Koh Ewe Chee v Koh Hua Leong and Another

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 11 February 2003
• Neutral Citation: [2003] SGHC 24
• Published date: 06 May 2004
• Court: High Court (Singapore)
• Plaintiff Counsel: Raj Singam, Gopinath Pillai and Tan Siu-Lin (Drew & Napier LLC)
• Defendant Counsel: Chandra Mohan (Rajah & Tann) and Lim Khoon (Lim Hua Yong & Co.)

The Background

1. The parties in these proceedings are brothers, the Plaintiff being the eldest and the First Defendant being the youngest. Their father was Koh Sim, a rag-and-bone man involved in the buying and selling of second hand goods (i.e. the “karang guni” trade). The modest business grew and in 1965, the father registered it as a partnership called Sin Wah Seng (“SWS”). The first three partners were the father, the Plaintiff and the Second Defendant. The First Defendant became a partner in place of his father in 1978. When their father passed away in 1979, the First Defendant was the executor and beneficiary of the entire estate including the father’s share in SWS. As time passed, things did not go well between the Plaintiff and his two younger siblings.

2. In an earlier action (Originating Summons No. 1930 of 1999) commenced by the two Defendants here, an order that the partnership be dissolved and that receivers and managers be appointed over its assets and liabilities was sought. The Defendants had appointed Chio Lim and Associates, a firm of certified public accountants, to review the partnership accounts with the intention of appointing them as receivers and managers but the Plaintiff disagreed with their choice. A report entitled “Sin Wah Seng - Special Review of the Accounting Records June 1997” (“the Chio Lim Report”) had been prepared by Chio Lim and Associates. On 11 February 2000, the present Defendants served a notice of dissolution of the partnership on the Plaintiff. They then sought to amend their Originating Summons by adding a prayer for a declaration that the partnership had been dissolved on 11 February 2000. When their application came up for hearing on 13 March 2000, they withdrew it and informed the court that they would be discontinuing the Originating Summons, which they did on 6 April 2000. This was followed by the filing of the present action the next day by the Plaintiff.

3. This Originating Summons was commenced on 7 April 2000 seeking an order that Pricewaterhouse Coopers (“PWC”) be appointed as receivers and managers of the partnership SWS which was dissolved on 11 February 2000. On 7 June 2000, the order sought was granted by T Q Lim JC who appointed Timothy James Reid and Chan Ket Teck of PWC jointly and severally as receivers and managers of SWS to take an account of the partnership debts/liabilities at the date of its dissolution.

4. In the present action, the receivers and managers, PWC, then prepared a report on 12 October 2001 (“the PWC Report”) on the status of the partnership properties. This report was not disputed by the parties. There were seven properties in issue. PWC concluded that one was a partnership asset (1 Syed Alwi Road #01-02 Siong Lim Building) and another should be shared equally by the parties outside the ambit of the partnership (27 Kang Choo Bin Road). PWC was however unable to determine the status of the other five.

5. On 12 March 2002, the Plaintiff applied by way of Summons in Chambers No. 600395 of 2002 under the “liberty to apply” clause in the order of 7 June 2000. In that application, he applied for an order declaring that SWS was a sole proprietorship and that he was the sole proprietor. He also asked that the Court discharge the receivers and managers, declare that he was the sole owner of three of the seven properties and that the remaining four properties were held on resulting trust by the Defendants for him and order them to transfer legal title in the properties to him.

6. In his judgment of 3 May 2002, Choo Han Teck JC held that where substantial changes were intended to be made to the original or main orders, an application under a “liberty to apply” clause was not the proper procedure. The judge went on to explain why the application before him was a clear example of that. He commented that the action was taken out by the Plaintiff more than two years ago to appoint receivers and managers over an entity which the Plaintiff regarded as a partnership. After reviewing the assertions of fact made by the Plaintiff in support of his application, the judge said:

“The point is, the assertions now made are so fundamentally opposed to the basis of his application and his own declarations under oath that Sin Wah Seng was a partnership and that the Defendants were his partners. To correct so fundamental a premise, the entire order of court of JC Lim must be overturned and set aside and fresh pleadings be drawn up. It is not a minor improvement to be dealt with, least of all, under a “liberty to apply“ appendage. The present cause was therefore irremediably lost from the outset”.

The judge then dismissed the Plaintiff’s application with costs.

The Present Application Before Me

7. As the parties were in dispute over which of the properties were partnership properties and their respective shares therein, the Defendants took out the present application (Summons in Chambers No. 600877 of 2002) for the following orders:

(1) that the receivers and managers of SWS distribute all the assets of the partnership to the partners in equal shares;

(2) a declaration that the property known as No. 27 Kang Choo Bin Road is jointly owned by all three partners in equal shares or alternatively is a partnership asset; and

(3) that an inquiry be held as to who is/are the beneficial owner(s) of the following properties and if there are more than one beneficial owner, their respective shares therein:

(a) 82/82A Jalan Senang

(b) 12 Palm Grove Avenue

(c) 1 Syed Alwi Road #01-05, Siong Lim Building

(d) 2 Kallang Pudding Road #01-04, Mactech Building

(e) 2 Kallang Pudding Road #01-12, Mactech Building.

8. On 29 July 2002, Lee Seiu Kin JC made directions as to the filing of affidavits by the parties. The judge ordered the Plaintiff to serve a copy of the Chio Lim Report on PWC so that PWC could comment on that report. He then ordered the matter to be tried.

9. On 3 October 2002, Timothy James Reid of PWC filed his affidavit enclosing a report of the same date (“PWC Comments”) setting out his comments on the Chio Lim Report.

10. At the hearing before me, the PWC Report, the Chio Lim Report (subject to what I state below) and the PWC Comments were admitted by consent. For the Chio Lim report, it was agreed that all references to an interview between the accountant and Gan Beng Tuck, the part-time bookkeeper of SWS, and the inferences drawn therefrom be deleted from the report. This was because none of the parties at the commencement of the hearing intended to call Gan as a witness and no affidavit was filed by him. I was also told that he was quite sickly. It was further agreed that the Defendants present their evidence before the Plaintiff’s as this application was taken out by them.

The Defendants’ Case

11. During the hearing, I asked the Defendants’ solicitors to prepare an aide-memoire on the seven properties in issue in order that all relevant information pertaining to them could be compendiously captured. I reproduce below the aide-memoire prepared by the Defendants’ solicitors with some additional information inserted by the Plaintiff’s solicitors:

“AIDE-MEMOIRE ON PARTNERSHIP PROPERTIES

1. No. 82/82A Jalan Senang

Registered in the names of Koh Sim (“KS”), Koh Yew Huat (“KYH”) and Koh Ewe Chee (“KEC”) as joint tenants

Purchased on 23 October 1969 (according to title deed)

According to Koh Hua Leong (“KHL”), purchase price was about $64,000

No documentary evidence on mode of payment

2. No. 12 Palm Grove Avenue

Sale and Purchase Agreement executed between KEC and vendor on 6 July 1977

Registered in the names of KS, KEC and KYH as tenants in common in equal shares on 10 October 1977

According to M/s Wee Swee Teow, purchased in 1977 for $275,500

Mode of payment:

i) Maybank cheque for $27,500 drawn on KEC’s personal account;

ii) Maybank cheque for $80,000 drawn on KEC’s personal account;

iii) Standard Chartered Bank cheque for $100,000 from unknown source; and

iv) Maybank cheque for $78,120 drawn on Sin Wah Seng i.e. Business Account.

3. #01-02 Song Lin Building

Registered in the names of KEC, KYH and KHL as joint tenants on 1 June 1984

According to M/s Wee Swee Teow, purchased in 1981 for $983,958

Recorded as a partnership asset

Mode of payment was 10 Maybank cheques issued in favour of Industrial & Commercial Bank Limited for the account of Ko Hong Realty (Pte) Ltd. Account from which the cheques were drawn is unspecified.

4. #01-05 Song Lin Building

Registered in the name of KEC on 30 September 1986

According to M/s Wee Swee Teow, purchased in 1986 for $520,000

Mode of payment:

i) Maybank cheque for $52,000 )

drawn on Business Account ) charged to KEC’s current

ii) Maybank cheque for $288,016 ) account with the firm.

drawn on Business Account; and )

iii) Maybank cheque for $200,000 drawn on KEC’s personal account.

5. No. 27 Kang Choo Bin Road

Registered in the names of KEC, KYH and KHL as tenants in common on 15 August 1989

According to M/s Wee Swee Teow, purchased in 1989 for $400,000

Mode of payment:

i) Maybank cheque for $40,000 drawn on Business Account

ii) Maybank cheque for $374,035 drawn on Business Account

Total purchase price was divided into three and charged to KEC, KYH and KHL’s current accounts with the Partnership

6. #01-04 Mactech Building

7. #01-12 Mactech Building

Registered in KEC’s name on 10 January 1996

Option initially granted in Sin Wah Seng’s name but was subsequently transferred to KEC’s name following a letter from Sin Wah Seng

According to M/s Wee Swee Teow, purchased together on or around 25 February 1991

Purchase price for #01-04 was $625,000, purchase price for #01-12 was $843,000

According to PWC’s report, mode of payment was several Maybank cheques totalling $1,485,620 of which $328,500 was verified to have been paid from the Business Account in 1991 and recorded in the “City Development Ltd” account. The balance was confirmed by Maybank to have been drawn on KEC’s personal bank account.

The...