Equity and Trust
| Author | Kelvin LOW Fatt Kin LLB (Hons) (National University of Singapore), BCL (Oxford); Assistant Professor, Faculty of Law, University of Hong Kong. |
| Published date | 01 December 2005 |
| Date | 01 December 2005 |
12.1 Although 2005 saw less extensive legislative intervention in trust law compared to 2004, the Trust Companies Act 2005 (Act 11 of 2005) was passed, updating and superseding the Trust Companies Act (Cap 336, 1985 Rev Ed). However, as the present chapter is intended to focus on judicial developments in the area, no more shall be said about the amendments.
12.2 The Singapore chapter on the presumption of advancement appeared to be closed when Lai Min Tet v Lai Min Kin[2004] 1 SLR 499 was decided in early 2004. However, as briefly noted in last year”s review, a differently constituted High Court applied the presumption of advancement barely a year later in Re Estate of Chong Siew Kum, deceased[2005] 2 SLR 324, and suggested that its reach might reasonably be extended (Tan Sook Yee & Kelvin Low Fatt Kin, ‘Equity and Trust’(2004) 5 SAL Ann Rev 260 at para 12.10). Chong Siew Kum was widowed in 1946 when her husband passed away, leaving her with six young children and a business specialising in making flags, sails and other canvas goods for ships. Although illiterate, she managed to grow the business and the business generated enough profits for her to purchase a property at 19 Ringwood Road in 1963 in the names of three of her four sons, viz, the plaintiff, Chia Kin Tuck, Tse Ng Chee, and the second defendant, Tse Sai Chee. The three of them occupied the Ringwood property until 1987 when Tse Ng Chee left after he was ‘disowned’ by Chong. Tse Ng Chee was paid $200,000 by Chong for his share in the Ringwood property and some shares and the first defendant, Chia Ee Moey, one of Chong”s two daughters, was substituted as a joint tenant in place of Tse Ng Chee. In 1965, Chong purchased a shop-house at 393 Balestier Road in the name of her other daughter, the third defendant, Chai Cheo Moey.
12.3 Chong died in 1996, leaving a will under which she gave all her movable and immovable property to her trustees to sell, call in and convert into money and divide the proceeds among the plaintiff (as to 50%), Chia Weng Tuck (as to 10%), and the first and third defendants (each as to 20%).
The dispute arose when the plaintiff sought a declaration that the Ringwood and Balestier properties were held by the respective legal owners in trust for the estate of Chong absolutely.
12.4 Andrew Ang JC (as he then was) began his analysis by noting that the traditional view is that a presumption of advancement does not arise as between a mother and her child. However, the court cautioned that the traditional view must be treated with care, bearing in mind the change in the status of women over the years. Whereas they were once mere dependants, they now often assume equal importance as providers for the family. Furthermore, both parents were under a statutory duty to provide a reasonable maintenance of their children in Singapore, unlike the position that prevailed in some of the older English cases. The court also noted (at [16]) some academic criticism of the traditional position, citing passages from both Halsbury”s Laws of England, vol 48 (Butterworths, 4th Ed Reissue, 2000) and Parker and Mellows: The Modern Law of Trusts (Sweet & Maxwell, 8th Ed, 2003).
12.5 Although the tenor of the judgment suggested concurrence with the criticism, the court did not appear to actually extend the presumption of advancement to cases of mothers and their children per se. Instead, the court was keen to emphasise the particular facts of the case that suggested that Chong stood in loco parentis to her children so that the presumption of advancement applied. In particular, the court observed that Chong was widowed at an early age and raised and provided for her children throughout her life. Even in their adulthood when they worked for the family business, she continued to hold the purse strings and they continued to depend on her for their basic necessities of life (at [18]—[19]). The ratio of the case, therefore, seems to be confined to the traditional view that, where a person other than a father stands in loco parentis to a child, the presumption of advancement would apply to transfers made from that person to the child, relegating the court”s comments on the modern role of women and its influence on the presumption of advancement to mere dicta.
12.6 The decision has created a state of uncertainty with respect to the continued applicability of the presumption of advancement in Singapore, owing to its direct opposition to Lai Min Tet v Lai Min Kin (supra para 12.2), decided barely a year ago. Before the tension between the two cases is examined, it is appropriate to commend the restraint exercised by Ang JC in not extending the presumption of advancement to mother-child relationships on the particular facts. Although the court”s comments on the modern role of women are laudable and the traditional view of the role of
the presumption of advancement in the mother-child relationship has been the subject of much criticism, Re Estate of Chong Siew Kum, deceased was perhaps not the ideal case for the presumption to be extended to such cases considering the age of the donor. Although she led an unusually independent life after the premature death of her husband, women of Mdm Chong”s age are hardly typical of the modern independent woman sharing responsibilities in providing for the family that has led to the widespread criticism of the rule.
12.7 The facts of Re Estate of Chong Siew Kum, deceased also demonstrate that any extension of the presumption of advancement must take into account the gradual nature of the change in the maternal role. Whereas the modern woman is generally regarded as an equal partner in a marriage with equal responsibility in raising a child, it is important to note that some women from the older generation may not fit neatly into this mould. Considering that the bulk of such disputes arise in cases of succession and intestacy involve such older folk, it is arguably inappropriate to apply presumptions relevant to women in their twenties and thirties to women in their seventies and eighties. Indeed, it is worth considering if such widely applicable presumptions remain relevant given the diverse range of attitudes from one generation to another. A further complication in the Singapore context is raised by the cultural diversity of Singapore society. An argument to the effect that a widely applicable presumption is inappropriate in the context of such cultural diversity is certainly not inconceivable.
12.8 There is also an undoubted tension between Lai Min Tet v Lai Min Kin and Re Estate of Chong Siew Kum, deceased that needs to be resolved. Here, it is respectfully submitted that the former decision”s reasoning is the less convincing of the two. As was noted in last year”s review, Lai Min Tet v Lai Min Kin took the view that the presumption of advancement from father (and presumably a stranger who was in loco parentis) to child and the presumption of advancement from husband to wife were both equally inappropriate. Whereas the latter presumption is arguably inappropriate given the modern status of women (subject to the reservations expressed above on the dangers of generalising the roles of one generation of women to those of other generations as well as the appropriateness of attributing a single presumption to a diverse multicultural populace), there is little evidence to show either that children are today more independent and self-sufficient than before or that today”s parents are less giving to their children.
12.9 As was the case last year, the reception of the clarification of the law of undue influence by the House of Lords in Royal Bank of Scotland plc v Etridge (No 2)[2002] 2 AC 773 (‘Etridge’) remains unsettled. In Oversea-Chinese Banking Corp Ltd v Tan Teck Khong[2005] 2 SLR 694 (‘OCBC Ltd v Tan Teck Khong’), Kan Ting Chiu J appeared to favour, following Etridge, examining whether a transaction was readily explicable by the relationship of the parties rather than examining whether one party was at a manifest disadvantage to determine if the presumption of undue influence is raised on a particular set of facts. In contrast, in Gan Cheng Chan v Gan Meng Hui[2005] SGHC 55, decided barely two weeks before OCBC Ltd v Tan Teck Khong, Lai Siu Chiu J persisted in applying the older test of manifest disadvantage.
12.10 In Gan Cheng Chan v Gan Meng Hui, the defendant, Gan Meng Hui, was the eldest daughter of the plaintiff, Gan Cheng Chan. The plaintiff divorced his wife, the defendant”s mother, Ang Suan Hong (‘Ang’), in June 2002. The plaintiff and Ang were the co-founders of Ghim Li Holdings Co Pte Ltd (‘Ghim Li’), which was involved in the textile and apparel manufacturing business. In spite of their divorce, the plaintiff and Ang continued to run the family business, which included Ghim Li as well as numerous affiliated and subsidiary companies, until the plaintiff borrowed money from Ghim Li to buy its shares in breach of s 76 of the Companies Act (Cap 50, 1994 Rev Ed). As it was then intended for Ghim Li to be listed publicly, it became imperative for the plaintiff to resign from its management so as not to jeopardise the flotation.
12.11 However, the plaintiff initially refused to vacate his office and demanded compensation in return. This led to numerous quarrels and disputes until the couple compromised matters in November 2003. Under this compromise, the plaintiff, Ang and the defendant entered into three related agreements. The first was a deed of settlement (‘the settlement’) between the plaintiff and Ang under which the couple agreed to a global settlement covering the plaintiff”s shareholdings, office and remuneration in the Ghim Li group of companies as well as the matrimonial home. The second was an agreement (‘the agreement’) between the plaintiff and the defendant under which the plaintiff agreed to resign as director of six companies in the...
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