High Court · Decided 18 February 2010

Ang Hong Hin v Ang Chye Hin

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[2010] SGHC 58Case no. Suit No 103 of 2006

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Grounds of decision

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Judith Prakash J:
[1] The plaintiff and the defendant are brothers who were, for many years, equal partners in an undertaking business. The partnership was dissolved in June 2004 pursuant to a dissolution agreement whereunder the plaintiff agreed to buy out the defendant’s share in the business for an agreed remuneration to be paid in instalments. The plaintiff failed to pay the third and final instalment of $200,000 and subsequently started this action for damages for fraudulent misrepresentation or wilful non-disclosure or fraudulent acts or, alternatively, for rescission of the dissolution agreement. The defendant denies the plaintiff’s allegations and has put in a counterclaim for payment of $200,000, an account of certain moneys in one of the plaintiff’s personal bank accounts, and the appointment of an accountant to enquire into the accounts of the business (including the business of a firm called Western Casket).
Background
[2] The story behind this action spans many years, many family members and various businesses. The first business, Ang Chin Moh Undertaker (“ACM”), was started in 1947. According to records at the Registry of Companies and Businesses (“ROC”), the parties’ mother, Mdm Ng Ah Yeow (“Mdm Ng”), was a partner in the business from the beginning. Notwithstanding that, however, ACM was apparently run by their father and it was only after his death, some time in 1971, that Mdm Ng took over the business. According to the ROC records, the plaintiff, Ang Hong Hin, became a partner in ACM for a short period between April 1976 and May 1976. Thereafter, ACM was registered as a sole proprietorship with Mdm Ng being the sole proprietor although the plaintiff maintained that he continued in fact to be a partner and was running the business himself.
[3] The plaintiff was born in about 1951 and since finishing national service, apart from a short spell in a textile business, he has spent his whole career working in ACM and other undertaking businesses. All parties agreed that he was in charge of “field work” which meant that he was the person who obtained business, dealt with customers and arranged funeral services for customers. Generally speaking, the plaintiff spent very little time in ACM’s office as the nature of his job required him to be supervising the provision of services in the field.
[4] In mid 1979, the plaintiff set up another undertaking business, Ang Chin Moh Kheng Khee (“ACMKK”), and registered himself as the sole proprietor of this business. ACMKK’s business was, however, conducted from the premises of ACM and, from all accounts, it was treated as part of the family undertaking business. The firms shared an office in Geylang Bahru as well as their resources and had a common pool of customers. In this judgment, when I refer to “the business” without any other description I should be taken as referring to the businesses of both ACM and ACMKK.
[5] In April 2000, the plaintiff’s wife, Mdm Foo Kok Keng, registered a business called “Western Casket”. The principal activity of Western Casket was recorded as being the manufacture of coffins. It was, however, not disputed that at all material times, this was also an undertaking business. The plaintiff was registered as the owner of Western Casket in May 2001 when his wife withdrew from the same. He operated it from premises in Toa Payoh. In February 2002, the plaintiff’s son, Ang Ziqian, became a partner in Western Casket. The defendant had no share in Western Casket nor did he play any part in its business.
[6] The defendant, Ang Chye Hin, is the elder of the two brothers. For most of his working life, he was a full-time civil servant working in the Supreme Court. He left the civil service about two years ago. One of the disputes between the parties is the extent to which the defendant was involved in ACM and ACMKK. The plaintiff’s position is that even before 1993 when the defendant became a partner of ACM, he was already in charge of the finances, accounts and bookkeeping and other administrative matters of both ACM and ACMKK. The defendant, on the other hand, maintains that he simply helped out in the office during weekends and gave casual assistance. He did not control the accounts in any way.
[7] The other family member who worked in the business on a full-time basis was the parties’ elder sister, Ms Ang Choon Boy (“Ms Ang”). She was not, however, recorded as an employee of either firm and was not paid a salary or CPF. Instead, she received an allowance of about $800 a month. Ms Ang assisted the plaintiff by running the office for him.
[8] In 1993, Mdm Ng decided to retire. At this stage, both the plaintiff and the defendant officially became owners of the business: they were registered as equal partners of ACM on 30 August 1993. According to the plaintiff, the defendant became a partner in ACM at the suggestion of Mdm Ng who reminded him that the defendant was his only brother. The defendant said that he became an authorised signatory of ACM’s bank account in 1996 on the insistence of his mother.
[9] Difficulties in the partnership surfaced in 2004. The defendant’s story was that some time in January 2004, the plaintiff began to have a different attitude towards the workers of the business and when the defendant remonstrated with him over the way he was treating the workers, the defendant was told by the plaintiff not to interfere or the defendant could part ways with the plaintiff. When the defendant sought clarification of this remark, the plaintiff confirmed that he wanted to end the partnership. In February 2004, the plaintiff instructed the defendant to ask the accountant of the business, one Mr Chew Whye Lee, to prepare a statement of assets and liabilities of ACM and ACMKK so that the basis of dissolution could be decided. I shall refer to these documents hereafter as the “asset statements”. Copies of the asset statements are annexed hereto as Appendices A and B.
[10] The plaintiff’s story was that in early 2004, he discovered that the defendant had made CPF contributions for his wife, Mdm Teo Bee Kieu (“Mdm Teo”), using the funds of ACM as if Mdm Teo was an employee of ACM. The true position was that Mdm Teo did not work in or have anything to do with the business. The plaintiff complained about this discovery to Ms Ang. Some weeks later, the defendant called him and angrily told the plaintiff that he no longer wanted to continue with the partnership. The defendant called again a few minutes later and told the plaintiff that he would have a valuation of the business done and would employ a lawyer to draw up a dissolution agreement.
[11] Mr Chew duly prepared the asset statements which were given to the parties some time in April or May 2004. The ACM asset statement showed that as of 31 March 2004, that firm’s asset balances were $2,877,426.11 being the total value of its fixed and current assets. Included among the assets and valued at $2,390,251 was the property described in [19(f)] below. The document also valued ACM’s current liabilities at $1,167,022.27. Therefore, ACM’s net assets would have amounted to $1,710,403.84. The ACMKK asset statement showed that ACMKK’s assets as at 31 March 2004 were worth $1,224,920.74. These assets included the property described in [31(c)] below which was valued at $600,000. ACMKK had no liabilities. On this basis, the total asset value of the two businesses was $2,935,324.58. However, the asset statements did not reflect a sum of $730,000 which had been kept in cash by Ms Ang on behalf of the business.
[12] By a letter dated 21 May 2004, drafted for the plaintiff by his niece, a lawyer, the plaintiff proposed to the defendant that either party would have the right to buy the other’s share in the business for $1,767,662.95. The letter showed that this sum was calculated on the basis that the business was worth $1,710,403.84 (valuation of ACM) plus $1,224,920.74 (valuation of ACMKK) plus $600,000 (the cash of $730,000 less $130,000 which the parties were proposing to give to Ms Ang). The proposed price thus was 50% of the value of the business.
[13] On 25 May 2004, the defendant agreed to sell his share in the business to the plaintiff for the sum of $1,767,662.95 on the basis that he would take $600,000 in cash from the amount held by Ms Ang and the plaintiff would pay him the balance of $1,167,662.95 in one lump sum by way of a cashier’s order. The plaintiff did not accept this offer as he was not in a position to make such a lump sum payment.
[14] Subsequently, there were discussions between the parties and documents for the dissolution of the partnership were prepared. Three drafts of the documents were produced. Eventually, two documents were signed by the parties and dated 7 June 2004. The first document entitled “Dissolution of Partnership Agreement (M/s Ang Chin Moh Undertaker)” (“the dissolution agreement”) was made between the defendant, referred to therein as the “Retiring Partner”, and the plaintiff, referred to therein as the “Continuing Partner”, and was in respect of the business of ACM. The dissolution agreement contains two clauses numbered 1 and 2 and five separate clauses numbered from a. to e. under the heading “The Consideration and Terms”. The agreement provides:
[15] The second document entitled “Acknowledgement and Confirmation (Sum of $600,000.00)” (“the acknowledgement”) was stated to be supplementary to the dissolution agreement. By the acknowledgement, the plaintiff and the defendant acknowledged that the plaintiff had handed over $600,000 to Ms Ang to be held on behalf of the partners, that this sum belonged to the partnership of ACM and each of the partners was entitled to $300,000 and that the plaintiff’s half share of the $600,000 was to be given to the defendant “as a gift in consideration of the love and affection between two brothers”.
[16] It would be noted that neither of the documents mentioned anything about ACMKK and that the total amount payable by the plaintiff to the defendant, when the sums payable under the dissolution agreement and the acknowledgement were aggregated, was $1,267,662 which was approximately $500,000 less than the alleged total value of the two firms.
[17] On 7 June 2004, the plaintiff paid the defendant the first instalment of $267,662. On 16 June 2004, he paid the second instalment of $200,000. The final instalment was due on 30 June 2004 but it was not paid. The defendant and Ms Ang had left ACM’s office by 11 June 2004.
[18] The plaintiff complained that after payment of the first instalment was made, the defendant had refused to hand over the account books of the business. Nor did he hand them over after clearance of the second instalment. The plaintiff therefore had difficulty in running the business as various documents including CPF and wage records, invoice books and general ledgers were not available to him. Furthermore, when he opened the drawer in the office where the cash was kept, instead of the sum of about $100,000 that he expected to find there, only $93 was in the drawer. The plaintiff decided that the defendant was dishonest and decided not to pay him the third instalment.
[19] On 27 October 2004, the plaintiff’s then solicitors, M/s Julie Tok & Co, wrote a letter to the defendant making various allegations on behalf of the plaintiff and demanding that he do certain things. The letter stated inter alia that:
(a) the defendant had been in charge of the administrative work of ACM and that since taking over ACM, the plaintiff had discovered discrepancies in the business’s bank account transactions and in the contributions made to the CPF Board;
(b) the defendant should furnish the plaintiff with various accounting documents in respect of the business for the period of three years preceding 7 June 2004. It also asked the defendant to confirm the total amount withdrawn from the bank account of ACM during that period and the basis for such withdrawal;
(c) the defendant should confirm why CPF contributions had been made from ACM’s funds in respect of Mdm Teo, her father, Mr Teo Ah Sai and the defendant’s daughter Ms Florence Ang Loo Yen, when none of these persons were employees of ACM;
(d) the defendant had been in charge of the administration of ACMKK and therefore should furnish the plaintiff with similar documents for the same three year period in respect of ACMKK;
(e) the defendant was to inform the plaintiff of the total amount withdrawn by him from the bank accounts of ACMKK for the same three year period and explain the basis of such withdrawals; and
(f) in relation to the property known as 53 Ubi Avenue 1, #01-56 Paya Ubi Industrial Park Singapore (“the Ubi property”), the defendant was to have transferred his interest in the same to the plaintiff in the course of the dissolution of the partnership and that he had failed to do so despite having received payment from the plaintiff. It also asked him to specify within the next seven days when he would be taking the necessary action to effect the transfer.
[20] In their response, dated 3 December 2004, the defendant’s solicitors expressed surprise at the plaintiff’s allegations and noted that in the dissolution agreement, the plaintiff had confirmed that he had had active management and control of the business. Secondly, the plaintiff as managing partner had signed all the previous accounts submitted to the authorities. Thirdly, the plaintiff had conducted his own valuation of the business and had had it valued at $1.7m, but he had asked for a reduction in price and the defendant had as a gesture of brotherly love and affection agreed to accept $667,662 and to take into account as part of the consideration the sum of $300,000 held by Ms Ang in full and final settlement of the sale of his share of business. As for the Ubi property, the letter stated that it was never partnership property as it was acquired in joint personal names.
[21] The correspondence then lapsed for a while. It was revived by the plaintiff’s solicitors’ letter of 2 September 2005 making further allegations. Further correspondence ensued. On 22 February 2006, the defendant wrote directly to the plaintiff and asked him to make some arrangement for the defendant to sign the transfer documents to transfer his share in the Ubi property to the plaintiff. The defendant said that he was more than happy to make the transfer. The plaintiff’s solicitors responded to the letter by stating that notwithstanding the defendant’s present offer to transfer the Ubi property, the plaintiff continued to hold him accountable for moneys taken by him from the partnership.
[22] On 27 February 2006, the plaintiff filed the writ in this action.
The pleadings
[23] I think it is helpful at this stage to set out the pleadings in some detail. This will indicate the scope of the parties’ respective cases.
[24] The material averments made by the plaintiff in his amended statement of claim are as follows:
(a) the plaintiff became a full-time partner of ACM on his father’s death in October 1975 and continued as such until Mdm Ng’s retirement and the defendant’s admission as a partner in August 1993. During the period between October 1975 and August 1993, the defendant was entrusted with keeping and maintaining the accounting records of the business and with handling its financial and administrative affairs;
(b) when the defendant was admitted as a partner, the agreement was that the plaintiff would be in charge of marketing and customer services whilst the defendant would be in charge of the administrative, accounting and financial aspects of the business;
(c) during the subsistence of the partnership, the plaintiff drew a monthly salary of $3,800 and an annual bonus of $11,400 whilst the defendant as a part-time partner was given allowances to service his housing loan, purchase his groceries and pay his utilities as well as a sum of $6,000 per year. Although the plaintiff had requested him to make CPF contributions in respect of the plaintiff’s monthly salary, the defendant had refused or failed to do so;
(d) apart from the aforesaid, there was no agreement for the withdrawal of any other moneys from the business by either of the partners and any profits made were to be retained in the business;
(e) at all material times, the plaintiff was also the sole proprietor of ACMKK. ACMKK operated from its office at Tannery Lane, Singapore, and this firm was registered with the full knowledge and consent of the defendant;
(f) the defendant was fully in charge of keeping the accounts of the business and depositing payments made to ACM and ACMKK and was also entrusted with and in charge of the cheque books of the two firms as well as of the drawing and issuing of cheques;
(g) although both partners had the mandate to draw cheques on ACM’s account, the plaintiff had pre-signed cheques and other documents in blank for the defendant to issue in the course of business of ACM and ACMKK;
(h) in March 2004, the defendant wanted to withdraw as a partner and both parties had agreed that the defendant would cause valuations of the assets of the business to be carried out;
(i) in May 2004, the defendant submitted such valuations [ie the asset statements] to the plaintiff and the asset statements contained the purported values of ACM and ACMKK as at 31 March 2004;
(j) in order to induce the plaintiff to agree to the withdrawal of the defendant from the partnership and to pay the defendant for the same, the defendant represented to the plaintiff inter alia that:
(i) the Ubi property would be treated as partnership property and would be transferred to the plaintiff upon the sale of the defendant’s share in the business to the plaintiff;
(ii) the value of the assets in ACM and ACMKK as stated in the valuation documents were accurate and true; and
(k) acting on the faith and truth of these representations, the plaintiff entered into the dissolution agreement and the acknowledgement and agreed to make payment to the defendant of the amounts and in the manner stated therein and did in fact make payment of $467,662 to the defendant and also allowed Ms Ang to transfer funds to the defendant pursuant to the acknowledgement.
[25] From para 17 of the statement of claim onwards, the plaintiff set out the allegations of misrepresentation and breach of duty which formed the basis of his claim. First, he claimed that the representations made were untrue in that:
(a) the defendant did not have any intention to transfer his interest in the Ubi property to the plaintiff;
(b) the current assets of ACM and ACMKK were inflated and/or untrue as these values were arrived at without taking into account numerous unauthorised withdrawals of funds that the defendant had made from the bank accounts of ACM and ACMKK;
(c) the current assets of ACM and ACMKK were inflated and/or otherwise untrue as these values did not take into account numerous unauthorised CPF contributions to the accounts of various persons made by the defendant; and
(d) the defendant had in the asset statements represented that ACM had cash in hand of $59,098.39 and ACMKK had cash in hand of $107,165.82, but after dissolution of the partnership, no part of these sums had been found.
[26] The second allegation was that the defendant, who knew more about the partnership accounts than the plaintiff, was under a duty to put the plaintiff in possession of all material facts with reference to the partnership assets but, in breach of this duty, the defendant had failed to inform the plaintiff of the following material facts and had concealed what he knew viz that for some years prior to the dissolution of the partnership, the defendant, without the consent of the plaintiff, had:
(a) used partnership moneys to make CPF contributions for the accounts of Teo Ah Sai, Florence Ang and Mdm Teo who were not employees of the business; and
(b) used cheques pre-signed by the plaintiff and drawn on the bank accounts of ACM and ACMKK to withdraw cash either by or for himself or by or for third parties who had no commercial dealings with the business.
Related to the second allegation was the third allegation which was that the defendant had in breach of his duty as a partner fraudulently used moneys belonging to the business for his own benefit or the benefit of third parties or caused such moneys to be used for the benefit of third parties.
[27] The main reliefs claimed by the plaintiff were:
(a) damages for fraudulent misrepresentation and/or fraudulent acts and/or wilful non-disclosure;
(b) an order that the defendant do transfer his right and interest in the Ubi property to the plaintiff; and
(c) alternatively, at the option of the plaintiff, a rescission of the dissolution agreement and the acknowledgement.
It should be noted that in closing submissions the plaintiff did not pursue [27(b)] above as he accepted during the course of proceedings that the defendant was willing to effect the said transfer and had been so willing prior to the commencement of the proceedings.
[28] The defendant filed both a defence and a counterclaim. He resisted the plaintiff’s claim and set out a version of the facts that was rather different from that pleaded by the plaintiff. The areas of difference are as follows:
(a) the defendant pleaded that the plaintiff was the precedent partner of ACM until 11 June 2004 and had full management and administrative control of the operations of ACM. Further, although ACMKK was registered in the sole name of the plaintiff, it was at all material times treated as part of the family business;
(b) that the plaintiff had been a partner in ACM from October 1975 for a period of about a year and thereafter Mdm Ng had been the sole proprietor of the business;
(c) that during the period between October 1975 and 30 August 1993, neither Mdm Ng nor the plaintiff had entrusted the defendant with any responsibility to keep and maintain the accounting records of ACM or to handle its administrative and financial matters and that at all material times, it was the plaintiff who was responsible for keeping and maintaining the accounting records and for the administrative and financial matters;
(d) after the admission of the defendant as a partner on 30 August 1993, the plaintiff as the precedent partner had full and effective control over the management, administration and operation of ACM and ACMKK, including control over all financial matters, the employment of workers, the conduct of sales and over at least 95% of all cash collections from customers; and
(e) whilst the plaintiff was a full-time active partner of the business, the defendant only assisted as and when necessary during weekends by relieving Ms Ang.
[29] In relation to drawings from the business, the defendant admitted that the plaintiff had paid the defendant’s mortgage instalments, his income tax and utilities bills and had also given him an annual ang pow of between $3,000 and $6,000. He averred that the plaintiff had controlled the finances of the business and had made all decisions as to payment of salary and bonus to the plaintiff himself and in respect of expenses borne on behalf of the defendant. The payments made for the defendant’s expenses had come from a bank account identified as the “UOB A/C No. 114xxxxxxx-x” (the “third account”). The moneys in the third account belonged to ACM and ACMKK. The plaintiff himself had drawn an average of $105,000 per year, or an average of $8,750 per month. Further, CPF contributions were made for the plaintiff from 1983 to 1985 and from 1988 to 1993. It was the plaintiff’s own decision to stop making CPF contributions to his CPF account.
[30] The defendant denied that there had been an agreement between him and the plaintiff relating to withdrawals from the partnership and averred that the understanding or practice was that both of them, being equal partners, were entitled to equal shares of the profits of the business and to make withdrawals from the business and to record such withdrawals to the respective partner’s account, subject to adjustment at the end of each financial year if the drawings had been unequal. Further, it had never been the practice of the partnership that either partner had to seek the prior consent of the other partner before making a partner’s withdrawal. The plaintiff had never accounted to the defendant for his withdrawals from the third account and another account in DBS Bank (which were both held in the sole name of the plaintiff) despite the fact that about $2,401,525.63 belonging to the business had been banked into these two accounts between 1993 and January 2002.
[31] Whilst agreeing that the plaintiff was the sole proprietor of ACMKK the defendant averred that:
(a) notwithstanding the plaintiff’s registration as sole proprietor, ACMKK was a family business and part of the assets of ACM;
(b) the defendant had suggested the registration of ACMKK in order to have an undertaking business which had a name that would identify it with the Heng Chew Hee Quan community so that it could obtain business from that community; and
(c) ACMKK was operated from ACM’s office in Geylang Bahru and not from Tannery Lane and that the reference to “Tannery Lane” by the plaintiff was a reference to ACM’s property known as #01-02 Elite Building II Tannery Lane, Singapore (the “Tannery property”) which had been purchased in 1992 and used as an warehouse for ACM’s goods.
[32] The defendant further stated that ACM and ACMKK had separate bank accounts and that the plaintiff was the “sole proprietor” of ACMKK’s only bank account and that the plaintiff had also been the sole signatory of ACM’s account with the United Overseas Bank Ltd from 1975 until 1996 when he allowed the defendant to become a joint signatory of the same. The plaintiff had been in charge and in control of all cheque books and of the recording of accounts and depositing of payments in the bank accounts. All financial transactions undertaken by and involving the business were undertaken with the full knowledge of the plaintiff. The plaintiff signed the annual accounts of ACM and ACMKK and all relevant transactions such as tax returns.
[33] In para 9 of the defence, the defendant set out his account of how the partnership had come to an end. He stated inter alia that although the original sale price was set by the plaintiff at $1,767,662.29, the plaintiff subsequently insisted on revising the price first to $1,267,662 and then to $667,662. Regarding the computation of the assets and liabilities of ACM and ACMKK, the defendant averred in para 10 that he had not prepared the asset statements and that they had been prepared by the accountant, Mr Chew. He had not given Mr Chew any instructions as to how to carry out the computation.
[34] In relation to the misrepresentation claim, the defendant pleaded that:
(a) he had not provided the plaintiff with any inducement;
(b) he had made no representation regarding the status of the Ubi property and he did not deny that the Ubi property belonged to ACM;
(c) he had made no representation as to the accuracy of the asset statements and the preparation of the same had been initiated by the plaintiff; and
(d) it was the plaintiff who relied on the asset statements and made the offer that either party should buy or sell the business to the other at $1,767,662.29 and if the plaintiff had sold his share he would have insisted on the price of $1,767,662.29 but since it was the defendant who was selling out, the plaintiff had revised and reduced the valuation from $1,767,662.29 to $1,267,662 and then to $667,662.
[35] In para 12 of the defence, the defendant averred that:
(a) the dissolution agreement was the final product of several draft agreements which the plaintiff had insisted should be changed;
(b) it was the plaintiff who had insisted on the execution of the acknowledgement to formalise the status of ACMKK and the sum of $730,000 which he had handed to Ms Ang;
(c) the plaintiff had insisted that the original reference to ACMKK in the draft dissolution agreement be removed for fear that other family members might contend that ACMKK’s assets belonged to the family; and
(d) the sum of $730,000 comprised part of the assets of the business and the plaintiff and the defendant were entitled to the same in equal shares.
[36] In further answer to the allegations of misrepresentation, the defendant stated that:
(a) any transfer of the Ubi property would have to be initiated by the plaintiff and the assertion made by the defendant’s previous solicitors that the Ubi property did not belong to the business had arisen out of miscommunications due to the removal of the assets and liabilities of ACMKK from the dissolution agreement;
(b) all withdrawals made by the defendant had been entered into the current accounts of the partners and reflected in ACM’s balance sheet which the plaintiff had approved and signed every year and therefore had actual or constructive notice of;
(c) there were no unauthorised withdrawals made by the defendant;
(d) the plaintiff was aware of the appointment of Mdm Teo, Florence Ang and Mr Teo Ah Sai on the payroll of ACM and he had signed most of the IR8A forms for these persons;
(e) no representation was made to the plaintiff that the cash in hand for ACM and ACMKK was, respectively, $59,098.39 and $107,165.82. These figures were taken from the asset statements and the cash was then kept in the firm’s drawer which could be accessed by both the plaintiff and Ms Ang; and
(f) the defendant did not represent that the asset statements were accurate and true; it was the plaintiff who relied on the asset statements to make the first proposal to dissolve the partnership and the plaintiff was not induced by the asset statements to enter into the dissolution agreement.
[37] The defendant repeated in later paragraphs of the defence that the plaintiff was aware of all appointments to the payroll of ACM and of the CPF contributions made to the various persons. In particular, he knew that Mdm Teo had been on the payroll of ACM since 1981. He also had actual or constructive knowledge of such appointments and of the withdrawals by partners (including the defendant) for payment to third parties or for the partners’ own expenses. All withdrawals by the defendant were properly accounted for under the partners’ current accounts and shown on the balance sheets of both ACM and ACMKK.
[38] In relation to Western Casket, the defendant pleaded in para 22 that the plaintiff had registered this business without consulting or seeking the defendant’s approval. The plaintiff had, for his own benefit, operated Western Casket using the assets of ACM and ACMKK and had not treated Western Casket as part of ACM and had not accounted for the profits of Western Casket.
[39] The defendant put in a counterclaim for the $200,000 which had not been paid to him under the dissolution agreement. He further alleged that the plaintiff, as a partner of the business, had owed a duty of good faith and probity to the defendant. In breach of that duty, the plaintiff had diverted business and orders belonging to the business to Western Casket.
[40] The defendant counterclaimed for the following reliefs:
(a) the sum of $200,000;
(b) a declaration that Western Casket be deemed to be part of the assets of the business and accordingly, that the plaintiff account to the defendant for the defendant’s share of the profits made by Western Casket;
(c) an independent certified public accountant be appointed to review the books and accounts of Western Casket from the date of its registration until 11 June 2004 to determine the defendant’s share of profits in Western Casket (and also for certain consequential orders in relation to the appointment); and
(d) that the plaintiff render an account of the moneys in the plaintiff’s account (and in his DBS account as well) which moneys lawfully belonged to ACM and ACMKK.
[41] The plaintiff filed a fairly lengthy reply and defence to counterclaim. I do not think it is necessary to deal with this except that in relation to Western Casket, the plaintiff explained that the same was created when the plaintiff took over the loss making casket/undertaker’s business of the parties’ uncle, one Mr Ang Chin Huat. The defendant had refused to take over the business because it was loss making. The plaintiff with the full knowledge of the defendant, then decided that he would take over the business on his own. After the creation of Western Casket, its clientele and that of ACM and ACMKK were kept separate.
The evidence
[42] As can be seen from the summary of the pleadings given above, the issues that arise in this case are mainly factual ones: questions of who did what and who knew what was being done. Whilst there is copious documentary evidence, the credibility of the various witnesses needs to be assessed carefully because of the claim by the plaintiff that many of the documents cannot be accepted at face value since he allegedly signed them in blank leaving the details to be completed later by the defendant. Also, it is clear that the financial records of the business were not kept painstakingly and that the accountants did the best they could with the material that they were given without being able to verify whether they had full records of all income received and expenses incurred in the business. This was a family run small business and it did not have professional systems for recording and tracking transactions and payments.
[43] It may be convenient here to mention the bank accounts operated for the business:
(a) ACM had two separate accounts: UOB account no. 114-xxx-xxx-x (the “ACM UOB account”) and DBS account no. 025-xxx-xxx-0 (the “ACM DBS account”). Both the plaintiff and the defendant were authorised signatories and cheques could be drawn by either of them. The correspondence (including bank statements) for both accounts was sent to the defendant’s residential address.
(b) ACMKK had one bank account: UOB account no. 103-xxx-xxx (the “ACMKK account”). The plaintiff was the sole signatory for this account and all correspondence (including bank statements) was sent to the defendant’s residential address.
(c) The third account (see [29] above) was an account held in the plaintiff’s personal name in the United Overseas Bank but into which cash cheques presented to the business and cash collected for the business were deposited. The correspondence for this account was sent to the plaintiff’s residential address and the plaintiff was the sole signatory for the account.
(d) There was also an account (DBS account no. 025-xx-xxx-7) held by the plaintiff in his personal name for which the plaintiff was the sole signatory. This account, however, was only used for one specific transaction and therefore does not play a part in the proceedings.
[44] I should also state that hereafter I shall sometimes refer to Mdm Teo, Florence Ang and Mr Teo Ah Sai collectively as “the defendant’s relatives”.
The witnesses for the plaintiff
[45] The persons who gave evidence for the plaintiff were the plaintiff himself, Mr Soo Choon Kiat, a certified public accountant, two persons from the auditing firm that prepared the business’s accounts viz Mr Bong Liat Hian, an accounts clerk and Mr Chew Whye Lee, the owner of the firm, and four friends and business associates of the plaintiff namely, Mr Ng Soon Hwa, Mr Lim Yeow Hui, Mr Lim Tiong Huat and Mr Ong Chin Kee.
The plaintiff
[46] The plaintiff in his affidavit of evidence-in-chief reiterated his history of the business. Various statements in the affidavit made it clear that the plaintiff did not accept that ACMKK was part of the business of ACM but considered it to belong to himself alone. The plaintiff also emphasised the defendant’s role as the person in charge of finance, accounts and administration as he was better educated than his siblings and had a full-time job as a civil servant doing paperwork. He stated that he relied completely on the defendant to manage the office. The plaintiff worked full-time for the business whilst the defendant would only go to the office of the business as and when it suited him and his schedule as a civil servant. The defendant had arranged for most official documents, in particular statements of account and CPF statements, to be sent directly to his residence. The plaintiff pre-signed cheques and other documents in blank in respect of the business so that it would be convenient for the defendant and Ms Ang in the administration of the office.
[47] The plaintiff explained that customers made payment to the business in one of three ways: in cash, by cash cheque or by cheques addressed specifically to ACM or ACMKK. The cheques addressed to the companies were deposited into their respective bank accounts. At the suggestion of the defendant, the third account was used for the deposit of cash cheque drawn by customers of ACM and ACMKK. The third account had originally been opened so that the plaintiff could service the loan he had taken for the purchase of the Tannery property. Subsequently, the defendant told the plaintiff that drawings of the partners from ACM and the plaintiff’s own drawings from ACMKK should only come from the third account.
[48] As for cash payments by customers, the arrangement was for the cash to be put in the drawer at the office and for such payments to be recorded in the books by the defendant. Either the defendant, the plaintiff or Ms Ang would collect cash payments and put it in the drawer with the order forms stating the customer’s particulars and order. Cash in the drawer was sometimes used to pay suppliers and other expenses. The defendant was in charge of recording the cash receipts and cash payments in the books of ACM and ACMKK.
[49] The plaintiff asserted that he and the defendant had agreed on the payments to each of them ie the plaintiff’s monthly salary of $3800 and annual bonus of $11,400 and the defendant’s annual lump sum of $6,000 and living expenses. The plaintiff asked the defendant why he did not effect CPF contributions on the plaintiff’s behalf on the plaintiff’s salary but received no reply. When the defendant bought a unit in a development called St Francis Court (“the SFC unit”), they agreed that the housing loan, maintenance, property tax and insurance premiums for the SFC unit would be paid from the third account. The defendant’s down payment was paid from the cash collections of ACM.
[50] The plaintiff asserted that there was no agreement on withdrawal of profits apart from what was mentioned above. Profits were agreed to be retained in the business for future expansion. There was no agreement that either party could withdraw any money from the business unilaterally.
[51] Whilst he had pleaded that he found out about the CPF contributions made to Mdm Teo in March 2004, in his affidavit, the plaintiff said that he discovered this in early 2004 when he saw a CPF contribution slip on the office table. He complained to Ms Ang about the contributions but did not pursue the matter immediately with the defendant. A few weeks after that complaint, he received a telephone call from the defendant who was angry and said he was not going to continue with the partnership in ACM. The defendant said that he would get a valuation of ACM done and a lawyer to draw up the dissolution agreement. The next day, the defendant called the plaintiff again and said that he already had a lawyer and that Ms Ang was holding $730,000 in cash from profits made from 1990 to 2000 which he wanted to have taken into account in the dissolution. The plaintiff proposed that Ms Ang should be given $130,000 for her many years of work and that only $600,000 be taken into account. At that point, he asked the defendant whether the defendant had taken any money from ACM or ACMKK and the defendant said he had not. The plaintiff then spent several paragraphs of the affidavit detailing the events leading up to the signing of the dissolution agreement and the discovery that the cash in hand reflected in the asset statements was not in the office.
[52] The plaintiff also made a point of saying that he could not really read the dissolution agreement and the acknowledgement. The defendant knew that he was not very good in English and when he gave the plaintiff the documents, the plaintiff looked at the figures stated therein and they appeared to match the selling price and the instalments that the plaintiff had agreed to. The plaintiff then signed the two agreements. Subsequently, after discovering the misappropriation by the defendant, the plaintiff consulted lawyers who told him that the dissolution agreement stated that he was in full control of the operation and administration of ACM. The plaintiff protested that he had no inkling that such a clause would be put into the dissolution agreement. He was a straightforward person and prided himself on being an honest businessman and thought that his brother, the defendant, would treat him the same way.
[53] The plaintiff then went on to deal with the discoveries that he had allegedly made after he received the records of the business from the defendant. He reiterated his shock at discovering unauthorised CPF contributions and salaries paid for the defendant’s relatives. Teo Ah Sai had occasionally participated in funeral services and had been paid an ang pow for this but neither Florence Ang nor Mdm Teo had worked for the business at all. Since January 2002, Mdm Teo’s salary was stated to be $8,000 per month. The plaintiff denied that his mother had ever authorised the defendant to use partnership money or the plaintiff’s funds in ACMKK to pay such salaries and CPF contributions.
[54] The plaintiff then asserted that after recovering and studying copies of the monthly bank statements of the ACM UOB account, the ACM DBS account, the ACMKK account and the third account, he had discovered that the defendant had surreptitiously been taking money over the years from all of these accounts for his own benefit as well as for the benefit of the defendant’s “neighbours”. He had done this by using cheques which had been pre-signed by the plaintiff. Most of the relevant cheques were issued to cash but were deposited into a bank account bearing the number 302-xxx-xxx-7 which was the defendant’s personal bank account. Some were cashed by the defendant. Although the cheques in question were signed by the plaintiff, the details of the payee and the amounts in words and figures were written by somebody else and the plaintiff asserted that that person was the defendant. The defendant had also used cheques for payment of his personal expenses such as credit card bills. The cheque images showed that between 2001 and 2003 alone, the defendant had withdrawn $158,915.72 from the ACM UOB account. Images of cheques from the ACMKK account showed that for the period from 2001 to 2004, the defendant had withdrawn at least $339,392.63 from that account. As for the third account, the cheque images showed withdrawals totalling $201,576.52 made by the defendant between 2001 and 2004.
[55] The plaintiff also produced cheques to substantiate his allegation that the defendant had withdrawn money from these various accounts for the benefit of the defendant’s neighbours, one Mr Chia Ann (also known as Chia Kok Ann) and the latter’s wife, Mdm Tay Sai Hui (together “the Chias”). He adduced 15 cash cheques drawn on the ACM UOB account between 9 March 2001 and 14 February 2004 which had either been en-cashed by Mr Chia or deposited into his bank account. These cheques totalled $135,025. Another 18 cash cheques amounting in total to some $150,000 had been en-cashed by Mdm Tay between April 2001 and October 2003. The plaintiff had also discovered certain cheques which indicated that the defendant had used cheques drawn on the ACMKK account and the third account for payment of the expenses of the Chias. The Chias were the defendant’s neighbours and although they were in business, they had no commercial dealings at all with either ACM or ACMKK.
[56] As for Western Casket, the plaintiff reiterated that he had bought over a failing business from his uncle and renamed it Western Casket. Although he had asked the defendant to participate in the venture, the defendant was not interested but indicated that he did not mind the plaintiff buying over the business on his own. Right from the start, the clientele, accounts, assets and liabilities of Western Casket were kept separate from those of ACM and ACMKK.
[57] In relation to his own drawings, the plaintiff asserted that for many years, he did not take his full monthly salary of $3,800, of which $1,000 was paid from cash on hand and $2,800 supposedly came from the cash cheques deposited into the third account. He left this monthly sum as well as his bonuses in the third account. The third account had been opened for the purchase of the Tannery property and from 1991 until 1996 or so, only moneys earned by ACMKK were deposited into the third account. The plaintiff had also deposited some $90,000 which he received in 1992 from the dissolution of a textile company in which he had had an interest. After the Ubi property was purchased in 1994 or 1995, moneys belonging to ACM were also deposited into the third account. At that time, the defendant told the plaintiff that the third account should be used for the collection of cash and cash cheque payments made by customers of both ACM and ACMKK. He said that in order to keep the accounting clear, the moneys in ACM’s and ACMKK’s bank accounts should be used to pay the expenses of those firms and the moneys in the third account would be used to pay his salary as well as to service the loan for the Tannery property and agreed personal uses such as medical expenses of Mdm Ng. The plaintiff agreed. He confirmed that the housing loan for the SFC unit was serviced from the third account until 1998. Thereafter, from time to time, the plaintiff drew cheques of $20,000 each in favour of the defendant to enable him to pay the housing instalments.
[58] The plaintiff admitted that there were some instances when he had used the third account to make payment to suppliers of ACM and ACMKK. This happened when he was unable to find the ACM and ACMKK cheque books. However, such occasions were few and far between. Deposits into the third account were made by the plaintiff and he would then place the deposit slips in the office drawer so that the defendant could record them in the books. The plaintiff admitted that he had used moneys from the third account to make the initial payments totalling about $200,000 for a residential property that he purchased in a development called “Trellis Tower”. He also spent about $150,000 from the third account on a purchase of unit trusts. However, the defendant was aware of these purchases and, to quote the plaintiff directly, “he knew that these monies came from the dividends I received from Hup Seng Textile, the savings from my undrawn salaries and bonuses which I kept over the years since 1991/2 and from the cash/cash receipts from my sole proprietorship of ACMKK. I did not use any monies that belonged to ACM”. Subsequently, the value of the unit trusts was included in the asset statement for ACM.
[59] The plaintiff explained the rationale for the action against the defendant and also justified his own conduct in the following words:
[60] The plaintiff was subjected to vigorous and sustained cross-examination over some five trial days. He was a long-winded witness prone to wandering off into irrelevant matters and prevaricated on several occasions. There were a number of areas in which the credibility of his evidence came under attack and the plaintiff was not always successful in warding off such attacks.
[61] First, there was the question of the plaintiff’s knowledge of the English language. He gave evidence in Hokkien and his stance was that he knew little English and therefore the paperwork in the business had been left to the defendant who was better educated. In cross-examination, he admitted that both his primary and secondary school education had been undertaken in the English stream. When asked whether he was comfortable in English, however, he replied “my result wasn’t good”. That was an early example of his prevarication. Subsequently, he stated that his command of English was very poor. It should also be noted that at times during cross-examination, he answered questions in English without waiting for the interpreter. Further, there was evidence that when he wrote out cheques he wrote them in English whereas when his sister, Ms Ang, wrote them, she used Chinese. The plaintiff also testified that on 25 May 2004, the defendant’s then lawyer (Mr Choo Si Sen) had sent him the defendant’s letter agreeing to dissolve the partnership for $1.76m. When he received this letter, the plaintiff said he did not consult anyone on its contents but immediately called Mr Choo to give his response. When asked whether he understood the contents of the letter written in English, he replied “I understood”. Subsequently when asked whether he could read the letter, he modified his response by saying “I could read but I do not understand – I did not understand fully”. The plaintiff persisted in using the excuse of a poor command of English to explain why he had not, allegedly, understood documents that he had signed. At one point he asserted that he had not been writing and speaking English for between 30 and 40 years.
[62] Secondly, he had a tendency to try to explain away inconvenient documents by blaming the defendant. On the first day of the trial, the plaintiff stated in cross-examination that he and his mother were partners in ACM from 1975 and that he had signed a document evidencing this fact. A document (marked P1) was shown to him on the fifth day of the trial. It was a copy of an “Application to Register Changes in Business Particulars” that was filed at the ROC in respect of ACM in 1976. The plaintiff recognised the document and confirmed that Mdm Ng had affixed her finger print to it and that he had signed it in the box marked “Declaration by Proprietor/Partners”. He confirmed that the document showed that he became a partner on 1 April 1976 and that he withdrew from the partnership on 31 May 1976. He was asked to explain the withdrawal in the light of his evidence that he had been a partner continuously from 1975. His answer was “I was not aware of this withdrawal. When I signed the form it was blank … I was given a blank form and I did not know what I was signing”. He said the defendant gave him the form and he simply signed it in blank. He was told it was for registration purposes, by which he understood ACM had to be registered. He could not explain, however, why there had to be another registration in 1976 when ACM had been registered since 1947. The plaintiff maintained that he only found out about the 1976 withdrawal from partnership in 2006 or 2007.
[63] The plaintiff was shown a series of statements issued by the Central Provident Fund Board (“CPF Board”) for dates between 1980 and 1993 which showed that during that period, ACM had made CPF contributions on behalf of both the plaintiff and Mdm Teo. The plaintiff maintained he was not aware of these CPF contributions because the statements had been sent to the defendant’s home. Although he had signed cheques in respect of the CPF contributions, the cheques only showed the lump sum paid and did not indicate on whose account the payments were being made. The plaintiff then changed his evidence slightly to say that all along he had signed blank cheques and when the defendant used them, he was not aware of it. It was pointed out to him that at various times there had only been two employees of ACM, himself and Mdm Teo, on the CPF records and his response to that was “He made the decision, he did the account. I did not know who was working for Ang Chin Moh Undertakers”.
[64] The plaintiff admitted signing the balance sheets prepared in respect of ACM. He said that the documents were prepared by the defendant and the accountant and he did not know whether the figures were correct but simply signed the documents at the defendant’s request. The documents contained the statement “Certified True and Full” which appeared above the plaintiff’s signature. When asked whether he had understood those words at the time of signing the accounts, the plaintiff evaded giving a direct answer and kept repeating that he depended on the defendant to deal with matters.
[65] The plaintiff was asked various questions about the figures in the accounts. ACM’s balance sheet for 1994 showed its gross sales as being $468,927 and the plaintiff was asked whether that figure was correct. He replied that that was the defendant’s calculation. When asked whether he had any reason to dispute the calculation, his response was that he had never touched the accounts all along and that the defendant had never shown him the account books and therefore he could not say whether the figure was correct or not. As for ACMKK (which the plaintiff steadfastly maintained belonged to him alone), the 1995 balance sheet showed its gross sales as being $601,880.80. Here too the plaintiff maintained that this was the defendant’s figure and he had signed the statement when the defendant said the same was correct. He agreed that the companies were together doing gross sales of over $1m a year and that the business was good.
[66] The plaintiff was shown an IR8A form for the year 1992 submitted by ACM showing Mdm Teo as an employee of the firm. The form bore Mdm Ng’s thumbprint against the space for the employer’s signature. The plaintiff maintained that Mdm Teo was not an employee of ACM and that his mother had been illiterate and had not known that this form was intended to show that Mdm Teo was an employee of ACM. He was then shown another IR8A form in respect of Mdm Teo, this one for 1994, that he himself had signed. He admitted signing it, but maintained that he had signed a blank form. He then asserted that all the IR8A forms that he had signed for Mdm Teo were blank and he had signed them in blank for the defendant’s convenience. He made the same assertion in respect of a document entitled “Form E” which was a declaration of employee remuneration made to the tax authorities by ACM and which showed that in 1993, Mdm Teo and the plaintiff had been employees of that firm. The plaintiff was shown a document entitled “Form P” which he had signed as precedent partner for ACM. Again he said that this document and all similar ones had been prepared by the defendant and he had signed without checking whether the details were correct.
[67] When it came to his own personal income tax return, however, the plaintiff’s testimony was rather confused. At first he said that the defendant did everything for him in relation to preparing the form and he (ie the plaintiff) then asked the account personnel to fill in the details accordingly. When I asked who prepared the income tax return for him, his reply was that it was prepared by his accounts personnel but the data had come from the defendant. He explained that by “accounts personnel” he had referred to his “personal accountant for the textile shop” not the accountant who prepared ACM and ACMKK’s accounts. He confirmed that the defendant had given the accounts of the two businesses to his personal accountant so that the latter could file the income tax return.
[68] The plaintiff’s testimony on how he discovered that ACM was paying CPF contributions for Mdm Teo was not consistent. At first, he said he remembered that it was some time in February 2004 that he discovered the CPF deposit slip showing the contributions made for Mdm Teo. He explained that one morning he went into the office and found the slip lying on the floor. He picked it up, saw Mdm Teo’s name written there and noticed that her salary was stated as $8,000. When Ms Ang came in later, the plaintiff told her about the slip and asked why it showed a sum of $8,000. Ms Ang did not reply. The amount made him angry because he thought the company’s money should not be spent indiscriminately. The plaintiff was asked whether he had contacted the defendant about this. His reply was that the following Sunday, which was about three or four days later, he had told the defendant about it in the office and the defendant had kept quiet. The plaintiff did not take the matter further because he then received an order and had to leave the office to deal with the order. Thereafter, the matter was not brought up again.
[69] The plaintiff was then shown his affidavit of evidence-in-chief and the paragraph where he had stated that he had seen the CPF contribution slip on the office table. He was asked whether there had been a lapse of memory in court because in court he had stated that he found the slip on the floor. The plaintiff replied that there was no lapse of memory: he had found two slips, one on the floor and the other on the table and could not remember whether the one on the floor or the one on the table was the slip showing the $8,000 figure.
[70] The plaintiff’s attention was drawn to para 32 of his affidavit where he had stated he had mentioned the matter to Ms Ang but did not pursue the CPF contribution with the defendant immediately because he was too busy and did not have the opportunity to see the defendant in the office. On being questioned about this variation, the plaintiff did not agree that the account he gave in the affidavit was different from the account he gave in court. In answer to the question whether his evidence in court of confronting the defendant on the Sunday after discovering the slip was incorrect, he responded that he did meet the defendant on Sunday and that it was probably because he was nervous that he had omitted something in his affidavit.
[71] The plaintiff was asked whether after discovering the CPF deposit slip he had taken any action to investigate the matter further. He replied at first, “Do I have the time and opportunity to investigate?” but on further questioning, he said that he asked Ms Ang about it twice. He was asked whether he had contacted the accountant to investigate the matter. His response was he did not know who the accountant was and did not know his address. He was depending on the defendant to give him an answer. When asked whether he had stopped the payment of CPF for Mdm Teo after February 2004, his response was that CPF matters were handled by the defendant and what could he say when the defendant kept quiet. When it was suggested that he could have told the defendant not to make any more payments, he said he had no opportunity to talk to the defendant. The plaintiff was not able to produce the copy of the deposit slip he had found in the office. He said that he had given it to Ms Ang. The plaintiff also confirmed that he had not brought up the issue of the CPF deposit slip during the negotiations with the defendant for the dissolution of the partnership.
[72] The plaintiff showed a tendency to be confused about dates. He had to concede that, when in an earlier affidavit he had said that matters had come to a head when he discovered Mdm Teo’s CPF deposit slip in May/June, he had been confused about the date. He also said that he had received the two asset statements in March 2004. It was pointed out to him that the first line of each document said “Assets (sic) Balances as at 31.03.04” and therefore the documents could not have been sent to him until after that date. He was asked several times whether he agreed that therefore the defendant’s version that the asset statements were completed after March and given to him in April was correct. The plaintiff prevaricated many times and finally reasserted that the documents had been sent to him in March 2004.
[73] The plaintiff was questioned about his complaint that after the dissolution agreement was signed and he took over the business, he could not find the cash in hand of $59,098.39 belonging to ACM and $107,165.82 belonging to ACMKK. He gave various accounts of how he found out this was missing. First he said that when the first instalment was paid on 7 June 2004, he looked in the office drawer but could only find $93. Then he said, one day after signing the dissolution agreement he went to the shop and found the money was not there. When asked whether he was changing his evidence, his reply was that he discovered the loss on both days. He agreed that the drawer had been locked and that all three siblings had the key to the drawer. He was very angry about the loss but did not write to the defendant to say so. He told the defendant about it many times but in a polite way and his (rather feeble, in my view) explanation was that he did not dare say the money was missing because that would mean he did not trust the defendant. The plaintiff was shown the letter of complaint to the defendant dated 27 October 2004 in which Ms Tok had asked for various documents and complained, among other things, about the CPF contributions made for the defendant’s relatives and had also asked for the total amount withdrawn by the defendant from the bank accounts of ACM and ACMKK. Yet this letter had not mentioned that cash of approximately $166,000 was missing. At first, the plaintiff maintained that it was mentioned because the word “cash” was mentioned although no figure was given, but he finally had to concede that there was no accusation of missing cash. He agreed subsequently that this accusation was first made a year later in a letter dated 2 September 2005.
[74] The plaintiff testified that when customers of ACM and ACMKK paid cash, it was put into the same drawer in the office but “there will be one paper which states that this is for ‘Ang Chin Moh Undertaker’ and another paper which states ‘Ang Chin Moh Kheng Kee’” so that the defendant could make a record of what had come in. The cash in the drawer would be used for some of the business expenses including payment of workers’ wages. Only when the cash was insufficient would the workers be paid by cheque. The plaintiff was asked whether in these circumstances he really expected that in June 2004, three months after 31 March 2004, the exact amounts of $59,098.39 and $107,165.82 would still be in the drawer. His reply was that he did not touch the sums and the expenses were paid from the daily takings. He asserted the daily takings were kept in a different drawer which he called “the cashier drawer”. He then said that he did not know where the sums of $59,098.39 and $107,165.82 were kept – whether they had been kept in the safe deposit box or elsewhere. Then again he contradicted himself by saying that the cash in hand for ACM and ACMKK were kept in the same drawer together with the daily takings. Subsequently, he testified that on 31 March 2004, the cashier’s drawer would have had cash of $4,000 or $5,000 at the most and would not have contained the sum of $59,098.39. Nor was the sum of $107,165.82 in the cashier’s drawer on 31 March 2004, but in June 2004 he had not expected either sum to be missing.
[75] The plaintiff confirmed that his assertion that his monthly salary was $3,800 and that he was given an annual bonus of $11,400 had also applied to his income in 1997. It was then pointed out to him that in the profit and loss account of ACM for 1997 his salary was stated as being $130,000. The plaintiff’s response was that this was prepared by the defendant and he himself had not been aware of it. He maintained the same position in respect of a salary of $130,000 shown in both the 1998 and 1999 profit and loss accounts. It should be noted that in the copies produced to the court, the 1999 accounts were signed by the plaintiff but the signature portions of the other two sets of accounts were not completed.
[76] In relation to the cash of $730,000, the plaintiff’s evidence was that it took at least ten years to accumulate that sum and that the money had come from the customers of ACM and had been collected by the defendant, himself and Ms Ang. He remembered that the collection had started in about 1990 and he had passed the cash to Ms Ang from time to time so that both the defendant and he would not feel that either of them could use the money. This money was regarded as the profits of the business. The plaintiff confirmed that at the time of dissolution, he was aware that Ms Ang had $730,000 in hand. He was asked to explain the contradiction between this statement and his earlier evidence that he only found out about the money when the defendant called him up in 2004 and told him about it. It took him some time to explain but finally he said that what he meant was that he had known from the beginning that Ms Ang was holding money for the business, but it was not until the defendant spoke to him that he knew the total amount that was in her hands. He confirmed that he gave different amounts to Ms Ang over the ten years but he did not keep any note of the dates or amounts passed to her from time to time.
[77] In relation to the third account, the plaintiff said that he did not keep records of the cash and cash cheques deposited into the account because this was the defendant’s job. What he did was to leave the deposit slips in the office drawer so that the defendant could make the record. He confirmed that all deposits had been made by him and the deposit slips were in his handwriting though he maintained he did not know exactly how much was deposited because he did not count up the deposits. Not all the cash cheques were put into the third account. When the third account needed a lot of money, he and the defendant would try and deposit as many cash cheques as possible so that there would be sufficient money to pay their personal loans, the workers’ pay, the plaintiff’s pay and the defendant’s maintenance charges. He said that he wanted to put all the cash cheques into the third account but sometimes the defendant stopped him and asked him to put the money into the other accounts of the business. His explanation for depositing these moneys into the third account instead of into ACM or ACMKK’s accounts was that it was due to the purchase of the Ubi property which was registered in the joint names of the brothers.
[78] The evidence showed that some of the payments for the Ubi property came from ACM’s UOB account, but the plaintiff maintained that the deposit for this property came from the third account though he did not remember the quantum. There was also a bank loan which helped finance the purchase and this was repaid by money belonging to ACM from the third account and ACM’s own accounts. The plaintiff was asked whether the amounts from ACM and ACMKK’s customers that were deposited into the third account had been reflected in the financial records of the two firms. His reply was that the defendant had to do that and it was the defendant who had to be asked whether the deposits were recorded in the accounts. He confirmed that the bank statements of the third account were sent to his home.
[79] The plaintiff had made an allegation that the moneys in the third account had been misused by the defendant. He was asked whether he had taken any money out of that account for himself and, while admitting that he did make withdrawals for some purchases, he was quick to say that it was only “a bit of money”. He did not keep an account of how much he had withdrawn. In response to further questioning, the plaintiff stated that between 1991 and 2004, he did not have any other personal bank account apart from the third account. He agreed that the money in the third account had been used for his personal expenditure and also his mother’s expenses.
[80] The plaintiff admitted that the defendant was entitled to a share in the third account because the moneys deposited into the account had come from the business. He was asked whether he agreed that on 31 March 2004 when the parties wanted to dissolve the partnership, the third account had to be included as part of the valuation. The plaintiff accepted this and it was then put to him that it was not fair to the defendant that the third account had not been factored into the valuation for the purpose of dissolution. The plaintiff’s response was that the valuation was done by the defendant and it was the defendant who had not factored it in. He speculated that maybe that was because the defendant had already taken more than his share from the third account.
[81] In relation to collection of payments, the plaintiff asserted that half of the customers would go to the office to pay their bills. Such customers paid whoever was manning the office who could have been himself, Ms Ang or the defendant. He disagreed that because of his direct contact with the customers he was in control of payment collections. He also disagreed that he was the person who determined which case would be handled by ACM and which by ACMKK.
[82] The plaintiff said that it had not occurred to him in 2004 that he could have asked for an independent valuation of the business.

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Ang Hong Hin v Ang Chye Hin

Grounds of decision

Background

The pleadings

The evidence

The witnesses for the plaintiff

The plaintiff