Siow Soon Kim v Lim Eng Beng: Partnership Assets, Tax Evasion, and Illegality in Contract
In Siow Soon Kim and Others v Lim Eng Beng, the Court of Appeal of Singapore heard an appeal regarding the distribution of partnership assets following Lim Eng Beng's withdrawal from Kim Eng Supplier. The court dismissed the appeal, upholding the High Court's decision in favor of Lim Eng Beng, who claimed his rightful share of the partnership assets. The legal issues involved the alleged illegality of setting aside partnership funds for tax evasion and the admissibility of expert evidence. The court ordered an inquiry into the accounts to determine Lim Eng Beng's exact entitlement.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding partnership asset distribution after withdrawal. Court addressed tax evasion claims and admissibility of expert evidence. Appeal dismissed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Siow Soon Kim | Appellant | Individual | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| Chua Beng Guek | Appellant | Individual | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| Siow Soon Geok | Appellant | Individual | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| Siow Soon Lye | Appellant | Individual | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| Kim Meng Supplier | Appellant | Partnership | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| S.S. Kim Enterprises Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| ASD Trading Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | Harbajan Singh, Ronald Lee |
| Lim Eng Beng alias Lim Jia Le | Respondent | Individual | Judgment for Respondent | Won | A Rajandran |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of Appeal | Yes |
| Choo Han Teck | Judge | No |
| Yong Pung How | Chief Justice | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Harbajan Singh | Daisy Yeo and Co |
| Ronald Lee | Daisy Yeo and Co |
| A Rajandran | A Rajandran Joseph and Nayar |
4. Facts
- The respondent and the first appellant formed a partnership to supply frozen food.
- The first appellant managed the business and maintained the accounts.
- The respondent was in charge of delivery of goods to customers.
- Moneys of the partnership were diverted into a separate account in the names of the first and second appellants.
- The respondent was told the separate account was for partnership savings and to purchase goods at a cheaper price.
- The sixth appellant was incorporated after the respondent withdrew from the partnership and took over the business.
- The respondent claimed for his just entitlement of the partnership assets upon his withdrawal.
5. Formal Citations
- Siow Soon Kim and Others v Lim Eng Beng alias Lim Jia Le, CA 44/2003, [2004] SGCA 4
6. Timeline
| Date | Event |
|---|---|
| Partnership called Kim Eng Supplier formed by the respondent and the first appellant. | |
| The second appellant was brought into the firm as a part-time accounts clerk. | |
| The third appellant became an equal partner with the first appellant and the respondent. | |
| The fourth appellant was brought into the firm as an employee. | |
| The second appellant became a full-time employee and the de facto manager of the office. | |
| The first appellant suggested to the respondent that moneys from cash sales be kept aside in a separate bank account. | |
| An employee of the firm asked the respondent to repay money to the partnership on account of the partnership settling the respondent’s income tax liability. | |
| The respondent signed some documents, including a guarantee for the purposes of obtaining letters of credit from the bank. | |
| The respondent’s solicitors sent a notice to the first and third appellants indicating his wish to withdraw from the partnership with immediate effect. | |
| The sixth appellant was incorporated by the first to fourth appellants. | |
| The first appellant falsely alleged that the documents were already in the possession of the respondent. | |
| Case heard in High Court. | |
| Appeal dismissed by the Court of Appeal. |
7. Legal Issues
- Entitlement to Partnership Assets
- Outcome: The court ruled that the respondent was entitled to his appropriate share in the assets of the partnership.
- Category: Substantive
- Sub-Issues:
- Valuation of partnership assets
- Accounting for partnership funds
- Illegality of Contract
- Outcome: The court held that the respondent's claim was not based on an illegal contract, and the partnership agreement was legitimate.
- Category: Substantive
- Sub-Issues:
- Contract to commit civil wrong
- Public policy considerations
- Admissibility of Evidence
- Outcome: The court held that the expert's opinion based on the CD-ROM should be disregarded as the CD-ROM was not admitted into evidence.
- Category: Procedural
- Sub-Issues:
- Proof of contents of documentary evidence
- Expert evidence based on unadmitted documents
8. Remedies Sought
- Account of partnership assets
- Payment of due share of partnership assets
9. Cause of Actions
- Breach of Partnership Agreement
- Failure to provide proper accounting
- Diversion of partnership assets
10. Practice Areas
- Commercial Litigation
- Partnership Disputes
11. Industries
- Food Supply
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sek Kim Wah v PP | High Court | No | [1987] SLR 107 | Singapore | Cited regarding the admissibility of expert evidence and the requirement that the facts on which an expert's opinion is based must be proved by admissible evidence. |
| Napier v National Business Agency, Ltd | English Court of Appeal | No | [1951] 2 All ER 264 | England and Wales | Cited to distinguish the present case, as the English Court of Appeal held that an agreement with the aim of evading tax was contrary to public policy and unenforceable. |
| American Home Assurance Co v Hong Lam Marine Pte Ltd | Court of Appeal | Yes | [1999] 3 SLR 682 | Singapore | Cited for the test to determine whether the court should assist a plaintiff to enforce an agreement, which is whether the plaintiff can establish his cause of action independently of the illegality. |
| Suntoso Jacob v Kong Miao Ming | High Court | No | [1986] SLR 59 | Singapore | Cited regarding the need to examine the intention of the parties whenever the question of illegality is raised. |
| Storey v Storey | N/A | No | [1961] P 63 | N/A | Cited regarding the bases on which a defendant could submit that there is no case to answer. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Partnership assets
- Separate account
- Tax evasion
- Illegality
- Withdrawal from partnership
- Anton Piller order
- Expert evidence
- Prima facie case
15.2 Keywords
- partnership
- assets
- tax evasion
- illegality
- contract
- evidence
- Singapore
16. Subjects
- Partnership Law
- Contract Law
- Evidence
- Taxation
17. Areas of Law
- Partnership Law
- Contract Law
- Evidence Law
- Tax Law