Ho Pak Kim Realty Co Pte Ltd v Ho Soo Fong: Directors' Duties & Breach
In Ho Pak Kim Realty Co Pte Ltd (in liquidation) v Ho Soo Fong and Ho Soo Kheng, the High Court of Singapore heard a claim by the liquidator of Ho Pak Kim Realty Co Pte Ltd (HPK) against Ho Soo Fong and Ho Soo Kheng, the directors of HPK, for breach of their duties as directors. The liquidator alleged that the directors failed to submit proper statements of affairs, destroyed company records, and failed to pursue a debt of $3.59 million owed to HPK by related parties. The court found that the directors had breached their duties and were liable for the loss suffered by HPK.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Liquidator sues directors for breach of duties regarding a $3.59m debt. Court finds directors liable for failing to pursue debt.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ho Soo Fong | Defendant | Individual | Judgment against Defendant | Lost | |
| Ho Soo Kheng | Defendant | Individual | Judgment against Defendant | Lost | |
| Ho Pak Kim Realty Co Pte Ltd (in liquidation) | Plaintiff | Corporation | Judgment for Plaintiff | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judge | Yes |
4. Counsels
4. Facts
- HPK was incorporated in May 1984 and engaged in civil engineering and real estate development.
- D1 and D2 are brothers and have been directors of HPK since its incorporation.
- In 2006, HPK commenced Suit 36 against Revitech over a construction dispute.
- Revitech filed a counterclaim, which was eventually assessed to be larger than HPK’s claim.
- HPK owed Revitech around $1.585 million as of October 2013.
- Revitech served statutory demands on HPK in June and July 2017 for an outstanding sum of $1.619 million.
- HPK failed to pay, and Revitech commenced winding up proceedings in October 2017.
- A winding up order was made on 27 October 2017, and Don Ho was appointed HPK’s liquidator.
- The liquidator claimed the directors failed to submit proper statements of affairs and destroyed company records.
- The liquidator claimed the directors failed to pursue a $3.59 million debt owed to HPK by related parties.
- The 2012 financial statement showed an amount owing from related parties to HPK of $3.59 million.
- The directors claimed the related parties were Wee Poh, Revitech, and Subramaniam, but the liquidator disputed this.
- The directors did not provide supporting documents or information to substantiate the $3.59 million amount or identify the related parties.
- The directors claimed they could not provide HPK’s documents as CAD had seized them.
- D1 claimed that any remaining documents were accidentally cleared away by his workers.
- D2 claimed he was a silent shareholder and left the management of HPK to D1.
- D2 claimed he did not know about HPK’s dealings with Revitech or third-party debts owed to HPK.
5. Formal Citations
- Ho Pak Kim Realty Co Pte Ltd (in liquidation) v Ho Soo Fong and another, Suit No 1012 of 2018 and Summons No 1077 of 2020, [2020] SGHC 193
6. Timeline
| Date | Event |
|---|---|
| HPK incorporated | |
| HPK commenced Suit 36 against Revitech | |
| Assessment of damages award in Suit 36 | |
| Revitech served statutory demands on HPK | |
| Revitech commenced winding up proceedings | |
| Winding up order made | |
| Present Suit commenced | |
| Trial began | |
| Judgment reserved |
7. Legal Issues
- Breach of Directors' Duties
- Outcome: The court found that the directors breached their duties by failing to pursue the $3.59m debt.
- Category: Substantive
- Sub-Issues:
- Failure to act honestly
- Failure to act bona fide in the company's interests
- Failure to consider the interests of creditors
- Conflict of interest
- Failure to exercise reasonable diligence
- Related Cases:
- [2018] 2 SLR 333
- [2014] 3 SLR 329
- [2010] 4 SLR 1089
- [2014] 3 SLR 277
- [2007] 2 SLR(R) 597
- [2017] 3 SLR 957
- [2017] 2 SLR 592
- [2020] 1 SLR 1199
- [2017] 4 SLR 1153
- [2007] 4 SLR(R) 218
- Limitation
- Outcome: The court found that the claim was not time-barred.
- Category: Procedural
- Related Cases:
- [2020] SGCA 47
8. Remedies Sought
- S$3,590,587
- Damages for breach of duties
- Declaration that the directors are jointly and severally liable for HPK’s debts
9. Cause of Actions
- Breach of Directors' Duties
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- Real Estate Development
- Civil Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd | High Court | Yes | [2014] 3 SLR 524 | Singapore | Cited for principles on allowing amendments to pleadings. |
| Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters | Court of Appeal | Yes | [2018] 2 SLR 333 | Singapore | Cited for the definition of the duty to act honestly and bona fide in the company's interests. |
| Ho Kang Peng v Scintronix Corp Ltd (formerly known as TTL Holdings Ltd) | High Court | Yes | [2014] 3 SLR 329 | Singapore | Cited for the test of whether directors acted reasonably and for proper purposes. |
| Liquidators of Progen Engineering Pte Ltd v Progen Holdings Ltd | High Court | Yes | [2010] 4 SLR 1089 | Singapore | Cited for the fiduciary duty to take into account the interests of the company’s creditors when making decisions for the company. |
| Dynasty Line Ltd (in liquidation) v Sukamto Sia and another and another appeal | High Court | Yes | [2014] 3 SLR 277 | Singapore | Cited for the principle that a director cannot be 'completely ignorant' of the company's affairs. |
| Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation) | High Court | Yes | [2007] 2 SLR(R) 597 | Singapore | Cited for the director's duty of undivided loyalty to his company. |
| Nordic International Ltd v Morten Innhaug | High Court | Yes | [2017] 3 SLR 957 | Singapore | Cited for the no-conflict rule. |
| Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal | High Court | Yes | [2017] 2 SLR 592 | Singapore | Cited for the strictness of the no-conflict rule. |
| Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals | Court of Appeal | Yes | [2020] 1 SLR 1199 | Singapore | Cited for the remedies available for a director’s breach of duty. |
| Abdul Ghani bin Tahir v Public Prosecutor | High Court | Yes | [2017] 4 SLR 1153 | Singapore | Cited for the principle that a director cannot simply be a 'dummy director'. |
| W&P Piling Pte Ltd (in liquidation) v Chew Yin What and others | High Court | Yes | [2007] 4 SLR(R) 218 | Singapore | Cited for the principle that the law does not make a distinction of the fiduciary duties that a nominee director owes to the company. |
| IPP Financial Advisers Pte Ltd v Saimee bin Jumaat and another appeal | Court of Appeal | Yes | [2020] SGCA 47 | Singapore | Cited for the principle that the plaintiff has to prove that its claim falls within the limitation period. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 157(1) of the Companies Act | Singapore |
| s 199 of the Companies Act | Singapore |
| s 336(1) of the Companies Act | Singapore |
| s 270 of the Companies Act | Singapore |
| s 157C of the Companies Act | Singapore |
| Limitation Act (Cap 163, 1996 Rev Ed) | Singapore |
| s 6(1)(a) of the Limitation Act | Singapore |
| s 6(2) of the Limitation Act | Singapore |
| s 6(7) of the Limitation Act | Singapore |
| s 22(2) of the Limitation Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Directors' duties
- Statement of affairs
- Related parties
- Liquidator
- Winding up
- Insolvency
- Breach of fiduciary duty
- Reasonable diligence
- Conflict of interest
- Limitation Act
15.2 Keywords
- Directors
- Duties
- Breach
- Companies
- Equity
- Remedies
- Civil Procedure
- Limitation
- Liquidator
- Statement of affairs
- Related parties
- Winding up
- Insolvency
- Fiduciary duty
- Reasonable diligence
- Conflict of interest
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fiduciary Duties | 90 |
| Company Law | 90 |
| Winding Up | 80 |
| Chancery and Equity | 70 |
| Civil Procedure | 60 |
| Limitation | 50 |
16. Subjects
- Company Law
- Directors' Duties
- Breach of Fiduciary Duty
- Insolvency