Tong Tien See Construction Pte Ltd v Tong Tien See: Director's Breach of Duty and Conspiracy to Defraud Creditors
In Tong Tien See Construction Pte Ltd (In Liquidation) v Tong Tien See and Others, the High Court of Singapore heard a case brought by the liquidator of Tong Tien See Construction Pte Ltd against its directors and related parties, alleging breach of duties, conspiracy to injure, and fraudulent misuse of company funds leading to insolvency. The court found the First, Second, Third, and Sixth Defendants liable for conspiracy to injure and breach of fiduciary duties, ordering them to pay $53.3 million in damages. Claims against the Fourth, Fifth, Ninth, Tenth, Eleventh, and Thirteenth Defendants were dismissed.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment against the First, Second, Third and Sixth Defendants for conspiracy to injure by unlawful means. Claims against Fourth, Fifth, Ninth, Tenth, Eleventh and Thirteenth Defendants dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Liquidator sues directors for breach of duty and conspiracy to defraud creditors, alleging misuse of company funds. Judgment against key directors.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tong Tien See Construction Pte Ltd (in liquidation) | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Tong Tien See | Defendant, Appellant | Individual | Judgment against Defendant | Lost | |
| Koo Yoke Fong | Defendant, Appellant | Individual | Judgment against Defendant | Lost | |
| Tong Hui Chee, Angela | Defendant, Appellant | Individual | Judgment against Defendant | Lost | |
| Koo Say Hee, Raymond | Defendant | Individual | Claim Dismissed | Dismissed | |
| Chia Siew Keng | Defendant | Individual | Claim Dismissed | Dismissed | |
| Tong Joo Aik Construction Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | |
| Tong Development Pte Ltd | Defendant | Corporation | Declaration Granted | Won | |
| Caltong (Australia) Pty Ltd (formerly known as Tong Tien See Holding (Austalia) Pty Ltd) | Defendant, Appellant | Corporation | Declaration Granted | Won | |
| Tong Hui Li, Linda | Defendant | Individual | Claim Dismissed | Dismissed | |
| Tong Hui Chuen, Carol | Defendant | Individual | Claim Dismissed | Dismissed | |
| Tong Hui Fung, Cindy | Defendant | Individual | Claim Dismissed | Dismissed | |
| Wei Fong Rasiah, Sally | Defendant, Appellant | Individual | Declaration Granted | Won | |
| Lee Han Chye, Alvin | Defendant | Individual | Claim Dismissed | Dismissed |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- The Plaintiff company was a Grade G8 construction company before being wound up due to insolvency.
- The First, Second, and Third Defendants were directors and/or shareholders of the Plaintiff company.
- The Plaintiff company was insolvent from about 1995, but the accounts were manipulated to show profitability.
- The First and Second Defendants transferred funds from the Plaintiff company to their personal accounts to earn interest.
- The First and Second Defendants used the Plaintiff company’s funds to purchase land and develop residential properties.
- The Third Defendant appointed the Eleventh Defendant as her attorney to sell properties.
- The Plaintiff company transferred funds to the Eighth Defendant in Australia, which were used to purchase properties.
5. Formal Citations
- Tong Tien See Construction Pte Ltd (In Liquidation) v Tong Tien See and Others, Suit 824/2000/K, [2001] SGHC 382
6. Timeline
| Date | Event |
|---|---|
| Construction firm registered by Tong Tien See. | |
| Construction firm incorporated as a private limited company. | |
| Plaintiff company was insolvent. | |
| Plaintiff company placed under interim Judicial Management. | |
| Yin Kum Choy appointed Provisional Liquidator. | |
| Winding up order made; Yin Kum Choy confirmed as Liquidator. | |
| Liquidator’s first Interim Report issued. | |
| Action commenced by liquidator. | |
| Mareva injunction issued. | |
| First and Third Defendants adjudicated bankrupt. | |
| Decision Date. |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found the First, Second, and Third Defendants liable for breach of fiduciary duty.
- Category: Substantive
- Sub-Issues:
- Failure to act in the best interests of the company
- Misuse of company funds for personal benefit
- Carrying on business with intent to defraud creditors
- Conspiracy to Injure
- Outcome: The court found the First, Second, Third, and Sixth Defendants liable for conspiracy to injure the Plaintiff company.
- Category: Substantive
- Sub-Issues:
- Use of unlawful means to cause loss to the company
- Manipulation of accounts to conceal insolvency
- Fraudulent Conveyance
- Outcome: The court dismissed the claim against the Thirteenth Defendant, finding no intent to defraud creditors in the sale of 755 Upper East Coast Road.
- Category: Substantive
- Sub-Issues:
- Intent to defraud creditors
- Sale of property at undervalue
- Shadow Director
- Outcome: The court found the Second Defendant to be a shadow director.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Declaration of Breach of Trust
- Rescission of Sale and Purchase Agreement
- Declaration of Liability
9. Cause of Actions
- Breach of Fiduciary Duty
- Conspiracy to Injure
- Breach of Trust
- Knowing Assistance in Breaches
- Knowing Receipt of Money
- Fraudulent Conveyance
10. Practice Areas
- Commercial Litigation
- Insolvency Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| West Mercia Safetywear Ltd v Dodd | N/A | Yes | [1988] BCLC 250 | N/A | Cited for the principle that when a company is insolvent, the interests of its creditors become the dominant factor. |
| Re Sanpete Builders (S) Pte Ltd | N/A | Yes | [1989] 1 MLJ 393 | Singapore | Cited for the principle that a temporary lack of liquidity does not amount to insolvency. |
| Re Hydrodam (Corby) Ltd | N/A | Yes | [1994] 2 BCLC 180 | N/A | Cited to define the requirements to establish that a defendant is a shadow director of a company. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Bankruptcy Act | Singapore |
| Companies Act | Singapore |
| Companies Act section 340(1) | Singapore |
| Companies Act section 4(1) | Singapore |
| Companies Act section 149(8) | Singapore |
| Conveyancing and Law of Property Act section 73B | Singapore |
| Interpretation Act section 39 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- G8 Grading
- Judicial Management
- Liquidation
- Mareva Injunction
- Constructive Trustee
- Shadow Director
- Insolvency
- Fiduciary Duty
- Sham Bills
- Prior Year Adjustment
15.2 Keywords
- Director's duties
- Insolvency
- Fraud
- Construction company
- Liquidation
- Breach of fiduciary duty
- Singapore
17. Areas of Law
16. Subjects
- Company Law
- Insolvency
- Director's Duties
- Fraudulent Trading