Chiang Sing Jeong and another v Treasure Resort Pte Ltd and others

JudgeTan Lee Meng J
Judgment Date05 July 2013
Neutral Citation[2013] SGHC 126
CourtHigh Court (Singapore)
Docket NumberSuit No 568 of 2007
Published date09 July 2013
Hearing Date18 November 2011,14 November 2011,17 November 2011,11 May 2011,12 November 2011,19 November 2011,20 November 2011,05 May 2011,12 May 2011,11 November 2011,04 May 2011,21 November 2011,13 November 2011,22 March 2012,09 January 2013,16 November 2011,06 May 2011,10 November 2011,20 March 2012,23 March 2012,22 November 2011,15 March 2012,19 March 2012,17 March 2012,18 March 2012,21 March 2012,16 March 2012,15 November 2011,10 May 2011
Plaintiff CounselTan Teng Muan and Loh Li Qin (Mallal & Namazie)
Defendant CounselDaniel Koh, Joni Tan and June Lim (Eldan Law LLP),Kenneth Pereira and Christopher Anand Daniel (Advocatus Law LLP),Davinder Singh SC, Bernette Meyer, Vanathi S and Jackson Eng (Drew & Napier LLC),Third defendant in person,N Sreenivasan SC (Straits Law Practice LLC) (instructed), Jimmy Yap (Jimmy Yap & Co), Srinivasan Namasivayam and Rahayu bte Mahzam (Heng, Leong & Srinivasan)
Subject MatterContract,Formation,Certainty of terms,Trusts,Express trusts,Certainties
Citation[2013] SGHC 126
Tan Lee Meng J:

This case involves a dispute regarding the ownership of 40% of the shareholding of the first defendant, Treasure Resort Pte Ltd (“TR”). It is one of a number of suits filed by various parties against the second defendant, Maxz Universal Development Group Pte Ltd (“MDG”), the majority shareholder of TR, regarding TR shares offered to them by the third defendant, MDG’s former managing director and former majority shareholder, Mr Seeto Keong (“Seeto”), under arrangements which MDG’s new majority shareholder refused to recognise.

The first plaintiff, Mr Chiang Sing Jeong (“Chiang”), filed the present proceedings and claimed TR shares from MDG for himself and as the nominee of the eighth defendant, Mr Lim Chong Poon (“Lim”). Chiang asserted that he and Lim were entitled to 15% and 25% of TR’s shareholding respectively. On 10 June 2010, Chiang discontinued his action after settling his dispute with MDG on confidential terms. Despite this, Chiang remained a party in the action as Lim brought third party proceedings against him. Lim claimed that he was entitled to damages from Chiang if the latter’s arrangements with MDG are found to have affected his own claim against MDG for TR shares.

With the discontinuance of Chiang’s action, the remaining claimants were Lim and the second plaintiff, Café Aquarium Pte Ltd (“Café”). Lim, who had initially depended on Chiang to claim TR shares from MDG on his behalf, fell out with Chiang and filed Suit No 548 of 2008 (“Suit 548”) against MDG to recover what he claimed was his shareholding in TR. Suit 548 was struck out for duplicity on 13 January 2009. On 2 April 2009, Lim applied to become a party in the present proceedings. He was granted leave to do so and he filed his Statement of Claim (“SOC”) against MDG on 15 May 2009.

Café, which is presently run by Lim’s wife, Mdm Soh Kee Hoon (“Mdm Soh”), claimed TR shares from MDG as Lim’s nominee on the basis that the signed Instruments of Transfer for 1,927,999 TR shares (“Instruments of Transfer”) that allegedly belonged to Lim and Chiang were handed over by Seeto in February 2007 to Chiang, who registered the TR shares in question in Café’s name. Apart from claiming TR shares, Café also claimed sums allegedly owed to it by MDG under its arrangements with Seeto.

The real defendant in these proceedings is MDG. TR is a nominal defendant and no claim was made against the third to sixth defendants, who were MDG’s directors at the material time. As for the seventh defendant, Mr Tan Eck Hong (“TEH”), a shareholder of TR who filed two other actions against MDG, he withdrew from the proceedings on the first day of the trial.


The dispute between the parties may be traced to the financial problems of Sijori Resorts (Sentosa) Pte Ltd (“Sijori”), which leased a plot of land (“the Sijori Lease”) at 23 Beach View, Sentosa, from Sentosa Development Corporation (“SDC”) for 81 years in 1994. Sijori developed and operated a hotel resort (“the Sijori Resort”) on the said property.

Lim was the managing director and majority shareholder of Sijori. Between 2002 and 2004, Sijori faced serious financial problems. By 2004, its debts had increased to $15m, out of which $12m was owed to the Bank of China (“BOC”) with respect to a loan to develop the resort. Lim furnished a personal guarantee to BOC for the said loan. In December 2004, SDC sued Sijori to recover more than $1m and to have the Sijori Lease forfeited.

In March 2005, Lim had discussions with MDG’s managing director, Seeto, about MDG taking over the Sijori Lease and Sijori Resort (“the Project”). He claimed that he and Seeto had concluded an oral joint venture agreement (“JVA”) to form a company, TR, to acquire the Project and that it was his task to procure the transfer of the Project to TR. Lim stated that under the oral JVA, he and MDG would hold 30% and 70% of TR’s shareholding. Furthermore, while MDG had to contribute towards TR’s authorised capital, Lim did not have to do so at this juncture for his shareholding in TR.

Lim added that given the history of Sijori’s litigation with SDC, it was agreed that his shares in TR would be held on his behalf by his nominee, Chiang, who operated a tourist attraction near the Sijori Resort. Chiang was then interested in taking over SDC’s lease of No 11 Siloso Road, Sentosa, to Sentosa Adventure Golf Pte Ltd (“SAG”). Café, of which he was a director, was his vehicle to acquire SAG. As SDC wanted the assignment of the SAG lease and the Sijori Lease to be done at the same time, Café soon became embroiled in TR’s affairs.

On 28 June 2005, TR was incorporated with an authorised capital of $10m. Chiang was allotted one subscriber share in TR, and he and Seeto were appointed as TR’s directors.

According to Lim, in July 2005, MDG agreed to reduce its stake in TR to 60% in return for a reduction of its contribution towards TR’s capital from $7m to $6m. Consequently, Lim’s stake in TR increased from 30% to 40% but he was required to contribute $1m to TR. Lim said that he kept 30% of the shares in TR for himself and gave Chiang the remaining 10% for looking after his interest in TR and for assisting him in the transfer of the Sijori Lease to TR.

On 23 July 2005, SDC obtained judgment against Sijori for $1,128,128.65 (“the Judgment Sum”), which had to be paid by 25 August 2005, failing which the Sijori Lease would be forfeited. Seeto, who had agreed that MDG would settle the Judgment Sum, wrote to Mr Rodney Tan Boon Kian (“Rodney”) on 4 August 2005 for help in arranging a $10m loan for the acquisition of the Project. In this letter, Seeto informed Rodney that MDG had a 60% stake in TR while the remaining 40% was held by Lim’s proxy. Thus, as early as August 2005, Rodney knew about Lim’s stake in TR’s shareholding.

As Rodney did not lend financial assistance to MDG, the latter was unable to pay the Judgment Sum. To salvage the situation, Seeto and Lim arranged for Café to assist in the payment of the Judgment Sum. Seeto agreed that MDG would raise $587,493.74 and Café undertook to loan MDG the balance required to settle the Judgment Sum on condition that the loan was repaid by 15 September 2005. On 18 August 2005, Seeto issued a cheque for $250,000 but it was dishonoured on presentation.

Ultimately, MDG could only raise $30,000 and Café had to loan money to MDG to pay the Judgment Sum (“the Loan”). Lim claimed that he, Chiang, Chiang’s wife and a director of Café, Mr Shen Yixuan, put funds into Café to enable the Judgment Sum to be paid. MDG has since repaid the bulk of the Loan.

The 40% of TR’s shareholding claimed by Lim was not transferred to Lim’s nominee, Chiang, even as late as April 2006. Lim claimed that when he queried Seeto about the transfer of TR shares to his nominee shortly after the Judgment Sum was paid, the latter told him that MDG would hold his TR shares on trust for him because it would be easier to arrange financing for the Project if MDG held most of the shares in TR. On numerous occasions thereafter, MDG confirmed that Lim and Chiang were entitled to 40% of TR’s shareholding. For instance, on 28 June 2006, in the face of a potential sale of TR to Golden Tulips Management Group (“Golden Tulips”) for $65m, MDG, which then held 820,000 of the 820,001 shares issued by TR in its name, entered into an agreement with Lim and Chiang to share the sale proceeds (“the Golden Tulips Agreement”). MDG acknowledged in this agreement that it “is now holding” [emphasis added] 30% of TR’s shareholding on trust for Lim and 10% on trust for Chiang and it undertook to deliver executed share transfers in blank together with share certificates to Lim and Chiang by 7 July 2006.

The proposed sale of TR to Golden Tulips did not materialise. On 14 November 2006, the Sijori Lease was finally transferred to TR with SDC’s consent. By a Supplemental Agreement dated 15 November 2006, TR undertook to renovate the hotel and to build a new hotel wing on an adjoining property leased from SDC for this purpose.

By February 2007, TR had issued 4,820,001 shares. After taking into account Chiang’s one TR share, Lim and Chiang would have been entitled to another 1,927,999 shares if they were the beneficial owners of 40% of TR’s shareholding. Significantly, in February 2007, Seeto executed the Instruments of Transfer for this number of shares and handed them over to Chiang.

TR did not have funds to fulfil its obligations to SDC. Rodney finally decided to invest in TR through his company, Roscent Group Ltd (“Roscent”). His plan was to gain control of MDG and TR by buying Seeto’s majority stake of around 54% of MDG’s shareholding for $90,000 and 30% of Roscent’s shares. Seeto, who had confirmed time and again that MDG held 40% of TR’s shareholding on trust for Lim and Chiang and had handed over to Chiang executed Instruments of Transfer for 1,927,999 TR shares, had the temerity to warrant that MDG “legally and beneficially owned not less than 92% of the issued share capital of [TR]”.

Despite Seeto’s warranty, Rodney was cautious enough to instruct his solicitors, Stamford Law Corporation (“Stamford”), to find out whether MDG really owned all its TR shares. Stamford advised that MDG’s legal ownership was affected by two documents. The first was a shareholders’ agreement between MDG, Chiang and TEH dated 8 August 2006 (“the Shareholders’ Agreement”), which provided that MDG held 74% of the shares in TR and that Chiang would have 25% of TR’s shareholding upon paying $2.5m for them within six months of the agreement. The second agreement was a declaration of trust dated 10 August 2006 (“the First Declaration of Trust”), in which MDG acknowledged that out of the 74% of TR shares in its name, it held 15% of TR shares for Chiang.

Stamford was instructed to prepare deeds (“the Stamford Deeds”) to terminate the Shareholders’ Agreement, which was in fact concluded sometime after 21 November 2006...

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2 books & journal articles
  • Contract formation
    • United Kingdom
    • Construction Law. Volume I - Third Edition
    • 13 April 2020
    ...developer. he contractor commenced work, and the developer accepted the beneit of the 238 Chiang Sing Jeong v Treasure Resort Pte Ltd [2013] SGHC 126 at [38]–[41], per Tan Lee Meng J. 239 See M Hart Construction Ltd v Ideal Response Group Ltd [2018] EWHC 314 (TCC) at [3]. 240 Hibberd v Serg......
  • Equity and Trusts
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    • Singapore Academy of Law Annual Review No. 2013, December 2013
    • 1 December 2013
    ...… Mr Chng was the mastermind and the Defendant was the pliant executioner. 15.5 In Chiang Sing Jeong v Treasure Resort Pte Ltd[2013] SGHC 126, the court had the occasion to consider the elements of a valid trust. Lim Chong Poon (‘Lim’) claimed that he was entitled to some shares in a compan......

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