TIO GEOK HONG BRYAN V KORBETT PTE LTD & ANOR

Facts

Korbett Pte Ltd held an industrial property at 26A Hillview Terrace on trust under a trust deed dated 10 September 2016 for four beneficiaries, including Tio Geok Hong Bryan, Wang Piao and Lee Wee Ching, each with a 25% share; a fourth beneficiary later dropped out. According to Mr Lee, he controlled Korbett and another company, Global Techsolutions (S) Pte Ltd (GTSS), which occupied part of the property. Korbett serviced the mortgage, paid property tax and insurance, collected rent and paid for renovation.

On 4 March 2021, on Mr Lee's initiative, Mr Tio and Mr Wang executed a deed of reconveyance and received what was said to be their share of sale proceeds; the court recorded that they later discovered there had been no sale. They sued in Suits 304 and 356 of 2022. By consent interlocutory judgments dated 4 September 2023, the parties agreed that the trust deed remained in effect, that each plaintiff kept a 25% beneficial interest, that Korbett would account for and pay over all profits obtained through the breaches of fiduciary duty pleaded in the statements of claim, and that Korbett would give each plaintiff a full account of his share. Assistant Registrar Gan Kam Yuin heard the taking of accounts with expert valuation evidence on both sides.

Issues

1. Whether rent Korbett saved by occupying the property without payment counts as profit for which it must account.
2. Whether the monthly payments from GTSS and a single payment of S$23,000 were profits caused by the pleaded breaches.
3. What sum Korbett must pay and whether it all goes to the two plaintiffs.
4. What the full account of the plaintiffs' beneficial interest must contain.

Holding

The court allowed the claims in part. Korbett must account for and pay a notional rent of S$415,333.33 for its rent-free occupation from March 2021 to April 2024, and the total of GTSS's monthly payments for its occupation of the property, all divided equally between Mr Tio and Mr Wang. It need not account for the S$23,000. Korbett was ordered to produce a full account of all incomings and outgoings on set terms, but the court declined to order the plaintiffs to pay Korbett any balance from that account. Timing, costs and liberty to apply were reserved.

Reasoning

The burden lies on a defaulting fiduciary to show that a profit is not one it must account for. Profits are not limited to money actually received: following the reasoning in re Howlett and consistent with UVJ and others v UVH and others and another appeal [2020] 2 SLR 336, a trustee occupying trust property rent-free is treated as having received occupation rent. A narrower rule would let fiduciaries take their gains indirectly. The pleaded duties, including the duty not to profit from the trusteeship, sufficed, and the claimed oral arrangement allowing rent-free use was not recorded in the consent judgments, was not confirmed by the plaintiffs and was unsupported.

Mr Lee's own affidavits described the GTSS payments as rent, and his later attempt to treat them as his share of the mortgage confused the payment's character with its use. The S$23,000 stood outside the regular pattern of rental receipts and was accepted as not rent. On quantum, the plaintiffs' expert's figures were accepted, as Korbett's criticisms were either not put to him or unsupported, and its own expert conceded her numbers could not be used. The consent judgments directed payment of all profits to the plaintiffs, and the court could not rewrite that settlement.

For the full account, Mr Lee's contributions had to be recorded even if Korbett paid for him; mortgage records for the plaintiffs ran from March 2021; and several renovation invoices, general improvements outside the agreed basic works, and costs linked to an undisclosed tenancy were excluded from the shared liabilities. The account is not itself a payment order.

From the judgment