Griffin Real Estate v ERC Unicampus: Res Judicata, Issue Estoppel, Account for Third Party Liability

In Griffin Real Estate Investment Holdings Pte Ltd (in liquidation) v ERC Unicampus Pte Ltd, the High Court of Singapore addressed a claim by Griffin Real Estate Investment Holdings Pte Ltd (GREIH) against ERC Unicampus Pte Ltd (ERCU) to recover a share of the proceeds from the sale of the Big Hotel, alleging that GREIH's directors wrongfully extended an unauthorized loan to ERCU. The court found that while ERCU was not estopped from re-litigating a prior finding regarding repayment of the loan, it was an abuse of process to re-litigate the finding that the directors breached their fiduciary duties. The court ordered ERCU to account for profits gained as a result of its knowing receipt of the loan.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Judgment for Plaintiff in part; Defendant ordered to provide an account of profits.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court addressed res judicata and issue estoppel in a dispute over a $10m loan. It ordered ERC Unicampus to account for profits from knowing receipt.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Griffin Real Estate Investment Holdings Pte Ltd (in liquidation)PlaintiffCorporationDeclarations granted in part; account of profits orderedPartial
ERC Unicampus Pte LtdDefendantCorporationAccount of profits orderedLost

3. Judges

Judge NameTitleDelivered Judgment
Chua Lee MingJudgeYes

4. Counsels

Counsel NameOrganization
Nawaz KamilProvidence Law Asia LLC
Abraham S VergisProvidence Law Asia LLC
Kenny LauProvidence Law Asia LLC
Vikram NairRajah & Tann Singapore LLP
Foo Xian FongRajah & Tann Singapore LLP
Gan Eng TongRajah & Tann Singapore LLP

4. Facts

  1. GREIH seeks to recover a share of the proceeds of the sale of the Big Hotel.
  2. GREIH claims its directors wrongfully caused it to extend an unauthorized loan of $10 million to ERCU.
  3. ERCU knowingly received the $10m Loan and used the monies to help it complete its purchase of the Big Hotel.
  4. Andy Ong and Han Boon were directors of GREIH at the material time.
  5. Andy Ong and Han Boon breached their fiduciary duties to GREIH by causing GREIH to extend the $10m Loan to ERCU.
  6. The Big Hotel was sold in September 2015 for $203m.
  7. Without the $10m Loan, ERCU would not have been able to draw down on the UOB-ERCU Loan to complete the purchase of the property.

5. Formal Citations

  1. Griffin Real Estate Investment Holdings Pte Ltd (in liquidation)vERC Unicampus Pte Ltd, Originating Summons No 1004 of 2017, [2018] SGHC 273

6. Timeline

DateEvent
ERCU obtained a loan from United Overseas Bank Limited
UOB granted GREIH a six-month short term loan of $10m
Andy Ong and Han Boon issued a letter to UOB to draw down the UOB-GREIH Loan
GREIH drew down on the UOB-GREIH Loan
Completion date for the sale and purchase of the Big Hotel
The Big Hotel was sold
Sale of Big Hotel completed
1st affidavit of Ong Han Boon filed
1st affidavit of Aaron Loh Cheng Lee filed
Hearing date
Hearing date
Judgment date

7. Legal Issues

  1. Issue Estoppel
    • Outcome: The court found that issue estoppel does not arise in relation to the S1098 Findings.
    • Category: Procedural
  2. Abuse of Process
    • Outcome: The court found that it would be an abuse of process for ERCU to re-litigate the Breach Finding, but not an abuse of process for ERCU to re-litigate the Repayment Finding.
    • Category: Procedural
  3. Breach of Fiduciary Duty
    • Outcome: The court concluded that Andy Ong and Han Boon breached their fiduciary duties to GREIH in arranging for the $10m Loan to be extended to ERCU.
    • Category: Substantive
  4. Knowing Receipt
    • Outcome: The court found that ERCU was a knowing recipient of the $10m Loan.
    • Category: Substantive
  5. Account of Profits
    • Outcome: The court ordered ERCU to account for the profits that it made as a result of its knowing receipt of the $10m Loan.
    • Category: Remedial

8. Remedies Sought

  1. Declaration that ERCU is a knowing recipient of the $10m transferred to it by GREIH
  2. Declaration that ERCU is a constructive trustee and holds on trust for GREIH the outstanding balance of the $10m Loan
  3. GREIH’s share of the proceeds from the sale of the Big Hotel

9. Cause of Actions

  • Breach of Fiduciary Duty
  • Knowing Receipt

10. Practice Areas

  • Commercial Litigation
  • Insolvency Law

11. Industries

  • Real Estate
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sakae Holdings Ltd v Gryphon Real Estate Investment Corp Pte Ltd and others (Foo Peow Yong Douglas, third party) and another suitHigh CourtYes[2017] SGHC 73SingaporeDetailed background leading to the present dispute can be found in this judgment.
Ho Yew Kong v Sakae Holdings Ltd and other appealsCourt of AppealYes[2018] 2 SLR 333SingaporeDetailed background leading to the present dispute can be found in this judgment.
Lee Tat Development Pte Ltd v MCST Plan No 301N/AYes[2005] 3 SLR(R) 157SingaporeCited for the requirements of issue estoppel.
Goh Nellie v Goh Lian Teck and othersN/AYes[2007] 1 SLR(R) 453SingaporeCited for the extended doctrine of res judicata, or as it is more popularly known, the doctrine of abuse of process
Intraco Ltd v Multi-Pak Singapore Pte LtdCourt of AppealYes[1994] 3 SLR(R) 1064SingaporeCited regarding directors considering the interests of the group as a whole when making decisions.
Novoship (UK) Ltd and others v Mikhaylyuk and othersN/AYes[2015] QB 499England and WalesCited for the principle that an account of profits may be ordered against a dishonest assistant.
Von Roll Asia Pte Ltd v Goh Boon Gay and othersN/AYes[2018] 4 SLR 1053SingaporeCited for the principle that a knowing recipient may also be required to account for profits gained as a result of his knowing receipt.
Akita Holdings v Attorney General of the Turks and Caicos IslandsPrivy CouncilYes[2017] AC 590Turks and Caicos IslandsCited for the principle that the remedy of account of profits is available against a knowing recipient.
Phipps v Boardman and othersN/AYes[1964] 1 WLR 993England and WalesCited for the doctrine of just allowance.
Phipps v Boardman and othersCourt of AppealYes[1965] Ch 992England and WalesCited for the doctrine of just allowance.
Boardman and another v PhippsHouse of LordsYes[1967] 2 AC 46England and WalesCited for the doctrine of just allowance.
Paul A Davies (Australia) Pty Ltd (in liquidation) v Davies and anotherN/AYes[1983] 1 NWSLR 440AustraliaCited for the doctrine of just allowance.
In re Jarvis, dec’dN/AYes[1958] 1 WLR 815England and WalesCited for the doctrine of just allowance.
In the Marriage of Wagstaff: Gruber (Intervener)N/AYes(1990) 14 Fam LR 78AustraliaCited for the doctrine of just allowance.
Mona Computer Systems (S) Pte Ltd v Singaravelu MuruganCourt of AppealYes[2014] 1 SLR 847SingaporeCited for the doctrine of just allowance.
Scott v ScottN/AYes[1964] VR 300AustraliaCited for the principle that beneficiaries are entitled to a proportionate share of the increase in the value of the property where a trustee pays for property with his own monies and trust monies in breach of trust.
Australian Postal Corporation v Lutak and othersN/AYes[1991] 21 NSWLR 584AustraliaCited for the principle that the trustee is not entitled to any share in the profits where a trustee does not contribute his own monies but uses trust monies in breach of trust to pay part of the purchase price of property, and on completion uses a mortgage loan secured on the property to pay the balance of the purchase price.
JGM Nominees Pty Ltd v Caveat Finance Pty Ltd (in liq)N/AYes[2009] VSC 604AustraliaCited for the principle that the beneficiaries and the trustee share the profits from the sale of the property in proportion to the amount of the trust monies and the trustee’s own monies where a trustee pays for property using trust monies in breach of trust, his own monies and a mortgage loan secured on the property.
Mavaddat v LeeN/AYes[2007] WASCA 141AustraliaCited for the principle that there was no basis for a declaration of trust over the whole property and, applying Scott, declared that the trustee held the property on trust for the beneficiary only to the extent of its proportionate contribution where trust monies were used to pay for the property and the balance of the purchase price was provided by the trustee from funds borrowed from the bank in circumstances in which there was no contention that the funds were obtained only through misuse of trust property, whether by mortgage or otherwise.
Telnet Pty Ltd v LintonN/AYesBC9807776AustraliaCited for the principle that the mortgage loan should go to the credit of Mrs Linton in determining the respective interests of herself and Telnet in the property where Mrs Linton bought a property and paid part of the purchase price using monies from a loan obtained by her husband from Telnet and Mrs Linton also obtained a mortgage loan secured on the property.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Originating Summons
  • Res Judicata
  • Issue Estoppel
  • Account of Profits
  • Knowing Recipient
  • Constructive Trustee
  • Fiduciary Duties
  • Breach Finding
  • Repayment Finding
  • UOB-ERCU Loan
  • UOB-GREIH Loan
  • SPV
  • Big Hotel
  • Bugis Cube

15.2 Keywords

  • Res Judicata
  • Issue Estoppel
  • Account of Profits
  • Knowing Receipt
  • Fiduciary Duty
  • Real Estate
  • Singapore

17. Areas of Law

Area NameRelevance Score
Fiduciary Duties90
Chancery and Equity80
Commercial Disputes70
Trust Law70
Estoppel60
Company Law60
Corporate Law60
Commercial Litigation50
Contract Law50
Civil Procedure50
Corporate Litigation50
Winding Up40
Civil Litigation40
Litigation40
Torts30
Bankruptcy30
Property Law30
Arbitration30

16. Subjects

  • Res Judicata
  • Issue Estoppel
  • Equity
  • Remedies
  • Trusts
  • Company Law