The company and its directors as co-conspirators

• Main Author: LEE, Pey Woan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2009
• Subjects: Asian Studies; Business Organizations Law; Commercial Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/2588; https://ink.library.smu.edu.sg/context/sol_research/article/4546/viewcontent/conspirators.pdf
• Institution: Singapore Management University

In Nagase Singapore Pte Ltd v Ching Kai Huat and Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd, the High Court of Singapore affirmed the proposition that a company may, like a natural person, conspire with its director to inflict harm on a third person even if the latter is its “directing mind and will”. In both cases, the courts’ focus was directed at a conceptual enquiry, ie, whether a company, whose “mind” is the same as that of its director, could properly be said to have “combined” or “agreed” to conspire. This article argues, however, that this focus is misplaced. By focusing on the corporate form, the courts have inadvertently overlooked the policy concerns underlying the enquiry. In each case, the real issue before the court was whether there were grounds for imposing tortious liability on a director for what was essentially the company’s wrongdoing (ie, breach of contract). For this purpose, the relevant legal principle is found in the leading decision of Said v Butt, which lays down the presumptive rule that a director acting on the company’s behalf does not incur tortious liability if he has acted bona fide within the scope of his authority. Its primary concern is to enable directors and officers to discharge their duties without the burden of having to defend ill-founded suits.