Poh Lian Development Pte Ltd v Hok Mee Property Pte Ltd and others

Lee Seiu Kin J:

[2] In this Addendum, I adopt the same nomenclature used in the Judgment. The Addendum will state the relevant parts of the Judgment that are modified or altered, with the reasons for them wherever applicable. In the event of any conflict between this Addendum and the Judgment, this Addendum is to take precedence over the Judgment. There have been submissions made by various parties on various points that I have considered but rejected. Some of those submissions are not reflected in this Addendum; I did not consider this necessary in view of the fact that I maintained those parts of my original decision, the reasons for which have been given in the Judgment.

(a) An item called “Granite Niche Cover to Modules $1,462,880” had been omitted from the works and the item had been considered in AGA’s Qualified Final Account. Therefore this item should be excluded from the computation of the total PC Rate items.

(b) There was a change to granolithic finishes (in lieu of granite finish) to the floor of the Annex Block which resulted in an omission of $1,078,206.40. As Hok Chung was similarly not paid for this, it should also be excluded from the total PC Rate items.

(c) Hok Chung was entitled to 15% profit for attendance for works carried out and this works out to be $127,525.68.

In the premises, the total overpayment to Hok Chung would be two-thirds of ($5,091,600-$1,462,880-$1,078,206.40) with a deduction for profit for attendance of $127,525.68, which results in the sum of $1,572,816.72.

[5] Therefore, the order in [31] of the Judgment should be for Hok Mee to refund to the Partnership the sum of $1,572,816.72 and in [40] of the Judgment, for Hok Chung to refund $1,572,816.72 to the Partnership.

[6] At [35] of the Judgment, I had found that PLD and Hok Mee had to account to the Partnership for the $800,000 advanced to four directors of PLD out of the proceeds of sale of the niches. There I had held that they should be liable in the ratio of their respective shares of the profits. However I agree with counsel for Hok Mee that the apportionment should be equal on the ground that it did not concern any sharing of profit as no profit was eventually made by the Partnership. Therefore my order in [35] of the Judgment is to be amended accordingly, and PLD is liable for $400,000.00 and Hok Mee also for $400,000.00.

[7] In [36] of the Judgment, I had found that the Temple was entitled to outstanding commission of $1m from the Partnership. As the commission was to be paid from the gross proceeds of sale, this debt is to rank ahead of all other payments due from the Partnership. Hok Mee submitted that this debt should rank pari passu with the loans and advances made by PLD, Hok Mee and Hok Chung. I do not agree with this on the ground that the latter were loans made by the partners whereas the commission to the Temple was an expense. As for the outstanding management fee due to Hok Mee, I was of the view that that should rank pari passu with the said loans and advances in view of Hok Mee’s conduct.

[8] In [39] of the Judgment, I had ordered Hok Chung to refund $2,005,856.03 to the Partnership being the amount overpaid to it. However I had not taken into consideration the fact that there should not have been an omission of $50,000 (which was made by the Architects) for the minor sewer works construction. Taking that into account, the refund should be reduced by that sum to $1,955,856.03. I therefore order this reduced amount to be refunded by Hok Chung to the Partnership instead. Hok Chung had made further submissions on other reasons for reducing this sum further, all of which I rejected.

[9] In [44] of the Judgment, I had held that the corporate veil should be lifted against Kek in respect of Hok Mee and Hok Chung. I had found in [39] and [40] of the Judgment (as amended in this Addendum) that the relevant losses were the sums of $1,955,856.03 and $1,572,816.72 due from Hok Chung. Consistent with my finding in [44] of the Judgment, I order that Kek be personally liable to the Partnership for these amounts, totalling $3,528,672.75.

[10] In [50] of the Judgment I had ordered Hok Mee to refund the kickback received from AGA of a sum amounting to $1,108,406.49. This sum is incorrect and the correct amount is $358,400.

$400,000 advance to the Temple

[12] In [76] of the Judgment, I had ordered the remaining amounts in the Partnership Account, after the Temple has been fully paid the sum of $281,200 pursuant to [74] of the Judgment and such expenses as may be assessed by the Registrar pursuant to [75] of the Judgment, to be distributed as follows: 36.235% to PLD, 52% to Hok Mee and 11.765% to the Temple. However I had not taken into account the outstanding debts owed by the Partnership to PLD, Hok Mee as well as Hok Chung. The parties are agreed that PLD had advanced a total of $13,300,000 to the Partnership, Hok Mee had advanced a total of $5,730,000 and Hok Chung a total of $286,000. Therefore the order in [76] of the Judgment is to include such payments before any distribution to the Partners. In the event that there is insufficient funds to repay these three creditors in full, they rank pari passu as the Joint Venture Agreements do not provide for any priority of payment.

[13] The following tables summarise the outcome of the above modifications to the Judgment.

Hok Mee and Hok Chung are jointly and severally liable for the sum of $1,572,816.72 in (1). Hok Chung is liable for the sum of $1,955,856.03 in (2). PLD is liable for the sum of $400,000 in (3)(a). Hok Mee is liable for the sum of $400,000 in (3)(b). As the corporate veil is lifted in respect of Hok Mee and Hok Chung, Kek is personally liable to the partnership for $3,928,672.75 comprising the $1,572,816.72 in (1), $1,955,856.03 in (2) and $400,000 in (3)(b).

As the total moneys that would be available in the Partnership Account as a result of the present action is $4,328,672.75 and the total debt owed by the Partnership is $21,448,389.41, it follows that each creditor is entitled to recover a rateable proportion for every dollar owed by the Partnership. The respective sum due to each creditor is as follows:

The computation of the net positions is as follows:

(a) PLD is entitled to set off $400,000 from the sums due from the Partnership and accordingly is entitled to recover $2,284,180.45 (rounded to $2,284,180) from the Partnership.

(b) Kek/Hok Mee/Hok Chung owed the Partnership a total sum of $3,928,672.25 but are entitled to be paid a total sum of $1,644,492.30 ($1,156,417.60 + $57,719.97 + $430,354.73). They are therefore liable to pay the partnership $2,284,179.95 (rounded to $2,284,180).

In the event that the assessed damages do not exceed $122,600, the Temple shall have to pay the net figure to the Partnership.

[14] Kek, Hok Mee and Hok Chung are liable to pay, on the basis of joint and several liability, the sum of $2,284,180 to the Partnership. As PLD is entitled to this sum from the Partnership, it follows that Kek, Hok Mee and Hok Chung ought to pay the sum of $2,284,180 to PLD and I so order.

[15] In the event that the damages assessed pursuant to the order in [64] of the Judgment is less than $122,600, the Temple shall pay such difference to the Partnership. Parties are at liberty to apply for further orders in relation to any difference between the assessed damages and the sum of $122,600.

[16] In [72] of the Judgment, I had ordered the Temple to pay $54,000 to PLD being money had and received. The Temple had subsequently paid this sum to its solicitors as stakeholders and I order it to be paid over to PLD forthwith.