Poh Lian Development v Hok Mee Property: Breach of Fiduciary Duty in Columbarium Development Joint Venture

Poh Lian Development Pte Ltd (PLD) sued Hok Mee Property Pte Ltd (Hok Mee), Leong Hwa Monastery (the Temple), Hok Chung Construction Co Pte Ltd (Hok Chung), and Kek Kim Hok (Kek) in the High Court of Singapore, alleging breach of fiduciary duties in a joint venture to develop a columbarium. The court, presided over by Lee Seiu Kin J, found Hok Mee and Kek liable for manipulating the tender process and overpaying Hok Chung. The court also addressed counterclaims by Hok Mee and the Temple, allowing some and dismissing others. The judgment was reserved on 1 July 2009.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff in part; Judgment for Defendant in part; Counterclaims allowed in part and dismissed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Poh Lian Development sued Hok Mee Property for breach of fiduciary duty in a joint venture to develop a columbarium. The court found Hok Mee liable for overpayments and other misconduct.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Poh Lian Development Pte LtdPlaintiffCorporationJudgment for Plaintiff in partPartial
Hok Mee Property Pte LtdDefendantCorporationJudgment against Defendant in partLost
Leong Hwa MonasteryDefendantAssociationJudgment against Defendant in partLost
Hok Chung Construction Co Pte LtdDefendantCorporationJudgment against Defendant in partLost
Kek Kim HokDefendantIndividualJudgment against Defendant in partLost

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudgeYes

4. Counsels

Counsel NameOrganization
Tan Lee ChengRajah & Tann LLP
Kelvin TeoMPillay
Christopher ChongMPillay
Eric ChewAsia Ascent Law Corporation
Julian LimAsia Ascent Law Corporation

4. Facts

  1. Poh Lian Development, Hok Mee Property, and Leong Hwa Monastery formed a partnership to develop a columbarium.
  2. Hok Mee was designated the managing partner and project manager.
  3. Hok Chung was awarded the construction contract.
  4. Kek Kim Hok was a director and majority shareholder of both Hok Mee and Hok Chung.
  5. The tender process was manipulated by Kek, who obtained fake bids from other contractors.
  6. Hok Mee altered contract documents to change provisional costs items to lump sum items, resulting in overpayments to Hok Chung.
  7. PLD and Hok Mee agreed to give preference to each other’s subsidiary construction companies.

5. Formal Citations

  1. Poh Lian Development Pte Ltd v Hok Mee Property Pte Ltd and Others, Suit 365/2005, [2009] SGHC 153

6. Timeline

DateEvent
Urban Redevelopment Authority invited tenders for columbarium land.
Leong Hwa Monastery submitted tender for columbarium land.
Urban Redevelopment Authority awarded tender to Leong Hwa Monastery.
First joint venture agreement between Leong Hwa Monastery and Hok Mee Property Pte Ltd signed.
Second joint venture agreement between Poh Lian Development Pte Ltd and Hok Mee Property Pte Ltd signed.
Tenders closed for columbarium construction.
Hok Chung Construction Co Pte Ltd awarded construction contract.
Partners spent $410,000 on publicity.
Leong Hwa Monastery assigned religious consultancy fee payments to Hok Mee Property Pte Ltd.
Hok Chung Construction Co Pte Ltd provided loans to Poh Lian Development Pte Ltd.
Deed to form partnership executed.
Leong Hwa Monastery wrote to Urban Redevelopment Authority expressing concerns about financial arrangements.
Temporary Occupation Permit granted.
Partners failed to make repayments to the bank.
Deloitte & Touche appointed as special accountant.
Columbarium sold to Best International Network Corporation.
Suit filed (Suit 365/2005).
Judgment reserved.

7. Legal Issues

  1. Breach of Fiduciary Duty
    • Outcome: The court found that Hok Mee breached its fiduciary duties to the other partners.
    • Category: Substantive
    • Sub-Issues:
      • Failure to provide proper accounts
      • Failure to carry out duties as project manager
      • Failure to prevent overpayment
    • Related Cases:
      • [1998] 1 Ch 1
  2. Lifting the Corporate Veil
    • Outcome: The court agreed that the corporate veil ought to be lifted in respect of Kek and his companies, Hok Mee and Hok Chung.
    • Category: Procedural
    • Related Cases:
      • [2008] 1 SLR 80

8. Remedies Sought

  1. Account of Profits
  2. Monetary Damages
  3. Repayment of Sums Overpaid

9. Cause of Actions

  • Breach of Contract
  • Breach of Fiduciary Duty
  • Fraud

10. Practice Areas

  • Commercial Litigation
  • Construction Disputes

11. Industries

  • Construction
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Bristol and West Building Society v MothewCourt of AppealYes[1998] 1 Ch 1England and WalesCited to explain the nature and duty of a fiduciary.
Nagase Singapore Pte Ltd v Ching Kai Huat & OrsHigh CourtYes[2008] 1 SLR 80SingaporeCited for the principle of lifting the corporate veil.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Societies Act (Cap 311, 1985 Rev Ed)Singapore
Charities Act (Cap 37, 2007 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Columbarium
  • Joint Venture
  • Fiduciary Duty
  • Tender Manipulation
  • Provisional Costs
  • Lump Sum
  • Overpayment
  • Corporate Veil

15.2 Keywords

  • columbarium
  • fiduciary duty
  • construction contract
  • tender
  • partnership
  • Singapore

17. Areas of Law

Area NameRelevance Score
Commercial Disputes90
Fiduciary Duties85
Partnership Law80
Contract Law75
Lifting corporate veil70
Fraud and Deceit65
Company Law60
Construction Law55
Corporate Law50
Trust Law40
Misrepresentation30
Property Law25
Arbitration15

16. Subjects

  • Construction Dispute
  • Partnership Dispute
  • Breach of Fiduciary Duty