Liang Xihong v Loong Soo Min and another

Ms Liang Xihong (Sandy) and Mr Loong Soo Min (Sam) married in 1994 and divorced in 2014 on consent terms under which Sam would pay Sandy S$9.3m as her share of the matrimonial assets and each would keep a 50% stake in Yangbum Engineering Pte Ltd, a precision engineering company Sam incorporated in 1997. The terms did not deal with Sandy's shares in Ace Class, Apex Precision and QL Precision (the Three Companies), which Sam had incorporated in 2008 as exclusive subcontractors to Yangbum. Sandy later married Mr Zhang Shengqiang.

In early 2020 relations broke down. Sandy withdrew S$188,000 from the couple's OCBC joint account; Sam proposed dividends with set-offs against loans Sandy owed and removed her as a signatory to Yangbum's accounts; and Sandy appointed herself and Zhang directors of the Three Companies and had them put into voluntary liquidation. In Suit No 275 of 2020 Sandy sought relief under s 216 of the Companies Act, including a buy-out, alleging that Sam diverted her dividends of US$922,052.47 and falsified payment vouchers, forged her signature on at least 49 cheques, proposed unequal dividends with improper set-offs, and breached a quasi-partnership understanding by removing her as signatory. In Suit No 345 of 2020 Sam claimed that Sandy held the shares in the Three Companies on trust for him and breached that trust, that Zhang dishonestly assisted her, that the two conspired to injure him, and that the S$188,000 withdrawal was wrongful. The suits were heard together.

1. Whether Sam diverted Sandy's dividends, falsified vouchers or forged her signature on cheques.
2. Whether the proposed dividends and set-offs in 2020 were oppressive.
3. Whether Yangbum was a quasi-partnership giving Sandy a legitimate expectation to remain a joint signatory.
4. Whether Sandy held the shares in the Three Companies on trust for Sam, and whether breach of trust, dishonest assistance and conspiracy were made out.
5. Whether the S$188,000 withdrawal from the joint account was wrongful.

On Sandy's claims, seven of the dividend cheques were paid into the joint account to which she had unrestricted access, and the evidence of the finance staff and the dividends journal showed she knew they were dividends. Her account of discovering a diversion in 2017 was internally inconsistent and found to be a fabrication. The eighth cheque was, as she knew and had agreed, payment of Sam's agreed management and expense fees. Sam had signed some cheques for her under an understanding that he could do so when she was in China. The 2020 dividends and set-offs were only proposals needing her agreement, which she refused, and had no continuing effect; they were in any case equal as dividends. Yangbum was not a quasi-partnership: Sandy had no material role in founding or running the business, resigned as director in 2005, and her alleged understanding on oversight of funds was vague, contradicted by the bank mandates, and a fabrication. The judge found her credibility sorely lacking.

On Sam's claims, the divorce terms preserved the Yangbum shareholdings but were silent on the Three Companies, there was no reason the shares would be held for Sam rather than Yangbum, and the alleged trusts were agreed before the companies existed, when there was no property to hold on trust. Nor had Sandy shown the shares were her own investment. With no trust, the breach of trust and dishonest assistance claims failed. The conspiracy claim failed because no agreement between Sandy and Zhang was pleaded or proved; the judge also criticised the practice of pleading conspiracy by general cross-reference. Finally, although the parties had agreed the S$9.3m would be paid through extra dividends, Sam's figures were selective and he had not proved full payment before the withdrawal, so Sandy remained entitled to use the joint account.

Chua Lee Ming J dismissed all of Sandy's claims in S 275 and all of Sam's claims in S 345. Each party bore its own costs, except that Sandy was to pay Yangbum S$20,000 for her claims for an account and reinstatement as signatory, and Sam was to pay Zhang S$30,000 for S 345.