FA Chua J:

The plaintiffs claim $41,000 from the defendant Tee Chin Yong, $80,000 from the defendant Peter Wong Tak On, and $18,000 from the defendant Tan Khia Fatt being the balances payable by the defendants under contracts by them to take 500, 1,000 and 200 shares respectively of $100 each in the plaintiff company and/or upon allotment of such shares to the defendants and/or upon the forfeiture of such shares on 9 November 1963 by reason of the defendants having failed to pay such balances.

The defendants in their defences admitted that they agreed to take the shares allotted to them and agreed that the balances claimed were outstanding but denied that they refused to pay the balances or that their shares were duly forfeited. They also said that these proceedings were instituted without any proper authority. The defendants counterclaimed for a declaration, inter alia, that (a) they are still the proprietors of the shares allotted to them and (b) the said shares have not been forfeited.

The plaintiffs filed a reply and defence to counterclaim.

The facts shortly are these. The plaintiff company was incorporated on 23 November 1961. The capital of the company is $50m divided into 50,000 shares of $100 each. The main object of the company is to carry on the business of hire purchase financiers. The subscribers and first directors were Geh Chong Keat, SK Lee, James Lim Hock Guan and the defendant Peter Wong Tak On. The defendants Tee Chin Yong, Peter Wong Tak On and Tan Khia Fatt applied for and were allotted, on 16 January 1962, 500, 1,000 and 200 shares respectively of $100 each in the plaintiff company on the terms that the amounts due for the shares were to be paid as follows:

Deposit of 100n 31 January 1962.

First instalment 300n 14 February 1962.

Second instalments 150n 28 February 1962.

Third instalment 150n 14 March 1962.

Fourth instalment 150n 28 March 1962.

Fifth instalment 150n 11 April 1962.

The shares of the defendants were entered on the company's register of shareholders. The defendant Tee Chin Yong has paid a total of $9,000 for his shares - $1,500 on 16 January 1962, $500 on 31 January 1962, and $6,000 on 6 March 1962 - leaving a balance of $41,000 unpaid. The defendant Peter Wong Tak On has paid a total of $20,000 for his shares - $10,000 on 7 April 1962 and $10,000 on 15 June 1962 - leaving a balance of $80,000 unpaid. The defendant Tan Khia Fatt has paid only $2,000 for his shares on 9 April 1962 leaving a balance of $18,000 unpaid.

On 16 January 1962 at the first board of directors meeting three additional directors were appointed, namely Leong Kee Nyean, Wong Hieng Tock and Gan Hock Chwee. Leong Kee Nyean was appointed chairman, Gan Hock Chwee deputy chairman and James Lim Hock Guan managing director. The board on that day resolved that 7,000 shares be allotted to sixteen persons who had applied for shares. The applicants included the three defendants and all the directors.

By 8 September 1962 only $259,000 had been paid up by the shareholders against the issued capital of $710,000. It is interesting to note that not one member (including the directors) had fully paid up their shares by 8 September 1962 when they had contracted to do so by 11 April 1962.

By 13 October 1962 only one member had paid up in full.

It was discovered that the managing director had been dishonest and at the board meeting of 8 December 1962 the board resolved that the accounts of the company be investigated into and also resolved to suspend business for the time being except the collection of hire purchase repayments. The managing director admitted that he had made use of $19,000 of the company. Needless to say the managing director was removed from his post and he later resigned from the company.

The first annual general meeting was called for 9 December 1962. Only six members attended. There being no quorum present, the quorum being not less than ten members, the meeting was adjourned to 29 December 1962 pu