Yee Bing Store Ltd v Yuen [1999] SBHC 138; HC-CC 012 of 1997 (15 September 1999)

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Mr A Radclyffe for the plaintiff and both defendants by counterclaim
Mr J Sullivan for the Defendant and plaintiff by counterclaim

*Notes:*	Deceased Estate	-	Performance of contract made by deceased, specific performance.
	Land Law	- - -	Proof of contract to dispose of registered interest in land, s:117 of the Lands and Titles Act. Registration and discharge of charge over land. Deed and Escrow, compliance with conditions of escrow and coming into effect of deed.
	Insurance Law	-	Insurable interest in loan for building a house, who is the assured?
	Company Law	--- ---	Transfer of shares, allotment of shares. Gaining control of a company. Unconscionable, inequitable and oppressive act, s:202 of Companies Act. Relief of rectification of register of members. Reduction of authorised capital. What amounts to a resolution of a board of directors.
	Practice and Procedure	- -	Counterclaim, whether may be ordered excluded and tried separately, O23 rr 10, 11 and 14. Joinder of parties, is leave required to join a defendant by counterclaim? O23 rr10, 11 and 14.

The Background: What started as a claim based on contract, against the estate of a deceased shareholder and director has digressed into Land Law, Company Law and the Law of Insurance. All the diverse points of law raised require close examination. The facts of the case are extensive even when stated in summary. As presented to Court, and without my evaluation yet, the facts are as follows.

Mr Bing Ngong Yee, to whom I shall refer as Bing Yee, carried on business in China Town, Honiara City, and in Tulaghi, in the Solomon Islands. On 7.4.1986 he incorporated a limited Company, Yee Bing Store Limited. The authorised capital, was $50,000 divided into 50,000 shares of $1 in value. At subscription, Bing Yee took 40 shares and his children, Henry Ta Tong Yee, known as Henry and Chan Kong Yee, known as Gin, took 30 shares each. On 7.5.1992 Yee Bing Store Limited transferred immovable property, parcel No.191-019-178 at Skyline Ridge, Honiara, to Henry; he was not asked to pay for the land. Subsequently Henry applied to Solomon Islands National Provident Fund, the SINPF, for a loan to build a residential house on the land. By a letter dated 11.9.1992, SINPF made an offer of the loan to Henry, the loan was $80,000, but escalated to about $86,000 by the time disbursement commenced. The land was charged with the loan, the charge in statutory, "Form 5", now exhibit DH3, was registered in the Fixed Term Estate Register. The loan instalments were sometimes paid by Henry and at other times by Yee Bing Store Ltd. On 5.6.1994 Henry died testate. In his will he appointed his wife, Yvette Miu Fong Yeun the executrix of all his estates and bequeathed the whole estate to her, “for her sole use and benefit absolutely,” if she survived him for 28 days. In the event that she did not survive him, he bequeathed the whole estate to his “child or children,” and the executrix would be his sister, Mary Yee. Yvette Yeun obtained probate much later after over 2 years, on 9.10.1996, and by that time she had gone to live in Hunghom Kowloon, Hong Kong-China. At the time of the death of Henry, the housing loan had not been paid up. SINPF, however, acting according to its requirement, had two insurance policies taken; the mortgage protection policy on the life of Henry for $89,000, and the natural calamity policy against the risk of destruction of the property. The total insurance sum was $150,000. The premium for the policies were added to the loan and was paid by the borrower. On the death of Henry, the sum of $86,278.78 (rounded to 86,278 in the accounts of Yee Bing Store Ltd) was paid directly to SINPF by the insurers as insurance claim. The figure represented the sum owed on the loan as at the date of the death of Henry. It was used to pay up and liquidate the outstanding loan completely. Yee Bing Store Ltd. has shown the sum in its 1996 accounts as profit. It was never passed on to the estate of Henry first and subsequently paid out to SINPF. Corresponding entry for the transaction was made in shareholders account. One of the present accountants of the company stated in Court that they were not quite sure about how to show the sum representing the insurance payment in the accounts of the company, he stated, "we parked it in shareholders account”. Subsequent to the paying of the loan a letter dated 4.11.1994, signed by "Yee Chan Tong" as director, was sent to a government official, the Official Administrator of Unrepresented Estates, asking him to transfer the land, Parcel No. 191-019-178 back to Yee Bing "Company" Limited. Gin said he signed the letter, Yee Chan Tong is another form of his name. The transfer requested has not been done.

Apart from the above main events, others were recorded as having occurred alongside. Exhibits presented to Court as minutes of the meetings of directors of Yee Bing Store Ltd. showed several resolutions. Resolution dated 6.10.1994 approved transfers of 10 shares belonging to Gin to his wife, Yee Wong Lai King, and appointed her director. Resolution dated 8.10.1994 approved transfers of 25 shares belonging to Bing Yee to Gin. Resolution dated 24.10.1994 allotted 5,000 new shares to Gin. In different minutes, of non company meeting, exhibit PCKY 13, it was recorded that on 21.10.1994 a meeting took place in Sydney, Australia. At the time Bing Yee lived in Sydney in retirement. Those who attended the meeting were: Ken Yee, the eldest son of Bing Yee, Maurice Yee, the youngest son, Gin Yee, the son now managing Yee Bing Store Ltd. and the second defendant by counterclaim, and Robert Goh, a son-in-law of Bing Yee and the accountant of Yee Bing Store Ltd. at the time. The accountants of the company are now Price Waterhouse Coopers. It was recorded that at the meeting it was agreed, among other things, that Yvette would be given a house in Sydney and, “nothing in Honiara,” Gin would be given all the shares of Yee Bing and Henry in Yee Bing Store Ltd. so that Gin would, “take over 100% of the company,” and would also “take over all the liabilities of the company.” Yvette Yeun, the executrix, was not present at the meeting.

In the original writ of summons Yee Bing Store Limited, the plaintiff and the first defendant by counterclaim, sued Yvette Yeun, the widow and executrix, the defendant and also the plaintiff by counterclaim, for specific performance order that land parcel No. 191-019-178 be transferred by the executrix back to the company, and it asked for costs of the suit. Its case was that it transferred the land to Henry so that Henry who qualified to obtain loan from SINPF would obtain loan for constructing a house on the land, the plaintiff intended one of its directors, Henry or Gin, to live in the house. To support its case, the plaintiff produced exhibit PGKY 11, a statutory form for transfer of estate in land. The form, made under s: 167 of the Lands and Titles Act, Cap.133 of the Laws, is “Form 4”. The plaintiff’s evidence about the transfer form was that Henry Yee filled in the particulars in the form including paragraph 2, acknowledging intention to transfer the land to Yee Bing Store Ltd., and signed it, but did not date the form because the transfer was to take place on a date after payment of the SINPF loan would have been completed.

The defendant, in her pleadings, denied the plaintiff’s case stated above, but during the hearing and certainly in submission, conceded almost all the facts of the transactions about the land. She however, denied the crucial averment that Henry was to transfer the land back to the plaintiff. Learned counsel Mr J. Sullivan, for the defendant, contested the plaintiff’s claim mainly on points of law. First he contended that the agreement was unenforceable under the Statute of Frauds, [1677] Act of England, which, he submitted, applies in Solomon Islands. Secondly he contended lack of consideration from the plaintiff for the promise to transfer the land back, consideration being an essential feature of an enforceable parol or simple contract. Thirdly, and I think that was meant to be in the alternative, he contended that the transfer document was delivered in escrow, the conditions thereof had not been met. As I understand it, the question of delivery in escrow would only arise if the document was a deed, consideration would not be required in a contract made by deed. The defendant’s contentions did not stop there, they went beyond the defence to the plaintiff’s case and transformed into counter-claim.

The defence and counter-claim were first filed against the plaintiff alone. The plaintiff then filed application under Order 23 rule 14 of the High Court (Civil Procedure) Rules, for an order to have the counterclaim tried separately. The application was not pursued, instead later the defendant applied to join Gin as the second defendant by counterclaim and to amend the counterclaim. The Registrar of the High Court, Mr D. Chetwynd granted the application. O23 rr10 and 11 allow other persons to be cited and served without leave when counterclaim includes other persons, it is for the plaintiff to apply under O23 r14 to have the counterclaim proceeded with in a separate proceeding. May be leave was applied for because defence and counterclaim had already been served.

The substance of the counterclaim was that at the time of Henry’s death, issued shares in Yee Bing Store Ltd. remained unchanged as at subscription, and that any purported transfers of shares since, should not be recognised by the Court, the shareholdings were to be regarded as 40% held by Bing Yee, 30% by Henry and 30% by Gin. The counterclaim was premised on the contentions that the company subsequent to Henry’s death, never held any company meetings and therefore never passed any resolutions approving any transfers of shares and that Bing Yee was too old to consent to transfers of his shares to Gin, or to anybody, further, that the company never subsequently allotted 5,000 shares to Gin. The plaintiff by counterclaim asserted that share distribution is not now 5,060 held by Gin, 30 by the executrix of Henry’s estate and 10 by Yee Wong King (Gin’s wife), as claimed by the company and Gin. An alternative position pleaded and submitted for was that if there have been directors’ meetings at which allotment of 5,000 shares were made to Gin, and transfers of shares to Gin and his wife were approved, then the allotment and transfers were improper allotment and transfers intended to further the interest of Gin, a director, by diluting the shares of Henry from 30% worth of the company to less than 1% worth, the transfers and allotment were therefore unconscionable, prejudicial and oppressive.

The defence to the counterclaim was that the transfers of the shares were duly executed and approved by the company under article 6 of its Articles of Association,and that the allotment of the 5,000 shares were made to Gin properly under article 4, and for the purpose of raising money which the company needed, it was operating on bank overdraft, the allotment was in the interest of the company.

The defendant has not put forward any explanation or purpose for the transfer of the land from the plaintiff to Henry without Henry paying for it and for Henry filling in and signing undated transfer form in favour of the plaintiff and having it kept by the plaintiff. By that time the land had been charged with the loan to Henry and so it had been encumbered with the loan made specifically for building on it. I view the charging of the land with the loan as being of some benefit to Henry; he had comfort in the knowledge that the land would be sold to pay up the loan in the event the contemplated source of payment failed. In my view all the transactions proved support the existence of the intention of the parties as put forward in the plaintiff’s case. I accept that there was an agreement between the plaintiff and Henry and that it was a term in the agreement that Henry would secure loan from SINPF as he was eligible, that the loan would be paid by the plaintiff, and that upon the plaintiff completing payment, Henry would transfer the land back to the plaintiff.

(The Statute of Frauds Act 1677, of England and Section 117 of the Lands and Titles Act, Chapter 133 in the Laws of Solomon Islands)

The contentions of the defendant that the agreement would be unenforceable under the Statute of Frauds Act [1677], of England, and that the contract, if any, was a simple contract not under seal, and would fail for lack of consideration, have now been abandoned, but only at submission stage and after much pleading and evidence, it is appropriate to state briefly the view of the Court about the contentions.

There was no need to rely on the Statute of Frauds Act 1677, of England. Mr Sullivan’s pleading was under the provisions in s:4 of that Act. The provisions have been re-enacted with modification in s:40 of the Law of Property Act 1925, of England. The original s:4 of the Statute of Frauds Act 1677, was subsequently repealed by the Law Reforms (Enforcement of Contracts) Act 1954, of England. The present statutory law in England on the point is therefore s:40 of the Law of Property Act, 1925.

Solomon Islands has its own statutory law applicable to the issue; it is s:117 of the Lands and Titles Act, Chapter 133 in the Laws of Solomon Islands. The section adopted the provisions in s:40 of the Law of Property Act 1925, of England. It provides that for an agreement disposing of registered interest in land to be enforceable, it must be in writing or there must be some memorandum of it, signed by the person to be charged, unless the purchaser has taken possession or the agreement has partly been performed. The defendant has conceded that on the evidence in this case, there has been sufficient “memorandum or note, signed by the party to be charged”, so that the contract would be enforceable. On the evidence there was certainly sufficient writing evidencing the agreement, alternatively there has been much part performance; the land has been transferred to Henry, the loan has been obtained and transfer instrument for the retransfer of the land to the company has been completed and signed though not dated. The agreement would be enforceable.

Very few contract cases are these days contested on the ground of nudum pactum, a parol or simple contract that is unenforceable for want of consideration. I think that is the result of what has now become a rather imprecise definition of consideration - the price paid by the plaintiff for the defendant’s promise, a definition in the English case, Dunlop Pneumatic Tyre Co. Ltd -v- Selfridge & Co. Ltd [1915] UKHL 1; [1915] AC 847. It is the definition preferred to that in the old English case, Currie –v- Misa (1875) [1875] UKLawRpExch 11; LR 10 Ex 153. In the latter case the definition was that “a valuable consideration may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment loss or responsibility, given, suffered or undertaken by the other.” The definition is more of an enumeration than a definition. Usually it is easy to recognise consideration in a transaction where there has been exchange of value for value, a quid pro quo transaction such as in sale and purchase, even if the values exchanged may appear to be unfair bargain to one of the parties. The law leaves balancing the worth of the values in the bargain to the wisdom of the contracting parties. The difficulty now though, is that case law has reached the point where it is accepted that the element of bargain need not even be of any practical value to the parties. The consequence is that the element of bargain has become difficult to identify. Cases decided on the question as to whether an act or promise is real consideration or is sufficient as consideration, that is, whether Court will accept an act or promise as consideration are frequently inconsistent. The time honoured popular statement that, “consideration must be something which is of some value in the eye of the law,” a statement in the judgment of Patterson J in Thomas –v- Thomas [1842] EngR 260; [1842] 2 QB 851, merely conveys the difficulty in identifying what court will accept as of value and therefore as consideration, it does not identify the nature of consideration so that consideration can be identified by its nature. In this case, my decision, which I base solely on case authorities available, would be that the agreement to transfer land parcel No.191-019-178 on the promise of Henry to transfer it back when the loan with which the land has been charged would have been paid, would not fail for lack of consideration. The agreement was not a nudum pactum; it was supported by consideration.

Mr Sullivan’s submission that the signed, but undated transfer was delivered in escrow was based on the assumption that the Court would accept his first submission that by reason of s:117(3) of the Lands and Titles Act, the unsigned transfer, now exhibit PGKY11 in Court, is a deed, and I add, but for delivery in escrow. Learned counsel Mr Radclyffe, for the plaintiff, did not challenge the assumption, he simply proceeded and strongly urged the Court to find that all the conditions in the escrow have been met.

Mr Sullivan's first submission was that the transfer in this case is a deed because s:117(3) of the Lands and Titles Act deemed it a deed. S:117 (3) which Mr Sullivan relied on states:

“(3) Every instrument when registered shall have the same effect for all purposes of and incidental to this Act as if it had been made under seal; but nothing in this subsection shall be construed to prevent a party to such an instrument affixing his seal thereto, or giving to the instrument any additional form of solemnity not inconsistent with the provisions of this Act”.

In my view emphasis must be placed on the adjectival phrase, “when registered”. It is only when an instrument has been registered that it is to be deemed a deed. It is common ground that exhibit PGKY 11 has never been registered. I must conclude therefore that it cannot be deemed a deed, or even to have some features of a deed under s:117 (3).

S:117 (3) aside, exhibit PGKY 11 qualifies as an escrow, that is, a document in the nature of a deed delivered conditionally so that the obligation therein is suspended until the condition has been fulfilled. A deed as we now know it, is an expression of obligation of the maker in writing, signed, sealed and delivered by the maker unconditionally “as his deed” – Macedo –v- Strouds [1922] 2 AC 330 (PC), Alan Estates Ltd –v- W G Stores Ltd [1982] Ch 511, Kingston –v- Ambrian Investment Co Ltd. [1975] 1 WLR 161 and Terrapin International Ltd –v- Inland Revenue Commissioners [1976], 2 All ER 46. Signing and sealing are now taken as alternatives, many people do not use seal these days. Exhibit PGKY11 was in writing, signed by Henry, it expressed his obligation to transfer Parcel 191-019-178 and he delivered it to the plaintiff as his deed. However, the delivery was conditional, the condition being that it would be acted upon only when the SINPF loan would have been paid up. So exhibit PGKY11 is not a deed because of the conditional delivery; it is an escrow, but not because s:117(3) deems so.

I have decided that exhibit PCKY11, is not a deed, I must mention that it, however, serves an important role as “some memorandum” or evidence in writing, of the contract between Yee Bing Store Ltd. and Henry to transfer the registered estate in the land.

In my view, the facts of the case viewed together lead to the inference that any sum paid by Henry to SINPF would have come or was by mutual understanding, recoverable from the plaintiff. Henry understood the agreement between the plaintiff and himself as resting the responsibility to pay the loan on the plaintiff, he would not have assumed responsibility to pay on the occasions when the plaintiff did not pay without coming to some understanding with the plaintiff. The fact that the plaintiff carried on paying the loan except on the occasions when Henry paid shows that the plaintiff continued acting in pursuance of the agreement that started with the transfer of the land to Henry and Henry did not regard the occasions when he paid as occasions of breach of the contract by the plaintiff. If Henry considered that there was breach of the term that the plaintiff was to pay the loan, one would expect that he would have demanded the return of the transfer form to him or its cancellation. On the other hand, if the loan was a matter between Henry and SINPF to the exclusion of the plaintiff, then why was the plaintiff paying most of the loan instalments and why would Henry sign undated transfer in favour of the plaintiff and have the plaintiff keep the transfer?

The submission that Henry paid some instalments of the loan so the plaintiff failed to fulfil the condition of the escrow fails.

(Escrow – Was the Insurance Claim Payment a Payment by or on behalf of Henry?)

The defendant’s other contention about delivery in escrow was that the plaintiff failed to meet a condition in the escrow in that upon the death of Henry the loan was paid up by insurance claim accruing to Henry's estate, not by the plaintiff.

That contention would not be accepted. Mr Sullivan was content to rest his submission on the point without taking the Court through what constituted the insurable interest in the contract and without pointing out the parties thereof. Mr Radclyffe did not consider it necessary either. The submission of Mr Sullivan assumed that the sum of $86,276.78, claimed by SINPF was part of the estate of Henry. The evidence does not bear that out. The evidence in the testimony of Joe Haga, DW2, was that it was the requirement of SINPF that insurance policies be taken by the borrower, Henry, not that Henry was to be the assured nor that indemnity payment would accrue to Henry or his estate. The policies were not produced in Court, they were merely testified about. On the testimonies, without the policies as exhibits, I am inclined to take it that SINPF was the assured in the policies. SINPF had, because of the loan, insurable interests in the life of Henry and in the land and building to be constructed, to the extent of the sum that would remain unpaid on the loan from time to time. SINPF was entitled to insure the life of Henry, and the building against destruction or damage during the time that the loan remained unpaid, to protect its own interest. It appears it did that and got the borrower to pay the insurance premium. The sums claimable were due to SINPF as the assured, not to the estate of Henry. It is true that premiums paid on the policies were part of the loan and the borrower paid the premiums, it must be understood, however, that how SINPF or any assured, would obtain money to pay its premiums could not affect the existence of its insurable interest and entitlement to enter the contract of insurance nor its right to the benefits accruing under the policies. Payment was from Henry as far as SINPF was concerned, but from the plaintiff as far as Henry and the plaintiff were concerned. It is significant that the sum paid to SINPF as insurance claim was the exact sum outstanding on the loan. That was consistent with the right of the assured in a contract of insurance which is the right to indemnity and not to profit from the occurrence of the risk insured against. The rule there is that a contract of insurance is not a wager.

My over all conclusion would not be different if my finding of facts was that Henry was the assured and the insurance claim was due to his estate. The evidence as a whole suggests that the plaintiff was responsible for and paid the loan instalments which included the insurance premiums. Sometimes payment of instalments was made through Henry. The reciprocal promise would be to reimburse Henry. The over all agreement was that the insurance claim would be utilised by the plaintiff to pay up the loan in the event that the claim materialised.

In the end the insurance claim was used to pay up the loan in full. The accounting transaction in the book of the plaintiff would be that the loan it owed to SINPF through Henry was written off resulting in gain or profit. My decision would be that the loan having been extinguished, there was nothing left for the plaintiff to continue paying for even if it wanted to. The interest of Henry in the contract was that eventually he was to be discharged without any costs to him and he was discharged without any costs to him. SINPF has completed and signed the statutory discharge, form 7A, it is ready to be presented for registration. Discharge form 7A is a prescribed form, the Registrar of Titles is obliged under s:167 of the Lands and Titles Act to act on it accordingly. The condition of the escrow has been carried out. I do not consider the act of mechanically noting the removal of the charge over parcel 191-019-178 on the Register of Fixed Term Estates a condition of the escrow. It was merely a clerical step to follow as the result of completing payment of the loan with which the land was charged and filling and signing discharge instrument. The plaintiff has since the delivery of the transfer in escrow left no condition unfulfilled that would make the removal of the charge legally impossible.

The submissions of Mr Sullivan about the insurance claim and about the removal of the charge over the land fail.

The determination that I make is that there was a contract between Yee Bing Store Limited and Henry, resulting in the transfer of land parcel 191-019-178 to Henry, he was bound to transfer the land back to Yee Bing Store Ltd. when the loan with which the land was charged had been paid up. The loan has been paid up a long time ago, the estate of Henry should have transferred the land back, to date it has not done so. More than reasonable time has passed, the executrix, the defendant is in breach of the contract.

I have considered that the relief of specific performance order for breach of contract is discretionary and should be denied if there is no good reason to order it in place of compensation which is the usual remedy. There is good reason if compensation will be inadequate remedy. In this case the house constructed was intended for specific use and possibly as an investment over time. It is my view that monetary compensation will be inadequate relief in the circumstances. Specific performance is ordered, requiring Yvette Miu Fong Yeun, the executrix of the estate of Henry:

It is clarified that these orders do not exempt payment of fees, duties and any other payment that may be due in the process of removing the charge from the register and registering transfer back to Yee Bing Store Ltd.

Now with the benefit of hindsight I am able to say that the claim of the plaintiff and the counterclaim of the defendant should have been separated and dealt with in separate proceedings. The two cases arose out of unrelated transactions; one during the life of Henry, the other after his death. The evidence in each case is independent of the other and the issues are different, many and and some are intricate. The trial of each case separately might have been much simpler than the joint trial, certainly there would have been no need for the several applications to have witnesses stand down while others were called and for recall and re-recall of some of the witnesses. In separate proceedings, much more detailed pleadings might have been done, the issues might have been better identified and much more detailed evidence might have been adduced to disclose more fully the conduct of the management of the affairs of Yee Bing Store Ltd. Those considerations all point to the probability that it may have been more convenient to have separate trials of the claim and counterclaim - see O23 rr10 and 14 and compare O17 r1 and O20 r1. Note that under O20 r2, a claim for recovery of land such as in this case is not to be joined with other cause except by leave of court.

When the Registrar ordered amendment of the counterclaim granting leave to join the second defendant by counterclaim and to amend the averment, he did not and could not have been expected to know the nature of the evidence and that the two cases tried together would complicate and prolong the trial.

Most of the facts in the counterclaim were contested. Some of those which were common ground were as follows. At the incorporation of the company on 7.4.1986, the promoters took 100 shares, being 40 by Bing Yee and 30 each by Henry and Gin. The ratio was 40% to 30% to 30% respectively. Only Bing Yee and Gin signed as subscribers, it is sufficient for two promoters to sign memorandum and articles of association. No further shares were issued and no share transfers took place at least up to 5.6.1994 when Henry died. The three shareholders were the first directors of the company, and remained in office until the death of Henry. At the time of Henry’s death, the plaintiff by counterclaim was his wife.

In addition to the facts that were common ground, Gin conceded on behalf of the company and on his own behalf that following the death of Henry, a meeting of the extended family took place in Sydney on 21.10.1994, exhibit PCKY 13 is the minutes of the meeting, the plaintiff by counterclaim did not attend the meeting, and further that there has not been meetings of the company or of directors, in particular, the meeting at which the directors are said to have passed a resolution authorising that 5,000 shares be allotted to Gin, further more, that it was the decision of the extended family, not of the father, Bing Yee, that the father was to transfer his shares to Gin.

From the cross examination several facts about issues that were not specifically pleaded were disclosed. The plaintiff by counterclaim regarded some as important. They are: the sudden rise of the remuneration of directors from $17,111 in 1994 to $39,229 in 1995 and to $122,417 in 1996, that some of the assets of the company were not included in the annual accounts of the company, and that depreciation figures were too high and had impact on net profits.

On the facts that are common ground and that have been conceded, I accept the copy of the Articles of Association, exhibit 10E, as an accurate copy reproduced after incorporation. The copy was signed by Bing Yee and Gin only. Articles of Association together with Memorandum of Association must have been filed at the Company Registry so that the company was incorporated and given No. 14 of 1986. Mr Sullivan did not challenge the accuracy of the Articles, he may have regarded exhibit 10E as a fair copy. On the other hand I reject exhibits 10C1 to 10C6 as minutes of meetings and resolutions of the Board of Directors. I think those exhibits were some of the records that Mr Benjamin St Giles Prince, DW3, the accountant, told the court were reconstructed after the events. Gin admitted in cross examination that company meetings did not take place, the family simply took decisions and he just signed. Some of the dates on the resolutions are suspect, for example, the resolution of the 8.10.1996 said to have been passed at a meeting in Sydney, Australia, recorded approval that day of the transfer of 25 shares from Bing Yee to Gin, yet on the same day a transfer dated the same day was presented far away in Honiara, Solomon Islands, for payment of stamp duties! The 2 date-stamp impressions showed the years as 1996, the figures 6 were added in handwriting. A very important finding of fact is that the decision taken by the extended family at the meeting of 21.10.1994, and not by the company, following the death of Henry, led to the transfers and allotment of the shares of the company. Gin stated that the defendant had been married to Henry only for a short time before his death. It seems it was desired by the extended family to keep her out of the company that the extended family regarded as belonging to the family.

Four other findings of facts need to be mentioned although they were not focussed on during the trial. First I find as a fact that no annual general meetings were ever convened since the death of Henry and therefore annual accounts have not been approved. Secondly the remuneration of directors were raised after the death of Henry from $17,111 to $122,417, by a whopping $105,306 without any resolution of the Board of Directors and when the accounts of the company showed net losses for each of the two years. The beneficiaries of the rise and indeed of the whole remuneration were Gin and his wife only; Bing Yee had retired and of course Henry had died. Thirdly item "salary" in the profit and loss accounts increased considerably yearly when the accounts recorded annual net losses consecutively. Fourthly the 5,000 new shares were issued at the price of $1 per share when the balance sheet showed that shares could have been issued at premium. Those facts might have founded claims which are not the subjects of the counterclaim.

It is a matter of law that upon the death of a shareholder, his shares are transmitted to his personal representative - see rule 29 of Table A in the First Schedule in Companies Act, Chapter 175, Laws of Solomon Islands. Rules in Table A are used as articles of association of a company if the company has adopted them or if its articles are silent on the point. A case illustration is James -v- Buena Ventura Nitrate Sydicate Limited [1896] UKLawRpCh 19; [1896] 1 Ch 456 in which the word members was interpreted to cover persons registered as members, deceased members or persons who were successors in title to deceased members; the wife, the executrix was held to be entitled to allotment that the deceased would have been entitled to as a member. Another good case on the point is Scott -v- Scott F Scott (London) Ltd and Others [1940] 3 All ER 508 wherein the articles of association were construed to mean that the widow of the deceased shareholder was entitled to be registered as the shareholder of the shares of her deceased husband.

So applying the law, it was the case upon the death of Henry on 5.6.1994, that his 30 shares were transmitted to his personal representative. It was common ground that Yvette Miu Fong Yeun, was the widow of Henry, she was therefore his personal representative. She applied and has been appointed by Court, the executrix of the estate of Henry, that confirmed her status. Some articles of association may restrict the persons who may acquire shares in the company, and may give the company the power to veto. In that case the personal representative will be bound by the restriction and the veto - see Scott's Case and the City of Glasgow Buchanan's Case [1879] 4 App. Cas. 549, and rule 30 of Table A.

A personal representative becomes entitled to receive, on behalf of the estate, dividends declared, any return of capital on reduction of capital or in the event of liquidation, other benefits and advantages that would have accrued to the deceased shareholder and to the benefit of the duties of directors to the company according to the law generally and under the memorandum and articles of association. He joins the other members in the rights and obligations in the memorandum and articles of association - see rule 32 in Table A. He is also entitled to receive notice of shareholders meetings, however, he needs to formally elect to be registered as a member by drawing up a transfer, signing and lodging it with the company, asking that the shares of the deceased be registered in his name, if he is to have the right to attend and vote at the meetings of the company - see rule 30. Only registered shareholders are entitled to vote at company meetings. The personal representative takes the benefits and advantages attached to the shares as well as the liabilities such as paying up calls on shares not fully paid and contributing in the event of liquidation, to the extent of the liability attached to the shares transmitted.

Yvette Yeun is to be regarded as having acquired all the rights and obligations that I have stated, in relation to the 30 shares transmitted to her upon the death of Henry, except the right to be registered which she has to elect by applying for. There has been no evidence, that she has elected to be registered, she was therefore not entitled to attend and vote at members meeting if it was called. She may have deliberately declined to apply for transfer. Sometimes that is the better thing to do so as to avoid personal liability to pay uncalled part of the shares - see Re City of Glasgow Bank, Buchanan's Case [1879] 4 App. Cas. 549. In this case Henry's shares were fully paid. Sometimes executors may wish to sell the shares and have the purchaser registered directly from the registration in the name of the deceased, that is permissible under rule 30 in Table A, by the personal representative so electing.

A shareholder in a private limited company may transfer his shares, subject to the restrictions in the articles of association; the restrictions are usually extensive, directors are usually not required to give reasons for refusing to approve transfer of shares. On the other hand a shareholder in a public limited company is free to transfer his shares to anybody unless the company has a lien on the shares or the shares are not fully paid shares in which case the directors have discretion to approve of the transferee, by authority of rule 24. Articles of Association of a public limited company may sometimes impose restrictions on transfer of shares, but the restrictions are usually limited. A shareholder, whether in private or public company must, however, not aim at causing loss of proprietary or voting rights to minority shareholders in an oppressive way. The definition of oppressive act given by Viscount Simonds in Scottish Co-operative Wholesale Society Ltd -v- Meyer [1958] 3 All ER 66 remains the leading definition; he defined oppressive act as, "burdensome, harsh and wrongful". In the case the directors of the holding company and their nominee directors in their subsidiary company decided to starve the subsidiary of raw material, rayon, after the minority shareholders did not agree to have more shares issued to the holding company at par, the intention of the holding company was to force the minority to sell their shares at par or to force voluntary winding up of the subsidiary.

In this case Gin transferred 10 of his 30 shares to his wife. The effect of the transfer was limited to merely reducing Gin’s own proprietary and voting rights and did not affect the interest of Bing Yee or of the estate of Henry. On the evidence, it may be inferred that it was merely a transfer by a shareholder to a nominee. Gin might have been actuated by the decision of the extended family which was that he was to take over the company completely. He might have started to prepare for it by transferring some of his shares to his nominee and wife so that when Henry's shares and Bing Yee's shares were acquired, there would still be two shareholders, his wife and himself and so the company would not lose its corporate entity, while in substance the company would really be Gin's. Motive for transfer by an individual member, other than motive to oppress some members or to act prejudicially to their interest is irrelevant. I do not think that Gin's action that far alone is oppressive or prejudicial to the other shareholders, nor to the company if I take into account that in his capacity as a director Gin approved the transfer. The transfer was by a minority shareholder, it did not alter the proprietary or voting rights of the other shareholders, and there is no provision in the articles that prohibits or restricts that kind of transfer except that there must be approval by directors.

The transfer of the 10 shares would not fail because of technical requirements. Gin, the transferor signed the instrument of transfer said to have been dated 6.10.1994, and even if I am sceptical about the date, the document was a good instrument of transfer, because what is required is the signature of the transferor, not so much the date and the signatures of the transferee and witness which are also on the exhibit. Instrument of transfer of shares is merely proof which may be in the usual or common form or in other form that the directors may require - see rule 23 in Table A.

I have found as a fact that the Board of Directors did not hold meetings at which it passed, among others, the resolution approving any of the transfers of shares, does that affect the validity of the transfer by Gin of the 10 shares? It is true that article 6 requires that transfer of shares must be approved by the directors. Approval by directors is of course, by resolution, usually passed at board meeting. There is a way out, the law in rule 106 in Table A regards a written resolution signed by all the directors without the resolution having been passed at directors meeting as valid. Moreover, article 38 of the Articles of Association of Yee Bing Store Ltd. specifically provides for such a resolution. Accordingly the resolution dated 6.10.1994 and signed by Gin and Bing Yee, the two surviving and only directors, approving the transfer of the 10 shares to Gin’s wife, was valid.

I conclude that the transfer by Gin of his 10 shares to his wife was a valid transfer.

According to exhibit 10D2, Bing Yee signed the exhibit as an instrument of transfer of the first batch of 25 of his shares to Gin. The date was given as 8.10.1994. A resolution dated the same day recorded approval by the directors of the transfer. Was the transfer valid?

I repeat that the law is that a shareholder in a private limited company may transfer his shares subject to usually many restrictions in the articles of association. Bing Yee could transfer his shares to Gin, subject to approval by the directors under article 6 of the company's Article of Association. His motive, unless oppressive and prejudicial to the minority shareholder, the executrix of Henry, would not be a relevant consideration.

It was solicited in cross examination that Bing Yee’s faculties may have been impaired by old age. There was evidence, however, that he had people, including a solicitor with power of attorney, to protect his interest. I do not consider that Bing Yee’s inability due to old age, was reason enough to invalidate his dealings with his shares.

As regards technical requirement that a decision by a board of directors is only by resolution, the reason I have given earlier applies. I hold that the resolution dated 8.10.1994 signed by both the surviving and only directors, recording their unanimous approval of the transfer of the 25 shares of Bing Yee to Gin, would meet the requirement that approval by the board must be in a resolution.

Another exhibit, 10D3, dated 17.6.1998 is a transfer instrument of the remaining batch of 15 of Bing Yee’s shares to Gin. Bing Yee signed it in the presence of a solicitor and Gin signed. The transfer met the requirement for technicality. Next, the transfer had to be approved by the Board of Directors. So far there has not been evidence of approval, the transfer thus far, was ineffective.

The effect of the first transfer, of 25 shares to Gin was to increase the proprietary and voting right of Gin to 55 per cent. He could, in a general meeting of the company, pass majority resolution alone, including resolution appointing or removing directors, provided for in article 27. The interest of Henry’s estate could be affected by the power of Gin to alone pass a simple majority resolution. It was a serious consequence to Henry's interest, but that may not be sufficient evidence at that stage to prove that Bing Yee's intention was to harm Henry's interest, and therefore the affairs of the company was being conducted in an oppressive and prejudicial manner. If the state of shareholding remained at that, perhaps not much would be read into the transfer. We now know, however, that Bing Yee later signed another transfer instrument for the transfer of his remaining 15 shares to Gin. It becomes apparent that Bing Yee made the two transfers so that the decision of the extended family at the meeting of 21.10.1994 would be carried out. The intention was to have Gin, "take over the company 100%." Approval by directors of such transfers to gain control would be approval of transfers for a purpose not in the interest of the company, the directors would be in breach of their fiduciary duty to the company, and inference would be drawn that the affairs of the company was being run in a manner unconscionable and oppressive to the minority shareholder, in this case, the executrix, the plaintiff by counterclaim, to force her to transfer her shares to Gin. A comparable situation arose in Piercy -v- S. Mills and Company Limited [1920] 1 Ch 77, a case in which the directors repeatedly issued shares of the company not for the purpose of raising money needed in the business of the company, but to repeatedly cancel the majority shareholding of a member, a salaried manager with whom the directors had disagreement.

The effect of both transfers was that Gin would have 70% of the shareholding which would entitle him to 70% of any profit declared as dividends, and 70% of the votes of members at the meetings of the company. He would be able to pass or block an ordinary resolution though not a special or an extraordinary resolution in a general meeting, he would have power to control the appointment of directors . Once he controlled the Board of Directors he would control all the powers of the board including the power to determine directors' remuneration, to declare or not to declare dividend, to approve or not to approve annual accounts, to approve or not to approve intended transfer of shares. The evidence in this case suggests that Gin with his nominee director, his wife, are likely to refuse to approve any transfer of Henry’s shares at the best possible price should the plaintiff by counterclaim wish to sell. They are likely to approve a transfer only if it is consistent with the decision of the extended family, which was to transfer all the shares to Gin. They are even likely to continue to refuse to declare dividends while on the other hand continuing to authorise large directors’ remuneration. It will be a great burden, harsh and wrongful to the minority, the plaintiff by counterclaim; it will be oppressive. The plaintiff by counterclaim is entitled to a court order stopping the oppressive and unconscionable transfers of the 40 shares of Bing Yee to Gin, or to other relief available to rectify the oppression. The counterclaim succeeds against the transfer of the 40 shares of Bing Yee to Gin.

Exhibit 10C5 recorded a resolution of the Board of Directors allotting, "5000 ordinary shares of $1 each to Gin at the price of $1 per share". The resolution was dated 24.10.1996. Those at the meeting were stated to be Gin Yee, as Chairman, and Yee Wong Lai King, his wife, apparently by that time already appointed a director. By article 28 of the company's Articles, a director interested in a subject matter is not disqualified from voting on the directors' resolution on the subject matter.

The power to allot shares of the company is provided for in article 4 of the Company's Article of Association. The directors have the power, which is very wide, I describe it as discretionary. Of course, the directors must always bear in mind their duties under s:202 of the Companies Act and under the Common Law and Equity which include fiduciary duty and duty of care to the company in the management of its affairs. They must exercise their power to issue shares in the interest of the shareholders of the company as a whole, not in the interest of individual members or class of members and certainly not for their own gain - see Piercy -v- S Mills and Company Limited. In particular, the directors must not act in oppressive and unjust manner to the plaintiff by counterclaim.

The first issue to be decided is whether exhibit 10C5 is a valid resolution. The answer is now known, I have already made a finding of fact that meetings of directors never took place since the death of Henry, the extended family took decisions for the company and Gin, one of the directors of the company, simply signed to effect the decisions. Exhibit 10C5 confirms it. An additional fact to note is that all the resolutions considered earlier in this case were signed by all or both directors, the present is signed only by Gin. Why that change from the usual course? It is beside the point that the signature of the chairman would suffice to acknowledge the resolution. The resolution could have been valid in law notwithstanding that the meeting never took place, if all the directors signed it. The evidence was, of course, that only one of the directors signed to acknowledge the resolution, that was not sufficient to acknowledge unanimity. Directors' decision must be taken by their resolution, exhibit 10C5 is not a resolution of the directors, so there has been no decision of the directors exercising their power given in article 4. The allotment of the 5,000 shares was invalid.

The determination in the preceding paragraph resolves the issue as to whether the allotment of the 5,000 shares was valid; it was not. I shall however, proceed to consider the matter on the alternative grounds relied on, in case it might be suggested that the error in not passing a resolution may be corrected by starting all over again by convening a meeting of directors and duly passing a resolution allotting the shares. If the decision to allot the 5,000 shares was passed by the directors in a valid resolution, the Court would have to consider the other complaints of the plaintiff by counterclaim and decide whether in the circumstances the directors acted in breach of other laws.

The complaint to be considered was that the allotment of the 5,000 shares was done for the purpose of diluting the worth of Henry's shares in the company with the result that the worth fell to 0.6% (0.59% by my calculation). Mr Sullivan submitted that the allotment was therefore inequitable, unconscionable and oppressive, and that as it was made for improper purpose the allotment is voidable.

I have stated earlier that the law is that directors owe to the company statutory as well as Common Law and equitable duties - see Piercy -v- S Mills and Company Limited and Howard Smith Ltd -v- Ampol Petroleum Ltd and Others [1974] UKPC 3; [1974] 1 All ER 1126. In this case, the power given in article 4, to the directors to decide allotment, sale and control of the shares of the company must be exercised for the purpose of and in the interest of the company, and must not be used to gain control and oppress minority members.

The defendants by counterclaim said that the allotment was made in the best interest of the company, at the time the company had bank overdraft of $136,044 as at 30.9.1995 and $105,102 as at 30.9.1996, it needed money, the 5,000 shares were allotted to Gin so as to raise much needed cash and $5,000 was raised. Mr Radclyffe cited Re Jermyn Street Turkish Baths Ltd [1971] 3 All ER 184 in support, a case decided on the ground of oppression under s:210 of the Companies Act, 1948 of England, equivalent to our s:202.

In my view the evidence in the present case does not support the submission of Mr Radclyffe. The overdraft was a huge sum of $105,102 only 23 days earlier than the allotment, injecting comparatively a small sum of $5,000 would not improve the overdraft significantly, nor would it improve the cash situation sufficiently so as to improve the business operations of the company significantly. If the intention was to raise sufficient or even reasonable cash, the directors might have inquired of the plaintiff by counterclaim as well. For example, in Re a Company [1986] BCLC 36, it was decided that the serious dilution of minority shareholding that was occasioned was not oppressive and prejudicial because the company had made rights offer of shares to all its shareholders to raise capital it needed, the minority could not afford the shares with the result that acceptance of the offer by the controlling shareholders led to serious dilution of the shares of the minority.

The case, Re Jermyn Street Turkish Bath, cited by Mr Radclyffe might at first reading appear comparable to the present case, but there are many significant differences. The shares of the company were originally held jointly in the ratio 50:50. The petitioners acquired their shares by transmission upon the death of the original shareholder and were registered as the shareholders and members only 7 years after the events, the subjects of the case. The liabilities of the company far exceeded its assets when the defendant took steps to raise money for the company; the assets were £1,700 and liabilities were £20,000; the liabilities were nearly 12 times the assets. The defendant who was a director with others, first asked the petitioners for funds, the petitioners wrote back to her that no money was forthcoming. The defendant then raised £101 by having 100 new shares allotted to her and 1 to someone who was appointed a director. The defendant also lent £1,000 secured by debenture. Ignoring the 1 share, of the other shareholder, the shareholding ratio became 75% by the defendant and 25% by the petitioners. It took 18 years later when the company finally prospered and the petitioners brought their case. In the course of that time bank overdraft was paid off and the petitioners' guarantee for the overdraft was cancelled. Debt owed to them by the company was also cancelled because it had not been properly acknowledged, but it had been time barred long before anyway. Notices of general meetings were not given and dividends were not declared since the death of the original shareholder of the petitioners' shares. In the last 9 years one of the defendants received remuneration amounting to £108,000. The Court decided that to amount to oppression the conduct must be unfair or burdensome, harsh and wrongful, in the case there was no oppression, the defendant acted bona fide to raise money for the company, she acted in the interest of the company which because of her effort without the petitioners', then prospered with the result that the petitioners gained by the cancellation of their guarantee for the bank overdraft. It might be suggested with merit that the decision that there was no oppression was debatable, but the case is very different from the present one.

The present case is more comparable to the English case, Clemens -v- Clemens Bros Ltd and Another [1976] 2 All ER 269 and the Australian case, Howard Smith Ltd -v- Ampol Petroleum Ltd and Others [1974] AC 281 1 All ER 1126 cited by Mr Sullivan, a case which went to the Privy Council. In Clemens an aunt and a niece were shareholders of 55% and 45% respectively. The aunt was a director with others, the niece was not. The aunt engineered a resolution which authorised allotment of shares to the other directors and to workers in trust. The allotment reduced the plaintiff's shareholding from 45% to 25% while increasing that of the aunt and the other directors to 75%. The niece had objected pointing out that the resolution proposed had the effect of reducing her vote to under 25%. At the meeting her proxy voted against the resolution. The aunt contended that when two shareholders disagree, the majority shareholder was entitled to vote as she choses. It was held that in the circumstances the aunt acted in order to put complete control of the company in her hand and of her fellow directors and to deprive the plaintiff of her existing rights as a shareholder of more than 25% of the votes permanently, (taking away her power to veto special or extraordinary resolution). That was inequitable, the resolution allotting the shares was set aside. In Howard Smith Ltd -v- Ampol Petroleum Ltd and Others, the respondents held between them 55% of shares in a company, Millers. They made a joint bid of $2.27 per share to take over Millers. The appellant made a bid of $2.50 per share. There was a third bid of $2.76. The directors preferred the appellant's bid. The respondents declared that in future they intended to act jointly in the affairs of the company. As they held 55% of the shares they would control the affairs of the company. The directors then issued new shares to the appellant at $2.30 with the result that the joint majority of the respondents was converted into minority. At the time Millers needed money for its operation. The trial judge found as a fact that the directors were not motivated by personal gain, he approached the question according to the rule in Mills -v- Mills [1938] 30 CLR150, by determining whether the primary purpose of the directors was to satisfy Millers' need for money or to dilute and destroy the majority voting power of the respondents. He decided that the primary purpose was to dilute the respondents' shares, an improper purpose, the issue of the shares to the appellant was set aside. The decision was upheld on appeal.

The submission of Mr Radclyffe that the executrix cannot complain because Henry got his shares free from the father has perfect answer in the English case, Re H R Harmer Ltd [1958] 3 All ER 689 in which that defence was rejected from an overbearing father who brought his children into his highly successful company in England with a branch in New York, USA, and another to be opened in Australia. Lord Jenkins at page 708 described the contention as, "irrelevant, a mere matter of prejudice." Mr Radclyffe might have not been aware of the case.

The counterclaim was based on duties under the Common Law and Equity, it was possible in my view to base it on the statutory duty under s:202 of the Companies Act alone, which section in my view is based on equitable duty. After all s:202 is the statutory law of Solomon Islands and should be considered first before considering Common Law or Equity. The relevant part of the section states:

The court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit, whether for regulating the conduct of the company's affairs in future, or for the purchase of the shares of any members of the company by other members of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company's capital, or otherwise."

In their submissions to Court, both counsel covered the duty not to oppress minority under the section anyway.

My conclusion is that the purpose of the allotment and the transfers of shares by Bing Yee to Gin was to effect the decision of the extended family, an improper purpose, the directors acted in breach of their fiduciary duty to the company. The consequences were not surprising, burdensome, harsh and wrongful to a member of the company, the executrix, the plaintiff by counterclaim. The affairs of the company was being conducted in an oppressive manner to her. The plaintiff by counterclaim succeeds against the allotment of the 5,000 shares.

Prayer (1) is granted with modification. The Court makes the declaration that Yvette Miu Fong Yeun, the executrix and plaintiff by counterclaim, is the beneficial owner of the 30 shares originally issued to Henry Ta Tong Yee and transmitted upon his death to her, the shares represent 30% of the issued shares and 30% worth of the company, Bing Yee Store Ltd. The question of ordering that Yvette Miu Fong Yeun be registered as a member of the company replacing Henry Ta Tong Yee is premature. It is for her to "elect to be registered, by applying for registration as a shareholder and member of the company. The directors then decide according to the restrictions that would have applied in the case of a transfer by Henry before his death - see rule 30 in Table A. Until she has done so and has been refused or ignored, she has no cause to claim registration - see Greene -v- Greene [1948] 1 Ch 167. The related consequential order asked for at prayer 2 (b) is refused.

The Court makes further declaratory orders pursuant to its determinations as follows:-

The transfer by Chan Tong Yee, alias Gin, of 10 of his shares to Wong Lai King, his wife, was a valid transfer, she was entitled to be registered as the shareholder of the 10 shares, her registration on the register of members of the company is valid.

The transfers by Bing Yee of 25 of his shares and subsequently the remaining 15 shares were improper transfers intended to place complete control of the affairs of the company in the hands of Chan Tong Yee, alias Gin, they were oppressive and prejudicial to the interest of the plaintiff by counterclaim. The transfer of the 15 shares was incomplete anyway because directors have not approved it. The two transfers are set aside. The consequential order is that the register of members of the company is to be rectified accordingly.

The allotment of the 5,000 shares to Chan Tong Yee, alias Gin, was not made, because it was not passed in a resolution of the Board of Directors of the company, in any case it would have been made for improper purpose and would have been oppressive and prejudicial. The allotment is set aside. The register of members is to be rectified accordingly.

Prayer (4) for further or other relief is the usual prayer for alternative relief in the discretion of the Court, in the event that the relief particularised may not be appropriate or adequate. In a case such as this base on oppressive act under s:202 of the Companies Act or on unconscionable and unjust act in equity, the prayer is appropriate because oppressive or unconscionable acts are so many and diverse, remedy for them are necessarily diverse. Such a prayer is consistent with the view taken by courts that the relief available under s: 202 includes wide discretion of court to relief the oppressive and wrongful act which are diverse. That is the view I adopt.

In my view the relief prayed for and I have been able to grant according to the evidence and the law, do not lead to the resolution of the difficulty that exists between the parties. Even if I were to grant all the relief in the form prayed the relief would not solve the underlying difficulty in this case. The relief granted will result in the issued shares reverting to 100, and the shareholdings to 40 shares by Bing Yee, 30 by Yvette Miu Fong Yeun, the executor of Henry, 20 to Chan Tong Yee and 10 to Wong Lai King. The underlying extended family difficulty will remain and will continue to loom large in the affairs of the company. Bing Yee, Gin and Wong Lai King will most likely agree on how to run the company, I doubt whether they will agree with Yvette Miu Fong Yeun. She will always be on the losing side when it comes to voting as she holds minority shares as against the combined shares of the other three members. Stalement [sic] is likely to arise frequently. Moreover, Yvette now lives in Hong Kong, she did not attend the hearing of this case, it will be impracticable for her to travel often to attend meetings of the company in Sydney or Honiara. I do not think ordering injunction prayed at paragraph (3), restraining the directors from diluting the worth of Yvette's shares will avoid the difficulty and the imminent stalement [sic] in the running of the company. That is where the prayer for further or other relief comes in.

Effective and just relief is to order that the other members, or the company purchase the shares of Yvette Miu Fong Yeun at a price which is just. That relief is available under s:202 (2) since I have decided that there has been oppression. It can be said that conditions existed for winding up the company on the ground that it would be just and equitable. Even if it were not so, I would have guidance from the case of Scottish Co-operative Ltd -v- Meyer [1958] 3 All ER 66, where Lord Keith at page 56 and Lord Denning at page 89 departed from the view that the relief is available only when the oppression complained of is so great as to cause the company to be wound up. Their view was subsequently adopted in the English Companies Act, 1985 amending the 1948 Act.

A more recent view is in Re a Company [1986] BCLC 362, a case in which it was decided in England under s:459 of their Companies Act, 1985, which is an amendment of their s:210 of 1948 Act, the equivalent of our s:202, that in a private company formed by shareholders to carry on business together as directors (a quasi partnership), should there be personal differences or difficulty such that would cause a minority to resign, it would be unfair and prejudicial if the controlling shareholders do not make an offer to buy the minority shares at a reasonable price. The amendment in the English Act substituted the expression unfair and prejudicial for oppressive. I think the decision in the case was possible under the original section. It is the view that provides a just resolution of the difference between the majority and the minority shareholders.

Who should the order to purchase the shares held by the plaintiff by counterclaim be made against in this case? Certainly not against Wong Lai King who was not responsible for the wrongful act. Regrettably the order cannot be made against Bing Yee because he was not joined as a party in the case. It would be proper to make the order against Gin, the second defendant by counterclaim, the difficulty is that there has not been sufficient evidence to disclose his income. An order against him could be in vain financially. On the other hand, there are in evidence annual accounts of Yee Bing Store Ltd for the years 1994, 1995 and 1996, even though I do not regard them as approved by the annual general meetings of the company, I regard the assets listed as belonging to the company. The balance sheets showed substantial assets over liabilities and some assets were not included. I think the better and effective order which I proceed to make is that the company, Yee Bing Store Ltd., is to purchase the 30 shares of Yvette Miu Fong Yeun, being 30% worth of the company, good will included, at a fair price which is the value of the shares on the date when the first oppressive act occurred. The first oppressive act was the purported transfer of 25 of Bing Yee's shares. I might have considered the date of petitioning the Court, had I received submission about it.

The order that Yee Bing Store Ltd. is to buy the shares of Yvette Miu Fong Yeun necessarily leads to a reduction of capital - see s:202 (2) of the Companies Act. That is made the consequential order. I do not see the reduction as occasioning hardship to creditors.

I have ordered that it is the company other than Gin to purchase the shares that Yvette Miu Fong Yeun holds because I was doubtful of Gin's means, should he be in a position to himself purchase the shares, I grant that in the alternative. In that event, the order to reduce the capital of the company will fall away.

The plaintiff won its case and the defendant who is the plaintiff by counterclaim won her case against the plaintiff and Gin. Although Gin, the second defendant by counterclaim has not won against the plaintiff by counterclaim, the case of the plaintiff very much involved Gin. In the circumstances parties shall bear their own costs.

The originals of documentary exhibits are to be returned, photocopies of them are to be substituted on the case file.

EXHIBIT NO:	PARTICULARS
DM1.	Westpac Banking Corporation. Cheque No. 405209 dated 24.10.1998.
PH2.	SINPF loan agreement, ref: HL5/SLO/RT; Received 15.9.1992.
DH3.	Lands and Titles Act, Charge form 5. Date stamped 22.9.1997, for Parcel 191-019-178.
DH4.	Insurance Nomination form. (Not in record why?).
DH4A.	Letter dated 1.3.1993 to increase insurance cover.
DH5.	Loan Account No. 3084, of Henry Yee Ta Tong.
DH6.	Letter of Pacific Insurance Brokers dated 3.10.1994 forwarding claim.
DH7.	Lands and Titles Act, Discharge of Charge form 7A.
DH8.	Lands and Titles Act, Fixed Term Estate Register showing Parcel 191-019-178.
DP9.	4 pages of Register of Members. (Application and Allotment Journal).
DP10.	File of Statutory documents.
	- -	DP10A: Power of Attorney of Bing Ngong Yee appointing Dang Din Gee Yee, dated 17.6.1998. DP10B: Certificate dated 17.6.1998, accompany-ing D10A.
	- - - - - -	DP10C1: Minutes of meeting of Board of Directors of Yee Bing Store Ltd., dated 6.10.1994. DP10C2: Minutes of meeting of Board of Directors of Yee Bing Store Ltd, dated 8.10.1994. DP10C3: Minutes of meeting of Board of Directors of Yee Bing Store Ltd., dated 31.10.1995. DP10C4: Minutes of meeting of Board of Directors of Yee Bing Store Ltd., dated 31.10.1995. DP10C5: Minutes of meeting of Board of Directors of Yee Bing Store Ltd., dated 24.10.1996. DP10C6: Minutes of meeting of Board of Directors of Yee Bing Store Ltd., dated 12.3.1997.
DP10D.	Transfer Instruments:
	-	DP10D1: Transfer of 10 shares from Gin Yee to Yee Wong Lai King dated 6.10.1994.
	-	DP10D1: Receipt No. B573900 dated 9.10.1996. Attached to DP10D1.
	-	DP10D2: Transfer of 25 shares from Yee Bing Ngong to Gin Yee dated 8.10.1994.
	-	DP10D3: Transfer of 15 shares from Bing Ngong Yee to Gin Yee, dated 17.6.1998.
DP10E.	Articles of Association of Yee Bing Store Limited bearing date stamp 24.3.1986.
PCKY11.	Lands and Titles Act, Transfer of Estate or Lease, form 4 signed by Henry Yee, undated.
PCKY12.	Letter dated 4.11.1994 to Official Administrator of Unrepresented Estates.
PCKY13.	Memorandum - Minutes of meeting in Sydney Australia on 21.10.1994.
DP14.	Valuation Report dated 14.3.1995.
DP15.	Financial Statements, 30.9.1995 of Yee Bing Store Limited.
DP16.	Financial Statements, 30.9.1996 of Yee Bing Store Limited.
DP17.	SINPF receipt No. 001 dated 18.12.1992.
DP18.	SINPF receipt No. 031 dated 4.10.1994.
DP19.	SINPF receipt No. 038 dated 25.2.1993.
DP20.	SINPF receipt No. 067 dated 9.2.1993.
DP21.	SINPF receipt No. 34.

High Court of Solomon Islands

Yee Bing Store Ltd v Yuen [1999] SBHC 138; HC-CC 012 of 1997 (15 September 1999)