Khan Aisanullah v Rajib Kumar Dhali

[2024] SGHC 313 High Court (General Division) 4 December 2024 • HC/S 977/2021 • 41 min read

14 cases cited (9 SG, 5 foreign)

Catchwords

Contract — Breach Contract — Contractual terms — Express terms Contract — Illegality and public policy — Common law Equity — Fiduciary relationships — When arising Companies — Members — Whether principle of reflective loss prevented shareholder from claiming against nominee director

Practice Areas

Contract Equity Companies

Judges (1)

Chan Seng Onn Delivered

Counsel (3)

Aquinas Law Alliance LLP Firm Cephas Yee Xiang Counsel Plaintiff Kieran Martin Singh Dhaliwal Counsel Plaintiff

Parties (2)

Khan Aisanullah Plaintiff Rajib Kumar Dhali Defendant

Case Significance

Khan Aisanullah v Rajib Kumar Dhali [2024] SGHC 313 is a reserved judgment of the General Division of the High Court (Suit No 977 of 2021) by Chan Seng Onn SJ, delivered on 4 December 2024. The plaintiff and defendant were both directors of a company in which the plaintiff was the sole shareholder. The plaintiff advanced two claims against the defendant — a breach of an oral agreement and a breach of fiduciary duties — arising from the defendant's removal of the plaintiff as a director, the transfer of the plaintiff's shares to himself, his assumption of control over the company's bank account and withdrawal of the moneys in it, and the striking off of the company. Apart from the withdrawal of moneys, the defendant did not dispute committing these acts.

The catchwords raise whether the principle of reflective loss prevented the shareholder from claiming against the nominee director, alongside issues of contractual breach, express terms, illegality and public policy at common law, and when fiduciary relationships arise. The judgment cites 14 authorities (9 Singapore, 5 foreign).

Summary

Khan Aisanullah, the sole shareholder and a director of Secur Credentials Logistics & Services Pte Ltd, sued Rajib Kumar Dhali, a fellow director resident in Singapore, in the General Division of the High Court for breach of an oral agreement and breach of fiduciary duties arising from acts including removing the plaintiff as director, transferring his shares, taking control of the company's bank account and striking off the company; the defendant raised a defence of illegality and counterclaimed for salary, lost income and compensation. The case raised issues of contractual breach, the reflective loss principle, when fiduciary relationships arise, and illegality and public policy at common law. Chan Seng Onn SJ dismissed both the plaintiff's claim and the defendant's counterclaim in their entirety.

Does the principle of reflective loss bar a shareholder from suing a nominee director in Singapore?

Khan Aisanullah v Rajib Kumar Dhali [2024] SGHC 313, decided by Chan Seng Onn SJ on 4 December 2024, addressed whether the reflective loss principle prevented a sole shareholder from claiming against a nominee director, in a suit also raising breach of an oral agreement and breach of fiduciary duties.

What were the claims in Khan Aisanullah v Rajib Kumar Dhali [2024] SGHC 313?

In [2024] SGHC 313, the plaintiff sued a fellow director for breach of an oral agreement and breach of fiduciary duties after the defendant removed him as director, transferred his shares, took control of the company's bank account and withdrew its moneys, and struck the company off.