Loh Sze Ti v Gay Choon Ing: Beneficial Ownership of Shares & Breach of Trust
In Loh Sze Ti Terence Peter v Gay Choon Ing, the High Court of Singapore addressed a dispute over the beneficial ownership of 1.55 million shares in Gay Lip Seng & Sons (Pte) Ltd. Terence Loh Sze Ti claimed that Gay Choon Ing held the shares on trust for him, while Gay argued the money was a loan. Loh sought to rescind a Points of Agreement (POA) on grounds of fraud or misrepresentation and claimed breach of fiduciary duty and sought an account of profits. The court declared that Gay held the shares on trust for Loh and rescinded the POA, ordering an account of dividends received by Gay and payment of dividends due to Loh, after finding that Gay breached his fiduciary duty by failing to make full disclosure of material facts before Loh signed the POA.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
High Court case regarding beneficial ownership of shares in Gay Lip Seng & Sons and allegations of breach of trust. The court rescinded the Points of Agreement.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Loh Sze Ti Terence Peter | Plaintiff | Individual | Judgment for Plaintiff | Won | |
| Gay Choon Ing | Defendant | Individual | POA Rescinded | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge | Yes |
4. Counsels
4. Facts
- Loh invested money in Gay Lip Seng & Sons (Pte) Ltd for hotel redevelopment.
- Gay held 1.55 million shares in the company.
- A Trust Deed was signed stating Gay held the shares on trust for Loh.
- Loh and Gay signed a Points of Agreement (POA) for Loh to sell the shares to Gay.
- Loh claimed Gay misrepresented the value of the shares and dividends due.
- Gay did not disclose the value of the shares before the POA was signed.
- The court found Gay breached his fiduciary duty to Loh.
5. Formal Citations
- Loh Sze Ti Terence Peter v Gay Choon Ing, Suit 341/2005, [2008] SGHC 31
6. Timeline
| Date | Event |
|---|---|
| Extraordinary General Meeting approved revaluation of hotel property. | |
| Share certificates issued in Gay's name. | |
| Trust Deed signed between Loh and Gay. | |
| Hotel reopened after redevelopment. | |
| Points of Agreement signed. | |
| Total sum of $1.5m under the POA was paid in full. | |
| Loh commenced action against Gay. | |
| Judgment issued. |
7. Legal Issues
- Beneficial Ownership of Shares
- Outcome: The court declared that Gay held the shares on trust for the benefit of Loh.
- Category: Substantive
- Sub-Issues:
- Declaration of Trust
- Intention of Parties
- Breach of Fiduciary Duty
- Outcome: The court found that Gay breached his fiduciary duty by failing to make full disclosure of material facts before Loh signed the POA.
- Category: Substantive
- Sub-Issues:
- Non-disclosure of Material Facts
- Conflict of Interest
- Fair Dealing Rule
- Rescission of Contract
- Outcome: The court ordered the POA to be set aside.
- Category: Substantive
- Sub-Issues:
- Misrepresentation
- Undue Influence
8. Remedies Sought
- Rescission of Contract
- Account of Profits
- Damages
9. Cause of Actions
- Breach of Trust
- Misrepresentation
- Breach of Fiduciary Duty
10. Practice Areas
- Commercial Litigation
- Trusts and Estates
- Corporate Law
11. Industries
- Hospitality
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| MCST Plan No 1933 v Liang Huat Aluminium Ltd | High Court | Yes | [2001] 3 SLR 253 | Singapore | Cited for the principle that the court is concerned with the substance of the transaction rather than the title or label the parties give to the document and that a recital in an instrument can only assist in the construction of the substantive terms thereof; it cannot override or control the operation of the substantive terms, where such terms are clear and unambiguous. |
| Citicorp Investment Bank (Singapore) Ltd v Wee Ah Kee | Court of Appeal | Yes | [1997] 2 SLR 759 | Singapore | Cited for the principle that section 95 of the Evidence Act only applies to patent ambiguity in a document. |
| Sandar Aung v Parkway Hospitals Singapore Pte Ltd | Court of Appeal | Yes | [2007] 2 SLR 891 | Singapore | Cited for the principle that a contract's language must be construed in the context in which the contract has been made. |
| Butt v Kelson and others | Chancery Division | No | [1952] 1 Ch 197 | England and Wales | Cited for the principle that beneficiaries cannot call on trustee directors to use their powers as directors as though such powers were held on trust for the beneficiaries. |
| Shaker v Al-Bedrawi & others | Court of Appeal | Yes | [2003] 2 WLR 922 | England and Wales | Cited for the principle that a claim brought by a beneficiary against a trustee for breach of fiduciary duty may well be barred by the rule against reflective loss. |
| Gardner v Parker | High Court | Yes | [2004] 2 BCLC 554 | England and Wales | Cited for the principle of reflective loss. |
| Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation) | Court of Appeal | Yes | [2007] 2 SLR 597 | Singapore | Cited for accepting the principle of reflective loss as good law in Singapore. |
| Teck Jin (Pte) Ltd v Tan Kim Seng | High Court | No | [2007] SGHC 151 | Singapore | Cited to support the argument that Gay as trustee has to account to Loh for all the benefit accruing to him as a result of the shareholding held on trust for Loh. |
| Boardman v Phipps | House of Lords | Yes | [1967] 2 AC 46 | United Kingdom | Cited for the principle that a trustee is accountable for the profits made within the scope and ambit of his duty. |
| Armitage v Nurse and others | Court of Appeal | Yes | [1998] Ch 241 | England and Wales | Cited for the principle that there are certain irreducible core obligations fundamental to the concept of a trust - the duty to perform the trust honestly and in good faith for the benefit of the beneficiary. |
| Johnson v Gore Wood & Co (a firm) | House of Lords | Yes | [2002] 2 AC 1 | United Kingdom | Cited for the principle that the fact that a company’s assets are depleted does not amount to an injury to the member even if it was by way of diminution in the dividends declared. |
| Ross River Ltd & Another v Cambridge City Football Club Ltd | High Court | Yes | [2007] EWHC 2115 | England and Wales | Cited for the legal position on the law of rescission for misrepresentation. |
| Tito and others v Waddell and others (No 2) | Chancery Division | Yes | [1977] 1 Ch 106 | England and Wales | Cited for the fair dealing rule which stipulates that a trustee may purchase the beneficial interest from his beneficiary, but the latter may have the sale set aside or rescinded unless the trustee can establish the propriety of the transaction. |
| Swindle & others v Harrison and another | Court of Appeal | Yes | [1997] 4 All ER 705 | England and Wales | Cited for the principle that liability for breach of fiduciary duty is not dependent on proof of deceit or negligence. |
| Bristol and West Building Society v Mothew | Court of Appeal | Yes | [1998] Ch 1 | England and Wales | Cited for the principle that the various obligations of a fiduciary merely reflect different aspects of his core duty of loyalty and fidelity. |
| Aberdeen Rail Co v Blaikie Brothers | House of Lords | Yes | [1843-60] | United Kingdom | Cited for the rule that a fiduciary is not allowed to enter into transactions in which he had, or could have a personal interest conflicting, or which may possibly conflict with the interests of his principal or beneficiary is universal and inflexible. |
| Bray v Ford | House of Lords | Yes | [1896] AC 44 | United Kingdom | Cited for the rule that a fiduciary is not allowed to enter into transactions in which he had, or could have a personal interest conflicting, or which may possibly conflict with the interests of his principal or beneficiary is universal and inflexible. |
| Dunbar Bank plc v Nadeem and another | Court of Appeal | Yes | [1998] 3 All ER 876 | England and Wales | Cited for the principle that it is a condition of relief that the party obtaining rescission should make restitutio in integrum or, in modern terminology, counter restitution to the other party. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act | Singapore |
| Misrepresentation Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Trust Deed
- Points of Agreement
- Beneficial Ownership
- Fiduciary Duty
- Shares
- Dividends
- Misrepresentation
- Rescission
- Material Facts
- Conflict of Interest
15.2 Keywords
- Trust
- Shares
- Fiduciary Duty
- Contract
- Singapore
- High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Trust Law | 95 |
| Fiduciary Duties | 90 |
| Beneficial Ownership | 70 |
| Company Law | 60 |
| Contract Law | 50 |
16. Subjects
- Trusts
- Equity
- Contract Law
- Company Law