Tan Yeow Khoon and Another v Tan Yeow Tat and Another (No 2)

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 27 October 1999
• Neutral Citation: [1999] SGHC 284
• Date: 27 October 1999
• Subject Matter: Order of court,Scope of "liberty to apply" clause,Judgments and orders,Whether modifications to draft terms of reference constituted a variation of order of court,Civil Procedure
• Docket Number: Originating Summons Nos 739 & 740 of 1996 (Summons in Chambers No 3019 of
• Published date: 19 September 2003
• Defendant Counsel: Ong Yin Ping (Ong Tay & Partners)
• Court: High Court (Singapore)
• Plaintiff Counsel: Devinder K Rai (Harry Elias & Partners)

: More than a year after the delivery of my grounds of decision in Suits 739 and 740/96 - where the feuding parties were all members of the same family [see [2000] 3 SLR 342] - the plaintiffs, Tan Yeow Khoon (`TYK`) and Tan Yeow Lam (`TYL`) applied to the court to resolve yet another problem that had sprung up in relation to the draft terms of reference prepared by the expert nominated by the parties and approved by the court. The background facts are sufficiently set out in my grounds of decision (see grounds) and suffice it if I said that the task of the expert appointed, Mr Ong Yew Huat of Ernest & Young, was to examine the accounts of the three family companies in which the plaintiffs, TYK and TYL hold majority shares and the defendants, Tan Yeow Tat (TYT) and Tan Guek Tin (TGT) the minority, and to determine the dues and entitlements of the parties within the framework of the order and directions contained in the order of court dated 21 February 1998. The present application by the plaintiffs was admittedly in pursuance of the `liberty to apply` clause contained in the said order.

It would seem that following his appointment, Mr Ong Yew Huat had forwarded to the parties his draft terms of reference under his letter dated 23 February 1999. Insofar as is material, the relevant parts of his draft terms of reference read as follows:

...

The purpose of this letter is to set out the terms upon which we accept the engagement described herein and our understanding of the scope of our work to be performed in pursuance of the order of court dated 21 February 1998 (`the order`) in respect of the OS 739/96 and 740/96 between Mr Tan Yeow Khoon, Mr Tan Yeow Lam (the `plaintiffs`) and Mr Tan Yeow Tat and Ms Tan Guek Tin (the `defendants`), hereon collectively referred to as `the parties`.

1 Background

This matter involves a dispute between the parties who are common shareholders and also directors of the following three companies (`the Companies`):

(a) Soon Hock Transportation Pte Ltd

(b) Soon Hock Container and Warehousing Pte Ltd

(c) Cogent Container Services Pte Ltd

Clause 2(10) of the order states that the plaintiffs shall buy out the defendants at a total sum equal to 25 percent of the aggregated audited book values of the companies as at 31 October 1995, subject to certain stipulated adjustments to be made as set out in cl 2(1) of the order.

Pursuant to cl 2(5) of the order Mr Ong Yew Huat, a partner of Ernst & Young, is by consent to be appointed to resolve the disagreements, if any, between the parties in respect of the adjustments stipulated in cl 2(1).

2 Our terms of reference

From the reading of the order and the draft terms of reference for the appointment of an expert as tabled by the parties during a meeting on 16 October 1998, our understanding of our scope of work for this engagement is as follows:

(a) establish the book values of the Companies as at 31 October 1995 (`the BV`) by reference to the audited accounts of the Companies as of 31 October 1995;

(b) assess, by reference to cl 2(1) of the order, the overall relevance of the various recommendations and proposed adjustments submitted by the parties;

(c) decide on the adjustments to be made to the BV, pursuant to cl 2(1) of the order, in order to arrive at the Adjusted BV (`ABV`) of the respective Companies;

(d) Compute the net amount payable by the plaintiffs to the defendants`, being 25 percent of the aggregate ABV of the Companies as at 31 October 1995;

For the purpose of applying cl 2(1) of the order, we shall be making the following assumptions:

[bull ] Clause 2(1)(a): the adjustment in respect of the market value of the immovable properties shall be based on difference between the audited net book value of the properties, as reflected in the audited accounts of the companies as of 31 October 1995, and the average market value of the properties as determined from the valuation reports prepared by Richard Ellis and Knight Frank;

[bull ] Clause 2(1)(b): that the phrase `payments made by the Company other than for business purposes, for the period 1 January 1990 to 31 October 1995` is taken to refer to all costs and or expenses incurred by the Companies other than for business purposes and captured in the respective audited accounts of the Companies within the stated period;

[bull ] As agreed between the parties, we shall not be required to take into account the potential tax impact of the adjustments to be made against the BV of the companies as at 31 October 1995.

We shall, for the purpose of this engagement, rely solely on the documents and information provided by the parties, including the audited accounts of the Companies as of 31 October 1995. And where necessary, we shall approach the respective parties and or Companies to seek clarifications.

We are not required to perform a full audit, inspection or investigation of the accounting books and records of the Companies. We shall rely on the audited accounts of the companies as at 31 October 1995 as the starting point and thereafter take relevant and duly supported representations from the respective parties regarding the adjustments specified in cl 2(1) of the order. If we require any additional documents and information to corroborate our work, the respective parties and companies shall produce the relevant documents and information to us.

3 Deliverables

Upon completion of the exercise, we shall issue a report dated on the day of the said...