Fu Loong Lithographer Pte Ltd and others v Mok Wing Chong (Tan Keng Lin and others, third parties)

• Jurisdiction: Singapore
• Judge: Quentin Loh J
• Judgment Date: 04 May 2017
• Neutral Citation: [2017] SGHC 97
• Plaintiff Counsel: Leo Cheng Suan and Teh Ee-Von (Infinitus Law Corporation)
• Docket Number: Suit No 311 of 2012/N
• Date: 04 May 2017
• Hearing Date: 06 February 2014,02 July 2015,10 September 2015,22 September 2014,19 September 2014,17 September 2014,01 July 2015,11 February 2014,25 September 2014,24 September 2014,18 September 2014,30 June 2015,20 February 2014,13 February 2014,18 February 2014,12 September 2014,01 December 2016,12 February 2014,14 February 2014,07 February 2014,09 October 2015,19 February 2014,09 September 2015,16 September 2014,03 July 2015,08 July 2015,23 September 2014
• Subject Matter: Strata Titles,Land,Management Council
• Year: 2017
• Defendant Counsel: Lee Peng Khoon Edwin and Poonaam Bai d/o Ramakrishnan Gnanasekaran (Eldan Law LLP),Lam Wai Seng (Lam WS & Co),Tan Tian Luh and Ling Zixian (Chancery Law Corporation)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 97
• Published date: 29 March 2018

Quentin Loh J:

This is the latest in a protracted dispute between two groups of subsidiary proprietors (“SPs”) of a rather dated light industrial and commercial complex comprised in a strata development known as Mun Hean Building (the “Development”). The Development consists of two blocks: Block 51 and Block 53, Kim Keat Road, Singapore 328821. The dispute appears to have arisen around late-2008 to early-2009, and the parties have already been to the Strata Titles Board (“STB”) six times (in STB No 79 of 2009 (“STB79/2009”), No 73 of 2010, No 78 of 2011 (“STB78/2011”), No 93 of 2011 (“STB93/2011”), No 50 of 2012 (“STB50/2012”), and No 98 of 2012), as well as to court twice (in Originating Summonses No 300 of 2009 (“OS300/2009”) and No 569 of 2013 (“OS569/2013”), including to the Court of Appeal (in Civil Appeal No 110 of 2013)). The present proceeding (“this Suit”) is but one more dispute before the courts.

After the evidentiary hearing before me, the parties agreed to try and mediate their differences at the Singapore Mediation Centre (the “SMC”). Unfortunately the mediation failed to reach any settlement.¹ The parties did not contact the SMC after the mediation, and no further mediation has since been scheduled.

I gave oral judgment with brief grounds on 1 December 2016. The second and fourth plaintiffs have appealed, and I now set out the full grounds for my decision.

The management corporation of the Development is Management Corporation Strata Title Plan No 1024 (“MCST 1024”). The Development comprises 19 units, 11 of which are in Block 53 and 8 are in Block 51.² Block 53, the older block, was completed in 1981. Block 51 was completed in 1986.³

The group of SPs which the Plaintiffs are a part, broadly speaking, comprises the SPs of eight units in Block 53 (the “Plaintiffs’ Camp”). The Plaintiffs’ Camp collectively holds the majority of the share values in the Development (584 shares) because Block 53 is approximately twice the size of Block 51. The other group of SPs led by the Defendant, Mr Mok Wing Chong, collectively owns all the eight units in Block 51 as well as three units in Block 53 (#01-00, #05-01, and #05-03) (the “Mok Camp”). The Mok Camp thus comprises the SPs of 11 of the 19 units in MCST 1024, and therefore controls the election of the council of MCST 1024 (the “Council”). However, because the Mok Camp collectively hold only 416 share values in the Development, they can be outvoted in general meeting by the Plaintiffs’ Camp. This is an unfortunate recipe for disaster when the two camps do not see eye-to-eye.

The Defendant was the chairman of the Council from 1991 to 2011. He and his family members are shareholders and/or directors of many of the companies who are SPs in the Development. The other SPs in the Mok Camp are well known to and on good terms with the Defendant and stand with him on the issues that have divided the parties.

The first to fifth plaintiffs, who are the SPs of units in Block 53,⁴ filed Originating Summons No 283 of 2012/V (“OS283/2012”) on 16 March 2012 in the High Court seeking various declarations that the Defendant had breached his duties as chairman, and an account of sums that the Defendant had improperly caused MCST 1024 to incur. On 17 April 2012, the parties agreed that the proceedings be converted to and continue as this Suit.⁵ The first to fifth plaintiffs then filed their statement of claim (the “SOC”) on 8 May 2012, which was subsequently amended and re-filed on 11 October 2013.

On 2 November 2012, the Defendant commenced third party proceedings against the first to fifth third parties seeking, in the event that the first to fifth plaintiffs succeed in any of the reliefs that they sought against the Defendant, (i) contribution and/or indemnity and/or corresponding declarations in respect of the first to fourth third parties; and (ii) a declaration that the fifth third party has been enriched by the works and is not entitled to any restitution.⁶

The first to fourth third parties are Tan Keng Lin (“KL Tan”), Ang Poh Poh Karen (“Karen Ang”), Tay Lay Suan (“Amy Tay”), and Tan Ah Chuan (“AC Tan”). All four were members of the 23rd Council and/or 24th Council. The fifth third party is MCST 1024.

On 19 February 2014, the first, third, and fifth plaintiffs discontinued their action against the Defendant, and agreed to pay costs fixed at $12,000.00 to him. The Defendant, too, discontinued his action against the second, third, and fourth third parties, with no order as to costs. These discontinuances were without liberty to commence fresh proceedings relating to the respective cases as pleaded in the SOC and the Defendant’s Statement of Claim against the Third Parties (the “3PSOC”).⁷

Accordingly, the parties that remain in these proceedings are the second and fourth plaintiffs (collectively, the “Plaintiffs”), the Defendant, KL Tan, and MCST 1024. KL Tan is also an owner of the second plaintiff, and represented the second plaintiff at every general meeting of MCST 1024 up until the first tranche of the 25th annual general meeting (“AGM”) on 5 October 2009 (see [35] below).

The pleadings The main action

In their SOC, the Plaintiffs allege that the Defendant breached his duties as the chairman and a member of the Council of MCST 1024 in three broad ways: First, he caused MCST 1024 to undertake the 62 items of works set out in the Annex to the SOC without having been authorised by the SPs to do so.⁸ I set out these works at [168]–[178] below, and refer to them as the “Annex A Works”. Secondly, he favoured the SPs in the Mok Camp in relation to nine items of works. These works were performed on the common property adjacent to the units owned by the Mok Camp, and were “far superior and more extensive” than the corresponding works applied to the common property adjacent to the units owned by the SPs in the Plaintiffs’ Camp.⁹ For convenience, I refer to these nine items of works as the “Annex B Works”, and note that there is some overlap between the Annex A Works and the Annex B Works. Thirdly, he appointed Mun Hean Asia Pte Ltd (“MH Asia”) as the managing agent of MCST 1024 without having been authorised to do so and without disclosing his pecuniary interest in MH Asia.¹⁰

In their closing submissions, the Plaintiffs cast the issues somewhat differently. The closing submissions state the essential issue to be whether the Defendant is liable to MCST 1024 for the funds (that were spent on the Annex A Works) and misusing and exceeding his powers as chairman. It is further stated that the following issues are “ancillary” to the “main issue”: Whether the expenses for the disputed works had been approved or authorised by the Council or the general body of MCST 1024; Whether the disputed works were upgrading works or routine maintenance works; Whether the Defendant was in control of the Mok Camp; Whether the decision to proceed with the disputed works was made by the Defendant; Whether the expenses for the disputed works had been properly budgeted for and approved by the general body, and/or properly ratified subsequently; Whether MH Asia had been appointed as managing agent of MCST 1024 and if so, whether they had been properly appointed; Whether the Defendant was in breach of s 60 of the Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) (“BMSMA”) in appointing MH Asia without declaring his pecuniary interests; and Whether the Defendant had failed to act in the best interests of all the SPs of MCST 1024 in relation to the disputed works.

Notwithstanding the strange characterisation of the above issues as “ancillary” (which means something that is auxiliary, supplementary, subsidiary, subordinate or additional), the answers to the issues at (a), (b), (d), (e), and (h) determine whether the Defendant is liable to MCST 1024 for the funds spent on the Annex A Works and whether the Defendant misused and exceeded his powers as Chairman. Also, for reasons that I will come to subsequently, whether the Defendant is “in control” of the Mok Camp (at (c) above) is irrelevant when all the SPs in the Mok Camp stood behind the Defendant and voted accordingly. Many of these SPs also gave evidence before me.

The Defendant denies all these allegations. He pleads as follows in his defence (the “Defence”): In relation to the Annex A Works: The undertaking of the Annex A Works was authorised by the SPs, whether by the custom in MCST 1024 of the SPs consenting to works without a formal resolution,¹¹ or by the discussion of the works at the 24th AGM at which the Plaintiffs were present and raised no objections to them.¹² Further, the undertaking of the Annex A Works was within the authority of MCST 1024 to maintain and keep the Development in good and serviceable repair (“repair and maintenance”), and the expenditure on the works had always been approved by the Council.¹³ In any event, MCST 1024 had at its 27th AGM ratified the Annex A Works.¹⁴ In relation to the Annex B Works: Some of the Annex B Works could not have been performed because the common property on which they were said to have been performed does not even exist.¹⁵ Others were necessitated by the different characteristics and layouts of Block 51 and Block 53,¹⁶ and the different times at which the works were performed on each building.¹⁷ In any event, the SPs in the Mok Camp had paid for any differences between the costs of the Annex B Works, and the costs of the corresponding works applied to the common property adjacent to the units of the SPs in the Plaintiffs’ Camp.¹⁸ In relation to the appointment of MH Asia, MH Asia was engaged on a temporary basis to provide MCST 1024 with the same book-keeping and administrative services that had previously been provided by Mun Hean Realty Pte Ltd (“MH Realty”), which was wound up in June 2009. MH Asia was paid the same rate of remuneration as MH Realty. All the members of the...