Prometheus Marine v Pickering: Directors' Duties, Conspiracy & Limitation Act
In Suit 1002 of 2021, the General Division of the High Court of Singapore heard a case between Prometheus Marine Pte Ltd (in liquidation) as Plaintiff and Alan John Pickering, Lynette Anne Pickering, and Promarine Yacht Sales Pte Ltd as Defendants. The Plaintiff claimed breaches of directors’ duties and conspiracy to cause loss. The court, presided over by Audrey Lim J, found Alan John Pickering and Lynette Anne Pickering liable for breaches of directors' duties, including unjustified salary payments, personal expenses, preferential repayments, rental expenses, and conspiracy related to a commission agreement. Judgment was entered in favor of the Plaintiff.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Judgment on directors' duties breach and conspiracy claims. The court found directors liable for unjustified payments, expenses, and diverting funds.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Prometheus Marine Pte Ltd (In Liquidation) | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Alan John Pickering | Defendant | Individual | Liable to Plaintiff | Lost | |
| Lynette Anne Pickering | Defendant | Individual | Liable to Plaintiff | Lost | |
| Promarine Yacht Sales Pte Ltd | Defendant | Corporation | Discontinued | Dismissed |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Alston Yeong | Providence Law Asia LLC |
| Hari Veluri | Providence Law Asia LLC |
4. Facts
- Prometheus Marine Pte Ltd (PMPL) was in the business of providing consultancy and management services for marine leisure industries.
- Alan John Pickering (D1) was the majority shareholder and a director of PMPL.
- Lynette Anne Pickering (D2) was a director of PMPL and D1's wife.
- Promarine Yacht Sales Pte Ltd (D3) was incorporated in 2013, with D1 and D2 as directors.
- PMPL faced arbitration proceedings in 2013, resulting in an award against it in 2016.
- PMPL was compulsorily wound up in 2017.
- D1 and D2 caused PMPL to make unjustified payments and incur expenses for their personal benefit and for the benefit of D3.
- D1 and D2 knew that PMPL was insolvent or of doubtful solvency from as early as 2013.
- D3 occupied PMPL's premises rent-free.
5. Formal Citations
- Prometheus Marine Pte Ltd (in liquidation) v Pickering, Alan John and others, Suit No 1002 of 2021, [2024] SGHC 293
6. Timeline
| Date | Event |
|---|---|
| Prometheus Marine Pte Ltd incorporated | |
| Lynette Anne Pickering appointed as director of Prometheus Marine Pte Ltd | |
| Alan John Pickering appointed as director and Managing Director of Prometheus Marine Pte Ltd | |
| Ann Rita King commenced arbitration proceedings against Prometheus Marine Pte Ltd | |
| Promarine Yacht Sales Pte Ltd incorporated | |
| Name Use Agreement executed | |
| Employment contract between Prometheus Marine Pte Ltd and Alan John Pickering signed | |
| Commission Agreement executed | |
| Alan John Pickering resigned as director of Prometheus Marine Pte Ltd | |
| Prometheus Marine Pte Ltd ceased to trade | |
| Promarine Yacht Sales Pte Ltd made payment of $5,000 to Prometheus Marine Pte Ltd | |
| Addendum to the Commission Agreement executed | |
| Promarine Yacht Sales Pte Ltd made payment of $5,000 to Prometheus Marine Pte Ltd | |
| Arbitration hearing began | |
| Arbitration hearing ended | |
| Termination Agreement executed | |
| Arbitrator rendered his award | |
| Simon Trevor Wood became a director of Promarine Yacht Sales Pte Ltd | |
| Alan John Pickering reappointed as director of Prometheus Marine Pte Ltd | |
| Ann Rita King commenced winding-up proceedings against Prometheus Marine Pte Ltd | |
| Prometheus Marine Pte Ltd compulsorily wound up by order of court | |
| Alan John Pickering sent letter to the Liquidators | |
| Lynette Anne Pickering resigned as director of Promarine Yacht Sales Pte Ltd | |
| Examination conducted | |
| Examination conducted | |
| Examination conducted | |
| Alan John Pickering resigned as director of Promarine Yacht Sales Pte Ltd | |
| Suit commenced against D1 and D2 for breaches of directors’ duties | |
| Trial began | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Judgment reserved | |
| Judgment issued |
7. Legal Issues
- Breach of Directors' Duties
- Outcome: The court found that D1 and D2 breached their duties to PMPL by causing unjustified payments and incurring unjustified expenses.
- Category: Substantive
- Sub-Issues:
- Failure to act bona fide in the company's best interests
- Conflict of interest
- Disregarding the interests of the company's creditors
- Conspiracy
- Outcome: The court found the Defendants liable for conspiracy pertaining to the Commission Agreement.
- Category: Substantive
- Sub-Issues:
- Diversion of business and corporate opportunities
- Intent to cause damage or injury
- Limitation of Actions
- Outcome: The court held that s 22(1)(a) of the Limitation Act applied to exclude the time bar due to fraudulent conduct by the directors.
- Category: Procedural
- Standard of Proof
- Outcome: The court applied the principle that the plaintiff needs to satisfy the court of a prima facie case on each of the essential elements of the claim to secure a judgment in its favour when the defendant chooses not to call evidence in defence.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Directors' Duties
- Conspiracy
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- Marine
- Leisure
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ma Hongjin v SCP Holdings Pte Ltd | Court of Appeal | Yes | [2021] 1 SLR 304 | Singapore | Cited for the principle that the plaintiff continues to bear the legal burden of proving its case on a balance of probabilities, even when a no-case submission is made by the defendant. |
| Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd and another appeal | Court of Appeal | Yes | [2012] 1 SLR 427 | Singapore | Cited for the principle that once the plaintiff has discharged the evidential burden (on a particular issue) on a prima facie case, the tactical burden shifted to the defendant to show otherwise. |
| Sakae Holdings Ltd v Gryphon Real Estate Investment Corp Pte Ltd and others (Foo Peow Yong Douglas, third party) and another suit | High Court | Yes | [2017] SGHC 73 | Singapore | Cited for the principle that a de jure, de facto or shadow director owes the same duties to the company. |
| Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) | High Court | Yes | [2010] SGHC 163 | Singapore | Cited for the principle that a de jure, de facto or shadow director would be subject to the duties ordinarily imposed on directors. |
| Foo Kian Beng v OP3 International Pte Ltd (in liquidation) | High Court | Yes | [2024] 1 SLR 361 | Singapore | Cited for the principle that when a company is insolvent or even in a parlous financial position, directors have a fiduciary duty to take into account the interests of the company’s creditors when making decisions for the company. |
| Liquidators of Progen Engineering Pte Ltd v Progen Holdings Ltd | High Court | Yes | [2010] 4 SLR 1089 | Singapore | Cited for the principle that when a company is insolvent or even in a parlous financial position, directors have a fiduciary duty to take into account the interests of the company’s creditors when making decisions for the company. |
| JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others | Court of Appeal | Yes | [2020] 2 SLR 1256 | Singapore | Cited for the elements of a claim for conspiracy by unlawful means. |
| Yuanta Asset Management International Ltd and another v Telemedia Pacific Group Ltd and another and another appeal | Court of Appeal | Yes | [2018] 2 SLR 21 | Singapore | Cited for the elements of a claim for conspiracy by unlawful means. |
| Ochroid Trading Ltd and another v Chua Siok Lui (trading as VIE Import & Export) and another | Court of Appeal | Yes | [2018] 1 SLR 363 | Singapore | Cited for the elements of a claim for conspiracy by lawful means. |
| Yong Kheng Leong and another v Panweld Trading Pte Ltd and another | High Court | Yes | [2013] 1 SLR 173 | Singapore | Cited for the principle that a director is regarded as a trustee over the company’s property and the application of s 22(1)(a) or s 22(1)(b) of the Limitation Act. |
| Gwembe Valley Development Co Ltd v Koshy (No 3) | Unknown | Yes | [2004] 1 BCLC 131 | Unknown | Cited for the definition of fraudulent breach of trust. |
| H P Construction & Engineering Pte Ltd v Mega Team Engineering Pte Ltd | High Court | Yes | [2024] 1 SLR 220 | Singapore | Cited for the principle that the cause of action would accrue from the time of the wrongdoing and to which a limitation period of six years applies. |
| Suresh s/o Suppiah v Jiang Guoliang | High Court | Yes | [2016] 4 SLR 645 | Singapore | Cited for the principle that the cause of action would accrue from the time of the wrongdoing and to which a limitation period of six years applies. |
| Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd | High Court | Yes | [2009] 4 SLR(R) 458 | Singapore | Cited for the principle that in a company winding-up, the creditor bears the burden of proving the debt on a balance of probabilities. |
| Parakou Investment Holdings Pte Ltd and another v Parakou Shipping Pte Ltd (in liquidation) and other appeals | Court of Appeal | Yes | [2018] 1 SLR 271 | Singapore | Cited for the requirement of mutuality of debts or dealings may not be fulfilled where the company’s claims are based on the misfeasance or wrongdoing of the creditor who is claiming the set-off. |
| Liquidator of Leong Seng Hin Piling Pte Ltd v Chan Ah Lek and others | High Court | Yes | [2007] 2 SLR(R) 77 | Singapore | Cited for the requirement of mutuality of debts or dealings may not be fulfilled where the company’s claims are based on the misfeasance or wrongdoing of the creditor who is claiming the set-off. |
| Feima International (Hongkong) Ltd (in liquidation) v Kyen Resources Pte Ltd (in liquidation) and others | High Court | Yes | [2022] SGHC 304 | Singapore | Cited for the requirement of mutuality of debts or dealings may not be fulfilled where the company’s claims are based on the misfeasance or wrongdoing of the creditor who is claiming the set-off. |
| Smith (Administrator of Cosslett (Contractors) Ltd) v Bridgend County Borough Council | House of Lords | Yes | [2002] 1 AC 336 | United Kingdom | Cited for the requirement of mutuality of debts or dealings may not be fulfilled where the company’s claims are based on the misfeasance or wrongdoing of the creditor who is claiming the set-off. |
| Manson v Smith (liquidator of Thomas Christy Ltd) | Unknown | Yes | [1997] 2 BCLC 161 | United Kingdom | Cited for the requirement of mutuality of debts or dealings may not be fulfilled where the company’s claims are based on the misfeasance or wrongdoing of the creditor who is claiming the set-off. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Limitation Act 1959 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Directors' duties
- Liquidation
- Conspiracy
- Limitation Act
- Constructive trustee
- Fraudulent breach of trust
- Name Use Agreement
- Commission Agreement
- Termination Agreement
- Shareholders' loans
- Unjustified payments
- Personal expenses
- Preferential repayments
- Rental expenses
15.2 Keywords
- directors duties
- breach of duty
- conspiracy
- liquidation
- limitation act
- singapore
- high court
- civil case
- marine industry
- insolvency
- fraud
- fiduciary duty
17. Areas of Law
16. Subjects
- Company Law
- Directors' Duties
- Civil Litigation
- Insolvency