son sued father after asking for S$15 million to 'amicably exit' failed supermarket business

The_King · March 27, 2023

SINGAPORE: A man who sued his father over a failed supermarket business, claiming he was verbally promised a larger share of the company and property, has had his case dismissed by the High Court.

Mr Kwek Hong Lim had demanded S$15 million (US$11.3 million) for his "amicable exit" from the company that ran YES Supermarket in Tampines and later threatened to publicise the family dispute.

His father Kwek Sum Chuan, who founded the company, said there was no such verbal agreement. When they could not agree on the terms of his son's exit, the younger man launched a legal suit.

The older man said his son had “seriously mismanaged the company” and that it incurred significant financial losses as a result. The supermarket, located at Block 201B Tampines Street 21, ceased operations in 2018.

The High Court dismissed the lawsuit on Thursday (Mar 23).

Justice Hoo Sheau Peng said: “Having observed the plaintiff (the son) and having considered his evidence against the surrounding facts and circumstances, I do not find the plaintiff a credible witness.

“The plaintiff has shown a tendency to exaggerate facts.”

She added that the younger man, who has a master’s degree and was an experienced businessman, never put the agreement into writing.

“Although he says he asked the defendant many times to put the agreement into writing, those were all verbal requests,” said the judge.

“Even if the defendant had refused to do so, the plaintiff could have followed up with a written request. There was none.”

THE DISPUTE

The company was set up in 1999 by the father, who owns 85 per cent of the supermarket business. His son, Mr Kwek Hong Lim, owned 8 per cent.

The remaining 7 per cent was split between the defendant’s wife (5 per cent) and his daughter (2 per cent).

In 2003, the property in Tampines was bought by one of the father’s companies.

The son told the court he was appointed CEO in 2004, and he claimed that the business boomed under him.

The defendant, however, said his son was “not substantively involved” in setting up the company, and that he saw it as a family business and wanted his five children to be involved in it.

His son only started working in the company in 2003 after getting his master’s degree. In 2004, the father agreed to make his son CEO as he “wanted to groom” his son to take over.

According to the son, he was headhunted by a Malaysian company for the position of CEO, and was offered an annual remuneration of between RM900,000 (S$272,000) and RM1.2 million.

But he claimed he turned it down when the father verbally offered him another 60 per cent shares in the company and 60 per cent of the properties – something the older man disputes.

“On the other hand, the defendant (father) denies having ever made such an offer to the plaintiff or having entered into the alleged oral agreement with the plaintiff,” Justice Hoo said in her judgment.

“The defendant says he did not receive any resignation letter from the plaintiff and did not receive any indication that the plaintiff wished to resign.”

According to the father, he decided in 2012 that his children should play a larger role in the company, and appointed his daughter and his son as directors of the company at the same time.

He said he intended to distribute his assets to his children, including his son, in the future.

The court heard that the son had asked his father to put matters into writing, but the older man said he thought it was unnecessary and that he was simply expressing his plans for the future and did not intend to create any legally binding agreement.

One such discussion was on Dec 21, 2015, which was captured on video. The son used it to substantiate his case.

By 2017, the supermarket business ceased to be viable, and on May 25, 2018, the father and other shareholders of the company unanimously resolved to end the supermarket operations.

THREATS AND DEMANDS

According to the older man, from 2016, his son made a series of threats and demands against him for his money and assets.

The relationship deteriorated significantly by March 2018, when the father was in the midst of closing the company’s supermarket operations.

He offered his son S$3 million to buy out his 8 per cent of shares and hoped his son would obtain the necessary documents for the closure.

But his son asked for S$15 million instead to exit the company. This was rejected by his father.

In an email on May 30, 2018, the son threatened to open legal proceedings against his father. On the same day, he sent another email that the father understood to be a threat to publicise the family dispute in the newspapers.

Fearing the threats, the father met his son the next day. He was shown a draft agreement in which his son was prepared to agree to the S$3 million for the shares, but they could not agree on the other terms.

About a week later, Shin Min News ran an article about the family’s feud, including the son’s allegations of the existence of a verbal agreement with his father.

The older man said he only found out about this verbal agreement after reading the article, and that he did not respond to the press because he did not want to make public the family feud.

Both sides met in June 2019 but could not resolve their differences. Slightly more than a year later, the son sued his father.

UNRELIABLE VIDEO RECORDING

The court heard that there were no witnesses to the meeting between the father and son when the alleged verbal agreement was made.

He also failed to call on any officer from the Malaysian company that had purportedly offered him a job to verify the offer letter. He did not even attempt to contact the people who made the offer to him, or any other relevant witnesses, the judge said.

Regarding the video recording in 2015, the son claimed it showed his father confirming the existence of the verbal agreement.

The judge noted that the video recording submitted to the court was only about 4 minutes and 38 seconds long – when the entire meeting was about two hours.

During the cross-examination, the son claimed that he had asked the person who retrieved the video to “truncate a relevant portion of the video recording”.

He claimed he did not receive the entire video recording, something the person who retrieved the video disputed.

The judge also said there was a “serious mismatch” between the audio and video feeds of the recording.

“For instance, during a portion of the video recording, multiple bouts of coughing were heard, but persons in the video were not seen coughing,” said the judge, adding that the son provided no explanation for the mismatch.

She said there were “serious lingering doubts” about the video’s authenticity and that it was only a small portion of the meeting.

Because the conversation was in Teochew – a commonly spoken Chinese dialect in Singapore – the son asked a Mr Yeo to help with the translation.

She noted that Mr Yeo’s translation was disputed by the father, and the judge highlighted Mr Yeo’s lack of expertise in translation.

The court was told that the son was unable to find a certified Teochew translator.

“I am not satisfied with the bald assertion that the plaintiff could not find a translator in Teochew in Singapore,” said the judge.

A professional translator engaged by the father observed the poor quality of the video and from what he could hear, provided a “vastly different transcript” from Mr Yeo’s.

The judge also said it was “entirely self serving” for the son to rely on the Shin Min article to establish the existence of the verbal agreement, given that it was “based entirely” on the son’s version of events.

She noted the son had no other personal written record of the verbal agreement, and in his letter and emails to his father, he did not mention this agreement.

“At the end of the day, it would have been reasonable to expect some form of documentation on the part of the plaintiff,” said the High Court judge.

“However, as discussed above, there is nothing that points to the existence of the alleged oral agreement. The video recording was meant to be the strongest piece of objective evidence to capture the alleged oral agreement, but it failed dismally to do so.”

She accepted that the father merely discussed succession plans with his son, including giving away assets to his five children in future.

Source: CNA/mi(gs)