Quek Leng Chye and Another v Attorney General
| Jurisdiction | UK Non-devolved |
| Judgment Date | 31 July 1985 |
| Date | 31 July 1985 |
| Docket Number | Privy Council Appeals Nos 59, 60, 61 and 62 of 1984 |
| Court | Privy Council |
[1985] SGPC 2
Privy Council
Lord Scarman
,
Lord Diplock
,
Lord Keith of Kinkel
,
Lord Brightman
and
Sir Owen Woodhouse
Privy Council Appeals Nos 59, 60, 61 and 62 of 1984
Samuel Aaron Stamler QC and S Rajendran (Macfarlanes) for the appellants
Stuart N McKinnon QC and Fong Kwok Jen (Jaques & Lewis) for the respondent.
Companies Act (Cap 185,1970 Rev Ed)s 130 (consd);ss 39 (4),43
Civil Procedure–Affidavits–Whether parties' witnesses entitled to be cross-examined on facts stated in affidavits–Companies–Directors–Prohibitions–Disqualification from directorship and management of companies–Application for leave to act as directors or promoters or to be otherwise directly or indirectly concerned with or take part in management of companies–Whether court's discretion to grant leave properly exercised–Section 130 Companies Act (Cap 185, 1970 Rev Ed)
The appellants had each been convicted of an offence under s 39 (4) of the Companies Act (Cap 185, 1970 Rev Ed) (“the Act”) for the unlawful issue of letters of invitation to members of the public to subscribe for shares in a company by failing to provide a prospectus disclosing, amongst other things, the premium at which each share was being offered for sale. Both applied to the High Court for leave under s 130 of the Act to act as directors and promoters or to be otherwise directly or indirectly concerned with or take part in the management of various companies in Singapore. The Chief Justice determined that neither appellant ought to be allowed to be a director or promoter of any company incorporated in Singapore but granted them leave to be concerned in and take part in the management of all but two companies; the two companies being the ones which the letters of invitation had been issued in relation to. The Court of Appeal subsequently affirmed the Chief Justice's decision in relation to refusal to allow the appellants to act as directors and promoters of any company incorporated in Singapore and reversed that part which granted the appellants leave to be concerned with and take part in the management of the various companies specified in the Chief Justice's judgment. In doing so, the Court of Appeal observed that the Chief Justice had not given sufficient regard to the fact that “ [m]ore and more in the management of companies, employees in managerial positions are exercising as much power in the management of companies as are exercised by directors of companies [, and that they], as with directors, are placed in a position where they are not without opportunity to manipulate the corporate structure to their own interest”.
The appeal to the Privy Council gave rise to two arguable points: firstly, whether the Court of Appeal was entitled to interfere with the way in which the Chief Justice had exercised a discretion which by s 130 of the Act was vested in the High Court; and secondly, whether the appellants' application under s 130 of the Act ought to be dismissed without first allowing the appellants to be cross-examined on their affidavit evidence pertaining to their reliance upon their lawyer's advice on the question of whether the letters of invitation needed to be accompanied by a prospectus.
Held, dismissing the appeals:
(1) It is well-settled law that the onus lies upon the applicant for the lifting of the disqualification to satisfy the court that he is possessed of the high degree of commercial integrity with which those exercising influential managerial functions in limited liability companies should be endowed if the public is to be given adequate financial protection: at [5].
(2) The distinction made by the Chief Justice, for the purposes of s 130, between taking part in the management of companies as a director and doing so as someone employed in the hierarchy of management of a company did not give sufficient regard to the fact that employees in managerial positions are exercising as much power in the management of companies as are exercised by directors and that they are placed in a position where they are not without opportunity to manipulate the corporate structure to their own interest. It is essential that managers of companies, like directors, be persons of integrity and act with the utmost candour in the management of companies. Given this, there was sufficient justification for the Court of Appeal to set aside the way the Chief Justice had exercised his discretion: at [12] and [14].
(3) If the Court of Appeal were going to accept as facts which justified refusal of the appellant's application matters that were denied in their affidavit evidence, the appellants were entitled to be so informed and to be given an opportunity of answering them. However, the affidavits of both appellants were confined to their state of knowledge of the need for a prospectus and their implicit reliance upon their lawyer's advice that there was no legal obligation to provide a prospectus with the letters of invitation. There was, in fact, no affidavit evidence disputing the discouraging effect...
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