Lin Tsang Kit v Chng Thiam Kwee: Breach of Trust and Misrepresentation in Koya Wood Shares Purchase

In 2005, the High Court of Singapore heard the case of Lin Tsang Kit and Yip Hing Chung v Chng Thiam Kwee, concerning allegations of breach of trust and misrepresentation related to the purchase of shares in Koya Wood Industries Company (Pte) Ltd. Lin Tsang Kit and Yip Hing Chung claimed that Chng Thiam Kwee, acting as their trustee, misrepresented the share price and failed to account for the sale proceeds. The court dismissed Yip Hing Chung's claim due to his failure to appear as a witness. However, the court found in favor of Lin Tsang Kit, holding that Chng Thiam Kwee was liable for breach of trust and misrepresentation, and ordered him to account for the overpayment and sale proceeds of the shares.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for the first plaintiff.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment reserved

1.5 Jurisdiction

Singapore

1.6 Description

Lin Tsang Kit sued Chng Thiam Kwee for breach of trust and misrepresentation related to the purchase of Koya Wood shares. The court found in favor of Lin Tsang Kit.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lin Tsang KitPlaintiffIndividualJudgment for PlaintiffWon
Yip Hing ChungPlaintiffIndividualClaim DismissedDismissed
Chng Thiam KweeDefendantIndividualJudgment against DefendantLost

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuJYes

4. Counsels

Counsel NameOrganization
Nicholas NarayananAng and Partners
Stanley WongJing Quee and Chin Joo

4. Facts

  1. Plaintiffs remitted funds to the defendant for the purchase of Koya Wood shares.
  2. Defendant represented that he would buy shares on plaintiffs' behalf.
  3. Shares were purchased in the name of CTK, a company the defendant directed.
  4. Defendant misrepresented the purchase price of the shares.
  5. Defendant sold the shares but did not account for the proceeds.
  6. First plaintiff obtained default judgment against CTK in a prior suit.
  7. Defendant's son initiated winding-up proceedings against CTK.

5. Formal Citations

  1. Lin Tsang Kit and Another v Chng Thiam Kwee, Suit 282/2003, Suit 282/2003
  2. , 1161 of 1997, Originating Summons No 1161 of 1997
  3. , 1424 of 2001, Suit No 1424 of 2001
  4. , 600056 of 2002, Companies Winding Up No 600056 of 2002
  5. , 955 of 2000, Suit No 955 of 2000

6. Timeline

DateEvent
Defendant came to know the second plaintiff through a friend.
Second plaintiff became a Singapore permanent resident.
Defendant recommended that the plaintiffs purchase shares in Koya Wood.
Defendant gave plaintiffs written acknowledgements for their remittances.
Trust shares registered in CTK’s name.
First plaintiff became a Singapore citizen.
Originating Summons No 1161 of 1997 was filed.
Defendant handed first plaintiff an envelope purportedly containing share certificates.
Defendant informed second plaintiff that Koya Wood would be wound up.
Court ordered Koh Teng Chou to buy over CTK’s shares.
Defendant requested share certificates in a letter to the plaintiffs.
Second plaintiff received a fax from the defendant setting out the total number of trust shares.
CTK transferred all its shareholdings in Koya Wood to Koh.
Defendant and Chng consented to pay $1,100,000 in settlement of Sea Star’s claim.
First plaintiff commenced action against CTK in Suit No 1424 of 2001.
Interlocutory judgment in default of defence was obtained against CTK.
Statutory demand issued to CTK for alleged debt.
Chng Siong Wee filed Companies Winding Up No 600056 of 2002 to wind up CTK.
Winding-up order was granted against CTK.
Plaintiffs commenced this suit.
Plaintiffs discovered documents indicating defendant purchased Koya Wood shares at $0.50.
Judgment reserved.

7. Legal Issues

  1. Breach of Trust
    • Outcome: The court found that the defendant breached the trust by selling the trust shares without accounting to the first plaintiff for the sale proceeds.
    • Category: Substantive
    • Sub-Issues:
      • Failure to account for sale proceeds
      • Misrepresentation of share price
  2. Misrepresentation
    • Outcome: The court found that the defendant misrepresented the price of the Koya Wood shares, thereby dishonestly profiting from the transaction.
    • Category: Substantive
    • Sub-Issues:
      • Dishonest secret profit
      • Overpayment for shares
  3. Default Judgment
    • Outcome: The court held that the interlocutory default judgment obtained in the first suit did not preclude the first plaintiff from bringing the current claim against the defendant.
    • Category: Procedural

8. Remedies Sought

  1. Account of trust shares
  2. Account of sale proceeds
  3. Inquiry as to application of funds
  4. Damages

9. Cause of Actions

  • Breach of Trust
  • Misrepresentation
  • Failure to Account

10. Practice Areas

  • Commercial Litigation
  • Trusts and Equity

11. Industries

  • Manufacturing

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Browne v DunnN/AYes(1893) 6 R 67N/ACited regarding the rule that a party must cross-examine a witness on a point if they intend to later dispute that point.
Jafaar bin Shaari v Tan Lip EngN/AYes[1997] 3 MLJ 693MalaysiaCited for the principle that if a defendant elects not to give evidence, then all the evidence led by the plaintiff must be assumed to be true.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2004 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 1994 Rev Ed)Singapore
Evidence Act (Cap 97, 1997 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Trust shares
  • Koya Wood
  • CTK
  • Breach of trust
  • Misrepresentation
  • Share certificates
  • Sale proceeds
  • Winding-up
  • Default judgment

15.2 Keywords

  • trust
  • shares
  • misrepresentation
  • default judgment
  • winding up
  • Koya Wood
  • account
  • remedies

17. Areas of Law

Area NameRelevance Score
Trust Law75
Fiduciary Duties65
Civil Procedure60
Misrepresentation55
Company Law50
Commercial Disputes40
Contract Law30

16. Subjects

  • Trusts
  • Civil Procedure
  • Company Law
  • Shareholder Disputes