Daniel Kroll v Cyberdyne Tech Exchange Pte Ltd and others

Mr Daniel Kroll invested in Cyberdyne Tech Exchange Pte Ltd (CTX), a start-up founded by Wong and Hong that was seeking a Capital Markets Licence from the Monetary Authority of Singapore. By early 2021 he held 7.67% of its shares. In Suit No 915 of 2021 he sued Wong, Bai and Hong for minority oppression under s 216(1) of the Companies Act. His main complaint was that new shares issued to Bai at an extraordinary general meeting on 30 April 2021, and further shares issued to Bai's entities on 12 May 2021, diluted him to 0.67%. He alleged that Wong and Hong pressured him to exit by saying CTX was in serious financial difficulty, while not disclosing investment agreements with Bai-related entities and other matters. The defendants said the share issue was a rescue that was in CTX's best interests and diluted all shareholders equally.

Kroll's pleadings listed his legitimate expectations and the documents governing his shareholding, and also complained of several omissions and non-disclosures. In Summons No 1405 of 2023 the defendants sought further and better particulars: which legitimate expectation each alleged act breached, and the source of each expectation. Kroll said his expectations were sufficiently pleaded, that their source was a matter of evidence, and that the omissions were only part of the course of conduct leading to the dilution.

1. Whether the material facts in a minority oppression pleading include the source of the legitimate expectations relied on
2. Whether every act alleged against the majority must be matched with particulars of the legitimate expectation breached
3. Which of the defendants' requests for particulars should be allowed

Pleadings must set out the material facts needed to complete a cause of action and tell the other side the case it must meet. Oppression turns on unfairness measured against the minority's legitimate expectations, which come either from formal instruments such as the constitution and shareholder agreements or from informal shared understandings. A legitimate expectation is a legal construct the court must find from other facts, so the facts showing how it arose are themselves material facts. Without them a defendant cannot contest whether the expectation exists. The source must therefore be pleaded.

However, particulars of the expectation breached are needed only for acts the plaintiff relies on as a ground of relief, not for acts pleaded as background. Kroll's reliance on a course of conduct did not change this. Reading Over & Over Ltd v Bonvests Holdings Ltd [2010] 2 SLR 776 correctly, each act forming part of an oppressive course of conduct must itself be shown to be unfair, even if judged cumulatively, and the statute targets the majority's conduct rather than the outcome.

Applying this, the court used the plaintiff's own summary of his grounds of relief, including his earlier definition of the material information said to have been withheld, to sort the allegations. Non-disclosure of the Zeepson and Saibotan contracts, the investment agreements and evidence of Xiamen Anne's regulatory breaches fell within the grounds of relief. Failures to consult, Wong's personal repurchase obligations, other funding sources and CTX's valuation were background. Having obtained that benefit, Kroll could not later take an inconsistent reading of his pleadings without formally amending them.

Assistant Registrar Perry Peh allowed the application in part. The requests in Categories 1, 4, 10 and 14 were allowed in full, those in Categories 2, 9, 11, 13 and 15 were allowed in part, and those in Categories 3, 5 to 8, 12 and 16 were disallowed. Consequential directions and costs were left to a later hearing.