Lim Kok Koon v Tan Cheng Yew: Striking Out Writ of Summons & Partnership Liability
In Lim Kok Koon v Tan Cheng Yew and Tan JinHwee Eunice & Lim ChooEng, the High Court of Singapore heard an appeal by the second defendant, Tan JinHwee Eunice & Lim ChooEng, against the dismissal of their application to strike out the plaintiff's writ of summons. The plaintiff, Lim Kok Koon, claimed the first defendant, Tan Cheng Yew, a partner at the second defendant's law firm, misappropriated funds given for an undertaking to the SGX. The court allowed the appeal, finding the law firm not liable as the first defendant's actions were outside the ordinary course of the firm's business.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding striking out writ of summons. The court held the law firm not liable for partner's actions outside ordinary business.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lim Kok Koon | Plaintiff | Individual | Appeal Dismissed | Lost | Allan Tan |
| Tan Cheng Yew | Defendant | Individual | No Order Made | Neutral | |
| Tan JinHwee Eunice & Lim ChooEng | Defendant | Partnership | Appeal Allowed | Won | Vinodh Coomaraswamy, David Chan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Allan Tan | Sim Mong Teck and Partners |
| Vinodh Coomaraswamy | Shook Lin and Bok |
| David Chan | Shook Lin and Bok |
4. Facts
- Lim Kok Koon consulted Tan Cheng Yew, a partner at Tan JinHwee Eunice & Lim ChooEng, regarding a reverse takeover.
- Tan Cheng Yew advised Lim Kok Koon to furnish an undertaking to the SGX for $1 million.
- Lim Kok Koon handed three cheques totaling US$490,000 and $150,000 to Tan Cheng Yew personally.
- Tan Cheng Yew executed two Deeds of Trust in favor of Lim Kok Koon.
- Tan Cheng Yew did not report for work and his partnership was terminated.
- The funds were not paid into the law firm's account.
- Tan Cheng Yew had a personal interest in the transaction, as evidenced by a draft MOU.
5. Formal Citations
- Lim Kok Koon v Tan Cheng Yew and Another, Suit 522/2003, [2004] SGHC 101
6. Timeline
| Date | Event |
|---|---|
| Tan Cheng Yew called to the Singapore Bar | |
| Tan Cheng Yew joined Tan JinHwee Eunice & Lim ChooEng as a partner | |
| Lim Kok Koon consulted Tan Cheng Yew on a reverse takeover | |
| Lim Kok Koon issued a cheque for US$200,000 to Tan Cheng Yew | |
| Lim Kok Koon handed over the UOB and DBS cheques to Tan Cheng Yew | |
| Lim Kok Koon issued a cheque for $150,000 to Tan Cheng Yew | |
| Tan Cheng Yew wrote to Lim Kok Koon and Ted Lai confirming instructions | |
| Lim Kok Koon handed Tan Cheng Yew a cheque for US$290,000 | |
| Tan Cheng Yew did not report for work | |
| Tan Chau Yee informed Tan Jin Hwee that Ted Lai said $1m had been paid to Tan Cheng Yew | |
| Tan JinHwee Eunice & Lim ChooEng terminated Tan Cheng Yew’s partnership | |
| Plaintiff's solicitors wrote to the second defendant | |
| Tan JinHwee Eunice & Lim ChooEng replied to the Solicitors’ letter | |
| Court of Appeal heard the second defendant’s application | |
| Proceedings commenced on the plaintiff’s behalf | |
| Second defendant applied to strike out the writ of summons | |
| Application heard | |
| Application heard | |
| Appeal allowed | |
| Further arguments heard | |
| Plaintiff appealed against the decision | |
| Court of Appeal granted the plaintiff an extension of time to file his appeal | |
| Decision Date |
7. Legal Issues
- Vicarious Liability of Partnership
- Outcome: The court held that the law firm was not vicariously liable for the partner's actions, as they were outside the ordinary course of the firm's business.
- Category: Substantive
- Sub-Issues:
- Actions outside the ordinary course of business
- Partner acting as express trustee
- Striking Out Pleadings
- Outcome: The court allowed the appeal and struck out the writ of summons against the second defendant.
- Category: Procedural
- Sub-Issues:
- No reasonable cause of action
- Abuse of process
8. Remedies Sought
- Return of Funds
- Damages
9. Cause of Actions
- Breach of Trust
- Misappropriation of Funds
10. Practice Areas
- Commercial Litigation
11. Industries
- Legal Services
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lim Kok Koon v Tan JinHwee Eunice & Lim ChooEng | Court of Appeal | Yes | [2004] 2 SLR 322 | Singapore | Cited regarding the plaintiff's appeal being filed out of time and the court granting an extension. |
| Dubai Aluminium Co Ltd v Salaam | House of Lords | Yes | [2003] 1 All ER 97 | United Kingdom | Cited for the principle that it is not part of the ordinary business of a law firm for its lawyers to act as express trustees and for determining whether a partner's act is done in the ordinary course of business. |
| Mara v Browne | N/A | Yes | [1896] 1 Ch 199 | N/A | Cited to distinguish between acts of a solicitor acting as solicitor to the trustees and acts done by him as an express trustee. |
| Re Fryer, Martindale v Picquot | N/A | Yes | (1857) 3 K & J 317, 69 ER 1129 | N/A | Cited to distinguish between acts of a solicitor acting as solicitor to the trustees and acts done by him as an express trustee. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 1997 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Reverse Takeover
- Undertaking
- Trust Deeds
- Partnership
- Vicarious Liability
- Ordinary Course of Business
- Express Trustee
15.2 Keywords
- partnership
- vicarious liability
- trust
- solicitor
- reverse takeover
- Singapore
16. Subjects
- Partnership Law
- Civil Procedure
- Trust Law
17. Areas of Law
- Civil Procedure
- Partnership Law