Innovative Corp Pte Ltd v Ow Chun Ming: Breach of Fiduciary Duty & Account of Profits for Eleven@Holland Project
In Innovative Corporation Pte Ltd v Ow Chun Ming and Clydesbuilt (Holland Link) Pte Ltd, the General Division of the High Court of Singapore addressed the assessment of profits owed by the defendants to the plaintiff following a prior judgment finding the first defendant, Ow Chun Ming, in breach of his fiduciary duties and the second defendant, Clydesbuilt (Holland Link) Pte Ltd, in dishonest assistance of that breach, related to the Eleven@Holland project. Ang Cheng Hock J ordered the defendants to account for profits, determining the appropriate valuation date for unsold units and addressing claims for equitable allowance. The court ordered the second defendant to pay the plaintiff $84,548,250.96 and the first defendant to pay the plaintiff $2,581,068.36.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court orders Ow Chun Ming and Clydesbuilt to account for profits from the Eleven@Holland project due to breach of fiduciary duty.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Innovative Corporation Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Ow Chun Ming | Defendant | Individual | Account of Profits Ordered | Lost | |
| Clydesbuilt (Holland Link) Pte Ltd | Defendant | Corporation | Account of Profits Ordered | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Ang Cheng Hock | Judge | Yes |
4. Counsels
4. Facts
- First defendant, Ow Chun Ming, was chairman and CEO of the Clydesbuilt group of companies.
- Plaintiff, Innovative Corporation Pte Ltd, intended to collaborate with FYTA on a project.
- First defendant was appointed as a director of the plaintiff in December 2009.
- First defendant submitted a bid for the Project, which was accepted by FYTA on 4 May 2010.
- Second defendant was incorporated on 17 May 2010 as the vehicle to carry out the Project.
- First defendant resigned as a director of the plaintiff in August 2010.
- The project was completed sometime in 2014.
5. Formal Citations
- Innovative Corp Pte Ltd v Ow Chun Ming and another, Suit No 410 of 2016 (Taking of Accounts or Inquiries No 2 of 2021), [2022] SGHC 233
6. Timeline
| Date | Event |
|---|---|
| Fong Yun Thai Association decided to embark on the Project | |
| Agreement signed between Tianjin Heping Construction Group Co Ltd and FYTA | |
| First defendant appointed as a director of the plaintiff | |
| Ms Chen introduced the first defendant to FYTA’s representatives | |
| First defendant submitted his bid for the Project | |
| First defendant's bid accepted by the board of FYTA | |
| Second defendant incorporated | |
| First defendant resigned as a director of the plaintiff | |
| Joint venture agreement entered into between the defendants, Clydesbuilt Investment Pte Ltd, FYTA and FYTA’s trustees | |
| Second defendant obtained the developer’s sale license | |
| Project completed | |
| 21 of the 25 units earmarked for FYTA were transferred to them | |
| Judgment issued finding the first defendant had breached his fiduciary duties to the plaintiff | |
| Court of Appeal dismissed the defendants’ appeal | |
| First defendant filed an affidavit | |
| Plaintiff filed an application for discovery against the defendants | |
| AR granted all of the plaintiff’s requests for documents | |
| Parties exchanged the first round of their affidavits of evidence-in-chief | |
| Portions of the first defendant’s affidavit of evidence-in-chief which dealt with this point were struck out | |
| Judgment reserved |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that the first defendant breached his fiduciary duties to the plaintiff.
- Category: Substantive
- Sub-Issues:
- Misappropriation of business opportunity
- Conflict of interest
- Unauthorised profit
- Account of Profits
- Outcome: The court ordered the defendants to account for the profits they made in relation to the Project.
- Category: Remedial
- Sub-Issues:
- Determination of profits
- Valuation of unsold units
- Equitable allowance
- Dishonest Assistance
- Outcome: The court found that the second defendant dishonestly assisted the first defendant in his breach of fiduciary duties.
- Category: Substantive
- Equitable Allowance
- Outcome: The court denied the first defendant's claim for an equitable allowance.
- Category: Remedial
- Sub-Issues:
- Cost of equity capital
- Cost of financial guarantee
- Cost of time, skill and effort
8. Remedies Sought
- Account of Profits
9. Cause of Actions
- Breach of Fiduciary Duty
- Dishonest Assistance
10. Practice Areas
- Commercial Litigation
- Construction Law
- Breach of Fiduciary Duty
11. Industries
- Construction
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Innovative Corp Pte Ltd v Ow Chun Ming and another | High Court | Yes | [2020] 3 SLR 943 | Singapore | Sets out the key factual findings made in the liability proceedings, establishing the breach of fiduciary duty and dishonest assistance. |
| UVJ and others v UVH and others and another appeal | Court of Appeal | No | [2020] 2 SLR 336 | Singapore | Explains the distinction between a common account and an account on a wilful default basis. |
| Lalwani Shalini Gobind and another v Lalwani Ashok Bherumal | High Court | No | [2017] SGHC 90 | Singapore | Explains the purposes of the accounting procedure. |
| Cheong Soh Chin and others v Eng Chiet Shoong and others | High Court | No | [2019] 4 SLR 714 | Singapore | Explains the purposes of the accounting procedure. |
| Sim Poh Ping v Winsta Holding Pte Ltd and another and other appeals | Court of Appeal | No | [2020] 1 SLR 1199 | Singapore | Explains the falsification of a wrongful expense or loss charged to the account. |
| United Pan-Europe Communications NV v Deutsche Bank AG | England and Wales High Court (Chancery Division) | No | [2000] 2 BCLC 461 | England and Wales | States that the purpose of a disgorgement of profits is not to compensate the beneficiary but to ensure that the fiduciary does not profit from his breach of duty. |
| Mona Computer Systems (S) Pte Ltd v Singaravelu Murugan | Court of Appeal | No | [2014] 1 SLR 847 | Singapore | Explains that an order for an account of profits may sometimes result in a “windfall” for the successful claimant. |
| Parakou Investment Holdings Pte Ltd and another v Parakou Shipping Pte Ltd (in liquidation) and other appeals | Court of Appeal | No | [2018] 1 SLR 271 | Singapore | States that a fiduciary cannot escape liability by diverting profits to third parties, especially companies which the fiduciary owns. |
| PlanAssure PAC (formerly known as Patrick Lee PAC) v Gaelic Inns Pte Ltd | High Court | No | [2007] 4 SLR(R) 513 | Singapore | States that the purpose of a statutory audit is not to ensure that all entries and documents in a particular set of accounts are correct. |
| Rabiah Bee bte Mohamed Ibrahim v Salem Ibrahim | High Court | No | [2007] 2 SLR(R) 655 | Singapore | States that the purpose of a statutory audit is not to ensure that all entries and documents in a particular set of accounts are correct. |
| Jet Holding Ltd and others v Cooper Cameron (Singapore) Pte Ltd and another and other appeals | Court of Appeal | No | [2006] 3 SLR(R) 769 | Singapore | Expresses the view that the court should not adopt “an overly punctilious insistence on compliance with the provisions in the Evidence Act [(Cap 97, 1997 Rev Ed)] for its own sake” in admitting documents into evidence, especially when large volumes of documents are being relied upon. |
| Soon Peck Wah v Woon Che Chye | High Court | No | [1997] 3 SLR(R) 430 | Singapore | States that if the documents are being admitted to prove the truth of their contents and the maker of the document is not present in court to be cross-examined to test the veracity of the documents, the documents would constitute hearsay evidence. |
| Nant-Y-Glo and Blaina Ironworks Company v Grave | England and Wales High Court (Chancery Division) | No | [1878] 12 Ch D 738 | England and Wales | Involved situations where it may perhaps be explained that the fiduciary’s breaches of duty had caused an identifiable loss to his principal, and the court was thus focused on making orders that made good the loss suffered by the principal. |
| Eden v Ridsdales Railway Lamp and Lighting Company, Limited | Queen's Bench Division | No | (1889) 23 QBD 368 | England and Wales | Involved situations where it may perhaps be explained that the fiduciary’s breaches of duty had caused an identifiable loss to his principal, and the court was thus focused on making orders that made good the loss suffered by the principal. |
| Ding Auto Pte Ltd v Yip Kin Lung and others | High Court | No | [2019] SGHC 243 | Singapore | Cites Nant-Y-Glo in the context of equitable compensation. |
| Murad and another v Al-Saraj and another | England and Wales Court of Appeal (Civil Division) | No | [2005] EWCA Civ 959 | England and Wales | States that the loss of a beneficiary is not necessarily the same as the profit which the fiduciary has made; the fiduciary may have to account for a profit even if the beneficiary has suffered no loss. |
| The “Dream Star” | High Court | No | [2018] 4 SLR 473 | Singapore | States that the independence and impartiality of an expert witness are paramount as the expert’s duty is to assist the court to come to a decision. |
| Pacific Recreation Pte Ltd v S Y Technology and another appeal | Court of Appeal | No | [2008] 2 SLR(R) 491 | Singapore | States that it is the duty of an expert to assist the court on the matters within his expertise, while O 40A r 2(2) provides that this duty overrides any obligation to the person from whom he has received instructions or by whom he is paid. |
| Gunapathy Muniandy v Khoo James and others | High Court | No | [2001] SGHC 165 | Singapore | States that experts must not only be impartial, but must also appear to be so. |
| HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v Toshin Development Singapore Pte Ltd | High Court | No | [2012] 4 SLR 738 | Singapore | States that experts should disclose “without any prompting” any existing or recent relationship with any of the parties; a failure to make proper disclosure in a timely manner may cause “serious concerns about apparent or actual bias on the part of the expert” and could lead to the expert’s evidence being discounted. |
| Technomed Limited and another v Bluecrest Health Screening Limited and another | England and Wales High Court (Chancery Division) | No | [2017] EWHC 2142 (Ch) | England and Wales | Where an expert is found not to be independent, the court may accord less weight to the expert’s evidence, or even exclude it entirely. |
| EXP v Barker | England and Wales Court of Appeal (Civil Division) | No | [2017] EWCA Civ 63 | England and Wales | Where an expert is found not to be independent, the court may accord less weight to the expert’s evidence, or even exclude it entirely. |
| CMS Dolphin Ltd v Simonet and another | England and Wales High Court (Chancery Division) | No | [2001] 2 BCLC 704 | England and Wales | An errant fiduciary should only be accountable for the profits “properly attributable to the breach of fiduciary duty”. |
| Phipps v Boardman | England and Wales High Court (Chancery Division) | No | [1964] 1 WLR 993 | England and Wales | The defaulting fiduciaries were granted a liberal allowance for the skill and work they had invested, which eventually reaped profits for the trust. |
| Jumabhoy Rafiq v Scotts Investments (Singapore) Pte Ltd | Court of Appeal | No | [2005] 1 SLR(R) 45 | Singapore | The court will only exercise its jurisdiction to allow the defaulting fiduciary an equitable allowance where to do so would not provide any encouragement to fiduciaries to put themselves in a position where their duties conflict with their interests. |
| Guinness plc v Saunders | House of Lords | No | [1990] 2 AC 663 | United Kingdom | The court will only exercise its jurisdiction to allow the defaulting fiduciary an equitable allowance where to do so would not provide any encouragement to fiduciaries to put themselves in a position where their duties conflict with their interests. |
| Griffin Real Estate Investment Holdings Pte Ltd (in liquidation) v ERC Unicampus Pte Ltd | High Court | No | [2019] 5 SLR 105 | Singapore | The purpose of an equitable allowance is to grant errant fiduciaries an allowance for their work and skill in producing the profits. |
| Ultraframe (UK) Ltd v Fielding and others and Conjoined Cases | England and Wales High Court (Chancery Division) | No | [2005] EWHC 1638 | England and Wales | While the mere fact that a fiduciary has a substantial interest in a company which knowingly receives trust property does not make the fiduciary personally accountable for the receipt, the case is otherwise where the company is a mere cloak or alter ego of the fiduciary. |
13. Applicable Rules
| Rule Name |
|---|
| Order 40A rule 2 of the Rules of Court |
| Order 40A rule 3(2)(b) of the Rules of Court |
| Order 40A rule 3(2)(c) of the Rules of Court |
| Order 40A r 3(2)(h) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Fiduciary Duty
- Account of Profits
- Eleven@Holland
- Dishonest Assistance
- Equitable Allowance
- Construction Costs
- Consultancy Costs
- Unsold Units
- Tender Price Index
- Wilful Default
15.2 Keywords
- fiduciary duty
- account of profits
- construction costs
- equitable allowance
- dishonest assistance
- real estate development
- Singapore
- Eleven@Holland
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fiduciary Duties | 95 |
| Dishonest assistance | 85 |
| Duty to Account | 80 |
| Remedies | 70 |
| Equitable Allowance | 65 |
| Company Law | 60 |
| Accounting | 55 |
| Civil Procedure | 50 |
| Evidence | 40 |
| Summary Judgement | 30 |
16. Subjects
- Equity
- Remedies
- Fiduciary Duty
- Construction Law
- Real Estate
- Accounting