Ex-business partner of Eng’s wanton noodles founder loses lawsuit against his children

• The late Ng Ba Eng’s business partner, Ms Pauline New, sued his children for allegedly conspiring to “injure” their company
• They had gone into business together in 2012 before falling out in 2018
• A judge found that Ms New and her husband had helped to set up Eng’s Wantan Noodle when the lease lapsed on the original premises on Tanjong Katong Road
• Ng Ba Eng’s daughters then set up Eng’s Char Siew Wantan Mee across the road

SINGAPORE — A High Court judge on Tuesday (Dec 22) threw out a lawsuit brought against the children of the man who founded the popular Eng’s wanton noodles business.

After Ng Ba Eng died of a sudden heart attack in 2013 after decades of selling the pork dumpling noodles, his business continued to flourish, but the relationship between his son Desmond and their business partners began to sour.

Their company, Eng’s Noodles House, ceased operations in 2018 following a fallout. The lease for its premises at 287 Tanjong Katong Road lapsed and was taken over by Eng’s Wantan Noodle.

One of the Ng family’s business partners, Ms Pauline New Ping Ping, then sued Mr Desmond Ng.

She accused him and his sisters, Ms Ng Mui Hong and Ms Ng Mei Ling, of conspiring to “injure” the company by setting up a competing restaurant across the road at 248 Tanjong Katong Road called Eng’s Char Siew Wantan Mee.

Ms New also named the two companies and Mr Bill Teng Chai Hai, who owns 5 per cent of shares in Eng’s Noodles House, as defendants in her lawsuit.

She further claimed that Mr Desmond Ng and Mr Teng breached their fiduciary duties to act in the best interests of the first company.

In dismissing the suit, Justice Valerie Thean agreed with the defendants that Ms New, along with her husband, had in reality helped to set up Eng’s Wantan Noodle in 2018.

Justice Thean also dismissed a counterclaim filed by the two Ng sisters alleging that Ms New and her husband had “stolen the family business”. 

BACKGROUND

Ng Ba Eng began selling wanton noodles from a pushcart more than 50 years ago.

He later moved to Dunman Food Centre in Joo Chiat, winning several accolades for his trademark springy noodles and chilli paste.

Mr Desmond Ng began helping his father at the stall daily in 2009, while the other family members played various supporting roles.

In 2012, Ms New’s husband, Mr Jason Sim, approached Ng Ba Eng with a business proposal to expand the hawker business. Mr Sim also advanced S$150,000 as part of the agreement.

Eng’s Noodles House was incorporated in February 2012, and the business moved to 287 Tanjong Katong Road about three months later.

Mr Teng, then an employee at Mr Sim’s timber and flooring company, was hired to manage the company’s finances.

Then in June 2013, Ng Ba Eng died suddenly.

The company’s profitability increased steadily after that, but the relationships between the parties began to decline, Justice Thean noted. This was because Mr Sim had fallen into financial trouble over his own company, Jason Parquet Specialist, in 2015.

He then allegedly asked Mr Desmond Ng to buy S$120,000 worth of shares in Jason Parquet’s parent company. He told Mr Desmond Ng to treat it as a loan, but he apparently did not repay the sum.

Mr Desmond Ng and one of his sisters said that by 2018, Mr Sim and Ms New were pushing the Ng family to franchise the business. They contended that this was part of Mr Sim’s attempt to raise money and pay off his debts.

Mr Desmond Ng also tried to wind up Eng’s Noodles House that same year but his application was rejected.

When the company stopped business operations in February 2018, Ms New was removed as a director in June that year. Mr Desmond Ng resigned the next month, making Mr Teng the only director.

A new lease for the 287 Tanjong Katong Road premises was signed by Mr Thomas Hong, the chief executive officer of soup chain Lao Huo Tang. This is where Eng’s Wantan Noodle is located today.

THE JUDGEMENT

In her lawsuit, Ms New claimed that the defendants conspired “to set up a competing business to usurp (the assets of Eng’s Noodles House) and ride on the goodwill and reputation of (the company)”.

She relied on several purported acts. This included Mr Desmond Ng allegedly trying to misappropriate the lease, as well as the registration of several trademarks over the signboards at the property at 287 Tanjong Katong Road.

In a 72-page judgement, Justice Thean ruled that these acts were not carried out due to any agreement between the defendants. The judge also found that Ms New had not proven the defendants' intent to injure the company.

Among other findings, Justice Thean said that Mr Teng did not play such a major role in looking after the firm’s finances, as alleged by Ms New. He took instructions from Mr Sim and cleared matters with him before preparing any documents.

In 2017, Ms Ng Mui Hong registered a sole proprietorship, as well as a composite mark over the Eng’s logo. Ms New suggested that this was part of the conspiracy.

However, Justice Thean agreed with the other woman that it was partly a back-up plan in case Eng’s Noodles House ceased business operations.

The judge also noted that the Ng sisters set up Eng’s Char Siew Wantan Mee in a “hasty and improvised manner”, and it is not a profitable business.

“This would seem to be the result of haphazard reactions to events as they unfolded, rather than (as Ms New alleges) a premeditated plan dating back to 2015,” Justice Thean added.

The siblings had banded together to assert the original and authentic Eng’s brand, the judge found.

Justice Thean also found that Ms New and her husband had helped to set up Eng’s Wantan Noodles.

During the trial, Ms New admitted that she co-managed it. They were also instrumental in setting it up because Mr Sim had introduced Mr Thomas Hong to the real estate agent, enabling Mr Hong to sign the lease.

As for the counterclaim against Ms New, the two Ng sisters contended that they owned the goodwill or customers' loyalty over their late father’s noodles business, but the judge found that they were unable to prove this ownership.

Justice Thean will next hear the parties on the issue of costs.