Lim Koon Park v Yap Jin Meng Bryan and others

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 29 October 2015
• Neutral Citation: [2015] SGHC 284
• Court: High Court (Singapore)
• Docket Number: Suit No 184 of 2010
• Year: 2015
• Published date: 10 November 2015
• Hearing Date: 16 April 2015,20 April 2015,12 June 2015,13 April 2015,15 April 2015,14 April 2015,17 April 2015
• Plaintiff Counsel: Srinivasan s/o V Namasivayam and Nur Liyana Binte Mohamed Sinwan (Heng Leong & Srinivasan)
• Defendant Counsel: Chew Mei Lin Lynette and Ang Minghao (Morgan Lewis Stamford LLC)
• Subject Matter: Damages,Assessment,Account of profits
• Citation: [2015] SGHC 284

Lai Siu Chiu J: Introduction

This is the third (but by no means final) chapter in the long running dispute between Lim Koon Park (“the plaintiff”) on the one side and Yap Jin Meng Bryan (“the first defendant) and Riverwealth Pte Ltd (“Riverwealth”) on the opposing side. The plaintiff and the first defendant had used Riverwealth as the corporate vehicle to purchase two plots of land at River Valley Road (collectively, “the Properties”) in 2007 for $48.5m, which the first defendant subsequently sold for $60.08m in 2009. Wee Pek Joon (“Wee”), the third defendant, is the wife of the plaintiff.

The parties fell out before the Properties were sold resulting in the plaintiff commencing this suit against the first defendant and Riverwealth. The two defendants joined Wee as the third defendant to the suit as she was a shareholder of Riverwealth and a director (until 12 August 2009) as well.

The first chapter of the dispute was the trial before this court in March and May 2012 (“the main trial”). In August 2012, this court dismissed the plaintiff’s claim against the first defendant for a share of the profits arising from the sale of the Properties (based on an oral profit sharing agreement), whilst judgment was awarded to the first defendant on his counterclaim (see Lim Kook Park v Yap Jin Meng Bryan and others [2012] SGHC 159). The first defendant’s counterclaim had alleged that the plaintiff had made certain misrepresentations to him regarding the Properties before their purchase.

The second chapter in this case was when the plaintiff successfully appealed to the Court of Appeal in July 2013 (see Lim Koon Park and another v Yap Jin Meng Bryan and another [2013] 4 SLR 150 (“the CA judgment”)). The Court of Appeal held that there was indeed an oral profit sharing agreement between the plaintiff, the first defendant and one Andy Lim Geok Lim (“Andy”) in the ratio of 2:1:1. The appellate court awarded judgment to the plaintiff on his claim and ordered that an account of profits be taken to determine the plaintiff’s share of the profits that were made from the sale of the Properties. This court was assigned the task of assessing the plaintiff’s profits.

In [80] of the CA judgment, it was stated that the profits arising from the sale of the Properties would comprise the difference between the sale price ($60.08m) and the purchase price ($48.5m) together with certain outgoings which were listed in [84] of the CA judgment.

In [84] of the CA judgment, the deductibles that were allowed from the sale profits were stated as: (i) interest charged by Hong Leong Finance (“HLF”) for the $30m loan obtained to part-fund the purchase of the Properties, (ii) interest payable to the first defendant for his personal loan of $22,580,621.99 (“the loan”) to part-fund the purchase of the Properties, together with (iii) “such other reasonable expenses necessarily incurred consequentially in relation to the sale (eg, marketing fees)”.

In [82] of the CA judgment, the Court of Appeal specifically disallowed as a deductible the management fees charged to the Properties by the first defendant’s company Daun Consulting Singapore Pte Ltd (“Daun”).

As with the main trial before this court, the plaintiff and the first defendant testified in this third tranche of the proceedings. In addition, the first defendant, in order to rebut the plaintiff’s allegation that he had charged an extortionate rate of interest for the loan, called two expert witnesses to give evidence on the appropriateness of the interest rate that he had charged. The first defendant filed two affidavits, one being his affidavit of evidence in chief (“AEIC”), while the second was the affidavit to verify the accounts (“AVA”) that he had filed pursuant to O 43 r 4 of the Rules of Court (Cap 322, R5, 2006 Rev Ed) (“the Rules”). The AVA related to the expenses of the purchase and sale of the Properties. The plaintiff similarly filed his AEIC for these proceedings along with Wee. The plaintiff did not have expert witnesses but Andy was his other factual witness. The first defendant’s factual witnesses were Low Chee Seng (“Low”), Ng Kim Leng and Tan Kok Keong. By consent of the parties, Wee’s testimony was dispensed with.

The dispute

I should point out at this stage that before the commencement of the assessment hearing, the parties informed the court that the following deductibles and their amounts had been accepted by the plaintiff:-

Item	Particulars	Amount($)
1	Stamp fees relating to the purchase of the Properties (both plots)	1,444,200.00
2	Legal expenses relating to purchase of the Properties	121,540.32
3	Legal fees relating to sale of the Properties	54,089.23
4	Payments on Hong Leong’s mortgage and commitment fee	2,590,420.96
5	Properties tax	389,823.09
6	Expenses relating to URA approvals	18,637.50
7	Fees paid for a “Qualified Person”	326,350.00
8	Payments made to National Environment Agency	2,000.00
9	Expenses relating to general maintenance of the Properties	20,487.20
10	Fees for valuation reports and report from Environcorp Consulting Services	28,355.00
11	Payment for secretarial services from Corporate Secretarial Services	30,500.14
12	Payment to Moore Stephens LLP (for secretarial services)	15,311.70
13	Payment for accounting services and in relation to GST filing	23,854.58
14	Payment to PricewaterhouseCoopers (“PWC”) in relation to IRAS queries on income for Y/A 2011 (for tax filing for year ending July 2010)	31,757.60
15	Payment to PWC for preparation and filing of tax returns	10,921.26
16	Payment of membership fees to Singapore Business Federation	428.00

The above items totalled $5,108,676.58. I should add however that the plaintiff’s acceptance of items 13 to 16 was premised on the first defendant’s representation that they related to the sale of the Properties.

The following expenses were disputed by the plaintiff and formed the subject matter of the assessment hearing:

Item	Particulars	Amount($)
1	Brokerage fees paid for the sale of the Properties	600,000.00
2	Legal fees paid to Rajah & Tann LLP (“R&T”) for drafting of term sheet agreement	34,248.66
3	Fees paid to R&T for work done for Suits 438 of 2009 and 344 of 2010 and advice rendered on corporate issues	275,814.98
4	Interest paid to first defendant for the personal loan + payments from end 2007 and May 2008 (3,088,350.14 + 2,780.14)	3,091,130.28
	Total:	4,001,193.92

By the time of the hearing, the first defendant had withdrawn one expense item, namely, the sum of $2,437.00 paid to the Commissioner of Stamp Duties.

Unlike the main trial, the first defendant bore the burden of proof for the accounts he had prepared. Consequently, he took the stand first along with his other witnesses.

The evidence

I shall deal with each of the four disputed items in [10] in turn.

The brokerage fee

The first defendant’s company Daun had charged Riverwealth $600,000 or 1% of the sale price as brokerage fee. In turn, Daun paid out therefrom to (i) Low and (ii) one Mohdar Bin Hassan (‘Mohdar”) the sums of $200,000 and $100,000 respectively. In support of this item, the first defendant had in his AVA produced (at page 299) a letter on Daun’s letterhead dated 29 Dec 2009 signed by himself, Low and Mohdar wherein the latter two acknowledged receiving the sums of $200,000 (by two part-payments of $165,000 and $35,000) and $100,000 respectively.

The first defendant’s evidence on this item was that the Properties were bought by Oxley JV Pte Ltd (“the Buyer”) which was a consortium comprising of Ching Chiat Kwong, Tan Swee Meng (“Bill Tan”) and Gilbert Ee (‘Gilbert”). Daun brought in Gilbert while Low (through Mohdar) had introduced Bill Tan.

Low also known as Jeffrey Low, testified that he is a property broker by profession and was attached to a real estate agency in 2009 when he was introduced by Mohdar to the first defendant. In turn, Low introduced Bill Tan, a developer, to the first defendant. Low then left it to the first defendant to negotiate with Bill Tan on the understanding that if a sale was concluded, he would be paid his commission for brokering the deal.

However, it was also the common testimony of the first defendant and Low that there was no written agreement between them that the latter should be paid a brokerage fee if a sale materialised from Low’s introduction of prospective buyers to Riverwealth. During cross-examination, the first defendant revealed he had agreed, acting on behalf of Daun, to pay Low 1% commission if the Properties were sold. However, according to Low’s testimony during cross-examination, there was no evidence that Riverwealth had agreed to pay Low the 1% commission.

Even though Low played no role in the formation of the tripartite consortium that eventually incorporated the Buyer to purchase the Properties and Low “could not conclude the sale” (in the first defendant’s own words), the first defendant nonetheless paid Low half of 1% brokerage (which Low shared with Mohdar in the proportion of 2:1 see [13]). The first defendant said the 1% brokerage fee to Low had been varied and reduced. He had himself helped to form the consortium from the parties that Low introduced to him so he felt Low was entitled to part of but not the whole 1% fee – he thought that half thereof was fair.

As for Daun itself taking the remaining half of the 1% brokerage fee (as the sales agent of Riverwealth), the plaintiff drew the court’s attention to an extraordinary general meeting (“the EOGM”) of the company held on 19 September 2009 that his counsel, Mr Srinivasan s/o V Namasivayam (“Mr Srinivasan”), had attended on his...