Lee Ker Min v Lee Gin Hong: Partnership Dispute, Constructive Trusts, and Fiduciary Duties
In Lee Ker Min v Lee Gin Hong, the High Court of Singapore addressed a partnership dispute where Lee Ker Min, represented by Lee Kai Teck Roland, sued Lee Gin Hong and Lee Gim Moi, executors of Ng Ang Chum's estate, to recover half of a partnership debt. The defendants counterclaimed, alleging the plaintiff misused partnership funds. The court dismissed the plaintiff's claim, finding he breached his fiduciary duties and treated partnership funds as his own. The court awarded interlocutory judgment to the defendants on their counterclaim and ordered an inquiry to determine the sums withdrawn by the plaintiff from the partnership.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Plaintiff's claim is dismissed with costs to the Defendants. Interlocutory judgment awarded to Defendants on their Counterclaim.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Partnership dispute over debt recovery and alleged misuse of funds. Court dismissed claim, finding Plaintiff breached fiduciary duties.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lee Ker Min | Plaintiff | Individual | Claim Dismissed | Lost | Bachoo Mohan Singh, Narayanan Vijay Kumar |
| Lee Gin Hong | Defendant | Individual | Interlocutory judgment awarded on Counterclaim | Won | Toh Jun Hian Jonathan, Wong Shi Yun |
| Lee Gim Moi | Defendant | Individual | Interlocutory judgment awarded on Counterclaim | Won | Toh Jun Hian Jonathan, Wong Shi Yun |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Senior Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Bachoo Mohan Singh | BMS LLC |
| Narayanan Vijay Kumar | Vijay & Co |
| Toh Jun Hian Jonathan | Rajah & Tann Singapore LLP |
| Wong Shi Yun | Rajah & Tann Singapore LLP |
4. Facts
- Lee Huat Company started as a sole-proprietorship in 1958 and later became a partnership.
- Lee Ker Min joined Lee Huat as a partner on 4 February 1975.
- After the father's death, the Deceased was registered as a partner.
- The Plaintiff managed Lee Huat's business until he suffered a stroke in July 2014.
- The Plaintiff used the Partnership's monies for personal expenses and investments.
- The UOB overdraft facility was secured by the Plaintiff's personal property.
- The Defendants alleged the Plaintiff took all the profits and only gave the Deceased a monthly allowance.
5. Formal Citations
- Lee Ker Min (by his litigation representative Lee Kai Teck Roland) v Lee Gin Hong (as executor and trustee of the estate of Ng Ang Chum, deceased) and another, Suit No 1301 of 2018, [2020] SGHC 159
6. Timeline
| Date | Event |
|---|---|
| Lee Huat Company started as a sole-proprietorship. | |
| Lee Ker Min joined Lee Huat as a partner. | |
| Lee Kim Eng passed away. | |
| Lee Gim Moi commenced working for Lee Huat. | |
| Lee Gin Hong commenced working for Lee Huat. | |
| UOB overdraft facility for $1.5m obtained. | |
| Lee Ker Min suffered a severe stroke. | |
| Ng Ang Chum passed away. | |
| Letter received from Plaintiff's solicitors regarding overdraft. | |
| Estate's solicitors replied to Plaintiff's solicitors' letter. | |
| Meeting between Defendants, Plaintiff’s wife, and sons. | |
| Estate’s solicitors wrote to Plaintiff’s solicitors regarding overdraft use. | |
| Jeffrey sought to transfer the tenancy of the shophouse to his personal name. | |
| Roland wrote to the Defendants regarding the Estate's obligation to settle debts. | |
| Estate’s solicitors replied to Roland reiterating Plaintiff's use of UOB debt. | |
| Roland replied, alleging conflict of interest. | |
| Defendants responded, disagreeing with Roland’s position. | |
| Roland alleged Defendants were running the business after the death of the Deceased. | |
| Defendants replied, stating Jeffrey was running the business and Plaintiff used Partnership assets. | |
| Defendants met with Roland, Jeffrey, and NLL and tendered their resignation letters. | |
| Defendants resigned from Lee Huat. | |
| Plaintiff’s solicitors demanded Defendants withdraw allegation and bear half of overdraft. | |
| Defendants replied, reiterating their position. | |
| Roland asserted he was unaware of how the Defendants had managed the Partnership. | |
| Jeffrey visited the Defendants bringing HDB’s letter. | |
| Estate’s solicitors received Tee’s Report. | |
| Defendants’ solicitors rejected demands for repayment. | |
| Plaintiff’s solicitors inquired whether Defendants’ solicitors had instructions to accept service. | |
| Plaintiff filed suit and statement of claim. | |
| Trial began. | |
| Trial concluded. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that the Plaintiff breached his fiduciary duties to the Deceased by using partnership funds for personal expenses and acquiring assets.
- Category: Substantive
- Sub-Issues:
- Misuse of partnership funds
- Making private profits to the exclusion of partner
- Related Cases:
- [2011] SGHC 259
- [2009] SGHC 153
- [1998] 1 Ch 1
- [2017] 1 SLR 654
- Constructive Trust
- Outcome: The court declared that the Plaintiff holds all sums determined at the inquiry as constructive trustee for the Partnership.
- Category: Substantive
- Related Cases:
- [1995] 2 AC 378
- Partnership Debt
- Outcome: The court ruled that the Plaintiff's debt to the Partnership must be settled before the Estate is obliged to pay half the outstanding UOB Overdraft.
- Category: Substantive
8. Remedies Sought
- Declaration that the Partnership had a debt as of the date of death of the Deceased
- Payment of half the debt by the Defendants
- Claim for $20,000
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Partnership Act
10. Practice Areas
- Commercial Litigation
- Trust Litigation
11. Industries
- Retail
- Motorcycle Sales and Repair
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ang Tin Gee v Pang Teck Guan | High Court | Yes | [2011] SGHC 259 | Singapore | Cited for the principle that partners owe fiduciary duties to each other, including not taking partnership monies for personal use or making private profits to the exclusion of the other partner. |
| Poh Lian Development Pte Ltd v Hok Mee Property Pte Ltd and Others | High Court | Yes | [2009] SGHC 153 | Singapore | Cited for the definition of a fiduciary and the fiduciary's obligation of loyalty. |
| Bristol and West Building Society v Mothew | Court of Appeal (Civil Division) | Yes | [1998] 1 Ch 1 | England and Wales | Cited for the definition of a fiduciary and the fiduciary's obligation of loyalty. |
| Tan Yok Koon v Tan Choo Suan | Court of Appeal | Yes | [2017] 1 SLR 654 | Singapore | Cited for the principle that the hallmark of a fiduciary obligation is that the fiduciary is to act in the interests of another person. |
| Chip Thye Enterprises Pte Ltd (in liquidation) v Phay Gi Mo and Others | High Court | No | [2004] 1 SLR(R) 434 | Singapore | Cited to argue that recoverability can be considered when assessing a company's solvency, but found not relevant to the present case. |
| Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming | Privy Council | Yes | [1995] 2 AC 378 | United Kingdom | Cited for the definition of dishonesty in the context of constructive trusts. |
| Barnes v Addy | Court of Appeal in Chancery | No | (1874) LR 9 Ch App 244 | England and Wales | Cited regarding the imposition of constructive trusts on third parties, but found not directly applicable to the present case. |
| Sumitomo Bank Limited v Thahir Kartika Ratna and Others and another Matter | High Court | No | [1992] 3 SLR(R) 638 | Singapore | Cited regarding the imposition of constructive trusts on third parties, but found not directly applicable to the present case. |
| Browne v Dunn | House of Lords | No | (1893) 6 R 67 | United Kingdom | Cited regarding the rule that witnesses must be challenged on points of contention. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 40A r 2 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) s 9 | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) s 20(1) | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) s 21 | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) s 43 | Singapore |
| Trustees Act (Cap 337, 2005 Rev Ed) s 60 | Singapore |
| Mental Capacity Act (Cap 177A, 2010 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Partnership
- Constructive Trust
- Fiduciary Duty
- UOB Overdraft Facility
- Misapplied Sums
- Private Profits
- Sundry Debtor
- Inquiry
- Accounting
15.2 Keywords
- Partnership Dispute
- Constructive Trust
- Fiduciary Duty
- Accounting Inquiry
- Singapore High Court
- Debt Recovery
16. Subjects
- Partnership
- Trusts
- Fiduciary Duties
- Debt Recovery
- Accounting
17. Areas of Law
- Partnership Law
- Trust Law
- Fiduciary Duty