Equity and Trusts

• Citation: (2014) 15 SAL Ann Rev 343
• Author: TANG Hang Wu LLB (National University of Singapore). LLM, PhD (Cambridge); Advocate and Solicitor (Singapore); Professor, School of Law, Singapore Management University.
• Published date: 01 December 2014
• Date: 01 December 2014

Express trust

The case of Goi Wang Firn (Ni Wanfen) v Chee Kow Ngee Sing (Pte) Ltd[2015] 1 SLR 1049 raises a very interesting point with regard to the beneficiary principle. In this case, the late Goi had declared that he held certain property on trust for a company. When Goi passed away, his executor's counsel attempted to undermine the trust by arguing, inter alia, that the beneficiary principle precluded a settlor from declaring an express trust for a non-human entity. Steven Chong J rejected this argument, holding that (at [27]):

My understanding of the beneficiary principle has always been that it is intended, through its insistence on the presence of some identifiable beneficiary, to ensure that a trust can both be enforced against the trustee and controlled by the courts. The aim of this is to nullify those trusts which have as their objects purely private purposes that, by virtue of their wholly abstract nature, cannot conceivably be enforced or policed It was therefore not immediately apparent to me where the objection lay in recognising that a company could own property beneficially under an express trust since it is trite that a company is a legal person capable of suing in its own right and can, accordingly, enforce a trust if necessary. [emphasis in original]

2 Guy Neale v Nine Squares Pty Ltd[2015] 1 SLR 1097 (Guy Neale) is a case which considered, inter alia, whether a trade mark is held on an express trust for a partnership. In this case, the plaintiffs were partners of a well-known restaurant, bar and club in Bali called Ku De Ta. The defendant, Nine Squares Pty Ltd (Nine Squares), is the registered owner of two trade marks in Singapore bearing the name Ku De Ta. Nine Squares was a company incorporated in the State of Victoria, Australia, where at all material times, a partner in Ku De Ta Bali, one Arthur Chondros, owned 50% of the shares. The plaintiffs argued that an express trust had been created whereby Nine Squares held the trade mark on trust for the plaintiffs. In this case, there was no dispute as to the certainty of subject matter and objects of the express trust. The primary contention is certainty of intention. Overturning the trial judge on the facts, the Court of Appeal found that there was sufficient evidence that Nine Squares intended to hold the trade marks on an express trust for the plaintiffs. After analysing the cases on certainty of intention to create a trust, Menon CJ observed that the focus seemed to be (at [58]):

whether it was possible and appropriate to infer an intention to create a trust by looking at evidence not only of the alleged settlor's words and conduct, but also of the surrounding circumstances and the interpretation of any agreements that might have been entered into.

3 Questions concerning older trust instruments continue to surface in the Singapore courts. In Zulaikha Bee bte Mohideen Abdul Kadir v Quek Chek Khiang[2014] 4 SLR 532, the High Court had to consider a trust declared in 1971 by the late Fatimah over certain properties in Joo Chiat for the benefit of her daughter, Zulaikha. Zulaikha sought to enforce the trust and this was resisted by Fatimah's estate and other children on several grounds. First, it was argued that the trust was invalid because it was not registered pursuant to the Registration of Deeds Act (Cap 269, 1989 Rev Ed) (RODA). Second, it was contended that the trust was not validly declared because Fatimah did not understand the contents of the trust deed, which was drafted in English. Finally, the enforcement of the trust was said to be precluded by the doctrine of laches. All these defences were rejected and the trust was upheld. With regard to the RODA point, Tan Siong Thye JC (as he then was) rightly pointed out that the relevant applicable statute is now the Land Titles Act (Cap 157, 2004 Rev Ed). Non-registration of the trust deed under RODA does not make it inadmissible as evidence or affect its validity. The learned judge also found as a matter of fact that the trust deed was interpreted to Fatimah. Hence, the allegation that Fatimah did not understand the contents of the trust deed was rejected. With regard to the doctrine of laches, Tan JC observed rightly that it would be extremely rare for the doctrine of laches to apply to an express trust. In any case, the defendants were not prejudiced by the time lapse as the key witnesses were still available.

Resulting trusts

4 The decision of the Singapore Court of Appeal in Chan Yuen Lan v See Fong Mun[2014] 3 SLR 1048 (Chan Yuen Lan) (noted in Hang Wu Tang, A Dispute in Chancery Lane: Re-considering the Resulting and Common Intention Constructive Trust (2015) Conv (forthcoming) and Rachel Leow & Timothy Liau, Resulting Trusts: A Victory for Unjust Enrichment(2014) 73(3) Camb LJ 500) is the most significant case of the year in equity and trusts. At the heart of the dispute was a disagreement about the arrangement that existed between See Fong Mun (See) and Chan Yuen Lan (Chan) in relation to the house. See alleged that he was the true owner; Chan's money was merely an interest-free loan to him. The house was registered in her name merely so that Chan could boast to her friends. In contrast, Chan said that she owned the house absolutely. She needed the financial security of owning a house because See was having an affair with his secretary. Chan alleged that See agreed to this arrangement to appease her over the affair. Whatever the true arrangement was between the parties, it was undisputed that Chan executed a power of attorney in respect of the house. The power of attorney authorised See and one of their sons totake charge of, manage and improve [her] property and, in particular, sell the house for such consideration as they saw fit and give receipts for the money received: at [17]. An uneasy truce apparently prevailed between Chan and See for many years. On 5 April 2011, Chan revoked the power of attorney. This prompted See to seek a declaration from the courts that the house belonged to him beneficially.

5 Chan Yuen Lan provided the Singapore court with the opportunity to reconsider the true jurisprudential basis of the doctrine of resulting trust. V K Rajah JA, who delivered the judgment of the Court of Appeal, considered head on the following question: What does the resulting trust respond to? In answering this question, Rajah JA endorsed Robert Chambers' (see Robert Chambers, Resulting Trusts (Clarendon Press, 1997)) lack of intention thesis on the resulting trust, saying (at [43]):

a resulting trust may arise independently of the presumption of resulting trust so long as it can be shown that the transfer was not...