Lim Hsi-Wei Marc v Orix Capital: Authority of Partner & Liability for Law Firm Debt
In Lim Hsi-Wei Marc v Orix Capital Ltd, the Singapore Court of Appeal addressed appeals concerning the liability of Lim Hsi-Wei Marc (ML) and Rebecca Marie Stephanie Tai-Yeo Hsiu Erh (RY), former salaried partners of Chor Pee & Partners (CPP), for a debt to Orix Capital Ltd (Orix). The debt stemmed from a lease agreement for office equipment and cash flow management, signed by Lim Chor Pee (LCP). The court examined LCP's authority to bind his partners and RY's liability after her departure. The Court allowed ML's appeal, finding he wasn't bound, and dismissed Orix's appeal against RY, concluding she wasn't liable.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Civil Appeal 124/2009 allowed (Lim Hsi-Wei Marc); Civil Appeal 127/2009 dismissed (Orix Capital Ltd).
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore appeal on a partner's authority to bind a law firm to debt and liability of a retired partner. Focus on partnership law.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lim Hsi-Wei Marc | Appellant | Individual | Appeal allowed | Won | Maniam Andre Francis, Koh Swee Yen |
| Orix Capital Ltd | Respondent, Appellant | Corporation | Appeal dismissed | Lost | Tan Siah Yong, Ng Hui-Li Felicia |
| Rebecca Marie Stephanie Tai-Yeo Hsiu Erh | Respondent | Individual | Claim dismissed | Won | Michael Khoo Kah Lip, Josephine Low Mew Yin, Chiok Beng Piow |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Sek Keong | Chief Justice | Yes |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | Yes |
| V K Rajah | Justice of the Court of Appeal | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Maniam Andre Francis | Wong Partnership LLP |
| Koh Swee Yen | Wong Partnership LLP |
| Tan Siah Yong | ComLaw LLC |
| Ng Hui-Li Felicia | ComLaw LLC |
| Michael Khoo Kah Lip | Michael Khoo & Partners |
| Josephine Low Mew Yin | Michael Khoo & Partners |
| Chiok Beng Piow | Michael Khoo & Partners |
4. Facts
- Lim Chor Pee (LCP) founded Chor Pee & Partners (CPP) in 1997.
- Lim Hsi-Wei Marc (ML) was a salaried partner at CPP.
- Rebecca Marie Stephanie Tai-Yeo Hsiu Erh (RY) was a salaried partner at CPP until July 31, 2005.
- CPP entered into a lease agreement with Newcourt Financial in 2001.
- CPP amended the Newcourt Agreement in 2004.
- CPP entered into an agreement with Orix in 2004 to lease copiers and refinance debt.
- The Orix agreement included a rollover of $120,000 for CPP.
- CPP defaulted on payments to Orix, leading to termination and reinstatement.
- LCP did not inform ML or RY about Orix’s claim or negotiations.
- Orix repossessed the copiers after LCP's death due to further defaults.
5. Formal Citations
- Lim Hsi-Wei Marc v Orix Capital Ltd and another and another appeal, Civil Appeals Nos 124 and 127 of 2009, [2010] SGCA 24
- Orix Capital Ltd v Personal Representative(s) of the Estate of Lim Chor Pee (deceased) and others, , [2009] 4 SLR(R) 1062
6. Timeline
| Date | Event |
|---|---|
| Chor Pee & Partners (CPP) was founded by Lim Chor Pee (LCP). | |
| Lim Hsi-Wei Marc (ML) joined CPP as a legal assistant. | |
| CPP entered into a lease agreement with Newcourt Financial (Singapore) Pte Ltd. | |
| ML was elevated to salaried partner. | |
| Rebecca Marie Stephanie Tai-Yeo Hsiu Erh (RY) joined CPP on a profit-sharing basis. | |
| The Newcourt Agreement was amended. | |
| Dora Loh proposed replacing the Newcourt copiers with Canon copiers. | |
| CPP signed an agreement with Canon. | |
| Canon paid for early termination of the Newcourt arrangement. | |
| Orix prepared the Original Agreement. | |
| The Original Agreement commenced. | |
| CPP defaulted on the monthly rental under the Original Agreement. | |
| RY ceased to work on a profit-sharing basis. | |
| Orix issued a letter of demand for the unpaid rental. | |
| Orix's solicitors sent a second letter of demand. | |
| RY left CPP entirely. | |
| Orix agreed to reinstate the lease. | |
| Orix received payment of the outstanding amounts. | |
| LCP passed away. | |
| Another default in the payment schedule occurred. | |
| Orix terminated the lease. | |
| The Canon copiers were repossessed by Orix. | |
| Court of Appeal decision. |
7. Legal Issues
- Authority of a Partner to Bind the Firm
- Outcome: The Court held that the partner did not have the authority to bind the firm because the agreement was not in the usual course of business.
- Category: Substantive
- Sub-Issues:
- Actual authority
- Apparent authority
- Usual course of business
- Liability of a Retired Partner
- Outcome: The Court held that the retired partner was not liable because the claim was based on a new contract entered after her retirement.
- Category: Substantive
- Sub-Issues:
- Notice of retirement
- Existing customers
- New contracts
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Legal Services
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Orix Capital Ltd v Personal Representative(s) of the Estate of Lim Chor Pee (deceased) and others | High Court | Yes | [2009] 4 SLR(R) 1062 | Singapore | Decision from which this appeal arose. |
| Construction Engineering (Aust) Proprietary Limited v Hexyl Proprietary Limited and Others | Australian High Court | Yes | [1984–1985] 155 CLR 541 | Australia | Deals with actual and ostensible authority of partners. |
| Freeman & Lockyer (A Firm) v Buckhurst Park Properties (Mangal) Ltd and Another | England and Wales High Court (Queen's Bench Division) | Yes | [1964] 2 WLR 618 | England and Wales | Defines apparent or ostensible authority. |
| Bank of Scotland v Henry Butcher & Co and others | England and Wales Court of Appeal (Civil Division) | Yes | [2003] 1 BCLC 575 | England and Wales | Explains the inquiry under the second limb of the Partnership Act. |
| Lim Kok Koon v Tan Cheng Yew and another | High Court | Yes | [2004] 3 SLR(R) 111 | Singapore | Whether an act is done in the ordinary course of business is a question of law. |
| United Bank of Kuwait Ltd v Hammoud and Others | England and Wales High Court (Queen's Bench Division) | Yes | [1988] 1 WLR 1051 | England and Wales | Deals with whether an act appeared usual. |
| JJ Coughlan Ltd v Ruparelia | England and Wales High Court (Chancery Division) | Yes | [2004] PNLR 4 | England and Wales | Deals with whether an act appeared usual. |
| Shannon and Others v Whiting and Another | High Court of Australia | Yes | (1901) 7 ALR 49 | Australia | Nature of businesses may evolve over time. |
| John Hutchinson Fergusson v David Fyffe and Another | House of Lords | Yes | (1840–41) 8 Cl & F 121 | United Kingdom | Rendering an account is not unusual. |
| Bond v Gibson and Jephson | King's Bench | Yes | (1808) 1 Camp 185 | England and Wales | Authority to purchase goods. |
| Jacaud v French | King's Bench | Yes | (1810) 12 East 198 | England and Wales | Receiving payment of a partnership debt. |
| Powell v Brodhurst | England and Wales High Court (Chancery Division) | Yes | [1901] 2 Ch 160 | England and Wales | Debt owed to one partner. |
| The Alliance Bank, Limited v Kearsley | Court of Common Pleas | Yes | (1871) LR 6 CP 433 | England and Wales | Opening a bank account. |
| Harrison v Jackson, Sykes and Rushforth | Court of King's Bench | Yes | (1797) 7 TR 207, 101 ER 935 | England and Wales | Binding the firm by deed. |
| Hirst v Etherington and Anor | England and Wales High Court (Queen's Bench Division) | Yes | [1999] Lloyd’s Rep PN 938 | England and Wales | Giving a guarantee in the firm’s name. |
| Niemann v Niemann | England and Wales High Court (Chancery Division) | Yes | (1889) LR 43 Ch D 198 | England and Wales | Accepting shares in lieu of money. |
| Bannatyne v D & C MacIver | King's Bench Division | Yes | [1906] 1 KB 103 | England and Wales | Submitting a dispute to arbitration. |
| Wheatley v Smithers | King's Bench Division | Yes | [1906] 2 KB 321 | England and Wales | Trading implies buying or selling. |
| Wheatley v Smithers | England and Wales Court of Appeal | Yes | [1907] 2 KB 684 | England and Wales | Trading implies buying or selling. |
| Higgins v Beauchamp | King's Bench Division | Yes | [1914] 3 KB 1192 | England and Wales | Trading business depends on buying and selling. |
| Chettinad Bank Limited v Chop Haw Lee and Chop Lee Chan | Federal Court of the Federated Malay States | Yes | (1931) 7 FMSLR 31 | Malaysia | Trading firm includes businesses giving credit. |
| The Bank of Australasia v Thomas Chaplin Breillat, Chairman of the Bank of Australia | Judicial Committee of the Privy Council | Yes | (1847) 6 Moo PC 152 | United Kingdom | Partner in trading partnership may pledge or sell property. |
| Chop Cheong Tuck v Chop Tack Loong and others | High Court | Yes | [1934] MLJ 176 | Malaysia | Partner in trading partnership may pledge or sell property. |
| Re Bell’s Indenture | England and Wales High Court (Chancery Division) | Yes | [1980] 3 All ER 425 | England and Wales | Partner accepting appointment as trustee. |
| Polkinghorne v Holland and Another | High Court of Australia | Yes | (1934) 51 CLR 143 | Australia | Partner giving guarantees. |
| Lek Peng Lung v Lee Investments (Pte) Ltd and others | High Court | Yes | [1991] 2 SLR(R) 635 | Singapore | Loan business of pawnbrokers. |
| The Union Bank of Australia v Fisher and Others | Supreme Court of New South Wales | Yes | (1893) 14 LR (NSW) Eq 241 | Australia | Borrowing documents of title. |
| Mercantile Credit Co Ltd v Garrod and Another | Queen's Bench Division | Yes | [1962] 3 All ER 1103 | England and Wales | Actions of others in similar businesses. |
| Goldberg v Jenkins & Law | Supreme Court of Victoria | Yes | (1889) 15 VLR 36 | Australia | Borrowing money at high interest. |
| Stekel v Ellice | England and Wales High Court (Chancery Division) | Yes | [1973] 1 WLR 191 | England and Wales | Salaried partner. |
| Tower Cabinet Co Ld v Ingram | Court of Appeal | Yes | [1949] 2 KB 397 | England and Wales | Apparent members. |
| Re Siew Inn Steamship Co; Ex Parte Ho Hong Bank, Ltd (In Voluntary Liquidation) In The Issue; Tan Boon Cheo v Ho Hong Bank, Ltd | High Court | Yes | [1934] MLJ 180 | Malaysia | Dormant partner. |
| Wood v Fresher Foods Ltd | High Court | Yes | [2008] 2 NZLR 248 | New Zealand | Debt incurred after partner retired. |
13. Applicable Rules
| Rule Name |
|---|
| Legal Profession (Naming of Law Firms) Rules (Cap 161, R 16, 1997 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
| Application of English Law Act (Cap 7A, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Salaried partner
- Apparent authority
- Usual course of business
- Partnership debt
- Lease agreement
- Reinstatement agreement
- Holding out
- Termination of contract
- Sole proprietorship
- Composite agreement
- Loan-cum-lease
15.2 Keywords
- Partnership liability
- Authority of partner
- Law firm debt
- Usual course of business
16. Subjects
- Partnership
- Contract
- Finance
- Agency
17. Areas of Law
- Partnership Law
- Agency Law
- Contract Law
- Commercial Law