Peter Lim’s suit fails but judge ticks off new RTC owners
Judge says they’ve bled the company; Lim says he has cleared his name
By CHEW XIANG
(SINGAPORE) The High Court yesterday dismissed a defamation lawsuit taken by ex-remisier king Peter Lim against the current owners of Raffles Town Club.
In a 113-page judgement, Justice Chan Seng Onn ruled that the defendants, Lin Jian Wei and Margaret Tung, had defamed Mr. Lim and had been ‘economical with the truth’, but found that insufficient to dent their defence of qualified privilege.
But he ticked off the two for ‘unabashedly and systematically’ bleeding the company dry since they took control in 2001. They had declared $55.1 million in dividends to themselves, plus a further $70 million to two former directors, who had sold them ownership of the club, effectively procuring the shares for free, Justice Chan said.
Moreover, the club had paid out $7.7 million for consultancy services, but did not provide any evidence that it was a genuine arms-length transaction. It had also paid $8.75 million for two antique Qilin figurines, which were later sold to Ms. Tung at 35 per cent of the cost. These ‘questionable transactions’ helped to deplete most of the club’s assets, which had amounted to $206 million in 2001.
By 2005, this had dwindled to the extent that the club could not pay damages it owed to club members after it lost a lawsuit for recruiting too many members. It offered instead a scheme of payment involving a mix of cash and vouchers.
In an explanatory statement accompanying the scheme sent out late in 2005, Mr. Lin and Ms. Tung suggested that the club’s financial difficulties were due to mismanagement by the original directors and management, one of whom was Mr. Lim.
The statement revealed that dividends totalling $124 million had been paid out ‘since its inception’ but did not disclose that a large chunk of money had been paid out to Mr. Lin and Ms. Tung.
Mr. Lim then sued the two, saying that they had made it seem as if he was to blame for the company’s dire financial straits.
Yesterday, Justice Chan agreed with the plaintiff’s lawyers that Mr. Lim had been defamed, as the defendants had deflected blame to former directors and Mr. Lim so that members would not be angered to vote against the scheme.
‘If the (statement) were to set out the defendants’ full involvement, there could be a fiasco,’ Justice Chan said. ‘It seems to me that the defendants were bent on draining out as much of the available current assets in the (club) as they could.’
However, the judge found that the purpose of the explanatory statement was not to defame Mr. Lim. ‘I find that the predominant motive in their conduct was to ensure the success of the scheme and not so much as to injure the reputation (of Mr. Lim),’ he said. There was no express malice and they ‘had no reason to be spiteful or vindictive’ to him, the judge said, and ruled that their defence of qualified privilege applied.
Mr. Lim said yesterday: ‘I’ve cleared my name. The judge agreed that when I left RTC, it had more than $200 million for the members’ benefit, but afterwards Tung and Lin asset stripped RTC, deceived members and blamed me.’
The club has separately sued Mr. Lim, as well as other former shareholders Dennis Foo, Lawrence Ang and William Tan, for breaching their fiduciary duties to the club, misapplying the club’s property and conspiring in relation to the launch of the club when they were still club shareholders and directors.
Another leg of the long-running and bitter Raffles Town Club (RTC) saga has come to a close with a sensation-laden High Court ruling in which both sides are claiming a victory of sorts.
Billionaire investor Peter Lim had sued RTC’s current shareholders for defamation over comments they made to club members in a contentious ‘explanatory statement’ in 2005, in which they tried to pin RTC’s financial woes on Mr. Lim.
Justice Chan Seng Onn ruled yesterday that while the statements Mr. Lim complained of were indeed defamatory, his suit was dismissed - as the defendants were able to rely on a defence of qualified privilege.
The defamation had been ‘collateral’, the court ruled, adding that it had failed to detect the necessary malice against Mr. Lim to sustain a ruling in his favour.
Mr. Lim has in effect lost his defamation suit, but he says he has preserved his reputation and can no longer be seen as responsible for RTC’s depleted assets.
In its judgment, the court made some critical comments about the defendants, Mr. Lin Jian Wei and Ms. Margaret Tung, the club’s current shareholders. The court found that RTC’s financial difficulties were in fact caused substantially by the pair, who it said had ‘unabashedly andsystematically bled the company dry’.
The court also noted Ms. Tung and Mr. Lin paid themselves ‘very significant dividends of over $54 million’, and made ‘large, questionable expenditures’ on feng shui consultancy and Qilin antiques amounting to $16.5 million. Justice Chan called these ‘skeletons...kept hidden in the closet’ and ‘a shameful raiding of the company’s funds’.
Despite losing the case, Mr. Lim felt vindicated. ‘I’ve cleared my name,’ he told The Straits Times.
Mr. Lin and Ms. Tung, who bought RTC from Mr. Lim and three other original shareholders in 2001, assumed about $206 million in assets, including about $114 million in cash reserves, and a potential payout of $15 million to $52 million to members resulting from a class action suit brought against RTC a year earlier.
Dubbed the Raffles5000 suit, 4,895 club members sued the club after finding it was not as exclusive as advertised.
The Court of Appeal awarded damages of $3,000 to each member in 2005. But Mr. Lin and Ms. Tung told members they did not have enough money to pay the damages as when they assumed control of RTC, ‘a substantial portion of the monies collected in entrance fees had already been spent’ by the former shareholders.
Yet, Justice Chan found Mr. Lin and Ms. Tung had already ‘systematically effected’ a depletion of the club’s cash - partly by way of dividends to themselves - between May 11, 2001 and March 29, 2004.
The dominant motive of Mr. Lin and Ms. Tung was ‘clearly to mislead’ RTC’s club members into accepting a scheme to be paid the $3,000 in kind - food and beverage vouchers or membership transfer fee cuts, for example - rather than in cash, he added.
Despite this, the court was unable to find sufficient evidence of express malice directed at Mr. Lim.
Said Justice Chan: ‘This personal agenda on their part to suppress important information in relation to what they had themselves done to damage the company’s financial health ... is incidental to the main reason for the publication of the explanatory statement, and certainly does not taint the matter with malice.’
As such, Mr. Lin and Ms. Tung were entitled to qualified privilege and the court dismissed the case. The Straits Times understands Mr. Lim is seeking advice from his lawyers on a possible appeal.
The Straits Times also understands the findings here may lead to another suit.
A member of the original Raffles5000 said their lawyers have a ‘watching brief’ to monitor the saga, as ‘whatever is disclosed will have a bearing on our case’.
2 comments:
Peter Lim’s suit fails but judge ticks off new RTC owners
Judge says they’ve bled the company; Lim says he has cleared his name
By CHEW XIANG
(SINGAPORE) The High Court yesterday dismissed a defamation lawsuit taken by ex-remisier king Peter Lim against the current owners of Raffles Town Club.
In a 113-page judgement, Justice Chan Seng Onn ruled that the defendants, Lin Jian Wei and Margaret Tung, had defamed Mr. Lim and had been ‘economical with the truth’, but found that insufficient to dent their defence of qualified privilege.
But he ticked off the two for ‘unabashedly and systematically’ bleeding the company dry since they took control in 2001. They had declared $55.1 million in dividends to themselves, plus a further $70 million to two former directors, who had sold them ownership of the club, effectively procuring the shares for free, Justice Chan said.
Moreover, the club had paid out $7.7 million for consultancy services, but did not provide any evidence that it was a genuine arms-length transaction. It had also paid $8.75 million for two antique Qilin figurines, which were later sold to Ms. Tung at 35 per cent of the cost. These ‘questionable transactions’ helped to deplete most of the club’s assets, which had amounted to $206 million in 2001.
By 2005, this had dwindled to the extent that the club could not pay damages it owed to club members after it lost a lawsuit for recruiting too many members. It offered instead a scheme of payment involving a mix of cash and vouchers.
In an explanatory statement accompanying the scheme sent out late in 2005, Mr. Lin and Ms. Tung suggested that the club’s financial difficulties were due to mismanagement by the original directors and management, one of whom was Mr. Lim.
The statement revealed that dividends totalling $124 million had been paid out ‘since its inception’ but did not disclose that a large chunk of money had been paid out to Mr. Lin and Ms. Tung.
Mr. Lim then sued the two, saying that they had made it seem as if he was to blame for the company’s dire financial straits.
Yesterday, Justice Chan agreed with the plaintiff’s lawyers that Mr. Lim had been defamed, as the defendants had deflected blame to former directors and Mr. Lim so that members would not be angered to vote against the scheme.
‘If the (statement) were to set out the defendants’ full involvement, there could be a fiasco,’ Justice Chan said. ‘It seems to me that the defendants were bent on draining out as much of the available current assets in the (club) as they could.’
However, the judge found that the purpose of the explanatory statement was not to defame Mr. Lim. ‘I find that the predominant motive in their conduct was to ensure the success of the scheme and not so much as to injure the reputation (of Mr. Lim),’ he said. There was no express malice and they ‘had no reason to be spiteful or vindictive’ to him, the judge said, and ruled that their defence of qualified privilege applied.
Mr. Lim said yesterday: ‘I’ve cleared my name. The judge agreed that when I left RTC, it had more than $200 million for the members’ benefit, but afterwards Tung and Lin asset stripped RTC, deceived members and blamed me.’
The club has separately sued Mr. Lim, as well as other former shareholders Dennis Foo, Lawrence Ang and William Tan, for breaching their fiduciary duties to the club, misapplying the club’s property and conspiring in relation to the launch of the club when they were still club shareholders and directors.
Billionaire Lim defamed but still loses case
Michelle Tay, Straits Times
11 February 2009
Another leg of the long-running and bitter Raffles Town Club (RTC) saga has come to a close with a sensation-laden High Court ruling in which both sides are claiming a victory of sorts.
Billionaire investor Peter Lim had sued RTC’s current shareholders for defamation over comments they made to club members in a contentious ‘explanatory statement’ in 2005, in which they tried to pin RTC’s financial woes on Mr. Lim.
Justice Chan Seng Onn ruled yesterday that while the statements Mr. Lim complained of were indeed defamatory, his suit was dismissed - as the defendants were able to rely on a defence of qualified privilege.
The defamation had been ‘collateral’, the court ruled, adding that it had failed to detect the necessary malice against Mr. Lim to sustain a ruling in his favour.
Mr. Lim has in effect lost his defamation suit, but he says he has preserved his reputation and can no longer be seen as responsible for RTC’s depleted assets.
In its judgment, the court made some critical comments about the defendants, Mr. Lin Jian Wei and Ms. Margaret Tung, the club’s current shareholders. The court found that RTC’s financial difficulties were in fact caused substantially by the pair, who it said had ‘unabashedly andsystematically bled the company dry’.
The court also noted Ms. Tung and Mr. Lin paid themselves ‘very significant dividends of over $54 million’, and made ‘large, questionable expenditures’ on feng shui consultancy and Qilin antiques amounting to $16.5 million. Justice Chan called these ‘skeletons...kept hidden in the closet’ and ‘a shameful raiding of the company’s funds’.
Despite losing the case, Mr. Lim felt vindicated. ‘I’ve cleared my name,’ he told The Straits Times.
Mr. Lin and Ms. Tung, who bought RTC from Mr. Lim and three other original shareholders in 2001, assumed about $206 million in assets, including about $114 million in cash reserves, and a potential payout of $15 million to $52 million to members resulting from a class action suit brought against RTC a year earlier.
Dubbed the Raffles5000 suit, 4,895 club members sued the club after finding it was not as exclusive as advertised.
The Court of Appeal awarded damages of $3,000 to each member in 2005. But Mr. Lin and Ms. Tung told members they did not have enough money to pay the damages as when they assumed control of RTC, ‘a substantial portion of the monies collected in entrance fees had already been spent’ by the former shareholders.
Yet, Justice Chan found Mr. Lin and Ms. Tung had already ‘systematically effected’ a depletion of the club’s cash - partly by way of dividends to themselves - between May 11, 2001 and March 29, 2004.
The dominant motive of Mr. Lin and Ms. Tung was ‘clearly to mislead’ RTC’s club members into accepting a scheme to be paid the $3,000 in kind - food and beverage vouchers or membership transfer fee cuts, for example - rather than in cash, he added.
Despite this, the court was unable to find sufficient evidence of express malice directed at Mr. Lim.
Said Justice Chan: ‘This personal agenda on their part to suppress important information in relation to what they had themselves done to damage the company’s financial health ... is incidental to the main reason for the publication of the explanatory statement, and certainly does not taint the matter with malice.’
As such, Mr. Lin and Ms. Tung were entitled to qualified privilege and the court dismissed the case. The Straits Times understands Mr. Lim is seeking advice from his lawyers on a possible appeal.
The Straits Times also understands the findings here may lead to another suit.
A member of the original Raffles5000 said their lawyers have a ‘watching brief’ to monitor the saga, as ‘whatever is disclosed will have a bearing on our case’.
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