Chiam Heng Hsien (on his own behalf and as partner of Mitre Hotel Proprietors) v Chiam Heng Chow (executor of the estate of Chiam Toh Say, deceased) and others

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 26 June 2014
• Neutral Citation: [2014] SGHC 119
• Court: High Court (Singapore)
• Hearing Date: 24 January 2014,21 January 2014,16 April 2014,28 January 2014,22 January 2014,23 January 2014
• Docket Number: Suit No 1 of 2012/N
• Plaintiff Counsel: Edwin Lee Peng Khoon, Fu Xianglin Lesley and Jin Shan (Eldan Law LLP)
• Defendant Counsel: Moey Chin Woon Michael (Moey & Yuen),Wee Chow Sing Patrick (Patrick Wee & Partners),Prem Gurbani (Gurbani & Co)
• Subject Matter: Partnership,Partners Inter Se,Admission of New Partner,Shares in Partnership
• Published date: 02 July 2014

Tay Yong Kwang J : Brief Summary of Facts

This case concerns the distribution of sale proceeds from the sale of the property located at No 145 Killiney Road, Singapore (“the Property”). The Property was registered in the name of Chiam Toh Say. Chiam Toh Say was one of the original partners of Mitre Hotel Proprietors (“MHP”). MHP was constituted in 1951 to take over the running of a hotel business located at the Property. Chiam Toh Say held 1/10 undivided share of the Property on trust for MHP and “the partners for the time being thereof”.¹ The Property was sold pursuant to an Order of Court made in Originating Summons No 830 of 2006/W (“OS 830 of 2006/W”).² MHP’s share of the sale proceeds (“the Sale Proceeds”) amounting to $11,500,000 was paid into Court.

Chiam Heng Hsien (“the Plaintiff”) is a partner of MHP. He was admitted as a partner of MHP on 19 November 1974.³ The Defendants are the personal representatives of the estates of 3 of the original partners of MHP. Chiam Heng Chow and Chiam Heng Tin (“the 1st and 2nd Defendants”) are the executors of the estate of Chiam Toh Say. Chiam Mui Ken (“the 3rd Defendant”) is the executrix of the estate of Chiam Toh Tong. Chiam Heng Suan (“the 4th Defendant”) is the executor of the estate of Chiam Toh Kai.

As the executors of the estate of Chiam Toh Say, the 1st and 2nd Defendants continue to be responsible as trustees over the Sale Proceeds. They took out an application in Originating Summons No 1123 of 2010/L (“OS 1123 of 2010/L”) to pay the Sales Proceeds to the Plaintiff and all the Defendants in various proportions. The Plaintiff claimed the entire Sale Proceeds in OS 1123 of 2010/L. The High Court ordered that OS 1123 of 2010/L be adjourned sine die in the light of the present suit that was then pending.

In the present suit, the Plaintiff claims the entire Sale Proceeds and all interest accruing thereon save for a nominal sum for the 3rd Defendant to be determined by him. The Defendants maintain that the personal representatives of the original partners are entitled to the Sale Proceeds in proportion to their original shares in MHP.

Background Facts

The original partners of MHP entered into a Partnership Deed⁴ on 28 February 1952 (“the Partnership Deed”) setting out their respective shares in the partnership as follows:

S/No.	Name of Partner	Share in MHP
1.	Chiam Toh Moo	21/88
2.	Chiam Toh Say	25/88
3.	Chiam Toh Tong	21/88
4.	Chiam Toh Kai	19/88
5.	Chiam Toh Lew	2/88

Clauses 3, 6, 7, 23 and 25 of the Partnership Deed, being the clauses relevant to the present dispute, read as follows:

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

…

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, 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.

…

23. If any partner shall die during the continuance of the partnership his share of the net profits shall be paid to his legal personal representatives.

…

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 and 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 provisions of the Arbitration Ordinance or any statutory modification thereof for the time being in force.

On 21 October 1952, Chiam Toh Say executed a Declaration of Trust (“Trust Deed”) stating he held 1/10 undivided share of the Property on trust “for the Firm [MHP] and the partners for the time being thereof” and that he would at their request and cost, convey and assign the share to such persons as the partners for the time being of MHP should direct or appoint.⁵

The Plaintiff was admitted as a partner of MHP on 19 November 1974 by the then surviving partners. ⁶ He claims that he took over his late father, Chiam Toh Moo’s, 21/88 share in MHP.⁷

Chiam Toh Lew passed away in 1975. In DC Summons No 6648 of 1984 (“DC Summons 6648 of 1984”), a consent judgment was recorded in which the estate of Chiam Toh Lew agreed to withdraw Chiam Toh Lew’s name from MHP and relinquish all claims that it had in respect of any share in MHP in consideration for Chiam Toh Kai, Chiam Toh Say and the Plaintiff (who were the defendants in that suit) paying the estate $7,000 and reimbursing the estate for the “all payments made by [the estate] to the Inland Revenue Department for the years 1983 to 1988”.⁸

Plaintiff’s Case

In the present suit, the Plaintiff claims that he was the sole surviving partner of MHP at the time the Property was sold. He also claims that the estate of Chiam Toh Tong is entitled to a nominal share in MHP, to be determined by him. Therefore, he claims the entire Sale Proceeds and all interest accruing thereon save for a nominal amount for the 3rd Defendant to be determined by him.

In the course of the present proceedings, the Plaintiff stated that he intends to give the 3rd Defendant $150,000 from the Sale Proceeds in view of the estate of Chiam Toh Tong’s nominal share in MHP.⁹

Chiam Toh Say’s original 25/88 share in MHP

Chiam Toh Say passed away on 16 February 1990. The Plaintiff claims that the 1st and 2nd Defendants were not admitted as partners of MHP.¹⁰ According to the Plaintiff, in order to be admitted as a partner of MHP, all the then surviving partners of MHP must give their consent as per s 24(7) of the Partnership Act (Cap 391, 1994 Rev Ed) (“Partnership Act”).¹¹ He asserts that he never gave his consent for the 1st and 2nd Defendants to be admitted as partners of MHP.

The Plaintiff asserts that there was a technical dissolution of MHP upon Chiam Toh Say’s death on 16 February 1990 and that Chiam Toh Say’s share of partnership assets and profits accrued as a debt payable to his estate on that date.¹² In 1993, the 1st and 2nd Defendants commenced Suit No 2439 of 1993 against MHP and the Plaintiff to compel the Plaintiff to render accounts of Chiam Toh Say’s share in MHP. The Plaintiff claims he rendered such accounts. He further states that as of 1996, the estate of Chiam Toh Say has taken no further steps to recover the sum owing to it.¹³ As such, the Plaintiff asserts that the claim is now time-barred by operation of s 6 of the Limitation Act (Cap 163, 1996 Rev Ed) (“Limitation Act”). The Plaintiff claims in addition or alternatively that the claim is defeated by laches.¹⁴

Chiam Toh Tong’s original 21/88 share in MHP

Chiam Toh Tong passed away on 17 May 1969. Chiam Toh Kai was appointed the executor of Chiam Toh Tong’s estate in accordance with his will.¹⁵ The Plaintiff maintains that Chiam Toh Tong’s 21/88 share in MHP accrued as a debt payable to his estate on the date of his death. The debt was subject to the contractual six-year limitation period. Chiam Toh Kai, the executor of Chiam Toh Tong’s estate, did not take any action to recover the debt. Therefore, any claim to recover the debt is now time barred.¹⁶

However, it appears that the Plaintiff accepts that Chiam Toh Tong’s 21/88 share in MHP was not extinguished when MHP was reconstituted among the then surviving partners. Instead, Chiam Toh Kai was holding it on trust for Chiam Toh Tong’s estate. However, contrary to the 3rd Defendant’s claim that she was admitted as a partner of MHP in respect of that share, the Plaintiff alleges that he acquired the estate of Chiam Toh Tong’s 21/88 share in MHP.

The Plaintiff asserts that sometime in 1974, Ho Kim Wah, the widowed first wife of Chiam Toh Tong, on behalf of all the beneficiaries of Chiam Toh Tong’s estate, requested Chiam Toh Kai to take over Chiam Toh Tong’s share in MHP in his personal capacity. The Plaintiff claims that this was because the beneficiaries of Chiam Toh Tong’s estate were not prepared to bear responsibility for the substantial accumulated losses of MHP. The Plaintiff asserts that Chiam Toh Kai acceded to this request.¹⁷ He claims that the minutes of a partners meeting dated 6 April 1975 reflected this arrangement.¹⁸

The Plaintiff also points out that the estate of Chiam Toh Tong was not included in the list of partners of MHP submitted by Chiam Toh Say to the Registrar of Businesses in 1974. The...