Associated Development Pte Ltd v Loong Sie Kiong Gerald (administrator of the estate of Chow Cho Poon, deceased) and Other Suits

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 14 July 2009
• Neutral Citation: [2009] SGHC 165
• Docket Number: Suits Nos 722, 723 and 724 of 2007 (Registrar's Appeals Nos 473 and 474 of
• Date: 14 July 2009
• Year: 2009
• Published date: 22 July 2009
• Plaintiff Counsel: Ang Cheng Hock SC and Jacqueline Lee (Allen & Gledhill LLP)
• Citation: [2009] SGHC 165
• Defendant Counsel: TPB Menon and Khoo Boo Jin (Wee Swee Teow & Co)
• Court: High Court (Singapore)
• Subject Matter: Section 26(2) Limitation Act (Cap 163, 1996 Rev Ed),Whether summary judgment should be entered in present case,Limitation of Actions,Plaintiffs failing to provide details of shares allegedly subject to lien and inspection of share certificates,Contract,Whether documents confirming indebtedness were acknowledgments of loans,Test to determine whether summary judgment should be entered,Plaintiff' articles of association creating lien over shareholder's shares when plaintiffs advanced moneys to shareholders,Civil Procedure,Section 21(1) Limitation Act (Cap 163, 1996 Rev Ed),Particular causes of action,Plaintiffs obtaining leave of court to commence legal action against Estate for recovery of sums recorded as unsecured,Whether loans were secured,Trustee might be in position of conflict when signing documents confirming indebtedness,Whether plaintiffs waived right to lien,Plaintiffs' articles of association creating lien over shareholder's shares when plaintiffs advanced moneys to shareholders,Plaintiffs adducing primary and secondary evidence of indebtedness of deceased and his Estate to them,Directors of plaintiffs subsequently signing audited accounts stating that loans were unsecured,Whether acknowledgments made to plaintiffs or their agent,Defendant alleging that loans not disbursed at all, loans not disbursed to deceased or his Estate and recovery of debts time barred,Section 27(2) Limitation Act (Cap 163, 1996 Rev Ed),Plaintiffs adducing documentary evidence from Estate's trustees confirming Estate's indebtedness to them,Summary judgment,Evidence of confirmation undated,Directors of plaintiffs authorising loans to shareholders qua directors,Documents confirming indebtedness addressed to plaintiffs' auditors

14 July 2009 Judgment reserved.

Judith Prakash J:

1 These registrar’s appeals arise out of an application filed by the plaintiffs in the consolidated actions for summary judgment in respect of their claims and an application by the defendant for the various statements of claim to be struck out as disclosing no reasonable cause of action or on the basis that they were frivolous or vexatious. The Assistant Registrar (“AR”) who heard the applications dismissed both of them and gave the defendant unconditional leave to defend the claims. The plaintiffs have appealed and have asked for summary judgment to be entered against the defendant whilst the defendant has appealed against the dismissal of his application for the actions to be struck out.

2 Three actions are consolidated in these proceedings namely Suit 722 of 2007 (“S722”), Suit 723 of 2007 (“S723”) and Suit 724 of 2007 (“S724”). The plaintiff in S722 is Associated Development Private Limited (“ADPL”), the plaintiff in S723 is Lee Tung Company (Private) Limited (“Lee Tung”) and the plaintiff in S724 is Chow Cho Poon (Private) Limited (“CCPL”). ADPL, Lee Tung and CCPL (collectively the “companies”) were established by the late Mr Chow Cho Poon (“the Deceased”) and during his lifetime, he and his wife, Mrs Grace Chow, were the directors and main shareholders of the companies. The defendant in each of the three actions was sued in his capacity as the Administrator of the Estate of Chow Cho Poon, deceased (“the Estate”).

3 In these proceedings, the plaintiffs are seeking the following reliefs:

(i) a declaration that the Estate owes ADPL the sum of S$5,466,980.44;

(ii) an order that the Estate pays to ADPL the sum of S$5,466,980.44;

(iii) a declaration that the Estate owes Lee Tung the sum of S$9,542,716.88;

(iv) an order that the Estate pays to Lee Tung the sum of S$9,542,716.88;

(v) a declaration that the Estate owes CPPL the sum of S$15,321,193.19; and

(vi) an order that the Estate pays to CPPL the sum of S$15,321,193.19.

Background

4 The Deceased died on 3 August 1997. He was survived by his wife and four children to wit his sons Chow Kwok Chi (“Chi”), Chow Kwok Chuen (“Chuen”) and Chow Kwok Ching (“Ching”), and his daughter, Mrs Betty Sheares. Pursuant to the provisions of the will of the Deceased dated 12 January 1994, his widow and one Mr Lee Kim Yew (“Mr Lee”), an advocate and solicitor, became the executors and trustees of the Estate. When Mrs Chow died on 1 December 2002 the administration of the Estate had not been completed. Therefore, on 17 February 2003 Mr Lee appointed Chi, Chuen and Ching as co-trustees (together with himself) of the Estate. On 28 October 2003, Mr Lee ceased to be an executor and trustee of the Estate. On 5 October 2005 the defendant was appointed by the High Court to administer the Estate as the three sons were not able to agree on the necessary actions to wind-up the Estate.

5 In other words, the Estate was managed by the following persons during the following times:

Period	Executors and Trustees
1997 to 1 December 2002	Mrs Chow and Mr Lee
2 December 2002 to 16 February 2003	Mr Lee
17 February 2003 to 28 October 2003	Mr Lee, Chi, Chuen and Ching
29 October 2003 to 4 October 2005	Chi, Chuen and Ching
5 October 2005 to date	The defendant

6 The directors of the companies from their respective dates of incorporation up to the time that they were wound up in November 2007 were as follows:

ADPL and CCPL

Period	Directors
From incorporation to 15 March 1993	The Deceased and Mrs Chow
From 16 March 1993 to 3 August 1997	The Deceased, Mrs Chow and Ching
From 4 August 1997 to 19 September 1999	Mrs Chow and Ching
From 20 September 1999 to; 1 December 2002	Mrs Chow, Ching, Chi and Chuen
From 2 December 2002 to; 20 September 2005	Ching, Chi and Chuen
From 21 September 2005	Ching, Chi, Chuen and Winston Loong; (as alternate director to Chi and Chuen)

Lee Tung

Period	Directors
From incorporation to 4 October 1970	The Deceased and Mrs Chow
From 5 October 1970 to 7 February 1971	The Deceased, Mrs Chow and Ching
From 8 February 1971 to 3 August 1997	The Deceased, Mrs Chow, Ching and Chi
From 4 August 1997 to 19 September 1999	Mrs Chow, Ching and Chi
From 20 September 1999 to; 1 December 2002	Mrs Chow, Ching, Chi and Chuen
From 2 December 2002 to; 20 September 2005	Ching, Chi and Chuen
From 21 September 2005	Ching, Chi, Chuen and Winston Loong; (as alternate director to Chi and Chuen)

7 At the time of the Deceased’s death, the books of the companies showed that he was indebted to them in various amounts. After his death, other amounts were, allegedly, advanced by the companies to the Estate and as a consequence, the amount of his indebtedness in the various books grew substantially. The Estate did not repay any portion of this alleged indebtedness. In or about November 2005, the companies took steps to try and recover the indebtedness. They did this by purporting to exercise a lien which they claimed to possess over the Estate’s shares in them and then by arranging for the sale of those shares and setting off the proceeds of the sale against the indebtedness of the Deceased. The set-offs of the debts were reflected in the companies’ audited accounts for the financial year ended 2005.

8 As stated, on 5 October 2005, the defendant became the independent third party administrator tasked to conduct and complete the administration of the Estate, subject to the supervision of the court. On 27 October 2006, he obtained a court order which set aside all the share transfers that had been made pursuant to the exercise of the liens by the companies. This meant that the set-offs had to be reversed and therefore the alleged debts owing by the Deceased remained unpaid.

9 The next development took place in October 2007. On 18 October 2007, Chuen was granted leave of court pursuant to s 216A of the Companies Act (Cap 50, 2006 Rev Ed) to commence legal proceedings in the name and on behalf of the companies against the Estate for the recovery of the alleged debts owing to the companies. This order of court also gave Chuen the full charge and control of the conduct of such actions. On 14 November 2007, Chuen commenced S722, S723 and S724 in the name and on behalf of the companies for the various reliefs set out in [3] above. These suits were consolidated (“the consolidated suits”) pursuant to an order of court dated 4 February 2008. After the companies were wound up, Chuen sought and obtained an order that he should have conduct of the consolidated suits until their final determination or disposal (including any appeal to the Court of Appeal). With the consent of all parties, on 4 November 2008 it was ordered that Chuen should have conduct of the consolidated suits until determination of the companies’ applications for summary judgment.

The claims

10 The statements of claim filed by the respective plaintiffs set out the various claims made against the Estate as follows:

(a) by ADPL for the period between 1992 and 2001, a total sum of $5,466,980.44 comprising:

(i) $350,000 loaned to the Deceased during his lifetime; and

(ii) $5,116,980.44 being the expenses incurred by ADPL for and on behalf of the Deceased and the Estate;

(b) by Lee Tung for the period between 1992 and 2005, the sum of $9,542,716.88 comprising:

(i) $8,511,720 loaned to the Deceased during his lifetime; and

(ii) $1,030,996.68 being the total expenses paid by Lee Tung to various parties on behalf of the Estate; and

(c) by CCPL for the period between 1992 and 2004, the sum of $15,321,193.19 comprising:

(i) $14,259,002.40 loaned to the Deceased during his lifetime; and

(ii) $1,062,190.79 being the total expenses paid by CCPL to various parties on behalf of the Estate.

11 The breakdown of these sums and the documentary evidence supporting them are set out in the tables annexed to this judgment as Annex A. The documents set out in the tables comprise payment vouchers, directors’ resolutions and bank statements being the primary evidence of the loans advanced or payments made. In addition the companies are relying on secondary evidence of the same in the form of acknowledgements of indebtedness executed at various times after the debts were incurred.

12 In all, there are four types of documents that the companies allege evidence the Deceased’s or the Estate’s acknowledgement of the debts, or part thereof, owed to the plaintiffs. These are as follows:

(a) documents addressed to the various auditing firms of Ernst & Young, Messrs Chan Kum Chee & Co, Messrs L C Loong & Co and TeoFoongWongLCLoong and signed by Mrs Chow and/or Mr Lee (“the Loan Confirmations”);

(b) a letter written by Mr Lee to Chi, Chuen and Ching dated 12 December 2002;

(c) certain detailed proposals prepared by the defendant dated 28 February 2006 and annexed to his 5^th affidavit in OS 729/2004 filed on 7 August 2006, suggesting various ways to settle the alleged debts; and

(d) the Estate’s application in Summons No 3586 of 2006 filed on 7 August 2007 under OS 729/2004.

13 Details of the Loan Confirmations signed by Mrs Chow or by Mrs Chow and Mr Lee are, in respect of ADPL, set out in the table below.

ADPL (Amount claimed in Statement of Claim: S$5,466,980.44)

Date of Document	Amount Confirmed	Date of Confirmation	Signed by
31 December 1998	S$350.00	31 December 1998	Grace Chow
31 December 1998	S$3,722,085.39	31 December 1998	Grace Chow
31 December 1999	S$350.00	31 December 1999	Grace Chow/ Mr Lee
31 December 1999	S$3,722.085.39	31 December 1999	Grace Chow/ Mr Lee
31 December 2000	S$350,000.00	31 December 2000	Grace Chow
31 December 2000	S$5,109.005.00	31 December 2000	Grace Chow
31 December 2001	S$350,000.00	31 December 2001	Grace Chow
31 December 2001	S$5,145,189.70	31 December 2001	Grace Chow

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