I will refer to Nancy, Zul and the Lims collectively as the “Four Persons”, and to the Lims and the Chuas collectively as “the Defendants”.

  11. [4] Dways claims that in February or March 2019, the Four Persons agreed that Irene would be the director in charge of accounts and operations (“Irene’s Employment Agreement”); and Justin would be appointed as the CFO to assist Irene in and supervise the execution of her duties (“Justin’s Employment Agreement”) (collectively “the Employment Agreements”). It claims that the Lims had exclusive control over its bank records and accounts, and exclusive access to and control over the Products and sales records, from March 2019 to February 2020. The Lims dispute the existence of the Employment Agreements. As for the Chuas, they were engaged as Dways’ distributors and assisted with stock-taking and collection of Products by other distributors for the purpose of sales.

  12. [5] By about November 2019, the working relationship between the Lims and Nancy/Zul soured, which Nancy claims was due partly to Irene’s lack of transparency in managing Dways’ accounts. The Lims claim that by January 2020: (a) they were unhappy with Nancy and Zul as Zul would misrepresent to potential distributors/customers about the country of manufacture of the Products; (b) they became increasingly suspicious as to the safety of the Products; and (c) they suspected that Nancy and Zul took Products in excess of their entitlement without paying or accounting for them.

  13. [6] The disagreements between the Lims and Nancy/Zul came to a head during a meeting on about 17 January 2020 where the sale of the Lims’ shares was raised, and thereafter Irene stopped communicating with Nancy. On 22 January 2020 Nancy and Justin discussed the sale of the Lims’ shares to Nancy and/or Zul (“22 Jan 2020 Meeting”). On 5 February 2020, Irene ceased to be Dways’ director and the Lims ceased to be shareholders. In February 2020, the Chuas also ceased to be distributors for Dways.

  14. [7] On 27 May 2020, Dways commenced the Suit. Its main claims against the Lims are broadly for: (a) wrongfully making payments from Dways’ OCBC bank account (“OCBC Account”) and UOB bank account (“UOB Account”) (collectively the “Bank Accounts”), which were unauthorised and/or illegitimate commercial transactions; (b) misappropriating Products on 23 and 30 January 2020; and (c) defamation based on WhatsApp messages and letters which Dways’ distributors/customers had received from Irene in April 2020. Dways also claims repayment of US$3,055.00 from the Lims pertaining to an investment in Throne Legacy Capital (“TLC Investment”), and further alleges that the Lims caused Dways to extend a $30,000 loan to the Chuas that it had not approved and sought repayment of the loan from the Chuas.

  15. [8] Dways also alleges that the Lims had failed to maintain a proper account of all transactions and inventory, failed to properly hand over its documents when they left the company, and removed or deleted information in its computer system without authorisation. I will deal with these at the appropriate juncture.

  16. The Employment Agreements and the Lims’ roles in Dways

  17. [9] I start with the Employment Agreements, which Dways claims were concluded by oral agreement. Dways claims that, by Irene’s Employment Agreement, Irene had agreed to be appointed as the director in charge of accounts and operations, which included maintaining a proper account of: (a) all inventory of Products; (b) all sales records of Products; and (c) all transactions made pertaining to the Bank Accounts. Dways also claims that, by Justin’s Employment Agreement, Justin agreed to be appointed as the CFO to assist Irene in and supervise the execution of her duties.

  18. [10] The Lims deny the existence of the Employment Agreements. They attested that initially Nancy and Zul had assured them that they would merely be “sleeping partners” and contribute money to the business. Although Irene subsequently aided Nancy in Dways’ operations and became a director, she did not agree to be in charge of Dways’ accounts and operations. Justin denied being appointed as the CFO or employed by Dways.

  19. [11] I find that Dways has failed to show, on balance, the existence of the Employment Agreements. There were no documents to evidence the agreements or their terms. This is despite numerous WhatsApp chat groups created at the material time where parties would discuss and put on record matters pertaining to Dways’ business and operations, even in early 2019. Dways also could not state when the Employment Agreements were concluded. It pleaded that the terms were agreed “during the course of several meetings … in or around February 2019 and/or March 2019” among the Four Persons, and that Irene was appointed director on 8 March 2019 and Justin was appointed the CFO on 12 March 2019. However, Nancy attested that the discussions started in January 2019, and she and Zul claimed that Justin’s Employment Agreement was concluded with Justin appointed as the CFO on around 28 March 2019. Further, Dways did not consistently represent who its CFO was to third parties. In an invoice from a vendor signed in July 2019 by Irene and Nancy, after the purported Employment Agreements were said to have been concluded, it was Irene and not Justin who signed off as “CFO” (with Nancy as “CEO”).

  20. [12] Dways relies on an unsigned partnership agreement (“PA”), which Nancy claims Irene provided to her in mid-March 2019, that showed the Lims were intended to be officers of Dways. However, the PA (which was unsigned) did not embody the terms of the Employment Agreements which Dways claimed were oral, and instead contradicted Nancy’s claim as it stated that Irene would be the CFO with Justin as the Chief Operating Officer.

  21. [14] The state of affairs just described is unsurprising when one considers how Dways’ business was run. Nancy and Zul attested that all the shareholders were to be involved in Dways. Zul explained the intent was for the Four Persons to be involved in all aspects of Dways’ business because it was a small company and their roles would overlap. The informal manner in which Dways’ business was run contradicts Nancy’s testimony that the Four Persons had agreed that Justin should have a formal position in Dways.

  22. [15] Hence, Justin was not a “sleeping partner”, but (as I accept from Nancy’s and Zul’s testimony) was involved in Dways’ business to some extent albeit informally. Before and after becoming a shareholder, he participated in Dways’ business operations, as can be seen from the numerous WhatsApp chat groups discussing its business and operations. When the Lims exited Dways in February 2020, Nancy communicated with Justin for the return of Dways’ keys, accounts and documents. However, as Dways has failed to show the existence of the Employment Agreements, the role and duties which Dways claimed Justin had to perform as the CFO (see [9] above)) are not made out.

  23. [16] As for Irene, although she was a director of Dways (and owed duties to it as such), that did not therefore show the existence of Irene’s Employment Agreement. Contrary to the submission of Plaintiff’s counsel, Mr Maniam, the Lims did dispute Dways’ claim that Irene had agreed to be employed as Dways’ director. The Lims had merely pleaded and agreed that Irene was a director, and no more, and had expressly challenged the existence of the Employment Agreements.

  24. [17] Nevertheless, I find there was an agreement between Nancy and Irene for Irene to be the director primarily in charge of accounts and making payments. Irene admitted to being one of the directors in charge of Dways’ accounts. Various messages from her showed that she took charge of Dways’ accounts and payments. For instance, on 20 December 2019, when Nancy said that she did not have the tokens for the Bank Accounts and requested to be able to make transfers and payments online while Irene was travelling, Irene assured Nancy that she (ie, Irene) would still be able to make payments even if she were away as she “[took] charge of accounts”. In court, Irene agreed that she was in charge of making payments for Dways and she had prepared a spreadsheet of payments Dways had made to its suppliers and vendors. Likewise, Irene had signed off as “CFO” on an invoice (see [11] above). She also updated Nancy on the balances in Dways’ accounts and kept a record of the transactions in its accounts.

  25. Alleged exclusive control over Bank Accounts, Products, records and inventory from March 2019 to February 2020

  26. [18] I turn to the issue of whether the Lims had exclusive or sole control over the Bank Accounts, Products, records and inventory from March 2019 to February 2020 (the “Relevant Period”) as Dways claimed.

  27. OCBC Account

  28. [19] The OCBC Account was set up in November 2018 with Nancy and Zul as authorised signatories for cheques and Nancy as the sole authorised person to conduct internet-banking transactions. Irene was added as an authorised signatory to the account around end March 2019. I find that Nancy had also, until November 2019, control over and access to the OCBC Account. She admitted to having joint control with Irene of that Account until November 2019 and that until September 2019 the bank statements were sent to her home.

  29. [20] I disbelieve Nancy’s claim that when the mailing address for the OCBC Account was changed to Dways’ office address in October 2019, she did not have access to Dways’ mailbox as the Lims held the key to the mailbox. The evidence showed that she had access to a set of Dways’ keys including for the mailbox. On 8 November 2019, Karen informed Nancy to bring her “2 sets of office keys” to be duplicated for Dways’ new staff. Whilst there were seven keys to different parts of the office (including the mailbox), I disbelieve that Nancy only had the keys to the main door, glass door and wooden cabinet; but not for the mailbox, metal lockers, storeroom and mezzanine level where the Products were kept. It is unbelievable that, being a founder and one of two directors of Dways, she would not have had the keys to access various parts of Dways’ office, and there is no evidence that she had ever asked for the keys or that she was not handed them despite asking. A WhatsApp message from Karen on 24 October 2019 showed the store and locker keys were kept in the office drawer and Nancy did not then reply to dispute this.

  30. [21] In fact, Nancy had, on about 25 November 2019, signed an OCBC form for any one director to apply for account and banking services. I disbelieve that she could not recall if she had seen the form in its entirety, given that her signature appeared in numerous places on it. I find that she had signed the form knowing the purport of it. In my view, Nancy was not excluded from accessing the OCBC Account. Rather, she did not care to do so.

  31. [22] Nevertheless, I accept that on or about 20 December 2019, when the relationship was deteriorating, Irene excluded Nancy from accessing internet banking by withholding the bank token from Nancy (see [17] above). Irene admitted that she wanted to control the Bank Accounts because she suspected Nancy was taking Products without paying for them and, if she relinquished the bank tokens to Nancy, she would lose access to online banking to check the Bank Accounts. This showed that Irene was at that time the sole person effecting transfers and making payments from the Bank Accounts. Hence, even if Nancy was still able to sign cheques independently as the Lims claimed, Irene was by December 2019 in sole control over the OCBC Account.

  32. UOB Account

  33. [23] Likewise, I find that up until November 2019, Nancy was not excluded from accessing or performing transactions with the UOB Account. Both Nancy and Irene were authorised signatories of the account. Nancy agreed that any internet-banking transaction had to be approved and performed by both of them. Whilst Nancy sought to show that the mailing address for the UOB Account was Irene’s home address to portray Irene being in complete control over that account from its inception, Nancy had agreed to the use of Irene’s home address as at that time Dways’ office premises were not ready.

  34. [24] However, on about 25 November 2019, the signatory for the UOB Account was changed solely to Irene, and Nancy had signed a form to authorise a single user to transact. For the same reasons as at [22] above, I find that by December 2019 Irene had excluded Nancy from accessing internet banking for the UOB Account as Irene had the token and was solely controlling the Account.

  35. Control over and access to Products

  36. [25] Next, Dways claims the Lims had exclusive control over the Products. HL Span and Purity were kept at the mezzanine level of Dways’ office and in the display cabinet and metal lockers in the office. As for B’Glo, they were stored at the Lims’ home (“the Lims’ Home”).

  37. [26] I find that all Four Persons and the Chuas had access to and control over the stock of HL Span and Purity. Nancy admitted that she had access to Products whenever she requested as she was a director and doing sales; that from 3 December 2019, she had access to Products without having to make a request; and that in January 2020, she had taken HL Span from Dways’ cabinet. I have also found that Nancy had the keys to Dways’ premises. Even around 28 November 2019, Carol (Dways’ staff) was updating Irene that Nancy had taken 12 boxes of Purity (“28 Nov 2019 Message”). It should be noted that HL Span, Purity and B’Glo were received by Dways from the manufacturers only on 21 October, 1 November and 17 November 2019 respectively. As for B’Glo, there is no evidence that Nancy was denied access to it. In court, Nancy admitted (contrary to her affidavit of evidence-in-chief (“AEIC”)) that she had instructed the manufacturer to deliver B’Glo to the Lims’ Home and there is no evidence that she had objected to B’Glo being stored there.

  38. Control over and access to sales records and inventory of the Products

  39. [27] Next, whilst the Lims had access to and control over the sales records and inventory of the Products, I find that they were not in exclusive control such that Nancy did not have access to or control over them. I reiterate that the Relevant Period started from March 2019, whereas Dways started receiving Products from only 21 October 2019.

  40. [28] Nancy admitted that Dways’ staff recorded information pertaining to Products in its books and computer system. This included a record pertaining to the movement of HL Span. I disbelieve that Nancy had been unaware of the existence of this record until the Lims exited Dways. Even if this were true, this did not show that the Lims had hidden the records from Nancy (as Nancy had tried to portray). Dways had a computer system which recorded information regarding its distributors, including the Products they purchased and the amounts paid to Dways, and I accept Irene’s testimony that Nancy and Dways’ staff had access to this system. I have also earlier found that the store and locker keys were kept in a drawer in Dways’ office which Nancy claimed had no lock. If Nancy claimed not to know about the inventory of stocks (or Dways’ financial position), it was because she did not at the material time bother to find out. Nancy was also a director of Dways and, as Zul attested, the intent was for the Four Persons to be involved in all aspects of Dways’ business.

  41. [29] In this regard, Dways also claims that the Lims failed or refused to hand over Dways’ sales records and inventory after their exit. It points to WhatsApp messages from early February 2020 where Nancy had asked Justin to return “stocks records” and “updated stock accounts”. However, the WhatsApp messages showed Nancy subsequently acknowledging the Lims’ handing over of invoices and records of bank statements (although Nancy claimed they were incomplete). On Nancy’s account, Irene also left behind inventory records in Dways’ office which Nancy relied on to show the shareholders’ Arrangement that she claimed existed among the Four Persons (see [110] below on this Arrangement). Hence it is unclear what other sales records and inventory the Lims were to hand over but failed to.

  42. [30] Further, I find the Lims were not responsible for maintaining the inventory and sales records of Products contrary to Dways’ claim. Dways could not rely on the Employment Agreements which I have found not to exist. Moreover, Nancy agreed that it was the Chuas who conducted stock checks and made a record of the stocks. This is supported by the WhatsApp messages and Karen’s testimony that the Chuas were tasked to do so and that the records for the stock checks were placed in Dways’ office drawers. Indeed, Dways’ system of managing its inventory was decentralised and honour-based, where each person would record what he or she had taken. For instance, on 6 January 2020, when Karen stated in a WhatsApp message that there was a shortfall of 17 boxes of HL Span, Nancy responded to say that she had taken them a few days earlier and had “[a]lready written down today what [she had] taken”. Nancy also attested to an occasion in December 2019 where she took the Products first and made a record in Dways’ books later.

  43. [31] At trial, Dways pointed to Carol’s 28 Nov 2019 Message (and the subsequent exchanges with Irene) to show that Irene was the director in charge of Dways’ stocks. However, these messages do not show a general system in which Products taken were reported to Irene regularly as part of her purported stewardship of Dways’ inventory. Rather it showed that Nancy could take Products on her own without prior approval. As for the WhatsApp messages between Karen and Irene on 21 to 22 December 2019 and 30 January 2020 (which Dways relies on to show Irene’s alleged control over the inventory and sales records), they do not evidence a practice of Irene tallying Dways’ sales records or payments made for Products against its inventory. By this time, the relationship between the Lims and Nancy had deteriorated and the messages thereby related to Irene’s suspicion of Nancy taking Products without paying and to the Shareholders’ Entitlement to Products (see [110] below on the Shareholders’ Entitlement).

  44. [32] On the above bases, I reject Dways’ claim that the Lims had failed or refused to hand over or maintain a proper account of Dways’ sales records and inventory of Products and that they should provide a true and full account of them. The Lims did not undertake to maintain such an account. Dways has also failed to show that the sales records and inventory were in the Lims’ exclusive control or that they failed to return these when they left Dways.

  45. Payments made without legitimate basis, the loan to the Chuas and the TLC Investment

  46. [33] I turn to the first main claim by Dways, namely that the Lims had caused Dways to make payments which were essentially unauthorised, without legitimate commercial basis or not in Dways’ best interests (“Disputed Payments”). At the close of trial, Dways pared the number of Disputed Payments down to 37 payments, which total $69,336.00 in value, as follows:

  47. [34] To begin with, Nancy was perfectly content to leave the management of Dways’ finances, including payments to vendors/suppliers, to Irene. She claimed that Irene was in charge of operations and bank transactions and made all payments for Dways. I accept that during the Relevant Period cheques were pre-signed by Nancy and she was thus unaware of the recipients and purposes of the payments. Nancy explained that she pre-signed the cheques because she trusted Irene and this arrangement was convenient as Dways had many payments to make and she did not meet Irene very often. Hence, it was not as if Nancy wanted to jointly operate Dways’ accounts or deal with transactions from the outset, but rather she willingly ceded control to Irene because she trusted her. She did not bother to look at the bank statements of the OCBC Account even when they were mailed to her home nor find out how to access internet banking for the UOB Account.

  48. [35] As such, that Nancy was unaware of or did not expressly approve each payment at the time it was made on Dways’ behalf is not in itself a ground to find a breach of duty by Irene. Rather the issue is whether the payments were made for a legitimate commercial purpose. It should also be noted that Dways operated on the basis that Nancy, Zul or one of the Defendants would sometimes make payment on Dways’ behalf and claim reimbursement from Dways.

  49. Disputed Payments – Payments made with a legitimate basis

  50. [36] I turn first to the subset of Disputed Payments which I find were made with a legitimate basis and thus for which there was no breach of duty by Irene in causing such payments to be made by Dways.

  51. Payments to Cosmo System Pte Ltd (“Cosmo”) of $911.64 and $252.51 (s/n 1 and 2 of Disputed Payments)

  52. [37] Dways claims there was no commercial justification to make two payments to Cosmo as the services provided by Cosmo were a duplicate of services already provided by one Scrollless Pte Ltd. I find this claim that the services by Cosmo were duplicate services to be Nancy’s bare assertion.

  53. [38] I accept Irene’s explanation that Cosmo had provided cloud servers for Dways’ computer system and set up its website domain. The payments are supported by Cosmo’s invoices. The invoice from Scrollless Pte Ltd showed a different service provided, namely for Dways’ “Customised Business Application”. Pertinently, Nancy was at the material time aware that Cosmo was providing services to Dways. On 7 October 2019, Cosmo’s tax invoice (for the sum of $252.51) was posted on a WhatsApp chat group, of which the Four Persons were members. Hence it is disingenuous for Nancy to claim that Irene had engaged Cosmo’s services without informing her of this and that she only discovered this in July 2020.

  54. Payments to Norlin for CPF contributions of $144 and $178 (s/n 3 and 30 of Disputed Payments)

  55. [39] Irene had reimbursed herself from Dways the sums of $144 and $178 which she claims were CPF contributions paid directly to one Norlin, Dways’ employee. Irene claims that Dways’ policy was to pay the CPF contributions directly to its staff and for the staff to declare the same to the CPF Board, because at that time Dways did not have a valid CorpPass account to declare its employees’ CPF contributions. Dways claims the payments could not be for the purpose of paying Norlin’s CPF because its records showed that it did not make CPF contributions for employees prior to December 2019.

  56. [40] I accept Irene’s explanation and find the payments that she had first made on Dways’ behalf as Norlin’s CPF contributions to be legitimate. Mr Maniam accepted that Norlin should have been paid CPF. A contemporaneous Dways voucher also suggests that Norlin was paid $1,294 comprising $1,150 in salary and $144 in CPF contributions as her October 2019 remuneration. However, Dways’ CPF records (adduced by Dways) showed that it did not make CPF contributions for employees prior to December 2019. All these supported Irene’s explanation that the arrangement in September and October 2019 was for Dways to pay CPF contributions to its staff directly.

  57. Payment to Karen of $4,276.84 (s/n 9 of Disputed Payments)

  58. [41] On 1 February 2020, Dways transferred $4,276.84 to Karen which Irene claimed was commissions and bonuses due to Karen as a distributor for Dways (“Karen’s Commission”). This was the net sum due to Karen after deducting a referral bonus fee which she was no longer entitled to when her customer (or downline) in Dways, one Sandra Ai Choo (“Sandra”), had requested for a refund on the Products that Sandra had purchased.

  59. [42] I find the payment was legitimate. Nancy admitted that she gave Karen approval to withdraw her commission and that the referral fee pertaining to Sandra’s case had been taken into account. Irene also stated that she had released Karen’s Commission to Karen only after she had seen Nancy’s approval.

  60. [43] At trial, Dways claimed the payment to Karen was nevertheless in breach of Irene’s duty because when Irene made this payment, she intended to instigate Karen’s downlines to seek refunds from Dways. However, this argument was not pursued in Dways’ closing submissions. Instead, Dways argued that the $4,276.84 paid to Karen did not take into account that Karen’s other downlines (such as Vivianne Sua or “Vivianne”) had also sought refunds from Dways on Products that they had purchased. I find this argument to be without merit. Nancy has not shown who were Karen’s other downlines that had sought a refund prior to Karen’s Commission being paid out on 1 February 2020. Vivianne sought a refund only around 13 February 2020. Likewise, there is no evidence that prior to 1 February 2020, Irene had instigated Karen’s downlines to seek a refund on Products they had purchased.

  61. Payment to WLP Pte Ltd of $280 (s/n 15 of Disputed Payments)

  62. [44] On 5 February 2020, a sum of $280 was transferred from the OCBC Account to WLP Pte Ltd (“WLP”), for an invoice that WLP had rendered to Enhance Life International Pte Ltd (“Enhance Life”) for that amount. Irene explained that WLP had made a lodgement with the Accounting and Corporate Regulatory Authority (“ACRA”) regarding her resignation from Dways and the transfer of the Lims’ shares to Nancy and Zul. WLP was the accounting firm engaged by Enhance Life, and Dways had engaged WLP (through Enhance Life) to effect the ACRA lodgement.

  63. [45] Enhance Life was incorporated in October 2016 with Irene as its shareholder and director. Subsequently all Four Persons became its shareholders, and Nancy stated that she was a director from 11 June 2019 to April 2021.

  64. [46] I accept Irene’s explanation that WLP had made the ACRA lodgement pertaining to her resignation as a director in Dways and the share transfer, and that Dways had engaged WLP for this purpose. WLP’s invoice dated 3 February 2020 recorded the purpose of WLP’s fee as “Transfer of Shares” and “Resignation of Director”. It is not disputed that Irene ceased to be a director and shareholder of Dways around 5 February 2020, and WLP’s invoice regarding “Resignation of Director” could not have applied to the resignation of any director in Enhance Life since Nancy and Irene were still its directors. As such, the payment to WLP was for the purposes of Dways’ business operations and thus legitimate, even if WLP had addressed the invoice to Enhance Life.

  65. Payments of $2,900, $1,580, $1,130 and $520 to VSK Design (s/n 16, 26, 36 and 37 of Disputed Payments)

  66. [47] Next, Dways disputes four sums paid to VSK Design Pte Ltd (“VSK Design”), an entity owned by Steven, pertaining to works it did for Dways, as follows (“Four Items”):

  67. (a) On 31 July 2019, VSK Design was paid for renovation works for Dways’ office totalling $11,676.75. From this sum, Dways disputes $2,900 pertaining to the supply and installation of a four-panel aluminium frame with mirror for Dways’ office (“the Frame”). Nancy claims she was not informed of the procurement of the Frame.

  68. (b) On around 23 September 2019, VSK Design was paid $2,340 for three items. Of this $2,340, Dways disputes the sum of $1,580 pertaining to the fabrication and installation of a “[m]irror beside existing [f]olding door” (“the Mirror”), which Nancy claims Dways did not authorise.

  69. (c) On 31 December 2019, VSK Design was paid $2,220 for items of work. Dways disputes two items, namely the fabrication and installation of a “[t]able [c]abinet beside stage and additional step for stage” and “[s]lide & [f]old door [with] key lock at [s]tore [r]oom downstairs”, for $1,130 and $520 respectively. Nancy claims she was not informed of these payments and did not authorise the procurement of these items.

  70. [48] Dways claims the Four Items were not procured in its best interests and were unnecessary at the time. It states that in July and September 2019, it did not have any income as it had not started selling Products; and that even in December 2019, it was only starting to sell Products and build its distributor base, such that it was still in a precarious financial situation. I find Dways’ claim to be without merit and there was no evidence pointing to a lack of bona fides in the transactions.

  71. [50] Pertinently, the Four Items were installed at Dways’ premises and would have been apparent to Nancy who was operating the business from its premises. Yet she did not at that time query the necessity for or object to them.

  72. [51] On balance, the evidence showed that Nancy was cognisant of and agreed to the procurement of the Four Items. Even if Dways had yet to or had only begun to generate revenue, this was immaterial. Dways’ directors could have deemed it necessary to renovate or refurbish its premises to start business. Indeed, despite knowing on around 4 September 2019 from Irene that Dways required its shareholders to top up its accounts (a point Dways relies on to show it was short of funds then), Nancy did not object to the procurement and installation of the Four Items.

  73. Debit card payments for meals (s/n 18–23 and 33 of Disputed Payments)

  74. [52] Next, Irene had used Dways’ debit card to pay for refreshments and meals comprising the following (“Food Expenses”):

  75. (a) On 30 August 2019, payments of $6.80 at Ya Kun, $77.55 at Tim Ho Wan, $24.00 at Au Croissant, and $81.10 at Tim Ho Wan were made. Irene claims she had purchased meals and refreshments for the Chuas who were installing furniture at Dways’ office.

  76. (b) On 14 September 2019, $20.22 was spent on refreshments at Crown Coffee, which Irene claims was coffee for the Four Persons.

  77. (c) On 13 September 2019, $75.21 was spent on dinner at Tim Ho Wan for the Chuas who had assisted Dways in setting up an Opportunity Product Presentation (“OPP”) conducted by Zul. An OPP is to promote Dways’ products and recruit distributors.

  78. (d) On 2 November 2019, $45.79 was spent on meals purchased from Tim Ho Wan for the Chuas, who were assisting with Dways’ OPP on that day.

  79. [53] I disagree with Nancy that these expenses were not authorised by Dways or were not in its best interests. The evidence showed that Irene was authorised to charge meal expenses to Dways’ account, including meals for the Chuas, as can be seen from various payments in which Dways’ debit card was used and which claims Dways is no longer pursuing against Irene. Dways had also paid for dinner for the Lims, one Doria (Dways’ distributor) and Doria’s friend who was keen to become a distributor – another claim no longer pursued by Dways.

  80. [54] Hence, I find that Irene was given the discretion to charge reasonable expenses for meals and refreshments even for persons who were not Dways’ employees and particularly where Dways might obtain an indirect benefit. I accept the expenses on 13 September and 2 November 2019 related to the Chuas assisting in Dways’ business operations, and the expense on 14 September 2019 was made in relation to the Four Persons. Whilst Nancy claimed otherwise, the evidence showed the Chuas assisted Dways in its business operations and were not merely distributors for its Products. The WhatsApp chats showed Nancy instructed Karen on various matters, such as preparing Dways’ compensation plan for distributors and communication materials, and arranging appointments with vendors. I disbelieve Nancy that the Chuas were managing the Products and daily operations at only the Lims’ request.

  81. Some payments for which Irene cannot recall their purpose (s/n 28, 31, 32 and 34 of Disputed Payments)

  82. [55] Finally, I turn to some of the payments made by way of cheques from the UOB Account, between September to November 2019. Irene claims she cannot recall the purposes of these payments, but that Nancy knew and authorised them at the material time as she had co-signed the cheques. They are for the sums of $3,000, $1,045.45, $3,959 and $3,664.75.

  83. [56] First, a UOB cheque for $3,000, dated 27 September 2019, was made to one Yang Tjun Yu (“Yang”) – this was pointed out by the Defendants’ counsel, Mr Lim, in closing submissions. Mr Lim submits that Yang, also known as Lewis, was part of the “DWay Executives” WhatsApp chat group (of which the Four Persons were also members) and that he had carried out works for Dways in respect of its website; hence the payment was likely made for such works. I accept this payment to Yang was legitimate and for Dways’ benefit. The WhatsApp chats, contemporaneous with the time of payment of the $3,000, support Mr Lim’s submission that Yang was engaged for Dways’ purposes.

  84. [57] Second, the cheque for $1,045.45 was again brought to the court’s attention by both counsel in closing submissions. This cheque was dated 27 September 2019 and made payable to Norlin (Dways’ employee). A payment voucher from Dways showed a payment of $1,150 to Norlin in the subsequent month, this being her October 2019 salary. Hence, more likely than not, the $1,045.45 was made to Norlin as her remuneration.

  85. [58] Third, in closing submissions, both parties also referred to a cheque for $3,959, dated 18 October 2019, and which was paid to “Global Premiums & Gifts Pte Ltd”. I accept that this entity was more likely than not Dways’ vendor or supplier and hence the payment was made for Dways’ purposes.

  86. [59] Fourth, both counsel in closing submissions pointed to a cheque dated 14 November 2019 of $3,664.75 paid to one Stratgeist Pte Ltd (“Stratgeist”). This payment was supported by contemporaneous invoices from Stratgeist and Dways’ payment voucher. Irene attested that Stratgeist was engaged by Dways to produce its promotional videos, which is not disputed by Dways. Pertinently the $3,664.75 was part of a larger sum of $6,473.50 due to Stratgeist. Of this larger sum, $2,800.70 had been paid without Dways disputing this payment.

  87. [60] In the round, I find Dways has not proved on balance that the above payments were not made in its best interests or for a proper purpose. Pertinently Yang and Stratgeist were Dways’ vendors or suppliers and Norlin was its employee – hence it is unlikely that Irene would have caused Dways to make payments to them if there was no legitimate basis for the payments. Whilst I had found that Irene was the director primarily in charge of accounts and payments, copies of the cheques were in Dways’ possession at the start of trial and should have been (but were not) put in cross-examination of Irene for her to explain.

  88. Disputed Payments – Payments without legitimate basis

  89. [61] I turn to the remaining Disputed Payments, which I find Irene had caused to make without legitimate basis and in breach of her directors’ duties.

  90. Season parking fees of $192.60 (s/n 5 of Disputed Payments)

  91. [62] Irene claims that Dways paid a sum of $192.60 for season parking for the month of October 2019 for Karen and that Dways had agreed to do so as Karen assisted Dways substantially during that time and went to Dways’ office every day. Dways claims that this payment provided no commercial benefit to it and was not authorised by Nancy; the Chuas were not Dways’ employees.

  92. [63] Whilst Irene claimed that the $192.60 “must have been” authorised by or known to Nancy at the material time because Nancy had signed a cheque for $36,783.22 to reimburse Irene for expenses made on Dways’ behalf (which she claims included the $192.60), I find that this was not the appropriate conclusion to draw. I have accepted that Nancy had pre-signed blank cheques (see [34] above). In any case, it would not have been apparent from the $36,783.22 cheque (made out to Irene) what expenses it comprised. As for the Lims’ assertion that both Nancy and Irene would together review underlying invoices, bills and receipts before cheques were signed and reimbursements approved, I reject this as unsupported by evidence. As I have found earlier (see [17] above), it was Irene who was primarily in charge of accounts and payments.

  93. [64] In any event, Irene claimed in court that the payment for Karen’s season parking was agreed orally with Nancy. This implied that authorisation had to be sought for such an item of expense (regardless of whether it provided any commercial benefit to Dways). But there was no evidence that Nancy had knowledge of or agreed to the payment at the material time. Irene did not mention in her AEIC such agreement or authorisation by Nancy at or before the time the fees were paid by Dways. Hence, Irene was in breach of her directors’ duties in causing Dways to bear this sum of $192.60 for the Chuas, who were not Dways’ employees. There was no legitimate commercial basis to do so, as there was no agreement for them to be remunerated.

  94. Payments relating to Enhance Life (s/n 4, 6 and 7 of Disputed Payments)

  95. [65] Next, three payments were made in relation to Enhance Life.

  96. [68] Second, on 9 January 2020, Irene caused Dways to transfer $10,210 from the UOB Account which Irene claims was a transfer to Enhance Life. Irene claims that Nancy had authorised Dways to transfer the money to Enhance Life as the latter required a minimum of $10,000 in its DBS bank account to avoid incurring a “fall below” fee. Nancy denies authorising this transfer.

  97. [69] I find there was no legitimate basis for Irene to have transferred $10,210 from the UOB Account and Irene’s claim that it was done to top up Enhance Life’s DBS account to avoid incurring the “fall below” fee is contradicted by the documents. Whilst Irene claims and had recorded in Dways’ payment voucher dated 9 January 2020 that $10,210 was paid to Enhance Life, the bank transaction slip shows the money was transferred to Irene’s DBS account on that date. This casts doubts on her claim as to the purpose of this transfer. Further, Enhance Life’s bank statement showed that it had $10,210 in its DBS account even at 31 December 2019, such that it had met the minimum $10,000 threshold even without the transfer. Irene did not produce the January 2020 bank statement to show that its bank balance fell below $10,000 by that time although she was in a position to do so (as Enhance Life’s bank statements at that time reflected her home address).

  98. [70] Third, Irene had on 15 January 2020 transferred $400 from the UOB Account to WLP as accounting fees, as WLP was Enhance Life’s accountant. Irene claims Enhance Life was the entity through which the Four Persons would receive their commissions for selling Products or introducing customers to Dways, and Nancy had authorised Dways to pay WLP. Nancy denied authorising the payment to be made by Dways, which was for Enhance Life’s purposes.

  99. [71] I find there was no legitimate basis for Dways to make this payment for Enhance Life. Even if I accept Irene’s (bare) assertion that Enhance Life was the vehicle from which the Four Persons would receive their commissions from Dways’ business, the two are nevertheless separate entities and WLP’s fees were for work done for Enhance Life. Further, Irene has not produced any evidence of Nancy having authorised this payment although she claims there was a “series of WhatsApp” messages in this regard.

  100. Payments to the Lims as allowances (s/n 8 of Disputed Payments)

  101. [72] On 1 February 2020, Irene caused $21,000 to be transferred from the UOB Account to her account. She claims that this comprises her director’s allowance of $10,500 and Justin’s shareholder’s allowance of $10,500 (“the Allowances”), both of which were orally approved by Nancy on a date that Irene cannot recall. The Lims claim that in about June 2019, the Four Persons orally agreed that Nancy and Irene would be entitled to directors’ allowances, that Zul and Justin would be entitled to shareholders’ allowances, and that these sums were not fixed but would vary depending on Dways’ profits (“June 2019 Agreement”). Nancy denies there was any such agreement.

  102. [73] I find the Lims have not shown that any such agreement was made. This is despite the existence of more than 70 WhatsApp chat groups which Irene had created for Dways’ purposes. Even if the June 2019 Agreement existed, it was not an agreement that the Four Persons would be paid allowances on a pre-determined periodic basis, much less that the Lims would be paid $21,000 in total; rather it was that an allowance or a payment might be declared in the future depending on Dways’ profitability and of a yet undetermined sum. Indeed, Justin explained that on previous occasions in 2019, there was a need for further approval before any form of allowance would be disbursed.

  103. [74] In the above regard, I disbelieve Irene’s assertion in court that the Lims had informed Nancy of payment of the Allowances on 17 January 2020. This assertion is contradicted by Irene’s claim in her AEIC that the $21,000 payment was orally approved by Nancy “on a date [Irene was] unable to recall”. In any event, this is a claim that is dubious and unsupported by any documents. By this time, the relationship between the Lims and Nancy/Zul had deteriorated to the extent that Irene stopped communicating with Nancy. Hence, it is doubtful that Nancy would have approved the Allowances.

  104. [75] Next, the Lims claim they were entitled to $10,500 each to bring their allowances in line with payments that Zul had received on previous occasions. I do not accept this argument. As I have found, the June 2019 Agreement does not exist. I accept Dways’ position that the payments to Zul were unique to him and even a payment that had been made to Nancy was only made on an ad hoc basis. There was documentary evidence (such as the WhatsApp chats) in those cases to show an agreement to such payments being made whilst there was none to show any agreement among the Four Persons that the Lims were entitled to the Allowances.

  105. [76] Irene’s disbursement of the $21,000 to Justin and herself was thus in breach of her duties to Dways, including the no-profit and no-conflict rules.

  106. Payment of $980 for “preparation of accounts” (s/n 11 of Disputed Payments)

  107. [77] On 5 February 2020, Irene caused Dways to transfer $980 to her friend Lionel Lem (“Lionel”), whom she claims she had engaged to prepare its audited accounts. Irene claims that Dways had agreed to pay $980 as a non-refundable deposit in preparation of the work that Lionel was to do for it and that she had informed Nancy of this arrangement, to which Nancy did not object.

  108. [78] I find this payment was of no commercial benefit to Dways. I disbelieve Irene’s claim that the agreement to engage Lionel was oral and find that he had not been engaged by Dways to prepare its audited accounts. There is no evidence of discussions pertaining to Lionel’s engagement by Dways, to show that Irene had informed Nancy of this arrangement to engage Lionel, or of the purported non-refundable deposit which was to be paid and which Nancy had agreed to. Pertinently, there is no evidence of Lionel having done any preparatory work for Dways to justify the $980 payment to him. Strangely, despite claiming to have engaged Lionel in December 2019 to prepare Dways’ accounts, the $980 “deposit” was only paid to him on 5 February 2020 – this was after Lionel had purportedly sought a refund from Dways (on 1 February 2020) for Products that he had purchased and when the Lims had exited Dways’ business. Lionel has also not testified in support of Irene’s assertions.

  109. Refunds on 5 February 2020 to Dways’ distributors (s/n 10, 12, 13 and 14 of Disputed Payments)

  110. [79] On 5 February 2020, Dways transferred moneys to its distributors, namely: (a) $1,000 and $2,000 purportedly to Wilano; (b) $3,000 to Lionel at CMS Global; and (c) $3,000 to Sandra. Irene claims that Wilano, Lionel and Sandra had asked for refunds on the Products they had purchased and she caused Dways to refund them in accordance with its refund policy (which according to the Lims had no time limit).

  111. [80] Whilst there was some dispute on Dways’ refund policy between Nancy and the Lims, this was not material to my findings. Although Nancy initially claimed that Dways would offer a full refund if requested within 30 days of purchase of Products and the unconsumed Products were returned, she later stated that even if Dways’ customers asked for a refund after 90 days, Dways would still make the refund in genuine cases. Nancy herself had acceded to a refund for a customer Susan more than four months after Susan had purchased Products. It is also undisputed that one director can exercise the refund policy independently of, and without having to seek prior approval from, the other.

  112. [81] The issue is thus whether Wilano, Lionel and Sandra did in fact seek refunds from Dways, with Irene then transferring Dways’ moneys to them on that basis. To support their claim, the Lims produced the following documents (“the Letters”), the authenticity of which was challenged by Dways:

  113. (a) A letter from Sandra dated 1 February 2020, addressed to Karen, requesting for a refund of $3,000 (“Sandra’s Letter”);

  114. (b) A letter from Lionel (for CMS Global) dated 1 February 2020, addressed to Justin, requesting to return his Products to Dways in exchange for a refund, as he did not find the Products suitable for him (“Lionel’s Letter”); and

  115. (c) A letter from Wilano dated 5 February 2020, addressed to Irene, acknowledging receipt of a $3,000 cash refund.

  116. [82] I find that Irene has failed to show that the purpose for transferring moneys from Dways was to refund Wilano, Lionel and Sandra for the Products that they had purchased. I also find the authenticity of the Letters was suspect. Irene did not call the three persons to testify and corroborate her case.

  117. [83] Irene could not maintain a consistent account of how the Letters came to be. In her AEIC, she claimed that Lionel’s Letter was sent to Dways on around 1 February 2020. However, in court, she claimed that the Lims met with Lionel on 1 February 2020, whereupon Lionel requested for a refund, and they asked him to provide something in “black and white”. Irene claimed that she then made a copy of Lionel’s Letter before Justin handed the original to Nancy on 6 February 2020. Pertinently, there was no evidence of Lionel having returned any Products and, when confronted, Irene claimed that Lionel had not even collected Products in the first place. This was unbelievable and contradicted Lionel’s Letter, which stated that Lionel did not find the Products suitable and that he was returning them. All these undermined the authenticity of Lionel’s Letter and the Lims’ claim that the payment to Lionel was a refund for returned Products. In any case, even if I accept that Lionel had requested for a refund, I would have found that Irene should not have caused Dways to refund moneys without Lionel returning the Products.

  118. [84] As for Sandra’s Letter, Irene’s account in her AEIC was simply that Sandra had sent a letter to Dways on or about 1 February 2020. In court, she claimed that Karen had passed her the said letter on 1 February 2020 and told her that Sandra wanted a refund. Irene then made a copy of Sandra’s Letter before Justin handed the original to Nancy on 6 February 2020. But this account was absent in both Irene’s AEIC and Karen’s AEIC. Indeed, Karen did not appear to be familiar with Sandra (although she claimed that Sandra was her downline) and merely explained her encounters with Sandra in general terms. It was only when she was confronted with Sandra’s Letter that she claimed that Sandra had met her and passed her the letter to request a refund. Similarly, Irene claimed that Sandra had not even collected any Products when the refund was made to her. Again, I find this unconvincing and an afterthought made to explain away the lack of any Products being returned to justify a refund. All these undermined Irene’s purported purpose for making the payment to Sandra.

  119. [85] Likewise, I disbelieve that the two payments which Irene claimed were made to Wilano were for the purpose of refunding Wilano for Products that she had purchased. Dways’ bank transaction slips showed the two payments were made to Irene’s bank account and not to Wilano, contrary to what Irene had claimed in her AEIC. Even if Irene had passed $3,000 in cash to Wilano as she claimed in court, there was no reason to first transfer the moneys from Dways to her bank account, when she could have easily withdrawn cash from Dways’ Bank Accounts to hand to Wilano. Her action as such casts doubts on her claim that the $3,000 was made to Wilano and to refund her for Products that she had purchased. Likewise, Irene’s claim that Wilano had not yet collected any Products when the refund was made further undermined her purported purpose for making the payment to Wilano (even assuming the moneys were in fact paid to her).

  120. [86] In the round, Irene has failed to show the transfers of the moneys from Dways were for the purpose of refunding its distributors for Products that they had purchased. Irene has failed to act bona fide in Dways’ best interests or for a proper purpose. The payments which were all made within a short span of time and purportedly as “refunds” to Wilano, Lionel and Sandra, coincided with the Lims exiting Dways after a deterioration in their relationship with Nancy. As Mr Maniam pointed out, Irene had sent a letter to some distributors in April 2021 which evinced her intent to deplete Dways of its moneys through refunds to the Lims’ friends and to leave a minimal amount in the Bank Accounts.

  121. Some payments for which Irene cannot recall their purpose (s/n 17, 27 and 35 of Disputed Payments)

  122. [87] I turn to a series of payments which were made by cheques from the UOB Account between August to November 2019. Irene could not recall the purpose of these payments but claimed that Nancy knew of and authorised them at the material time as she had co-signed the cheques. They are for $325.51, $1,619.37 and $513.60 (“Three Sums”).

  123. [88] I find there is insufficient evidence to show the payments were for a legitimate commercial benefit to Dways. The payees of the Three Sums are not identifiable, much less the purpose of the payments. Irene, who had caused Dways to pay the Three Sums, could not merely assert that she could not recall to whom they were made. As I have found, Irene was the director primarily in charge of accounts and payments. She agreed that she was in charge of making payments to vendors and suppliers and she had even prepared a spreadsheet to show payments that Dways had made to them (see [17] above). Hence, the payments of the Three Sums would have been within Irene’s knowledge and the burden was on her to explain what they were for. Indeed, in other transactions where Irene caused Dways to issue cheques with a lump sum payment to reimburse her for Dways’ expenses, she could recall the breakdown of each item and its transaction value and she even kept her own internal records.

  124. [89] I add that Irene’s claim that Nancy would have known of and authorised the payment of the Three Sums because she co-signed the cheques does not assist Irene’s case. I have accepted that Nancy had pre-signed blank cheques for business expediency and because she trusted Irene (see [34] above).

  125. Reimbursement to Irene for “meals and refreshments” and “cleaning services” (s/n 24, 25 and 29 of Disputed Payments)

  126. [90] Finally, I turn to three sums paid to Irene on 23 and 30 September 2019, which she claimed were: (a) $156.10 for refreshments for Dways’ OPP on 14 September 2019; (b) $530.46 for refreshments and meals for Dways’ directors, shareholders and staff in or around August/September 2019; and (c) $230 for the engagement of a cleaning company to clean Dways’ premises in about September 2019 (collectively “the Expenses”). I find the Expenses were not for any legitimate commercial benefit to Dways.

  127. [91] Compared to the Three Sums, Irene’s claims pertaining to the Expenses are even more tenuous. Irene’s claims for meals and refreshments were part of a larger cheque of $3,263.56, and the claim for cleaning services was part of a larger cheque of $3,008, both made to purportedly reimburse her for various expenses she expended for Dways. However, the goods and services which generated these Expenses could not be objectively identified from the evidence. Irene has not provided any documents to show that she had expended moneys for the stated purposes or to identify the suppliers/vendors, much less the amounts expended. It is unbelievable and improbable that she could recall the purpose of each of the Expenses or even the exact figure that she spent on each of them, if she claimed to be unable to locate any bills or receipts pertaining to these expenses and there being no evidence of a distinct sum having been paid to a third party for each of the Expenses.

  128. [92] Again, I accept that Nancy had pre-signed blank cheques. Even if the cheques were signed after the particulars were filled in, it would not have been apparent on the face of the cheques what components of expenses they comprised.

  129. $30,000 loan to the Chuas

  130. [93] I turn to the $30,000 loan to the Chuas (“the Loan”). Dways claims that: (a) the Loan was a personal loan from the Lims; (b) Dways did not authorise the Loan to be made from it; and (c) in any event, the Loan remains due and owing from the Chuas. The Lims however claim that the Loan was authorised by and came from Dways, and that Nancy subsequently approved writing it off as a way of compensating the Chuas for having contributed substantially to Dways’ business and in exchange for them continuing to do so.

  131. [94] I find that the Loan was from Dways and authorised by both its directors. This is supported by the WhatsApp chat group “DWay Loan to Steven Karen” [emphasis added] and the messages therein. The members of this chat group were Nancy and the Defendants. On 4 July 2019, Irene sent a message stating that “DWay has agreed to loan S$30,000 to Steven Karen on 4 July 2019” [emphasis added] with “[l]oan repayment in 4 months’ time”. After disbursement of the Loan, there was a message requesting the Chuas to acknowledge receipt of the Loan from “DWay to [you]”. Nancy’s explanation in court, that she did not contradict Irene (when Irene stated that Dways had agreed to make the Loan) because she thought it was the Lims who were lending money to the Chuas, is unbelievable given the clarity of the name of the chat group and the messages therein. As such Dways’ claim against the Lims in relation to the Loan fails.

  132. [95] Nevertheless, I find that the Loan remains due and owing by the Chuas to Dways and has not been written off. The Defendants claim that at a 14 August 2019 meeting with Nancy at Crown Café, they agreed to write off the Loan, and point to WhatsApp messages to show the meeting took place. However, the WhatsApp messages do not show any discussion on the Loan. Hence the Defendants’ claim that Nancy had agreed to write off the Loan at that meeting was but a bare assertion.

  133. [96] Instead, the documentary evidence, which spans from 23 September 2019 to 1 April 2020, all point to the Loan being outstanding from the Chuas. On 23 September 2019, when Irene was providing reports in the “DWay Accounts Updates” WhatsApp chat group (which comprised the Four Persons), she stated “there is a loan amount to Steven Karen of S$30,000”. Irene herself thus treated the Loan as outstanding, even after the 14 August 2019 meeting at Crown Café. On 5 December 2019, Nancy messaged the Chuas to state that the outstanding Loan was supposed to have been settled in October but it was now December. Yet the Chuas did not refute her claim. Their explanation, that they had been on holiday and had subsequently clarified with Nancy about the Loan which Nancy then acknowledged had been written off, was but a bare assertion and unbelievable. In fact, WhatsApp messages even on 6 January 2020 showed Nancy and Justin discussing the repayment of the Loan. Finally, on 1 April 2020, Irene stated in an email to Nancy that “[s]ince it is a DWay loan to [the Chuas], it is only proper that DWay to go after them to pay back S$30,000 to DWay.” Although the Lims had by then fallen out with Nancy and left Dways, Irene did not say that Nancy had agreed to write off the Loan.

  134. [97] Strangely, whilst Irene was quick to record that Dways had agreed to lend the Chuas $30,000 in a WhatsApp chat, none of the Defendants made a record of the purported agreement to write off the Loan. This was despite them claiming that Nancy had been prevaricating on the issue of writing off the Loan (which I disbelieve). As such, Chuas are liable to Dways for the Loan amount.

  135. TLC Investment

  136. [98] As for the TLC Investment, Dways invested a sum of money in the TLC Investment through Justin, and Nancy claims that Justin had represented that the interest payable to Dways included the sums of US$699, US$829 and US$1,527.20, which have not been paid to Dways. The Lims deny being liable to Dways for the claimed amount of US$3,055. They pleaded that any profits from the TLC Investment is generated through trading in foreign currencies and not through accruing interest. Further, the amount due to Dways was only US$1,527.20, as the profits generated was an accumulated amount of US$1,527.20 before it was withdrawn. The Lims pleaded that Dways then used the profits to make a donation of $1,500 to Psalt Care Ltd (“Psalt”) for its charity dinner on 25 October 2019 and to pay Zul $1,500 on 1 August 2019 as he was in need of money. As such, there was no moneys owing to Dways.

  137. [99] I find that the Lims owed Dways profits of US$1,527.20 from the TLC Investment, which has not been paid over to Dways. Nancy’s claim of three sums (of US$699, US$829 and US$1,527.20) was based on a misreading of the electronic cash wallet for the TLC Investment (“the Wallet”). The WhatsApp messages between Justin and Nancy (containing screenshots showing the total assets in the Wallet) reflected a sum of US$699 on 28 July 2019, which became US$829 on about 31 July 2019, and then US$1,527.20 on about 11 November 2019. Indeed, Justin’s 31 July 2019 WhatsApp message to Nancy described what was in the wallet as “[p]rofit U$829 in less than 2 weeks for DWAY888 invested 10,500”. The Wallet would show only one amount, which would increase or decrease depending on whether more profits were made or moneys withdrawn from it. There was therefore only one figure of US$1,527.20 that was due. As an aside, Justin explained that the amount in the Wallet was denominated in the cryptocurrency USDT, but this distinction was immaterial as 1 USDT is equivalent to US$1. In any event, the parties’ submissions did not distinguish between 1 USDT and US$1.

  138. [100] This sum of US$1,527.20 remained owing to Dways. The $1,500 donation to Psalt and $1,500 payment to Zul did not change this conclusion. Whilst there was a message from Justin to Nancy on 28 July 2019 to say “[n]ext week we can pay Zul S$1500 without using company fund, instead we can withdraw profit from TLC”, the fact remained that on 11 November 2019, there was an accumulated amount of US$1,527.20 in the Wallet and there is no evidence that this sum was subsequently withdrawn and paid to Dways. Likewise, even if the donation of $1,500 to Psalt was made using the profits from the TLC Investment, this sum would have been withdrawn from the Wallet before 11 November 2019 as the dinner took place in October 2019. Hence, I find the Lims liable to pay this amount to Dways.

  139. Conclusion on the Disputed Payments

  140. [101] In summary, I find the Chuas jointly and severally liable for $30,000 to Dways on the Loan and the Lims jointly and severally liable for US$1,527.20 to Dways on the TLC Investment.

  141. [102] Further, I find Irene liable to Dways on those Disputed Payments that I have found to have been made without legitimate basis and/or in breach of her directors’ duties, namely items 4 to 8, 10 to 14, 17, 24, 25, 27, 29 and 35 of the Table at [33], and for the amounts stated therein. However, Dways has not proved on balance that Justin was equally liable whether by causing and procuring these transactions or by conspiring with Irene, as Dways has pleaded, save for the $21,000 that was transferred to Irene’s bank account that included his purported “shareholder’s allowance” (see [72] above), a point which I will return to. I accept that the Lims worked closely with each other, both in Dways and in preparing for the trial. However, this does not therefore mean that Justin was privy to the payments that Irene was making from the Bank Accounts, much less that he conspired with her to cause Dways to make them.

  142. [103] In the above regard, I also find that Dways has not shown that Justin was a custodial fiduciary (see in this regard Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals [2020] 1 SLR 1199 at [106]). I find that Dways has not shown that Justin had control over Dways’ funds and the existence of Justin’s Employment Agreement. As for Irene, I find that she was a custodial fiduciary of Dways’ Bank Accounts, based on my earlier findings on her role in Dways . Also, by December 2019, Irene took steps to give herself greater control over the Bank Accounts (see [22] and [24] above).

  143. [105] As for the Allowances, I find that Justin had conspired with Irene to withdraw the $21,000 from the UOB Account and that they did so with intent to injure or damage Dways. The Lims were not entitled to the Allowances and Nancy was unaware of and did not consent to its withdrawal at the material time. I find that Irene had made the withdrawal with Justin’s agreement and knowledge as he would benefit from a share of the Allowances.

  144. [106] I accept Dways’ assertion that the $21,000 withdrawal (as with other Disputed Payments such as items 6, and 10 to 14 of the Table at [33], all made when the Lims were intending to exit or were exiting Dways) was intended to deplete its accounts when the Lims exited the company. In particular, the $21,000 withdrawal was done to deplete the UOB Account by Irene in concert with Justin. On 1 February 2020, the UOB Account had $27,981.19 before the $21,000 was transferred out on the same date, leaving a balance of $6,981.19. When Irene ceased to be a director on 5 February 2020, the UOB Account had about $150. This was partly because she had caused further payments to be made that were not for proper purposes (items 10 and 11 of the Disputed Payments amounting to $1,980). Irene’s act of withdrawing the Allowances on 1 February 2020 also occurred shortly after the Lims had removed Products from Dways’ office on 23 and 30 January 2020, and as I find below, were removed without Nancy’s knowledge at the material time. As such, I find Justin jointly and severally liable to Dways for the sum of $21,000.

  145. Misappropriation of Products and/or revenue from sales of Products

  146. [107] Next, Dways claims the Lims had misappropriated or removed Products without its authorisation on 23 and 30 January 2020. Dways also claims the Lims had misappropriated revenue from sales of Products.

  147. Misappropriation of revenue from sales of Products

  148. [108] I find Dways has failed to make out a claim for misappropriation of revenue from sales of Products. Dways did not plead particulars of such misappropriation. This issue was also not canvassed in any detail at trial and Dways’ closing submissions did not deal with how revenue from sales of Products was misappropriated but focused on the misappropriation of Products. There was a paucity of evidence, if at all, on this issue. It was insufficient for Nancy to simply state that she was unable to tell whether the Lims had deposited the moneys generated from their sales of Products into Dways’ bank accounts.

  149. Agreements on the entitlement to Products

  150. [109] As for the misappropriation of Products, it is not disputed that Justin had on 23 January 2020, and the Lims (with the Chuas’ assistance) had on 30 January 2020, removed Products from Dways’ office. The Lims claim the removal of Products was lawful and relied on two purported agreements among the Four Persons, which is an issue I will deal with first.

  151. [110] The Lims claim that in about September or October 2019, it was orally agreed among the Four Persons that they would each be entitled to 12 boxes of HL Span, six boxes of Purity and six boxes of B’Glo per month (“Shareholders’ Entitlement”). Nancy attested however that in about October or November 2019, the Four Persons agreed that they could each take, in each month, two boxes of HL Span and three boxes of Purity for personal consumption and two boxes of HL Span and two boxes of Purity to distribute as samples to potential distributors or customers (“the Arrangement”). This adds up to four boxes of HL Span and five boxes of Purity per month.

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