Chiam Heng Chow and another (executors of the estate of Chiam Toh Say, deceased) v Mitre Hotel (Proprietors) (sued as a firm) and Others

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 08 September 1993
• Neutral Citation: [1993] SGCA 63
• Date: 08 September 1993
• Subject Matter: Partnership,Whether tenancy is 'business property',Income tax paid on profits partner did not receive,Distinguished from notice of retirement,Treatment of notice as ineffective,Dissolution,Assignment of 'business property' to partnership,Limitation Act applies,Claim time-barred,Limitation of Actions,Whether partnership asset,Action for specific sum owed,Tenancy of premises used by partnership,Refund of income tax from other partners,s 6(1)(a) Limitation Act (Cap 163),Subsequent conduct of all partners,Partners inter se,Moneys owed under provisions of partnership deed,Partnership property and property of separate partners,No legal obligation for partners to refund income tax,Account,Notice,Effect of notice of dissolution served on partnership,Particular causes of action
• Docket Number: Civil Appeal No 150 of 1991
• Published date: 19 September 2003
• Defendant Counsel: Aloysius Leng (Abraham Low & Pnrs)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Robert Reid QC and KS Chung (Harry Elias & Pnrs)

Cur Adv Vult

The appellants are the executors of the estate of Chiam Toh Say, deceased (`Toh Say`). The first respondent (`the partnership`) was formed in 1952 by a deed of partnership dated 28 February 1952 (`the partnership deed`) made between Toh Say and his three younger brothers, namely, Toh Kai (the third respondent), Toh Moo and Toh Lew and his cousin, Toh Tong. The partnership was formed for the purpose of running the hotel known as the Mitre Hotel at No 145, Killiney Road. The salient provisions of the partnership deed governing the duration, retirement and dissolution of the partnership are as follows:

The partnership shall be deemed to have commenced on the 1st day of December 1951 and shall continue for the term of three (3) years from that date subject to the provisions hereinafter contained.

Any partner may at the end of the sixth month or thereafter retire from the partnership on giving not less than two (2) weeks previous notice in writing to the other partners or partner or leaving the same at the place of business of the partnership and at the expiration of such notice the partnership shall determine accordingly as to the partner giving or leaving such notice.

The death or retirement of any partner shall not dissolve the partnership as to the other partners.

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(21) Upon the determination of the partnership by effluxion of time or by any other event not herein otherwise provided for a full and general account shall be taken of the assets, credits, debts and liabilities of the partnership and of the transactions and dealings thereof and with all convenient speed such assets and credits shall be sold, realized and got in and the proceeds applied in paying and discharging such debts and liabilities and the expenses of and incidental to the premises and the winding up of the partnership affairs and subject thereto in paying to each partner any unpaid profits or interest on capital which may be due to him and his share of the capital and the balance (if any) of such proceeds shall be divided between the partners in the shares in which they are entitled to the net profits of the partnership and the partners respectively shall execute, do or concur in all necessary or proper instruments acts, matters and things for effecting or facilitating the sale, realization and getting in of the partnership assets and credits and the due application and division of the proceeds thereof and for their mutual release or indemnity or otherwise.

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(24) Upon the determination of the partnership or the retirement of any partner due notice of the fact of such determination or retirement shall be given by advertisement in the Straits Times and/or The Singapore Standard and in the Sin Chew Jit Poh Singapore immediately on the execution of this deed and each partner including a retiring partner shall sign and concur in all necessary and proper notices for that purpose and on any partner refusing to do so any other partner may sign the name of such refusing partner to any such notice.

The partners` shares or interests in the partnership assets and their capital contribution to the partnership are regulated by cll 6 and 7, which are as follows:

(6) Subject to the provisions of this deed the partners shall be entitled to the capital and property for the time being of the partnership and to the goodwill of the business in the following shares (that is to say) the said Chiam Toh Kai nineteen (19) shares, the said Chiam Toh Moo twenty one (21) shares, the said Chiam Toh Say twenty five (25) shares, the said Chiam Toh Tong twenty one (21) shares and the said Chiam Toh Lew two (2) shares.

(7) The capital of the partnership shall be the sum of dollars eighty eight thousand ($88,000) to be contributed by the partners in the shares in which they are hereinbefore declared to be entitled to the capital, the property of the partnership and the goodwill of the business and in consideration of the sums of dollars nineteen thousand ($19,000) from the said Chiam Toh Kai, dollars twenty one thousand ($21,000) from the said Chiam Toh Moo, dollars twenty one thousand ($21,000) from the said Chiam Toh Tong and dollars two thousand ($2,000) from the said Chiam Toh Lew (receipt of which sums the said Chiam Toh Say acknowledges) the said Chiam Toh Say assigns to each of them their respective shares in the business property and goodwill of the partnership.

The partnership deed also provides for arbitration in the event of any disputes or questions arising during the partnership or afterwards between the partners. Clause 25 provides:

(25) All disputes and questions whatsoever which shall either during the partnership or afterwards arise between the partners or their respective representatives or between any partners or partner and the representatives of any other partner touching this deed or the construction or application thereof or any clause or thing herein contained or any account valuation or division of assets, debts or liabilities to be made hereunder as to any act, deed or omission of any partner or as to any other matter in any way relating to the partnership business or the affairs thereof or the rights, duties or liabilities of any person under this deed shall be referred to a single arbitrator in case the parties agree upon one otherwise to two arbitrators one to be appointed by each party to the difference in accordance with and subject to the Arbitration Ordinance or any statutory modification thereof for the time being in force.

Prior to the execution of the partnership deed in 1952, the five partners together with five others, namely, Chiam Heng Luan, Chiam Wee Liang, Chiam Eng Aun, John Dalton and RA Pranam, had been carrying on in partnership the business of a public house, restaurant and hotel (known as the Mitre Hotel) at No 145 Killiney Road, and this partnership had been in existence since 1 January 1949. However, in 1951 the partners had differences among themselves and they agreed to sell the business of the partnership as a going concern to the highest bidder. Toh Say made the highest offer which was accepted by the other partners. They then executed a deed of dissolution dated 26 February 1952 (`the deed of dissolution`) whereby they agreed, inter alia, that the partnership be deemed to have been dissolved on 30 November 1951. Various sums totalling $210,000 were expressed to have been paid by Toh Say to the other partners representing their shares or interests in the partnership and they assigned to Toh Say absolutely their respective shares, title and interest in the partnership business including the tenancy of the premises, namely, No 145, Killiney Road, where the business was carried on, and one-tenth undivided share in the freehold and leasehold lands and premises, namely, the said No 145, Killiney Road. Only the outgoing partners were actually paid for their shares; as for the other four partners, who agreed to enter into the new partnership with Toh Say, the payments to them under the deed of dissolution were set off against their contributions towards the capital of the new partnership under the partnership deed.

The one-tenth undivided share in the freehold and leasehold lands and premises No 145, Killiney Road was conveyed to Toh Say only on 29 September 1952. Soon thereafter, on 21 October 1952, Toh Say by a declaration of trust declared that he held the one-tenth undivided share on trust for the firm and partners for the time being thereof. The rest of the freehold and leasehold lands and premises were held by the following persons in the following shares: Chiam Heng Luan holding four-tenths undivided share, Chiam Toh Kai holding three-tenths undivided share, Chiam Eng Aun holding one-tenth undivided share and Chiam Toh Moo holding one-tenth undivided share.

The business of Mitre Hotel was run by Toh Say and the second respondent`s father, Toh Moo, who were the only active partners. Toh Moo died on 24 February 1961, and after his death Toh Say carried on the business as the sole managing partner. The other partners did not interfere in his running of the hotel. The third respondent managed and partly owned the Pavilion Restaurant in which Toh Say had a small share, and Toh Tong managed the Tanglin Inn. Toh Lew was illiterate and worked as a general sweeper/cleaner at the Pavilion Restaurant.

The second respondent was the sole issue of Toh Moo. By a deed of gift dated 22 July 1968, Toh Moo`s widow, Madam Chiang Boo Jee, gave to the second respondent the share of the partnership which she had inherited from Toh Moo. From 1968 onwards, the second respondent (who had just graduated from the university) began to take an interest in the running of the hotel. In that connection, he questioned Toh Say in respect of the 1973 accounts as to why there were unauthorised loans made to the partnership and why it was making losses. The relationship between Toh Say and the second respondent rapidly deteriorated. There were allegations by the appellants that Toh Say had been physically assaulted on several occasions by the second respondent.

On 20 March 1975 Toh Say through his solicitors, SK Lee & Co, wrote to the second and third respondents and Toh Lew (the remaining partner Toh Tong having died) as follows:

Dear Sirs,

Re: Mitre Hotel (Proprietors)

We act for Mr Chiam Toh Say of No 23-A Oxley Road, Singapore, a partner of the abovementioned firm, holding 25U88 shares in the partnership.

In view of the dispute between you and our client, our client proposes that the partnership be dissolved on 31 March 1975, and an account of the partnership assets and liabilities be taken, a final account to be rendered to the date of dissolution and that a receiver be appointed.

Our client would also require repayment of the loan of $15,000 made by him to the partnership together with interest thereon accumulated todate.

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