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Grounds publishedDecided 26 Jun 2014
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High Court

Chiam Heng Hsien (on his own behalf and as partner of Mitre Hotel Proprietors) v Chiam Heng Chow (executor of the estate of Chiam Toh Say, deceased) and others

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[2014] SGHC 119Case no. Suit No 1 of 2012/N

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  1. Tay Yong Kwang J :

  2. Brief Summary of Facts

  3. [1] This case concerns the distribution of sale proceeds from the sale of the property located at No 145 Killiney Road, Singapore (“the Property”). The Property was registered in the name of Chiam Toh Say. Chiam Toh Say was one of the original partners of Mitre Hotel Proprietors (“MHP”). MHP was constituted in 1951 to take over the running of a hotel business located at the Property. Chiam Toh Say held 1/10 undivided share of the Property on trust for MHP and “the partners for the time being thereof”. The Property was sold pursuant to an Order of Court made in Originating Summons No 830 of 2006/W (“OS 830 of 2006/W”). MHP’s share of the sale proceeds (“the Sale Proceeds”) amounting to $11,500,000 was paid into Court.

  4. [2] Chiam Heng Hsien (“the Plaintiff”) is a partner of MHP. He was admitted as a partner of MHP on 19 November 1974. The Defendants are the personal representatives of the estates of 3 of the original partners of MHP. Chiam Heng Chow and Chiam Heng Tin (“the 1st and 2nd Defendants”) are the executors of the estate of Chiam Toh Say. Chiam Mui Ken (“the 3rd Defendant”) is the executrix of the estate of Chiam Toh Tong. Chiam Heng Suan (“the 4th Defendant”) is the executor of the estate of Chiam Toh Kai.

  5. [3] As the executors of the estate of Chiam Toh Say, the 1st and 2nd Defendants continue to be responsible as trustees over the Sale Proceeds. They took out an application in Originating Summons No 1123 of 2010/L (“OS 1123 of 2010/L”) to pay the Sales Proceeds to the Plaintiff and all the Defendants in various proportions. The Plaintiff claimed the entire Sale Proceeds in OS 1123 of 2010/L. The High Court ordered that OS 1123 of 2010/L be adjourned sine die in the light of the present suit that was then pending.

  6. [4] In the present suit, the Plaintiff claims the entire Sale Proceeds and all interest accruing thereon save for a nominal sum for the 3rd Defendant to be determined by him. The Defendants maintain that the personal representatives of the original partners are entitled to the Sale Proceeds in proportion to their original shares in MHP.

  7. Background Facts

  8. [5] The original partners of MHP entered into a Partnership Deed on 28 February 1952 (“the Partnership Deed”) setting out their respective shares in the partnership as follows:

  9. [6] Clauses 3, 6, 7, 23 and 25 of the Partnership Deed, being the clauses relevant to the present dispute, read as follows:

  10. [8] The Plaintiff was admitted as a partner of MHP on 19 November 1974 by the then surviving partners. He claims that he took over his late father, Chiam Toh Moo’s, 21/88 share in MHP.

  11. [9] Chiam Toh Lew passed away in 1975. In DC Summons No 6648 of 1984 (“DC Summons 6648 of 1984”), a consent judgment was recorded in which the estate of Chiam Toh Lew agreed to withdraw Chiam Toh Lew’s name from MHP and relinquish all claims that it had in respect of any share in MHP in consideration for Chiam Toh Kai, Chiam Toh Say and the Plaintiff (who were the defendants in that suit) paying the estate $7,000 and reimbursing the estate for the “all payments made by [the estate] to the Inland Revenue Department for the years 1983 to 1988”.

  12. Plaintiff’s Case

  13. [10] In the present suit, the Plaintiff claims that he was the sole surviving partner of MHP at the time the Property was sold. He also claims that the estate of Chiam Toh Tong is entitled to a nominal share in MHP, to be determined by him. Therefore, he claims the entire Sale Proceeds and all interest accruing thereon save for a nominal amount for the 3rd Defendant to be determined by him.

  14. [11] In the course of the present proceedings, the Plaintiff stated that he intends to give the 3rd Defendant $150,000 from the Sale Proceeds in view of the estate of Chiam Toh Tong’s nominal share in MHP.

  15. Chiam Toh Say’s original 25/88 share in MHP

  16. [12] Chiam Toh Say passed away on 16 February 1990. The Plaintiff claims that the 1st and 2nd Defendants were not admitted as partners of MHP. According to the Plaintiff, in order to be admitted as a partner of MHP, all the then surviving partners of MHP must give their consent as per s 24(7) of the Partnership Act (Cap 391, 1994 Rev Ed) (“Partnership Act”). He asserts that he never gave his consent for the 1st and 2nd Defendants to be admitted as partners of MHP.

  17. [13] The Plaintiff asserts that there was a technical dissolution of MHP upon Chiam Toh Say’s death on 16 February 1990 and that Chiam Toh Say’s share of partnership assets and profits accrued as a debt payable to his estate on that date. In 1993, the 1st and 2nd Defendants commenced Suit No 2439 of 1993 against MHP and the Plaintiff to compel the Plaintiff to render accounts of Chiam Toh Say’s share in MHP. The Plaintiff claims he rendered such accounts. He further states that as of 1996, the estate of Chiam Toh Say has taken no further steps to recover the sum owing to it. As such, the Plaintiff asserts that the claim is now time-barred by operation of s 6 of the Limitation Act (Cap 163, 1996 Rev Ed) (“Limitation Act”). The Plaintiff claims in addition or alternatively that the claim is defeated by laches.

  18. Chiam Toh Tong’s original 21/88 share in MHP

  19. [14] Chiam Toh Tong passed away on 17 May 1969. Chiam Toh Kai was appointed the executor of Chiam Toh Tong’s estate in accordance with his will. The Plaintiff maintains that Chiam Toh Tong’s 21/88 share in MHP accrued as a debt payable to his estate on the date of his death. The debt was subject to the contractual six-year limitation period. Chiam Toh Kai, the executor of Chiam Toh Tong’s estate, did not take any action to recover the debt. Therefore, any claim to recover the debt is now time barred.

  20. [15] However, it appears that the Plaintiff accepts that Chiam Toh Tong’s 21/88 share in MHP was not extinguished when MHP was reconstituted among the then surviving partners. Instead, Chiam Toh Kai was holding it on trust for Chiam Toh Tong’s estate. However, contrary to the 3rd Defendant’s claim that she was admitted as a partner of MHP in respect of that share, the Plaintiff alleges that he acquired the estate of Chiam Toh Tong’s 21/88 share in MHP.

  21. [16] The Plaintiff asserts that sometime in 1974, Ho Kim Wah, the widowed first wife of Chiam Toh Tong, on behalf of all the beneficiaries of Chiam Toh Tong’s estate, requested Chiam Toh Kai to take over Chiam Toh Tong’s share in MHP in his personal capacity. The Plaintiff claims that this was because the beneficiaries of Chiam Toh Tong’s estate were not prepared to bear responsibility for the substantial accumulated losses of MHP. The Plaintiff asserts that Chiam Toh Kai acceded to this request. He claims that the minutes of a partners meeting dated 6 April 1975 reflected this arrangement.

  22. [17] The Plaintiff also points out that the estate of Chiam Toh Tong was not included in the list of partners of MHP submitted by Chiam Toh Say to the Registrar of Businesses in 1974. The Plaintiff claims that this shows that Chiam Toh Kai had taken over the estate of Chiam Toh Tong’s share in the partnership. Therefore, the Plaintiff asserts that as of sometime in 1974, Chiam Toh Kai had a 40/88 share in MHP (which comprised his original 19/88 share and the estate of Chiam Toh Tong’s 21/88 share in MHP).

  23. [18] Sometime in the mid-1980s, Chiang Heng Pout (Chiam Toh Tong’s son and a beneficiary of his estate) ran into financial difficulties. He requested a loan of $50,000 from the Plaintiff. The Plaintiff asserts that Chiam Toh Kai was worried that if Chiam Heng Pout became bankrupt, his creditors would pursue their claims against Chiam Toh Tong’s estate which Chiam Toh Kai was responsible for. The Plaintiff also claims that there was a falling out between Chiam Toh Kai and Chiam Heng Pout and that their relationship had deteriorated so much so that Chiam Heng Pout even sent a bouncer from his night club to confront Chiam Toh Kai. The Plaintiff claims that Chiam Toh Kai wanted to prevent such incidents from recurring. As such, he reached an oral agreement with the Plaintiff for the Plaintiff to extend a loan of $50,000 to Chiam Heng Pout and in consideration he agreed to transfer the entirety of Chiam Toh Tong’s original 21/88 share in MHP which he had assumed in his personal capacity in 1974 (see [16] above) to the Plaintiff, from the date of the loan (“backdating clause”), save for a nominal share of MHP (to be determined by the Plaintiff) that he would hold for the estate of Chiam Toh Tong (“nominal share clause”) if:

  24. (a) Chiam Heng Pout failed to repay the $50,000 loan to the Plaintiff within 6 months of the date of the loan; or if

  25. (b) Chiam Heng Pout was declared a bankrupt.

  26. (the “Loan Agreement”)

  27. [19] The Plaintiff claims that Chiam Heng Pout signed a note stating the he was fully aware of the terms of the Loan Agreement. The Plaintiff claims that Chiam Siew Juat (Chiam Toh Kai’s daughter) and her relative, Chiam Ai Tong, broke into Mitre Hotel sometime around September to October 2008 and stole some documents including this note evidencing the Loan Agreement. The Plaintiff was recuperating from an operation during that period and was not at the Property.

  28. [20] Chiam Heng Pout did not repay the $50,000 loan to the Plaintiff within 6 months. Further he was adjudged a bankrupt in 1988. The Plaintiff claims that he became aware of Chiam Heng Pout’s bankruptcy in the early 1990s. Thereafter, he requested Chiam Toh Kai to transfer the estate of Chiam Toh Tong’s share in MHP to him save for a nominal share of MHP (to be determined by the Plaintiff) which Chiam Toh Kai would continue to hold for the Chiam Toh Tong’s estate as per the Loan Agreement. The Plaintiff claims that Chiam Toh Kai did so and gave him a letter, drafted by his daughter, Chiam Siew Juat, stating that his share in MHP was reduced to his original 19/88 share. The Plaintiff claims that this note was stolen as well.

  29. [21] Therefore, according to the Plaintiff, he acquired the estate of Chiam Toh Tong’s 21/88 share in MHP sometime in the early 1990s.

  30. Chiam Toh Kai’s original 19/88 share in MHP

  31. [23] The Plaintiff claims that the 4th Defendant agreed to remain as a partner holding a nominal share (to be determined by the Plaintiff) on behalf of Chiam Toh Tong’s estate.

  32. [24] The Plaintiff asserts that Chiam Toh Kai’s share of partnership assets and profits accrued as a debt payable to his estate either on the date of his death or alternatively when his estate served notice to withdraw from the partnership sometime soon after 8 September 1993. In either case the claim for the sum owing to the estate is now time-barred by operation of s 6 of the Limitation Act. The Plaintiff claims in addition or alternatively that the claim is defeated by laches.

  33. Allocation of Profits of MHP by the Plaintiff and Income Tax Payable Thereon

  34. [25] The Plaintiff maintains that he never allocated any of the profits and losses of MHP to any of the Defendants in the tax returns he filed with Inland Revenue Authority of Singapore (“IRAS”). He refers to the tax returns he filed for the years 1995 and 1998 – 2009 and points out that he allocated the profits and losses of MHP either solely to himself or left the allocation blank. The tax returns filed in 1997 lists the estate of Chiam Toh Kai as a partner. However the Plaintiff maintains that he listed the estate of Chiam Toh Kai as a partner only in respect of the nominal share that it held for Chiam Toh Tong’s estate. He maintains that IRAS’ allocation of partnership profits using the basis of allocation indicated in the Partnership Deed did not reflect the true makeup of the partnership at the material times. For instance, when cross-examining the 3rd Defendant, the Plaintiff’s counsel pointed out that IRAS’ allocation of profits and losses for the accounting period 1 January 1999 to 31 December 1999 lists the estate of Chiam Toh Lew as a partner even though Chiam Toh Lew’s name was withdrawn as a partner pursuant to a consent judgment in DC Summons 6648 of 1984 (see [9] above). Therefore the Plaintiff maintains that income tax assessments issued by IRAS cannot be relied upon as proof of admission to the partnership.

  35. [26] The Plaintiff points out that he consistently wrote to IRAS objecting to its allocation of partnership profits. He claims that in reality, from 1975 onwards, the partnership profits were allocated on a 50:50 basis between Chiam Toh Kai and himself and that the two of them paid income tax on that basis from 1975 to sometime in the 1990s when Chiam Siew Juat, who took over as the trustee of Chiam Toh Kai’s estate, wrote to IRAS requesting her share of the income tax to be reduced to reflect her purported 19/88 share in MHP. Under cross-examination, he explained that Chiam Toh Kai’s estate continued paying tax even after 1993 (when, according to him, Chiam Toh Kai’s estate withdrew from MHP) because of a prior agreement between him and Chiam Toh Kai to pay tax on a 50:50 basis and settle the difference between themselves.

  36. Originating Summons No 136 of 2002/X

  37. [27] In Originating Summons No 136 of 2002/X (“OS 136 of 2002/X”) between the 3rd Defendant and the 4th Defendant, it was decided that the estate of Chiam Toh Kai held 21/88 share in MHP on trust for the estate of Chiam Toh Tong. Neither MHP nor the Plaintiff was joined as a party to OS 136 of 2002/X and as such the Plaintiff claims that neither he nor MHP is bound by the decision. The Plaintiff’s counsel suggested to the 3rd Defendant in cross-examination that she deliberately did not add the Plaintiff as a party because she did not want him to give evidence of his acquisition of the estate of Chiam Toh Tong’s share in MHP.

  38. [28] The Plaintiff points out that following the decision, the 4th Defendant failed to get him to sign the form required by Registry of Companies and Businesses (“RCB”) for the rectification of the particulars of the partnership even though Judith Prakash J had explicitly directed the 4th Defendant to do so. He asserts that the 4th Defendant failed to do so because he was aware he was no longer a partner in MHP.

  39. Records kept by the Accounting and Corporate Regulatory Authority

  40. [29] The Plaintiff claims that the records kept by the Accounting and Corporate Regulatory Authority (“ACRA”) and its predecessor, the RCB, are not reflective of the actual partnership makeup of MHP. He insists that these records were merely for administrative purposes and cannot have any legally binding effect nor can they be relied upon as proof of admission to partnership. For instance, he points out that RCB records from 1996 inaccurately lists Chiam Toh Say as a partner of MHP even though Chiam Toh Say had passed away in 1990.

  41. [30] The Plaintiff also points out that he was informed by ACRA on 20 January 2011 that

  42. The Plaintiff maintains that ACRA’s response led him to believe that there was no need for him to apply to rectify the records.

  43. 1st and 2nd Defendants’ Case

  44. [31] The 1st and 2nd Defendants argue that the Trust Deed conferred a beneficial interest in the Property on the original partners. This beneficial interest vested in the respective estates at the moment of the original partners’ deaths. Therefore, the estates are now entitled to the Sale Proceeds.

  45. [32] The 1st and 2nd Defendants argue that upon a partner’s death, his legal representatives are automatically admitted as partners of MHP. They raise a number of arguments in support of this claim. First they claim that Clause 23 of the Partnership Deed which provides that the personal representatives of deceased partners shall be paid the deceased partner’s share of profits after their passing must be construed to mean that the personal representatives of deceased partners are automatically admitted as partners after the demise of the original partners. They claim that to construe it otherwise would render its inclusion in the Partnership Deed redundant. They also maintain that such an interpretation would gel with the original partners’ intention to create a family business whereby “families of all partners would be provided for when a partner retires or passes away…until the business [is] no more”.

  46. [33] Second they claim that Chiam Toh Kai, Chiam Toh Say and the Plaintiff’s decision by way of consent judgment in DC Summons 6648 of 1984 to pay Chiam Toh Lew’s estate $7,000 and to reimburse the income tax payments made by the estate in consideration of the estate withdrawing Chiam Toh Lew’s name as a partner of MHP and relinquishing all claims that it had in respect of any share in MHP is evidence that the then partners recognised that the estates of deceased partners continue as partners of MHP. Essentially, the 1st and 2nd Defendants claim that the partners of MHP bought out the estate of Chiam Toh Lew from the partnership by way of this consent judgment.

  47. [34] The 1st and 2nd Defendants also argue that even if legal representatives of a deceased partner are not automatically admitted into the partnership, it can be inferred that they were admitted as partners of MHP. They point out that Chiam Toh Say’s estate continued to be registered as a partner of MHP in ACRA records until MHP’s registration was cancelled on 3 May 2011.

  48. [35] They also claim that IRAS assessed income tax on Chiam Toh Say’s estate until MHP’s registration was cancelled. The 1st and 2nd Defendants claim that they continued to pay the income tax as executors of Chiam Toh Say’s estate. They also point out that they paid IRAS the estate of Chiam Toh Say’s share of property tax for 2008 and 2009 when IRAS demanded the same from them. Prior to 2008, the property tax was nominal as the Property was under rent control. They claim that the Plaintiff neither reimbursed them for this property tax payment nor raised any objections when they paid the property tax.

  49. [36] In sum, 1st and 2nd Defendants maintain that they continued as partners of MHP at all material times. They claim that they are entitled to a 25/88 share of the assets of MHP. As such they claim 25/88 share of the Sale Proceeds.

  50. [37] In the alternative, the 1st and 2nd Defendants maintain that even if they were not admitted as a partner of MHP as per the Plaintiff’s case, the limitation period has not started to run since the Plaintiff has never rendered proper accounts of Chiam Toh Say’s share of the assets of the MHP.

  51. 3rd Defendant’s Case

  52. [38] The 3rd Defendant claims that upon Chiam Toh Tong’s death on 17 May 1969, his estate continued as a partner of MHP. In support, she points to MHP’s balance sheets as at 31 December 1972 and 31 December 1973 both of which list Chiam Toh Tong’s estate as a partner in MHP. In addition, she maintains that at all material times, Chiam Toh Tong’s estate continued to be entitled to Chiam Toh Tong’s original 21/88 share in MHP and that she was eventually admitted into the partnership in respect of that share.

  53. Chiam Toh Kai did not acquire the estate of Chiam Toh Tong’s share in MHP in his personal capacity

  54. [39] The 3rd Defendant denies that Chiam Toh Kai took over the estate of Chiam Toh Tong’s share in MHP in his personal capacity in 1974. She denies that Ho Kim Wah, the widowed first wife of Chiam Toh Tong, consented, on behalf of all the beneficiaries of Chiam Toh Tong’s estate, to Chiam Toh Kai’s acquisition of the Chiam Toh Tong’s share in MHP. She claims that in any case, Ho Kim Wah did not have the requisite authority to give consent on behalf of all the beneficiaries of Chiam Toh Tong’s estate. She maintains that if Chiam Toh Kai had transferred Chiam Toh Tong’s share to himself, such transfer would have been in breach of trust. She claims that the minutes of the meeting on 6 April 1975 do not state nor support the inference that Chiam Toh Kai had taken over Chiam Toh Tong’s share in MHP.

  55. [40] Chiam Toh Kai relinquished his position as the sole trustee of the Chiam Toh Tong’s estate and appointed the 3rd Defendant and Chiam Heng Pout in his place by a Deed of Appointment dated 27 February 1986. As the outgoing trustee, he rendered accounts of Chiam Toh Tong’s estate to the 3rd Defendant and Chiam Heng Pout. In cross-examining the Plaintiff, counsel for the 3rd Defendant referred to one such account, for the period 12 January 1982 to 26 October 1983. By this time, according to the Plaintiff, Chiam Toh Kai had already acquired the estate of Chiam Toh Tong’s share in MHP in his personal capacity. Therefore he need not have attributed any portion of the share of profits he received from MHP to Chiam Toh Tong’s estate. Nonetheless, in the accounts for this period, he attributed $38,940.03 to Chiam Toh Tong’s estate. Counsel for the 3rd Defendant contends that this proves that Chiam Toh Kai never took over Chiam Toh Tong’s share in MHP in his personal capacity.

  56. [41] In cross-examining the Plaintiff, counsel for the 3rd Defendant also referred to a letter dated 26 April 1985 from Chiam Toh Kai’s then solicitors, M/s Laycock & Ong, to M/s Chua Hay & Wee who were representing the 3rd Defendant and Chiam Heng Pout. He highlighted that in that letter, Chiam Toh Kai’s solicitors stated that their client was holding the estate of Chiam Toh Tong’s share on trust for the 3rd Defendant and Chiam Heng Pout.

  57. [42] In cross-examining the Plaintiff, counsel for the 3rd Defendant also referred to an affidavit dated 2 June 2011 that the Plaintiff filed in OS 1123 of 2010/L. In paragraph 36 of that affidavit, the Plaintiff stated that sometime in mid-1980s, he and Chiam Toh Kai reached a decision to “buy out” Chiam Toh Tong’s share in MHP. Counsel for the 3rd Defendant contends that the fact that Chiam Toh Kai had to “buy out” Chiam Toh Tong’s share is evidence that he never acquired Chiam Toh Tong’s share in his personal capacity in 1974.

  58. [43] The 3rd Defendant also called Chiam Heng Pout to give evidence. Chiam Heng Pout disagrees with the Plaintiff that his mother, Ho Kim Wah, consented to Chiam Toh Kai’s acquisition of the Chiam Toh Tong’s share in MHP in 1974 because the beneficiaries of Chiam Toh Tong’s estate were not prepared to bear responsibility for MHP’s substantial accumulated losses amounting to more than $100,000. He disputes the quantum of the MHP’s accumulated losses in 1974. He claims that the estate of Chiam Toh Tong’s portion of the accumulated losses in 1974 was only $7,877.73 which the estate could have easily paid.

  59. There was no Loan Agreement between the Plaintiff and Chiam Toh Kai

  60. [44] The 3rd Defendant denies that there was ever any agreement between the Plaintiff and Chiam Toh Kai regarding the loan of $50,000 that the Plaintiff extended to Chiam Heng Pout. Instead she claims that the Plaintiff “extended a friendly unsecured loan of $50,000/- free of interest to Chiam Heng Pout” and that the loan was “unconditional”. She maintains that the loan was a private arrangement between the Plaintiff and Chiam Heng Pout and it did not involve Chiam Toh Tong’s estate.

  61. [45] Chiam Heng Pout also states that the loan was unconditional. He denies the Plaintiff’s allegation that he signed a note to state that he was fully aware of the terms of the purported Loan Agreement.

  62. In any event, Chiam Toh Kai was not entitled to the estate of Chiam Toh Tong’s share in MHP at the time of the purported transfer

  63. [46] Alternatively, the 3rd Defendant argues that even if the Loan Agreement existed, Chiam Toh Kai did not possess the estate of Chiam Toh Tong’s share in MHP in the early 1990s when he purportedly transferred the share to the Plaintiff. This is because Chiam Toh Kai appointed the 3rd Defendant and Chiam Heng Pout as the new trustees of Chiam Toh Tong’s estate by a deed of appointment on 27 February 1986. The 3rd Defendant maintains that upon the appointment of the new trustees, pursuant to s 41 of the Trustee Act (Cap 337, 2005 Rev Ed) (“Trustees Act”) all of the estate of Chiam Toh Tong’s “interest in land, property, chattel and rights” vests in the new trustees. Therefore she claims that the estate of Chiam Toh Tong’s share in MHP already vested in herself and Chiam Heng Pout by the time of the purported transfer of the share to the Plaintiff in the early 1990s.

  64. [47] However, the Plaintiff maintains that Chiam Toh Kai did not transfer the estate of Chiam Toh Tong’s share in MHP to the 3rd Defendant and Chiam Heng Pout. He insists that he had to agree for the share in the MHP to be transferred. He claims that he never gave such consent. He also points out that the 3rd Defendant admitted in her affidavit dated 24 January 2002 that she filed in OS 136 of 2002/X that although Chiam Toh Kai executed the Deed of Appointment dated 27 February 1986, “he did not effect the transfer of the share”. The Plaintiff’s counsel suggested to Chiam Heng Pout, in cross-examination, that the transfer did not occur because Chiam Heng Pout failed to repay the $50,000 loan that the Plaintiff had extended to him within 6 months. Therefore Chiam Toh Kai was aware, that pursuant to the Loan Agreement, he was under an obligation to transfer the estate of Chiam Toh Tong’s share in MHP to the Plaintiff and that the transfer was to take effect from the date of the loan. The Plaintiff’s counsel suggested that Chiam Toh Kai did not transfer the share to the 3rd Defendant and Chiam Heng Pout so as not to breach the Loan Agreement.

  65. [48] The 3rd Defendant denies that her affidavit dated 24 January 2002 filed in OS 136 of 2002/X amounts to an admission that the estate of Chiam Toh Tong’s share in MHP was never transferred to her and Chiam Heng Pout. She maintains that the share was transferred when the Deed of Appointment was executed, but the change was not reflected in the records kept by RCB. She insists that she commenced OS 136 of 2002/X against Chiam Toh Kai’s estate simply to have the estate of Chiam Toh Tong’s share in MHP reflected in the records kept by RCB.

  66. Accounts of MHP for the years 1987 – 1990 and 1996

  67. [49] The 3rd Defendant refers to the accounts of MHP for the years 1987 – 1990 and 1996 prepared by the Plaintiff for tax purposes. She points out that the Plaintiff continued to state that Chiam Toh Kai’s share in MHP is “inclusive of Estate of Chiam Toh Tong Dec’d” notwithstanding his contention that Chiam Toh Kai had transferred the estate of Chiam Toh Tong’s share to him pursuant to the Loan Agreement sometime in the early 1990s. Moreover she points out that the accounts reflect that Chiam Toh Tong’s estate was rewarded for services rendered to MHP during this period. The 3rd Defendant contends that this proves that Chiam Toh Tong’s personal representatives continued as partners in MHP.

  68. Income Tax

  69. [50] The 3rd Defendant maintains the estate of Chiam Toh Tong was assessed and it paid income tax to IRAS on the basis that it owned 21/88 share in MHP until MHP’s registration was cancelled.

  70. Originating Summons No 136 of 2002/X

  71. [51] The 3rd Defendant argues that OS 136 of 2002/X confirms that the estate of Chiam Toh Kai was holding a 21/88 share of MHP on trust for the estate of Chiam Toh Tong. She points out Prakash J explicitly directed Chiam Toh Kai’s estate to serve a copy of the order on “the other partners in [MHP] and … ask them to sign any form in compliance with the Registry of Companies and Businesses for the rectification of the particulars in the partnership business”. The 3rd Defendant argues that the purpose of this direction was to give all interested parties, such as the Plaintiff, an opportunity to make legal protests should they disagree with the court’s finding. The 3rd Defendant contends the Plaintiff was duly notified but he accepted the order without making any legal protest. He only wrote a letter to M/s Albert Teo & Lim, the solicitors for Chiam Toh Kai’s estate in that matter. Therein, he only stated that Chiam Toh Kai’s estate had not been admitted as a partner of MHP. The 3rd Defendant points out that the Plaintiff did not mention that Chiam Toh Tong’s estate was no longer entitled to 21/88 share in MHP. Nor did he mention that Chiam Toh Tong’s estate was not admitted as a partner of MHP. She claims that the Plaintiff thereby accepted that Chiam Toh Tong’s estate was a partner entitled to a 21/88 share of MHP.

  72. [52] The 3rd Defendant points out that the Plaintiff even relied on the order in OS 136 of 2002/X in his affidavit dated 31 August 2006 that he filed in OS 830 of 2006/W.

  73. [53] In sum, the 3rd Defendant maintains that the estate of Chiam Toh Tong continued as a partner of MHP possessing a 21/88 share in MHP at all material times. She claims that she was eventually admitted into the partnership in respect of that share. Therefore she claims 21/88 share of the Sale Proceeds.

  74. 4th Defendant’s Case

  75. [54] The 4th Defendant argues that the Trust Deed conferred a beneficial interest in the Property on the original partners. This beneficial interest vested in the respective estates at the moment of the original partners’ deaths. Therefore, the estates are now entitled to the Sale Proceeds.

  76. [55] Alternatively, the 4th Defendant maintains that upon Chiam Toh Kai’s death on 20 June 1993, he was admitted as a partner of MHP and continued to be a partner at all material times.

  77. [56] The 4th Defendant denies serving notice to withdraw from MHP following the release of the decision in CA 150/1991. He points out that the Plaintiff listed Chiam Toh Kai’s estate as a partner of MHP in a partnership account he prepared in 1995 for tax purposes. He also points out that Chiam Toh Kai’s estate was assessed and it paid tax to IRAS on the profits of MHP even after 1993, when the Plaintiff alleges that the estate of Chiam Toh Kai had withdrawn as a partner.

  78. [57] The 4th Defendant argues that OS 136 of 2002/X confirms that Chiam Toh Kai’s estate continued to hold a 19/88 share in MHP. He points out that even the Plaintiff relied on the finding in that order in his affidavit dated 31 August 2006 that he filed in OS 830 of 2006/W without explicitly stating that he was not bound by that decision since he was not a party to those proceedings.

  79. [58] The 4th Defendant acknowledges that Chiam Toh Kai’s estate was removed as a partner of MHP in the records kept by ACRA for a period. However, he maintains that the removal of the estate of Chiam Toh Kai as a partner of MHP from ACRA records was due to a clerical error. He points out that his then solicitors M/s PKWA Law Practice LLC wrote to ACRA on 17 July 2006 seeking that the clerical error be rectified. ACRA’s records were subsequently rectified to show that the estate of Chiam Toh Kai remained a partner of MHP.

  80. [59] In sum, the 4th Defendant maintains he continued as a partner of MHP at all material times. He claims that the he is entitled to a 21/88 share of the assets of MHP. Therefore he claims 21/88 share of the Sale Proceeds

  81. The Decision of the Court

  82. Facts in the present case must be viewed in light of the underlying family relations between the parties

  83. [61] Additionally, even though Clause 23 of the Partnership Deed states that a deceased partner’s share of the net profits of the partnership shall be paid to his personal representatives, it seems that the 3rd and 4th Defendants did not pursue all available legal means to obtain what they were owed pursuant to the Partnership Deed. Concerning the estate of Chiam Toh Tong’s share of the profits, it transpired during the trial that after Chiam Toh Tong’s death, occasional disbursements were made to Chiam Toh Tong’s wives (although there was uncertainty as to whether this money came from MHP’s profits). As for the estate of Chiam Toh Kai, the 4th Defendant gave evidence that he asked the Plaintiff for the accounts of MHP and that he was occasionally given the accounts. This is contested by the Plaintiff. Even assuming that the 4th Defendant did ask for accounts, it is clear that neither him nor the 3rd Defendant commenced any legal action (eg, an action for account) to recover what was owed to them.

  84. [62] In contrast, the 1st and 2nd Defendants did commence an action for an account. In 1993, the Chiam Toh Say’s estate commenced Suit No 2439 of 1993 against MHP and the Plaintiff to compel the Plaintiff to render accounts of Chiam Toh Say’s share in the profits of MHP and the value of Chiam Toh Say’s share in MHP as at 16 February 1990. On 18 July 1994, the Plaintiff filed a fresh defence containing assertions that Chiam Toh Say had retained moneys amounting to more than his capital contribution and that he had also withdrawn all his capital contribution from the partnership. On 5 October 1994, the Plaintiff was ordered to produce all the accounts of MHP and to file an affidavit verifying the said accounts. On 19 October 1994 he filed an affidavit and exhibited four sheets of accounts. The accounts were not verified by affidavit.

  85. [63] On 24 November 199, an application to strike out the abovementioned portions of the Plaintiff’s defence was heard. The Plaintiff was ordered to comply with the 5October 1994 order failing which his defence would be struck out and judgment entered against him (“the unless order”). The Plaintiff appealed and argued that he had rendered proper accounts. The issue before Kan Ting Chiu J was whether the unless order was justified. As such, Kan J made no finding on whether the accounts were proper but noted that they were not verified by affidavit. He held that the unless order was justified since the Plaintiff had not complied with the 5 October 1994 order even though the accounts went to the heart of his defence. Therefore he ordered that judgment be entered against the Plaintiff if he failed to comply with the 5 October 1994 order within a further period of 28 days without good reason (Chiam Heng Chow and another (executors of the estate of Chiam Toh Say, deceased) v Mitre Hotel (Proprietors) (a firm) and another [1996] 1 SLR(R) 899 at [11]). It appears that the Plaintiff did not comply with this order and neither did the 1st and 2nd Defendants take any further action to procure proper accounts.

  86. [64] It is understandable why the Defendants did not insist strictly on their legal rights. After all, the Plaintiff was their cousin and crucially, the Property was not only the premises on which the hotel business was carried out, it was also the family home of the Plaintiff and his family. Had any of the Defendants insisted that they be paid their share of the partnership immediately upon the death of the original partner whose estate they represented, the then existing partners may have had to wind-up the partnership. This would have in effect amounted to the Plaintiff and his family being evicted from their family home. The Defendants may not have wanted this to occur. It is noteworthy that the action in OS 830 of 2006/W seeking sale of the Property with vacant possession was not commenced by any of the Defendants in the present suit.

  87. [65] In sum, it is clear that the partnership was not run as though it was a strictly commercial affair between parties who were dealing at arm’s length. Adhering to strict formalities was not on the top of anyone’s minds. This was most likely because of the underlying family relations between the parties. Therefore, the facts in the present case must be viewed in the light of these family relations.

  88. 3rd and 4th Defendants’ application to amend their defence after parties had filed their written closing submissions

  89. [66] After all the parties had filed their written closing submissions, the 3rd and 4th Defendants took out Summons No 1509/2014 and Summons No 1716/2014 respectively, seeking leave to amend their respective defences. They both sought to add a defence based on the writing requirement contained in s 6 of the Civil Law Act (Cap 43, 1999 Rev Ed) (“Civil Law Act”). The 4th Defendant also sought to include a defence based on s 7 of the Civil Law Act and another based on s 12(4) of the Limitation Act.

  90. [67] The Plaintiff’s counsel accepted that the new defence based on s 12(4) of the Limitation Act concerned a point of law and did not object to its inclusion. However, he argued that the new defences based on the Civil Law Act would cause irreparable prejudice if they were allowed to be included at such a late stage since the Plaintiff was deprived of the opportunity to lead evidence of part performance at trial to challenge the Defendants’ case based on the new defences.

  91. Chiam Toh Lew’s 2/88 share

  92. [69] I note that pursuant to the consent judgment in DC Summons 6648 of 1984, the estate of Chiam Toh Lew agreed to withdraw Chiam Toh Lew’s name from MHP and relinquish all claims that it had in respect of any share in MHP. The 1st and 2nd Defendants characterise this as a buyout of Chiam Toh Lew’s estate which they claim was automatically admitted as a partner. The Plaintiff argues that the consent judgment reflects a settlement of the debt owed to Chiam Toh Lew’s estate. Irrespective of which characterisation is preferred, I find that the consent judgment did not extinguish Chiam Toh Lew’s 2/88 share in MHP. Rather, his share must be proportionately redistributed to the partners of MHP based on their respective shares in MHP.

  93. Are the personal representatives of the original partners entitled to the Sale Proceeds irrespective of whether they were partners of MHP when the Property was sold?

  94. [70] The 1st and 2nd Defendants and the 4th Defendant submit that the issues of whether the personal representatives of the original partners had been admitted and whether they subsequently withdrew from MHP are irrelevant. They submit that the Trust Deed conferred a beneficial interest in the Property on the original partners. This beneficial interest vested in the respective estates at the moment of the original partners’ death. Therefore, the estates are now entitled to the Sale Proceeds.

  95. [71] According to the Trust Deed, Chiam Toh Say held the Property on trust “for the Firm [MHP] and the partners for the time being thereof”. The 4th Defendant submits that this phrase must be taken to mean that Chiam Toh Say held the Property on trust for those who were partners of MHP “at the moment” of the creation of the Trust Deed. The Plaintiff argues that the inclusion of the phrase “for the time being thereof” must mean that the Property was held on trust for whoever qualified as a partner of MHP at the “relevant future period”.

  96. [72] The Plaintiff relies on Cars & Cars Ltd v Volkswagen AG and another [2010] 1 SLR 625. In that case, the High Court dealt with a contractual clause which provided for arbitration “in accordance with the Rule of the Singapore Arbitration Centre for the time being in force”. The issue was whether the SIAC rules at the time of the conclusion of the contract or the SIAC rules at the time of the commencement of the arbitration applied. The High Court decided that the latter applied. It observed at [25]:

  97. [73] Similarly, in the present case, if the testator’s intention was to hold the Property on trust only for the original partners, the partners could have been named individually, or the phrase “existing partners” could have been used instead. Therefore, I agree with the Plaintiff’s submission. Only those who were partners of MHP when the Property was sold are now entitled to a share of the Sale Proceeds.

  98. Are the personal representatives of deceased partners automatically admitted as partners of MHP?

  99. [74] In partnership law, in the absence of an express provision in the partnership agreement, no person can be admitted as a partner without the consent of all existing partners. This is codified in s 24(7) of the Partnership Act. Therefore when a partner dies, his personal representatives are not automatically admitted into the partnership with the surviving partners, unless there is an agreement to that effect in the original partnership agreement: Pearce v Chamberlain (1750) 2 Ves Sen 33; Roderick I’Anson Banks, Lindley & Banks on Partnership (Sweet & Maxwell, 19th Ed) (“Lindley & Banks on Partnership”) at para 19-49.

  100. [75] The 1st and 2nd Defendants argue that Clause 23 of the Partnership Deed which provides that the personal representatives of deceased partners shall be paid the deceased partner’s share of profits after their passing must be construed to mean that the personal representatives are automatically admitted as partners after the demise of the original partners. I do not agree with this construction of Clause 23. All this clause requires is for a deceased partner’s share of profits to be paid to his personal representative after his passing. It does not operate to automatically admit a personal representative into the partnership. Admission as a partner means that the personal representative would have all the attendant rights of being a partner and would have to bear the liabilities and responsibilities of being one. Nothing in this clause suggests that was intended.

  101. [76] The 1st and 2nd Defendants also argue that Clause 25 of the Partnership Deed which allows personal representatives of deceased partners to refer all disputes concerning the Partnership Deed to arbitration must similarly be construed to mean that the personal representatives are automatically admitted as partners. They argue that the personal representatives can only refer disputes to arbitration if they were partners of MHP. Again, I disagree with this interpretation. It is not clear why only partners will be able to refer disputes concerning the Partnership Deed to arbitration. The Partnership Deed clearly confers rights upon the personal representatives (eg, the right to the deceased partner’s share of profits pursuant to Clause 23). It must be the case that Clause 25 allows the personal representatives to refer any disputes that are connected with such rights to arbitration. They will be doing so in their capacity as personal representatives of deceased partners and not as partners themselves.

  102. What is the effect of Clause 3 of the Partnership Deed which provides that the partnership shall continue notwithstanding the death of any partner?

  103. [77] Subject to agreement to the contrary, a partnership is dissolved by the death of a partner: s 33(1) of the Partnership Act. When the partnership is dissolved, unless otherwise agreed, the business and affairs of the firm must be wound up in the manner prescribed by s 44 of the Partnership Act. As Romer LJ stated in Bourne v Bourne [1906] 2 Ch 427 at 431 - 432, “when a partner dies and the partnership comes to an end, it is not only the right, but the duty, of the surviving partner to realize the assets for the purpose of winding up the partnership affairs, including the payment of the partnership debts”. However, such a general dissolution is avoided where there is an agreement for the partnership to continue notwithstanding the death of any partner. Instead, a technical dissolution occurs because there is a change in the composition of the partnership: Chiam Heng Chow and anor (executors of the estate of Chiam Toh Say, deceased) v Mitre Hotel (Proprietors) (a firm) and others [1993] 2 SLR(R) 894 at [17].

  104. On the occurrence of a technical dissolution caused by death of a partner, do the surviving partners hold the deceased partner’s share in partnership land on trust for his estate?

  105. [78] The 4th Defendant submits that by virtue of s 20(1) of the Partnership Act, on the death of any partner, his beneficial interest in partnership land will devolve to his surviving co-partners who will continue to hold it on trust for his estate. Therefore he contends that the action in the present case is one to recover the proceeds of sale of trust property from a trustee. He points out that such an action is not time-barred by virtue of s 22(1)(b) of the Limitation Act.

  106. [79] Section 20(1) of the Partnership Act provides that:

  107. Section 22(1)(b) of the Limitation Act provides that:

  108. [80] The 4th Defendant is in essence proposing that partnership land should be treated in a different manner from other assets of the partnership. He is suggesting that although an action to recover a deceased partner’s share of the latter may possibly be subject to a limitation period (he has not conceded this point), no such limitation period should apply to an action to recover a deceased partner’s share of partnership land.

  109. [81] I do not accept the 4th Defendants’ submission. I am of the view that the starting point of the analysis should be s 22 of the Partnership Act. This section provides that whenever land is considered partnership property, it is deemed as the personal rather than real property of the partners (including the representatives and heirs of any partner). This reflects the principle that a partner’s share in partnership property, whether it consists of land or not, “is nothing more than his proportion of the partnership assets after they have been turned into money and applied in liquidation of partnership debts”: Lindley & Banks on Partnership at para 19-14. Additionally, commenting on the nature of a partner’s share in partnership property upon his death, retirement or expulsion from the partnership, Lindley & Banks on Partnership states at para 19-11:

  110. [82] Therefore, in the absence of an express provision in the partnership agreement, a deceased partner’s estate which has an entitlement to a share in partnership land cannot be said to be “beneficially interested in the land” as per the proviso to s 20(1). The estate’s entitlement is to the proportionate share of the net proceeds from liquidation of the partnership assets.

  111. [83] Additionally, the surviving partners do not hold this amount on trust for the estate of the deceased partner. Rather, s 43 of the Partnership Act makes it clear that this amount accrues as a debt owed to the personal representative of a deceased partner on the date of the death of the partner. Section 43 of the Partnership Act provides:

  112. Section 43 of our Partnership Act is in pari materia with s 43 of the Partnership Act 1890 (53 & 54 Vict, c 39) which is in force in England and Scotland. Sir Frederick Pollock, the draftsman of the Partnership Act 1890 commented in his A Digest of the Law of Partnership, incorporating the Partnership Act, 1890 (5th Ed) (“Pollock’s Digest”) that the debt which is owed to a personal representative of a deceased partner pursuant to s 43 of the Partnership Act “is in the nature of a simple contract debt, and it is subject to the Statue of Limitations, which runs from the deceased partner’s death” (at 121 – 122).

  113. [84] Additionally, in Duncan v The MFV Marigold Pd 145 2006 SLT 975 the court stated that the objective of s 43 of the Partnership Act 1890 (as ascertained from Pollock’s Digest) was to ensure that claims from an outgoing partner, or by the representatives of a deceased partner, were subject to the limitation period applicable to ordinary debts, with time running from the date of dissolution. The court stated that the “the intended significance of the use of the word ‘debt’, in section 43, appears to have been to make it clear that the surviving partners were not trustees for the deceased partner’s representatives in respect of his interest in the partnership, and that the claim of the representatives against the surviving partners was therefore subject to the statute of limitation” (at [52]).

  114. [85] Therefore on the occurrence of a technical dissolution caused by the death of a partner, the surviving partners do not hold the deceased partner’s share in partnership land on trust for his estate. Rather, the deceased partner’s share in the partnership accrues as a simple contract debt, owed to his personal representative, on the date of the death of the partner. Hence, the claim of the deceased partner’s personal representative is subject to the six-year limitation period prescribed by s 6(1)(a) of the Limitation Act for actions founded on contract. The limitation period starts to run from the date of the death of the partner.

  115. [86] This interpretation of ss 20(1), 22 and 43 of the Partnership Act does not render the proviso to s 20(1) otiose. The proviso accommodates situations where parties contract out of ss 22 and 43 (as they are entitled to) and agree that the surviving partners are to hold the deceased partner’s share on trust for his estate. In such situations, the estate of the deceased partner’s beneficial interest in the land would arise from the express provision in the partnership agreement and the surviving partners would hold the deceased partner’s share on trust for his estate in order to give effect to the parties’ agreement.

  116. [87] In the present case, Clause 23 of the Partnership Deed concerns the treatment of partnership assets after the death of any partner. Clause 23 provides that the personal representative of a deceased partner shall be paid the deceased partner’s share of net profits after his passing. In essence, this clause simply reflects the position in the Partnership Act set out above. It makes clear that the personal representative does not have a proprietary interest in the partnership assets. Rather, he is entitled to a share of what remains after partnership assets have been turned into money and applied to discharge partnership debts and liabilities. Therefore, in the present case, the parties have not contracted out of ss 22 or 43 of the Partnership Act. Hence it is not necessary to conclude that surviving partners hold the deceased partner’s share on trust for his estate.

  117. [88] The 4th Defendant cites two cases in support of his position: Abdul Majeed v Official Administrator, F.M.S. [1937 – 1940] 14 FMSLR 242 and Mehra v Shah and others [2003] All ER (D) 15 (“Mehra”). Both these cases suggest that a claim by a deceased partner to a share in the partnership land is not time-barred. However, in both these cases, the conclusion was reached without any consideration of ss 22 and 43 of the Partnership Act or any equivalent statutory provision. In fact, when Mehra was decided, s 22 of the Partnership Act 1890 had already been repealed.

  118. [89] Notwithstanding my conclusion that the surviving partners did not hold the deceased partner’s share of the partnership assets on trust for his estate and that a personal representative’s claim to recover what is owed to the estate is subject to a six-year limitation period, all the defendants in the present case are nevertheless entitled to a share in the Sale Proceeds because they were admitted into the partnership in their personal capacities.

  119. The 1st and 2nd Defendants were admitted as partners holding 25/88 share in MHP that originally belonged to Chiam Toh Say

  120. [90] Existing partners can impliedly accept a new person as a partner: Lindley & Banks on Partnership at para 10-256. I find that the 1st and 2nd Defendants were impliedly accepted as partners of MHP by the Plaintiff’s conduct for the following reasons. The Plaintiff:

  121. (a) did not take any action to rectify the records kept with ACRA which showed that Chiam Toh Say’s estate was a partner even though he was repeatedly advised to do so.

  122. (b) did not object to the 1st and 2nd Defendants paying 25/88 of the property tax assessed on the Property in their capacity as partners of MHP. Neither did he reimburse them for this payment.

  123. The Plaintiff’s inaction suggests that he impliedly accepted the 1st and 2nd Defendants as partners of MHP.

  124. [91] The 1st and 2nd Defendants point out that the estate of Chiam Toh Say continued to be registered as a partner of MHP in in the records kept by ACRA and its predecessor, the RCB, until MHP’s registration was cancelled on 3 May 2011. This is not disputed by the Plaintiff. The Plaintiff however maintains that these records are not reflective of the actual partnership makeup of MHP. He insists that these records were kept merely for the purpose of protecting third parties and cannot have any legally binding effect on the rights of partners against one other. They also cannot be relied upon as proof of admission to partnership. For instance, he points out that RCB records from 1996 inaccurately lists Chiam Toh Say as a partner of MHP even though Chiam Toh Say passed away in 1990.

  125. [92] I accept that the primary function of registration under the Business Registration Act (Cap 32, 2004 Rev Ed) (“Business Registration Act”) is to protect third parties from fraud. This is evident from the structure of the Business Registration Act itself. Section 5 of the Business Registration Act requires every person carrying on business in Singapore to register the business with the Registrar of Business. Section 14 requires changes in the particulars of the business to be notified to the Registrar. Section 21 sets out the consequences that follow when a person carries on a business either without registering or when he has failed to furnish information required under s 14. It provides that any contract entered by him in relation to that particular business that he carries on shall be unenforceable except when the court exercises its discretion to grant relief. Pursuant to s 21(3), the court can grant relief to the person in default, on being satisfied that the default was accidental, or due to inadvertence, or some other sufficient cause. It can also grant relief on other grounds it deems “just and equitable”. It was suggested in Federal Lands Commissioner v Benfort Enterprise [1997] 3 SLR(R) 895 that the court will exercise this wide power to grant relief when it appears to the court that the counterparty to the contract had not been misled as to the members of the firm with whom he was dealing (at [13] – [14]). It is evident from this that the purpose of registration is to ensure that those who do business in Singapore do not mislead those whom they do business with as to their real identity. Therefore, registration should not affect the rights of the partners against one other. Similarly, Professor Yeo Hwee Ying states in Partnership Law in Singapore (Butterworths Asia) (“Partnership Law in Singapore”) that the Business Registration Act “is only concerned with protecting outside parties from fraud and it thus has no impact on the rights of the parties who are owners of the business” (at 26 – 27).

  126. [93] However, registration as a partner can be of some evidential value. Notwithstanding the statement quoted in the above paragraph, Professor Yeo does accept that “[t]here is some probative utility to registration”: Partnership Law in Singapore at 26. Indeed, in Sivagami Achi v P R M Ramanathan Chettiar & Anor [1959] MLJ 221, the court accepted that “registration is prima facie though strong evidence of partnership”. The court also held that partners are not estopped from alleging and proving that a person who is registered as a partner is in fact, merely a nominal partner.

  127. [94] I accept that in the present case, the registration of Chiam Toh Say’s estate as a partner of MHP is not by itself determinative of whether his personal representatives were admitted into the partnership. It is clear from the Plaintiff’s correspondence with ACRA that the registration was done more as a matter of ACRA’s standard operating procedure than to reflect the true makeup of the partnership. A letter from the RCB to MHP dated 30 March 2000 stated that the words “Estate of” in respect of Chiam Toh Kai and Chiam Toh Say were only entered “to denote that these two persons…have passed away. It does not denote that the estate has been admitted into the partnership”. Additionally, in a letter dated 27 November 2006 from ACRA to the Plaintiff, ACRA explained that:

  128. Lastly, in an email dated 20 January 2011, the Plaintiff was informed by ACRA that:

  129. Hence it appears that ACRA simply rectified its records to include Chiam Toh Say’s estate as a partner once it was notified of Chiam Toh Say’s death by his personal representatives. This seems to have been done as a matter of its standard operating procedure. Therefore the registration of Chiam Toh Say’s estate as a partner of MHP alone is not sufficient evidence of the admission of Chiam Toh Say’s estate into the partnership.

  130. [95] However, I believe that the registration of Chiam Toh Say’s estate as a partner of MHP takes on a different complexion when viewed in light of the Plaintiff’s failure to take any action to rectify the records kept with ACRA even though he was advised to do so several times.

  131. [96] IRAS continued to allocate profits and losses to the estate of Chiam Toh Say as a partner holding 25/88 share of MHP for the period 1996 to 2008. The 1st and 2nd defendants claim that they continued to pay the income tax that was assessed on the profits of MHP as executors of Chiam Toh Say’s estate. From the evidence, the partnership was making a loss from 1999 to 2008. Therefore no tax would have been payable for those years. For the period prior to that, the 1st and 2nd defendants must have paid the estate of Chiam Toh Say’s share of income tax. It is significant that IRAS continued to allocate profits and losses to the estate of Chiam Toh Say and the Plaintiff was aware of this because these allocations were sent to him in his capacity as the precedent partner of MHP.

  132. [97] The Plaintiff points out that he consistently wrote to IRAS objecting to its allocation of partnership profits. He also maintains that the allocations issued by IRAS cannot be relied upon as proof of admission to the partnership because IRAS consistently allocated partnership profits using the historical basis of allocation indicated in the Partnership Deed. The plaintiff insists that the allocation of the profits by IRAS did not take into account changes in the composition of the partnership overtime. For instance when cross-examining the 3rd Defendant, the Plaintiff’s counsel pointed out that IRAS’ allocation of profits and losses for the accounting period 1 January 1999 to 31 December 1999 lists the estate of Chiam Toh Lew as a partner even though Chiam Toh Lew’s name was withdrawn as a partner pursuant to a consent judgment in DC Summons 6648 of 1984 (see [9] above).

  133. [98] I accept that IRAS’ profit and loss allocations were based on the historical basis of allocation indicated in the Partnership Deed. There is also sufficient evidence on record to support the Plaintiff’s claim that he consistently objected to IRAS’ allocation of partnership profits. However, the Plaintiff failed to commence any legal proceedings to clarify the respective partners’ shares in MHP or to get the legal representatives of the deceased partners to sign the prescribed Form D so as to rectify the records kept by the ACRA to accurately reflect the makeup of the partnership, even though IRAS, Ministry of Finance and ACRA had advised him to do so several times.

  134. [99] In fact, the Plaintiff did not even protest when Chiam Toh Say’s estate paid 25/88 share of the property tax assessed on the Property in its capacity as a partner of MHP. IRAS’ property tax assessment on the Property was sent to the estate of Chiam Toh Say since they were holding the Property on trust for MHP. Upon receiving the tax assessment, the solicitors for Chiam Toh Say’s estate wrote to the Plaintiff and to the estates of Chiam Toh Kai and Chiam Toh Tong proposing that all “the partners of [MHP] pay the property tax due…in proportion to their shares” (emphasis added). They calculated the estate of Chiam Toh Say’s share of the property tax as amounting to $29,545.45. The 1st and 2nd defendants paid the same in their capacity as partners of MHP. There is no evidence to suggest that the Plaintiff either reimbursed them for this property tax payment or that he raised any objections when they paid the property tax.

  135. [100] On cross-examination, the Plaintiff claimed that the 1st and 2nd defendants paid the property tax only because they held the Property as trustees. He pointed out that he had written to the 1st and 2nd Defendants asking them to transfer the trusteeship of the Property to him but the 1st and 2nd Defendants had not acceded to his request. He maintained that had they done so, property tax would have been levied on him alone. However I am not convinced by his explanation for his inaction. The 1st and 2nd defendants made it abundantly clear that they were paying the property tax not as trustees of the Property but as partners of MHP. It is also significant that they only paid 25/88 share of the property tax that was assessed on the Property. This figure represents Chiam Toh Say’s original share in MHP. This suggests that they considered themselves to have been admitted as partners in respect of the 25/88 share that was originally held by Chiam Toh Say. The Plaintiff did nothing to make them think otherwise.

  136. [101] The payment of tax which is usually assessed on and paid by a partner is one factor that can be taken into consideration in determining whether the person who does so has been accepted into the partnership. In Chiam Heng Chow and another (executors of the estate of Chiam Toh Say, deceased) v Mitre Hotel (Proprietors) (a firm) and others [1993] 2 SLR(R) 894 the Court of Appeal considered Chiam Toh Say’s continued payment of tax on his share of the partnership profits from 1976 to 1986 as evidence that the then existing partners of MHP did not give effect to a notice of dissolution issued by Chiam Toh Say’s solicitors in 1975. Rather the court held that the partners treated the partnership as subsisting and continued to accept Chiam Toh Say as a partner (at [25] – [26]).

  137. [102] Additionally, silent inactivity may be sufficient to signify a party’s implied consent to an arrangement if the relationship between the parties is such that the silent party ought to have spoken up or objected: Giuffrida Luigi v Julius Baer (Singapore) Ltd (in members’ voluntary liquidation) and another [2010] SGHC 96 at [20] (“Julius Baer”). In Julius Baer, the claimant’s account with Julius Baer (Singapore) Ltd (“JBS”), a merchant bank incorporated in Singapore, was in credit. JBS informed the claimant by letter that his account would be transferred to Bank Julius Baer & Co Ltd which was incorporated in Switzerland. The claimant maintained that he never saw the letter and that he did not consent to the transfer and sought payment from JBS instead. The court found that by virtue of a clause in the Account Mandate that the claimant had signed when he opened the account with JBS, he had given instructions for his mail to be held by JBS. The mail was deemed delivered and received by him. The court held that in the circumstances, “there was a duty on [the claimant] to speak out, based on his deemed knowledge, if he wanted to object”. His failure to object was a factor that the court took into consideration in coming to the conclusion that the claimant had impliedly consented to his account being transferred.

  138. [103] In the present case, the Plaintiff knew that the 1st and 2nd defendants’ action in paying the property tax in their capacity as partners was diametrically opposed to the position that he maintained – ie, that they were never admitted into the partnership. Yet, he did not object but rather opportunistically went along. This, when viewed in light of the other factors discussed above, suggests that the Plaintiff had impliedly accepted the 1st and 2nd defendants as partners of MHP.

  139. The 3rd defendant was admitted as a partner and she held the 21/88 share in MHP that originally belonged to Chiam Toh Tong when the property was sold

  140. [104] Chiam Toh Tong passed away on 17 May 1969. Chiam Toh Kai was appointed the executor of Chiam Toh Tong’s estate in accordance with his will. Chiam Toh Tong’s 21/88 share in MHP accrued as a debt payable to his estate on the date of his death. The debt was subject to the contractual six-year limitation period. Chiam Toh Kai, the executor of Chiam Toh Tong’s estate, did not take any action to recover the debt. Any claim to recover the debt is now time barred.

  141. [105] However, it is clear that Chiam Toh Tong’s 21/88 share in MHP was not extinguished when MHP was reconstituted among the then surviving partners. Instead, Chiam Toh Kai was holding it on trust for Chiam Toh Tong’s estate.

  142. [106] However the Plaintiff alleges that he acquired the estate of Chiam Toh Tong’s 21/88 share in MHP through a series of transactions. First, he claims that Chiam Toh Kai personally acquired the estate of Chiam Toh Tong’s share in 1974. Next, the Plaintiff claims that he acquired Chiam Toh Tong’s share from Chiam Toh Kai in 1986 pursuant to the Loan Agreement. I am not convinced that either of these two events happened.

  143. Chiam Toh Kai did not acquire the estate of Chiam Toh Tong’s share in MHP in his personal capacity

  144. [107] I am of the view that Chiam Toh Kai never acquired the estate of Chiam Toh Tong’s share in MHP in his personal capacity in 1974 for a number of reasons.

  145. [108] The Plaintiff has not produced any evidence to substantiate his assertion that the beneficiaries of Chiam Toh Tong’s estate were not prepared to bear responsibility for the accumulated losses of MHP which the High Court in Chiam Toh Say v Mitre Hotel [1991] SGHC 132 found to amount to $103,805. Neither has he proved that Ho Kim Wah, the widowed first wife of Chiam Toh Tong, had the authority to consent to Chiam Toh Kai’s acquisition of the estate of Chiam Toh Tong’s share on behalf of all the beneficiaries of Chiam Toh Tong’s estate. Both the 3rd Defendant and the Chiam Heng Pout, who are the beneficiaries of Chiam Toh Tong’s estate, deny authorising Ho Kim Wah to consent to the Chiam Toh Kai’s acquisition of the estate of Chiam Toh Tong’s share in MHP.

  146. [109] I am not convinced that the minutes of the partners meeting dated 6 April 1975 prove that Chiam Toh Kai had acquired the estate of Chiam Toh Tong’s share in MHP in his personal capacity. The pertinent parts of the minutes read:

  147. All that the minutes say is that Chiam Toh Kai would assume responsibility for the estate of Chiam Toh Tong’s share of liabilities of MHP. It does not state unequivocally that Chiam Toh Kai had acquired the estate of Chiam Toh Tong’s share in his personal capacity.

  148. [110] The Plaintiff also points out that the estate of Chiam Toh Tong is not included in the list of partners of MHP submitted by Chiam Toh Say to the Registrar of Businesses in 1974 (“Form B”) to support his case. The Plaintiff claims that this shows that Chiam Toh Kai had taken over the estate of Chiam Toh Tong’s share in the partnership. However, Form B does not set out the shareholding of each partner. Without details of the shareholding of each of the partner, it is not possible to draw the inference that Chiam Toh Kai had acquired the estate of Chiam Toh Tong’s share in MHP. A more plausible explanation for the omission is that the 3rd Defendant and Chiam Heng Pout, who were the beneficiaries of the estate of Chiam Toh Tong, were not admitted as partners of MHP at that time.

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