Cheong Soh Chin v Eng Chiet Shoong: Fiduciary Duties, Account on Wilful Default

Cheong Soh Chin, Wee Boo Kuan, and Wee Boo Tee sued Eng Chiet Shoong, Lee Siew Yuen Sylvia, and C S Partners Pte Ltd in the High Court of Singapore, Suit No 322 of 2012, on September 28, 2018, for an account of their dealings with the plaintiffs' assets. The plaintiffs claimed the defendants, as trustees and fiduciaries, owed them over US$12m. The defendants counterclaimed for management fees. The court held substantially in favor of the plaintiffs, ordering the defendants to account on a wilful default basis.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Judgment substantially in favor of the plaintiffs.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Wealthy plaintiffs sued experienced asset managers for an account of their dealings. The court held substantially in favor of the plaintiffs.

1.7 Decision Date

27 September 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Cheong Soh Chin	Plaintiff	Individual	Claim Allowed	Won	Philip Jeyaretnam, Foo Maw Shen, Chu Hua Yi, Ooi Huey Hien, Jasmine Yong
Wee Boo Kuan	Plaintiff	Individual	Claim Allowed	Won	Philip Jeyaretnam, Foo Maw Shen, Chu Hua Yi, Ooi Huey Hien, Jasmine Yong
Wee Boo Tee	Plaintiff	Individual	Claim Allowed	Won	Philip Jeyaretnam, Foo Maw Shen, Chu Hua Yi, Ooi Huey Hien, Jasmine Yong
Eng Chiet Shoong	Defendant	Individual	Claim Partially Dismissed	Lost	Koh Swee Yen, Jared Chen, Ho Wei Jie, Jill Ann Koh Ying, Lim Yangyu, Goh Mu Quan
Lee Siew Yuen Sylvia	Defendant	Individual	Claim Partially Dismissed	Lost	Koh Swee Yen, Jared Chen, Ho Wei Jie, Jill Ann Koh Ying, Lim Yangyu, Goh Mu Quan
C S Partners Pte Ltd	Defendant	Corporation	Claim Partially Dismissed	Lost	Koh Swee Yen, Jared Chen, Ho Wei Jie, Jill Ann Koh Ying, Lim Yangyu, Goh Mu Quan

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Philip Jeyaretnam	Dentons Rodyk & Davidson LLP
Foo Maw Shen	Dentons Rodyk & Davidson LLP
Chu Hua Yi	Dentons Rodyk & Davidson LLP
Ooi Huey Hien	Dentons Rodyk & Davidson LLP
Jasmine Yong	Dentons Rodyk & Davidson LLP
Koh Swee Yen	WongPartnership LLP
Jared Chen	WongPartnership LLP
Ho Wei Jie	WongPartnership LLP
Jill Ann Koh Ying	WongPartnership LLP
Lim Yangyu	WongPartnership LLP
Goh Mu Quan	WongPartnership LLP

4. Facts

The Wees are wealthy individuals who engaged the Engs, experienced asset managers, to grow their wealth.
The Engs were given the Wees’ monies to invest, but the Wees had no intention to make the Engs the beneficial owners of those monies.
The Engs were trustees of the Wees’ monies under a presumed resulting trust.
The Engs used the Wees’ monies to make investments on the Wees’ behalf and managed those investments.
The Engs refused to return seven of the Wees’ 20 SPVs, holding them hostage for their counterclaim.
The Engs provided a deceptive table to the Wees, misrepresenting their actual interest in Agis Pte Ltd.
The Engs misrepresented the availability of existing funds to meet capital calls, asking the Wees to supply fresh funds instead.

5. Formal Citations

Cheong Soh Chin and others v Eng Chiet Shoong and others, Suit No 322 of 2012, [2018] SGHC 131
Cheong Soh Chin and others v Eng Chiet Shoong and others, , [2015] SGHC 173
Eng Chiet Shoong and others v Cheong Soh Chin and others and another appeal, , [2016] 4 SLR 728
Cheong Soh Chin and others v Eng Chiet Shoong and others, , [2018] SGHC 130

6. Timeline

Date	Event
2012-04-01	Plaintiffs brought action to compel defendants to account for dealings with plaintiffs’ assets.
2015-01-01	High Court allowed the plaintiffs’ claim and dismissed the bulk of the defendants’ counterclaim.
2016-01-01	Court of Appeal dismissed the bulk of the defendants’ appeal, awarding A$2m on a quantum meruit for Project Plaza.
2017-06-27	Evidential hearings in the accounting phase began.
2017-06-27	Certified Transcript
2017-06-27	Certified Transcript
2017-06-30	Hearing
2017-07-04	Hearing
2017-07-04	Certified Transcript
2017-07-05	Certified Transcript
2017-07-06	Certified Transcript
2017-07-07	Hearing
2017-07-07	Certified Transcript
2017-07-11	Hearing
2017-08-11	Plaintiffs’ closing submissions
2017-08-11	Defendants’ closing submissions
2017-08-25	Plaintiffs’ reply closing submissions
2017-08-31	Date below ECS’s signature
2017-09-04	Hearing
2017-09-04	Certified Transcript
2017-10-27	Plaintiffs’ further submissions
2018-09-28	Judgment reserved.

7. Legal Issues

Breach of Fiduciary Duty
- Outcome: The court found that the Engs breached their fiduciary duties by preferring their own interests and failing to disclose information.
- Category: Substantive
- Sub-Issues:
  - Conflict of interest
  - Failure to act in best interest
  - Secret profits
Account on Wilful Default
- Outcome: The court ordered the defendants to render an account on a wilful default basis due to their misconduct as trustees.
- Category: Procedural
Trustees' Expenses
- Outcome: The court held that the Engs were only entitled to be indemnified for authorized transactions and properly incurred expenses.
- Category: Substantive

8. Remedies Sought

Account
Account of Profits

9. Cause of Actions

Breach of Trust
Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation
Trusts
Asset Management

11. Industries

Finance
Asset Management

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Eng Chiet Shoong and others v Cheong Soh Chin and others and another appeal	Court of Appeal	Yes	[2016] 4 SLR 728	Singapore	The Court of Appeal dismissed the bulk of the defendants’ appeal but awarded the defendants A$2m on a quantum meruit for Project Plaza.
Cheong Soh Chin and others v Eng Chiet Shoong and others	High Court	Yes	[2015] SGHC 173	Singapore	The High Court allowed the plaintiffs’ claim and dismissed the bulk of the defendants’ counterclaim. The Engs were trustees of the Wees’ monies under a presumed resulting trust and owed fiduciary duties to the Wees.
Cheong Soh Chin and others v Eng Chiet Shoong and others	High Court	Yes	[2018] SGHC 130	Singapore	The grounds of decision on the preliminary issue of whether the defendants are precluded from asserting in the accounting phase that there was an overarching agreement for the plaintiffs to pay the costs and expenses incurred by the defendants in managing and administering the plaintiffs’ investments.
Singapore Telecommunications Ltd v Starhub Cable Vision Ltd	Court of Appeal	Yes	[2006] 2 SLR(R) 195	Singapore	Cited for the elements necessary for an estoppel by convention.
Travista Development Pte Ltd v Tan Kim Swee Augustine and others	Court of Appeal	Yes	[2008] 2 SLR(R) 474	Singapore	Cited for the elements necessary for an estoppel by convention.
Re Grimthorpe	Chancery Division	Yes	[1958] Ch 615	England and Wales	Cited for the principle that trustees are entitled to be indemnified against costs and expenses properly incurred.
Eu Lim Hoklai v Public Prosecutor	Court of Appeal	Yes	[2011] 3 SLR 167	Singapore	Cited for the principle that all questions before a court are intended to be decided by a judge, not experts.
Chng Weng Wah v Goh Bak Heng	Court of Appeal	Yes	[2016] 2 SLR 464	Singapore	Cited for the two categories of account: common account and account on the footing of wilful default.
Foo Jee Seng and others v Foo Jhee Tuang and another	Court of Appeal	Yes	[2012] 4 SLR 339	Singapore	Cited for the principle that the beneficiary is entitled ‘as of right’ to be given an account in common form of the trustee’s stewardship of the trust assets, without the beneficiary having to show that the trustee has committed a breach of trust.
Libertarian Investments Ltd v Hall	Hong Kong Court of Final Appeal	Yes	16 HKCFAR 681	Hong Kong	Cited for the principle that by falsifying an entry in the account, the beneficiary essentially disclaims any interest in the property, and the investment is treated as if it was bought with the trustee’s own money.
Lalwani Shalini Gobind and another v Lalwani Ashok Bherumal	High Court	Yes	[2017] SGHC 90	Singapore	Cited for the principle that a critical aspect of the custodial fiduciary relationship is the duty of the trustee to keep accounts of the trust, and to allow the beneficiaries to inspect them as requested.
Foo Jee Boo and another v Foo Jhee Tuang and others	High Court	Yes	[2016] SGHC 260	Singapore	Cited for the principle that the court has the discretion not to order an account where it is oppressive to require the trustee to do so, or for some other good reason.
Partington v Reynolds	Court of Chancery	Yes	(1858) 62 ER 98	England and Wales	Cited for the principle that an account taken on the wilful default basis is distinct from a common account because the former requires the trustee to have committed some sort of misconduct while the latter does not.
Ong Jane Rebecca v Lim Lie Hoa and others	Court of Appeal	Yes	[2005] SGCA 4	Singapore	Cited for the principle that the beneficiary seeking an account on the wilful default basis must allege and prove at least one act of wilful neglect or default.
Re Owens	Not specified	Yes	(1882) 47 LT 61	England and Wales	Cited for the principle that an instance of wilful default can be shown when custodial fiduciaries “do that which it is their duty not to do; or omit to do that which it is their duty to do”.
Armitage v Nurse	Court of Appeal	Yes	[1998] Ch 241	England and Wales	Cited for the principle that it is not a requirement for the trustee to be conscious of his misconduct, or indeed to appreciate that his behaviour is a breach of trust.
Meehan v Glazier Holdings Pty Ltd	New South Wales Court of Appeal	Yes	[2002] 54 NSWLR 146	Australia	Cited for the principle that it is sufficient that the trustee has been guilty of a want of ordinary prudence.
Bartlett v Barclays Bank Trust Co Ltd (No 2)	Court of Appeal	Yes	[1980] 1 Ch 515	England and Wales	Cited for the principle that the trustee is subject to what has been called a “roving commission” by the master taking the accounts.
Ultraframe (UK) Ltd v Fielding	High Court	Yes	[2005] EWHC 1638 (Ch)	England and Wales	Cited for the principle that where the beneficiary falsifies an entry in the trustee’s account, and the trustee cannot show that the disbursement or transaction was in fact justified or authorised, the entry is disallowed and the disbursement effectively treated as if it had not happened.
Breen v Williams	High Court of Australia	Yes	(1996) 186 CLR 71	Australia	Cited for the principle that fiduciary duties can arise where there is a “relationship of ascendancy or influence by one party over another, or dependence or trust on the part of that other”.
Tan Yok Koon v Tan Choo Suan and another and other appeals	Court of Appeal	Yes	[2017] 1 SLR 654	Singapore	Cited for the principle that a resulting trust is very often a bare trust and, as such, only requires the trustee to convey the trust property when called upon to do so.
Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal	Court of Appeal	Yes	[2017] 2 SLR 592	Singapore	Cited for the principle that the no-profit rule obliges a director not to retain any profit which he has made through the use of the company’s property, information or opportunities to which he has access by virtue of being a director, unless he has the fully informed consent of the company.
Re Gee	Chancery Division	Yes	[1948] Ch 284	England and Wales	Cited for the principle that every man who becomes a trustee holding as such shares in a limited company is not made ipso facto accountable for remuneration received from that company independently of any use by him of the trust holding, whether by voting or refraining from so doing.
Susilawati v American Express Bank Ltd	Court of Appeal	Yes	[2009] 2 SLR(R) 737	Singapore	Cited for the principle that the factum of consent can be proved through oral evidence and/or inferences from established facts.
Beyonics Technology Ltd and another v Goh Chan Peng and others	High Court	Yes	[2016] 4 SLR 472	Singapore	Cited for the applicable law on causation in the context of equitable compensation.
Target Holdings Ltd v Redferns	House of Lords	Yes	[1996] 1 AC 421	England and Wales	Cited for the traditional “but for” test for causation.
Brickenden v London Loan & Savings Co of Canada	Judicial Committee of the Privy Council	Yes	[1934] 3 DLR 465	Canada	Cited for the less strict approach in Brickenden v London Loan & Savings Co of Canada [1934] 3 DLR 465, where a claim for equitable compensation would succeed so long as the wronged party could show that the fiduciary’s breach of duty was “in some way connected” to the loss.
Quality Assurance Management Asia Pte Ltd v Zhang Qing	High Court	Yes	[2013] 3 SLR 631	Singapore	Cited for the principle that the Brickenden approach should apply to a fiduciary who is in one of the well-established categories of fiduciary relationships, who commits a culpable breach, and who breaches an obligation which stands at the very core of the fiduciary relationship.
Then Khek Koon v Arjun Permanand Samtani	High Court	Yes	[2014] 1 SLR 245	Singapore	Cited for the principle that the Brickenden approach should apply to a fiduciary who is in one of the well-established categories of fiduciary relationships, who commits a culpable breach, and who breaches an obligation which stands at the very core of the fiduciary relationship.
Murad v Al-Saraj	Court of Appeal	Yes	[2005] EWCA Civ 959	England and Wales	Cited for the principle that the burden lies on the fiduciary to show that the profit is not one for which he should account.
Warman v Dwyer	High Court of Australia	Yes	(1995) 182 CLR 544	Australia	Cited for the principle that the burden lies on the fiduciary to show that the profit is not one for which he should account.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute Name	Jurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Wilful Default
Resulting Trust
Fiduciary Duty
Secret Profits
Capital Calls
SPV
WWW Concept
Project Plaza
Agis Pte Ltd
Berners
Seaglow Investment Structure
Johnstons Investments Limited
Hall & Hanson Limited

15.2 Keywords

Trust
Fiduciary
Account
Wilful Default
Investment
Singapore
Equity

16. Subjects

Trusts
Equity
Fiduciary Duty
Accounting
Investments

17. Areas of Law

Equity
Fiduciary relationships
Trust Law