United Project Consultants v Leong Kwok Onn: Breach of Contract & Negligence in Tax Agent Duties

United Project Consultants Pte Ltd sued Leong Kwok Onn in the High Court of Singapore on December 10, 2004, alleging breach of contract and negligence. United Project Consultants claimed that Leong Kwok Onn, their auditor and tax agent, failed to advise them on the tax implications of retaining a portion of declared director's fees, leading to penalties from IRAS. The court dismissed United Project Consultants' claims, finding no breach of duty by Leong Kwok Onn and that the company's own actions caused the loss.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's claims dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Engineering firm United Project Consultants sued auditor Leong Kwok Onn for breach of contract and negligence, alleging failure to advise on tax implications of director fee payments. The court dismissed the claims.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
United Project Consultants Pte LtdPlaintiffCorporationClaims dismissed with costsLost
Leong Kwok OnnDefendantIndividualJudgment for DefendantWon

3. Judges

Judge NameTitleDelivered Judgment
Lai Kew ChaiJudgeYes

4. Counsels

Counsel NameOrganization
Hee Theng FongHee Theng Fong and Co
Tay Wee ChongHee Theng Fong and Co
Valerie AngStraits Law Practice LLC
N SreenivasanStraits Law Practice LLC

4. Facts

  1. Plaintiff failed to make proper IR8A form returns, leading to tax and penalty imposed by IRAS.
  2. Plaintiff retained a portion of declared fees payable to its directors.
  3. Plaintiff only declared fees paid to directors in IR8A forms.
  4. Plaintiff claimed the whole of the declared fees as a deductible expense.
  5. Directors paid tax only for the fees received, not the retained fees.
  6. Defendant was the plaintiff's auditor and tax agent.
  7. Plaintiff seeks to recover the penalty imposed on it by IRAS from the defendant.

5. Formal Citations

  1. United Project Consultants Pte Ltd v Leong Kwok Onn, Suit 1081/2003, [2004] SGHC 276

6. Timeline

DateEvent
Defendant wrote to accounting firm about acting as tax agent for the plaintiff.
Plaintiff informed defendant of appointment as auditor.
Plaintiff made additional allocation of directors’ fees.
Plaintiff made further distribution of the retained fees.
IRAS queried the plaintiff about directors’ fees.
Defendant replied to IRAS regarding directors' fees.
Meeting between Mr. Tan, Ms. Yeo, and the defendant.
Plaintiff held a meeting to allocate and distribute retained fees.
Contracts of retainers ended.
Lawsuit filed (Suit 1081/2003).
Judgment reserved.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant did not breach his contractual duties.
    • Category: Substantive
    • Sub-Issues:
      • Scope of contractual duties under contract of retainer
  2. Negligence
    • Outcome: The court found that the defendant did not breach any duty of care owed to the plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Duty of care
      • Causation
      • Damages
  3. Ex Turpi Causa Non Oritur Actio
    • Outcome: The court held that the plaintiff was barred from recovering damages due to their own wrongdoing.
    • Category: Substantive

8. Remedies Sought

  1. Damages

9. Cause of Actions

  • Breach of Contract
  • Negligence

10. Practice Areas

  • Commercial Litigation
  • Professional Negligence
  • Tax Advisory

11. Industries

  • Accounting
  • Engineering

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Euro-Diam Ltd v BathurstN/AYes[1990] 1 QB 1N/ACited for the principle that courts will not assist a plaintiff guilty of illegal conduct.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Income Tax Act (Cap 134, 2001 Rev Ed)Singapore
Companies Act (Cap 50, 1994 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • IR8A form
  • Declared fees
  • Retained fees
  • Tax agent
  • Auditor
  • Contract of retainer
  • Inland Revenue Authority of Singapore
  • Ex turpi causa non oritur actio

15.2 Keywords

  • breach of contract
  • negligence
  • tax agent
  • auditor
  • IR8A
  • directors fees
  • Singapore

17. Areas of Law

Area NameRelevance Score
Income taxation85
Contract Law75
Negligence65
Misrepresentation50
Auditing40
Accounting40
Estoppel30
Evidence25

16. Subjects

  • Contract Law
  • Tax Law
  • Professional Liability