Medora Xerxes Jamshid v Planar One: Provable Debt & Breach of Fiduciary Duty in Bankruptcy
In HC/OSB 14/2024, the Singapore High Court addressed an application by Medora Xerxes Jamshid, the private trustee in bankruptcy of Tan Han Meng, for directions on whether a claim against Tan Han Meng for breach of fiduciary duty by Planar One & Associates Pte Ltd (in liquidation) is a provable debt in bankruptcy. The court ruled that such a claim is a provable debt and provided guidance on the relevant date for valuation of the claim.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Directions given to the private trustee regarding the treatment of a proof of debt.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court addresses whether a claim for breach of fiduciary duty is a provable debt in bankruptcy, ruling in the affirmative.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Medora Xerxes Jamshid | Applicant | Individual | Directions given | Neutral | |
| Tan Han Meng | Other | Individual | |||
| Planar One & Associates Pte Ltd (in liquidation) | Non-party | Corporation |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aedit Abdullah | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Tan Han Meng was adjudicated bankrupt on 26 September 2019.
- Prior to his bankruptcy, Tan Han Meng was a director of several companies, including Civil Tech Pte Ltd and Planar One & Associates Pte Ltd.
- Civil Tech Pte Ltd and Planar One & Associates Pte Ltd were placed into compulsory liquidation.
- Planar One & Associates Pte Ltd's liquidators lodged a proof of debt for S$6,565,803.76 against Tan Han Meng’s bankruptcy estate.
- The sum represented money transfers from Planar One & Associates Pte Ltd to companies in the Civil Tech group, allegedly procured by Tan Han Meng in breach of his fiduciary duties.
- The Private Trustee assessed that Planar One & Associates Pte Ltd had established a clear case of breach of fiduciary duty against Tan Han Meng.
5. Formal Citations
- Re Medora Xerxes Jamshid (in his capacity as the private trustee in bankruptcy of Tan Han Meng)(Planar One & Associates Pte Ltd (in liquidation), non-party), Originating Summons (Bankruptcy) No 14 of 2024, [2024] SGHC 196
6. Timeline
| Date | Event |
|---|---|
| Final improper transfer of funds from Planar One & Associates Pte Ltd to Civil Tech companies | |
| Planar One & Associates Pte Ltd placed into compulsory liquidation | |
| Civil Tech Pte Ltd placed into compulsory liquidation | |
| Tan Han Meng adjudicated bankrupt | |
| Planar One & Associates Pte Ltd's liquidators lodged a proof of debt in Tan Han Meng’s bankruptcy | |
| Private Trustee communicated that he was prepared to accept Planar One & Associates Pte Ltd’s proof of debt in full on a provisional basis | |
| Hearing date | |
| Hearing date | |
| Judgment issued |
7. Legal Issues
- Provability of Debt in Bankruptcy
- Outcome: The court held that a claim for breach of fiduciary duty is a provable debt in bankruptcy.
- Category: Substantive
- Sub-Issues:
- Whether a claim for breach of fiduciary duty is a provable debt in bankruptcy
- Relevant date for valuation of proofs of debt
- Accrual of Cause of Action for Breach of Fiduciary Duty
- Outcome: The court held that the cause of action for breach of fiduciary duty accrues at the time of breach.
- Category: Substantive
8. Remedies Sought
- Directions from the court regarding the acceptance of a proof of debt
9. Cause of Actions
- Breach of Fiduciary Duty
10. Practice Areas
- Bankruptcy
- Insolvency
- Trust Law
- Equity
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Wang Aifeng v Sunmax Global Capital Fund 1 Pte Ltd and another | High Court | Yes | [2023] 3 SLR 1604 | Singapore | Cited for the statement that a breach of trust claim could only be resolved by court proceedings and is quite inappropriate to be decided by way of proof of debt in the bankruptcy proceedings. |
| Bristol & West Building Society v Trustee of the property of Back and another (bankrupts) | English High Court | Yes | [1998] 1 BCLC 485 | England | Cited in Wang Aifeng for the statement that a breach of trust claim could only be resolved by court proceedings and is quite inappropriate to be decided by way of proof of debt in the bankruptcy proceedings. |
| Yap Cheng Ghee Bob (in his capacity as the joint and several interim judicial manager of Envy Asset Management Pte Ltd) and others v Envy Asset Management Pte Ltd and other matters | High Court | Yes | [2024] 4 SLR 746 | Singapore | Cited for the requirements for the court to grant the directions sought by an insolvency officeholder. |
| Kyen Resources Pte Ltd (in compulsory liquidation) and others v Feima International (Hongkong) Ltd (in liquidation) and another matter | Court of Appeal | Yes | [2024] 1 SLR 266 | Singapore | Cited for the principle that if an issue arising before an officeholder is substantially or factually complex, it may be inappropriate for the officeholder to summarily deal with it in the proof of debt adjudication process. |
| NGI Savannah Living Communities Pty Ltd v Dunne & Ors | Supreme Court of Queensland | Yes | [2023] QSC 273 | Australia | Cited for outlining different positions under Australian law on whether a claim for breach of fiduciary duty is a provable debt in bankruptcy. |
| Auto Group Ltd v England | Supreme Court of New South Wales | Yes | [2008] NSWSC 402 | Australia | Cited as an authority that held that a claim for breach of fiduciary duty could be characterised as a liquidated claim in equity. |
| Cummings v Claremont Petroleum NL and another | High Court of Australia | Yes | (1996) 137 ALR 1 | Australia | Cited as an authority that held that a claim for breach of fiduciary duty could be characterised as an unliquidated claim arising by reason of a contract. |
| Ultraframe (UK) Ltd v Fielding and others | English High Court | Yes | [2005] EWHC 1638 (Ch) | England | Cited for the principle that company directors are a well-established category of fiduciary obligation. |
| In re Lands Allotment Company | English Court of Appeal | Yes | [1894] 1 Ch 616 | England | Cited for the principle that directors have always been considered and treated as trustees of money which comes to their hands or which is actually under their control. |
| J J Harrison (Properties) Ltd v Harrison | English Court of Appeal | Yes | [2002] 1 BCLC 162 | England | Cited for the principle that directors owe fiduciary duties to the company in relation to their powers and a breach of those duties is treated as a breach of trust. |
| In re West of England and South Wales District Bank, ex parte Dale & Co | N/A | Yes | (1879) 11 Ch D 772 | N/A | Cited for the principle that if a wrong arise in a fiduciary relationship, the same remedy exists against the wrong-doer on behalf of the principal as would exist against a trustee on behalf of the cestui que trust. |
| Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals | Court of Appeal | Yes | [2020] 1 SLR 1199 | Singapore | Cited for recognizing the distinction between substitutive monetary awards and reparative monetary awards for breach of fiduciary duty. |
| Burnden Holdings (UK) Ltd v Fielding and another | UK Supreme Court | Yes | [2018] AC 857 | United Kingdom | Cited for the principle that the statutory provisions on limitation for breach of trust apply either directly or by analogy to claims for breach of fiduciary duty against directors. |
| In re Nortel GmbH (in administration) and related companies | UK Supreme Court | Yes | [2014] AC 209 | United Kingdom | Cited for the principle that the scope of provable debts in bankruptcy ought to be read as expansively as possible. |
| Re Vassis: Exparte Leung | N/A | Yes | (1986) 9 FCR 518 | N/A | Cited for the proposition that a trustee’s obligation to make good the breach of trust is treated as a species of equitable debt. |
| Ex parte Adamson, In re Collie | English Court of Appeal | Yes | (1878) 8 Ch D 807 | England | Cited for the characterisation of a claim for breach of fiduciary duty as a claim for an “equitable debt”. |
| Target Holdings Ltd v Redferns (a firm) and another | House of Lords | Yes | [1996] 1 AC 421 | United Kingdom | Cited for the principle that a claim for breach of trust would remain of an unascertained quantum until liquidated by, and on the date of, the court’s judgment. |
| Libertarian Investments Ltd v Hall | Hong Kong Court of Final Appeal | Yes | (2013) HKCFAR 681 | Hong Kong | Cited for the explanation of the process of taking an account and identifying the proper remedy for breach of trust or fiduciary duty. |
| UVJ and others v UVH and others and another appeal | Court of Appeal | Yes | [2020] 2 SLR 336 | Singapore | Cited for the explanation of the process of taking an account and identifying the proper remedy for breach of trust or fiduciary duty. |
| Dusoruth v Orca Finance UK Ltd (in liquidation) | English High Court | Yes | [2023] 1 All ER (Comm) 1075 | England | Cited for the principle that it is a contradiction in terms to speak of a claim for an account as a claim for a “liquidated sum”, even if the claimant professes to be able to calculate his claim “down to the last penny”. |
| Agricultural Land Management Ltd v Jackson and others (No 2) | Supreme Court of Western Australia | Yes | (2014) 98 ACSR 615 | Australia | Cited for the principle that only reparation claims are in the nature of compensation for loss properly so-called, such that the usual rules limiting recoverability of damages apply to reparation but not substitutive performance claims. |
| Barnett and another v Creggy | English Court of Appeal | Yes | [2017] Ch 273 | England | Cited for the observation that claims for breach of trust and fiduciary duty are now often pleaded as direct claims for “equitable compensation”. |
| Robinson v Harman | N/A | Yes | Robinson v Harman (1848) 1 Exch 850 | N/A | Cited for the principle that claims for breach of contract are generally compensatory in nature. |
| Brickenden v London Loan & Savings Co et al | Privy Council | Yes | [1934] 3 DLR 465 | Canada | Cited for the Brickenden rule, which emplaces a rebuttable presumption in favor of the principal that the fiduciary’s breach caused its loss. |
| Clearlab SG Pte Ltd v Ting Chong Chai and others | High Court | Yes | [2015] 1 SLR 163 | Singapore | Cited for the principle that an employee’s duty of good faith and fidelity is not the same as a fiduciary duty. |
| Quality Assurance Management Asia Pte Ltd v Zhang Qing and others | High Court | Yes | [2013] 3 SLR 631 | Singapore | Cited as a word of caution that the word “restitution” is used in the modern cases on equitable compensation not as a legal term of art but purely as an ordinary word of the English language meaning “recompense for injury or loss”. |
| In re T & D Industries plc and another | English High Court | Yes | [2000] 1 WLR 646 | England | Cited for the principle that commercial and administrative decisions are for the administrator, and the court is not there to act as a sort of bomb shelter for him. |
| Re Spedley Securities Ltd (in liq) | Supreme Court of New South Wales | Yes | (1992) 9 ACSR 83 | Australia | Cited for the principle that if the officeholder has full power to act, it would typically be inappropriate for the court to intervene on an application for directions. |
| Park Hotel CQ Pte Ltd (in liquidation) and others v Law Ching Hung and another suit | High Court | Yes | [2024] SGHC 105 | Singapore | Cited for the principle that the proof of debt regime takes over as the primary mode of enforcement of claims against a debtor upon the onset of bankruptcy or insolvent liquidation. |
| Re T&N Ltd and others (No 2) | English High Court | Yes | [2006] 2 BCLC 374 | England | Cited for the principle that the defining characteristic of claims falling within s 87(1)(a)(i) is that they are liabilities that are “unquestionably payable at a future date”. |
| In re Elenin, decd | English High Court | Yes | [2016] 1 WLR 2091 | England | Cited for the principle that pari passu distribution requires a common date for the ascertainment and quantification of the bankrupt’s debts. |
| In re Dynamics Corporation of America (in liquidation) | English High Court | Yes | [1976] 1 WLR 757 | England | Cited for the principle that the claims of the creditors amongst whom the division is to be effected must all be crystallised at the same date. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Bankruptcy Act (Cap 20, 2009 Rev Ed) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 40(2) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87 | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87(1)(a) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87(3) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Bankruptcy
- Proof of Debt
- Breach of Fiduciary Duty
- Provable Debt
- Private Trustee
- Liquidated Claim
- Unliquidated Claim
- Breach of Trust
- Cause of Action
- Accrual
- Valuation
15.2 Keywords
- Bankruptcy
- Insolvency
- Fiduciary Duty
- Trust
- Provable Debt
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Insolvency Law | 95 |
| Bankruptcy | 90 |
| Fiduciary Duties | 85 |
| Breach of Trust | 80 |
| Chancery and Equity | 70 |
| Winding Up | 40 |
16. Subjects
- Bankruptcy
- Insolvency Law
- Fiduciary Duty
- Trust Law