Wong Kia Meng (trading as Smart Tuition Centre) v Seet Siow Luan and Others

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 28 May 2004
• Neutral Citation: [2004] SGHC 112
• Plaintiff Counsel: Peter Pang Xiang Zhong (Loh Lin Kok)
• Published date: 03 June 2004
• Court: High Court (Singapore)
• Defendant Counsel: Arthur Quay and Teh Ee-Von (Wong M Seow and JYP Chia)
• Subject Matter: Personal Property,Ownership,Beneficial,Wife as full-time teacher prohibited from running business,Business registered under husband's name,Whether husband held business as trustee for wife,Whether illegal act was committed which prevented claim in equity.

28 May 2004

Tay Yong Kwang J:

1 The plaintiff and the first defendant were husband and wife. They married in 1985. In October 2001, their relationship deteriorated to the extent that divorce was contemplated. On 7 November 2003, the first defendant was granted a decree nisi in her uncontested petition (Divorce Petition No 604460 of 2002) on the ground of unreasonable behaviour.

2 The second defendant is the mother and the third defendant is the younger brother of the first defendant. All three defendants are, on record, the partners of a private education business called Smart Link Tuition Centre (“Smart Link”).

3 The plaintiff is the registered sole proprietor of a similar private education business known as Smart Tuition Centre (“Smart”). His claim against the defendants jointly and severally was for passing off Smart Link as Smart, for diverting the business of Smart to Smart Link, for breach of confidence and/or unfair enrichment and for accounts to be taken to determine the loss and damages suffered by Smart.

4 The defendants denied his allegations. The first defendant, in her counterclaim against the plaintiff, sought a declaration that she is and was at all material times the beneficial owner of Smart. In addition, she asked that an amount of $64,944.00 taken away by the plaintiff from Smart’s bank account be returned to her. She also claimed other damages.

5 I dismissed the plaintiff’s claim and granted the first defendant the declaration sought as well as the return of the said $64,944.00.

The plaintiff’s case

6 The plaintiff and the first defendant have two children, a son born in January 1989 and a daughter born in October 1992. When they married in 1985, the first defendant was a graduate teacher employed by the Ministry of Education (“MOE”). In March 1993, she applied for no-pay leave for three years in order to look after the two young children. In May 1996, she resigned from her teaching post and joined the plaintiff in running Smart on a full-time basis.

7 The plaintiff was educated up to pre-university level. He had three “A” level passes and two “O” level passes. He was a part-time student in one of the polytechnics doing a course in production engineering. However, due to work commitments, he stopped his studies in the third year.

8 In 1990, the plaintiff was the managing director of a company called Primex Design Pte Ltd (“Primex”) whose business was in interior design and renovation. The company was engaged to do renovation works by various businesses involved in private education, namely Patrick Tuition Centre at Serangoon Central Drive, Steven Tuition Centre at Marine Parade Central and Inlingua School of Languages at Cuppage Road. One Wong Yew Fatt, who had his own firm, was involved in the renovation works. As a result of these renovation projects, the plaintiff had to make various submissions to authorities such as the Fire and Safety Bureau, the Urban Redevelopment Authority (“URA”) and the Housing and Development Board (“HDB”). He also had the opportunity to mix with people involved in the business of running tuition centres. He could also observe the daily activities at Patrick Tuition Centre, located three units away from the premises of Primex.

9 Having a keen business mind, the plaintiff realised that the tuition centre business was lucrative. He then told the first defendant that he wanted to set up such a centre as he “knew the procedure to start up”. His then wife was supportive of his idea. However, the plaintiff was short of funds. He then went to borrow $50,000.00 from the first defendant’s elder brother, Eric Seet Seow Huat (“Eric Seet”), who became his partner. The said amount of money was banked into the personal account of the plaintiff. However, on 16 August 1991, the plaintiff registered Smart as a sole proprietorship. A bank account was opened in his name but both he and the first defendant were authorised to sign cheques individually.

10 After getting the approval in principle of the MOE to set up a tuition centre, the plaintiff tendered for various HDB premises apparently using the name “Wong Kia Meng & Partner”. He was successful in securing a tenancy for Block 501 Jurong West Street 51, #04-257. In October 1991, the URA approved the change of use for the said premises. On 11 November 1991, the plaintiff and Eric Seet submitted a letter to the HDB to state that Eric Seet “would like to withdraw as co-owner of” the said premises with effect from that date, leaving the plaintiff as “the sole owner”. The plaintiff stated that Eric Seet “pulled out for reasons best known to himself”.

11 The plaintiff drew up and submitted the design and renovation plans to the HDB for approval. He also submitted the design plans, the application forms and the subject syllabi to the MOE. On 28 February 1992, Smart was registered as a school with the plaintiff registered as a supervisor. In March 1992, Smart began functioning as a tuition centre.

12 The renovations on the premises were undertaken by the plaintiff’s company, Primex, at a cost of almost $23,000. This was for material and labour costs only. No profits were made by Primex. This therefore saved Smart some $6,900. The $50,000.00 loan from Eric Seet was repaid on 16 December 1993 ($30,000.00 cheque signed by the first defendant) and on 6 May 1994 ($20,000.00 cheque signed by the plaintiff) using funds from Smart’s bank account.

13 The plaintiff designed the publicity leaflets for Smart and arranged for 50,000 copies to be printed. He went about by car and on foot in the Jurong West housing estate to distribute the leaflets. Every two months, another 20,000 copies were printed and distributed. His wife, then a full-time teacher, helped him whenever she was free to do so.

14 The plaintiff did all the planning for Smart. He advertised for and engaged the tutors with the help of his wife. The syllabi for various subjects for submission to the MOE were obtained from the Marine Parade Library. He prepared the list of tutors, their curriculum vitae and their terms of employment. He also prepared the registration book and other records. He did the costing and the price list for the various subjects and the different levels of study, the teaching materials and methodologies. He also obtained supplies of materials and the business information of tuition classes conducted by other tuition centres. He paid the tutors according to their educational level.

15 From the time of commencement of business until May 1996, when the first defendant resigned from her full-time teaching post with the MOE, she was engaged as a tutor by Smart for Mandarin classes at various levels. The plaintiff produced a letter from the Inland Revenue Authority of Singapore dated 17 November 2000 addressed to the first defendant stating that additional assessments would be raised on “tuition fees received by you from Smart Tuition Centre” between 1994 and 1998. He also produced a Form IR8A (Return of Employee’s Remuneration) issued to the first defendant (described as “Administrator”) by Smart as employer for the year ended 31 December 1997 and three salary vouchers and one payment voucher in the name of the first defendant, handwritten by the first defendant herself and unsigned.

16 The plaintiff claimed that he spent about 80% of his time working for Smart in 1992 as the first defendant was then a full-time teacher with the MOE. In April 1992, he engaged Ngoh Miao Ping as the full-time manageress cum tutor. She left after a couple of months and was replaced by Tan Ai Ling, then a part-time tutor. In July 1992, he engaged Theresa Lim Poh Choo to assist Tan Ai Ling in the running of Smart.

17 The staff turnover was very high as the manageresses resigned one after another. That caused him a lot of stress as he had to spend time interviewing and training the new staff. As a result, he had no choice but to ask his wife to take no-pay leave to look after the children and to help him out part-time at Smart. He spent so much time at Smart and neglected his other business (Primex) to the point that it almost collapsed. Later, he left the task of interviewing and engaging tutors entirely to the first defendant in order to minimise matrimonial disputes as they would disagree occasionally on the persons to employ.

18 Around 1995, Joanne Tang Li Ping (“Joanne”) was employed by Smart as an administrative assistant. She enjoyed her work and stayed on the job thereby giving stability to Smart. From that time onwards, Smart’s business picked up tremendously and the plaintiff could devote more time to Primex whose business also picked up thereafter.

19 In 1996, Smart became very profitable, making profits of more than $100,000. The plaintiff advised his wife to resign from her teaching post in order to work for him as the full-time manageress of Smart. She did resign and joined Smart full-time on 1 May 1996. As she was his wife, he entrusted her to take charge of Smart and to improve the running of the tuition centre, to give valuable advice and to upgrade its facilities. The plaintiff would handle the technical issues such as servicing of the airconditioning unit and clearing toilet blockages. The contractors engaged by Smart knew he was the boss of Smart. Joanne, a Malaysian, sought his help to write a letter to the immigration authority when she wanted to apply for permanent residence here.

20 When the plaintiff was not at Smart, he would sometimes call up to ask about the student intake and about any problems the tuition centre might be facing. He would render advice and decide on measures to take, leaving the implementation of such to his wife who would also update him about Smart constantly.

21 In 1997, the plaintiff went to China to look for more business opportunities. He bought hardware products back here for sale. In June 1997, he started a furniture hardware business here. In November 1997, he set up another tuition centre...