Land Law

• Author: TEO Keang Sood LLM (Malaya), LLM (Harvard); Advocate and Solicitor (Malaya); Professor, Faculty of Law, National University of Singapore.
• Date: 01 December 2008
• Citation: (2008) 9 SAL Ann Rev 383
• Published date: 01 December 2008

Introduction

18.1 In the year under review, cases on collective sales dominate the discussion. They clarify various aspects of the law in this area which, until recently, had not seen much litigation. Another important area discussed is that of property held on a joint tenancy, involving the relationship between the application of the presumption of resulting trust and that of the presumption of advancement. Further case law developments can also be seen in the areas of indefeasibility of title and caveatable interests, among others.

Joint tenancy

18.2 The interplay between the presumptions of resulting trust and that of advancement in the case of property held on a joint tenancy in spousal relationships was considered by the Court of Appeal in Lau Siew Kim v Yeo Guan Chye Terence[2008] 2 SLR 108. The properties in question were held by the appellant and the deceased as joint tenants. The deceased was the father of the respondents and the appellant their stepmother. The respondents had argued for a resulting trust over the properties while the appellant submitted, inter alia, that the right of survivorship in a joint tenancy entitled her to claim the entire legal interest in the properties.

18.3 The High Court (see Yeo Guan Chye Terence v Lau Siew Kim[2007] 2 SLR 1, discussed in (2007) 8 SAL Ann Rev 329 at 329) found on the evidence that there was a resulting trust over the properties in question in the proportions of the financial contributions of the appellant and the deceased. Although the deceased and the appellant remained joint tenants at law but, given that they had each contributed money in unequal proportions in the purchase of the properties, they were, thus, tenants in common in equity according to the proportion of their respective financial contributions. In the result, the resulting trust had the effect of overriding the right of survivorship in the joint tenancies of the properties concerned and the appellant was not entitled to claim the entire legal interest therein. On the facts, the High Court also found that the presumption of advancement did not displace the

presumption of a resulting trust. The court took the view that the presumption of advancement was no longer applicable in modern times unless there was evidence to support its application.

18.4 On appeal by the appellant, the Court of Appeal reversed the decision of the High Court and affirmed the appellant”s absolute ownership of the properties. The Court of Appeal set out (Lau Siew Kim v Yeo Guan Chye Terence[2008] 2 SLR 108 at [147]) the following useful analytical framework when dealing with the interplay of the two presumptions in any given instance of a joint tenancy:

The presumptions of resulting trust and advancement must be applied in accordance with the modern context; a fact-sensitive approach is necessary and courts should be both pragmatic and principled in dealing with issues where these presumptions come into play. The presumptions are judicial devices for allocating the burden of proof when property disputes arise. They continue to be relevant and can still be sensibly applied. … Where a legal joint tenancy is concerned, the initial inquiry of the court should be whether a presumption of resulting trust arises in the first place. It is only where the prima facie circumstances of unequal contributions to the purchase price of the property exist, and there is a lack of any apparent contrary intention, that the presumption of resulting trust may operate; otherwise the legal joint tenancy will reflect the beneficial interests of the parties. Indeed, we should reiterate that where objective evidence of the considered and voluntary intention of registered legal joint tenants to hold land as such is adduced and accepted by the court, there is no room to look beneath the express intentions of the parties as reflected in the legal title; there is, consequently, no foundation for the application of the presumption of resulting trust. If it is established that the presumption of resulting trust applies, it is then appropriate to turn to examine the relationship between the parties. Where there is a subsisting relationship which is one of equity”s darlings (for example, husband-wife, parent-child), the presumption of advancement arises to prima facie displace the presumption of resulting trust. The next step is then to determine the strength of the presumption of advancement based on all the facts of the case, and to consider if that presumption can be rebutted by evidence of an intention on the part of the transferor or contributor to permanently retain an interest in the property. [emphasis in original]

18.5 In arriving at its decision, the Court of Appeal undertook a comprehensive review of the law pertaining to the issues at hand. On the facts, the court held that the presumption of resulting trust arose with respect to the two properties concerned given that there were unequal contributions by the appellant and the deceased. As the relationship between the parties concerned was a spousal one, the presumption of advancement would apply to rebut or displace the presumption of resulting trust. The following factors were considered by the court as giving rise to a strong presumption of advancement in favour of the

appellant. The deceased”s unrevoked intention, as reflected by his execution of the second will, added considerable strength to the presumption of advancement that the deceased intended the appellant to benefit absolutely from all his assets after his demise notwithstanding that the second will was executed before the purchase of the properties concerned. Given that both the deceased and the appellant had sought the advice of their lawyers on the legal effect of a joint tenancy, it was clear that the deceased had in fact intended for the operation of the rule of survivorship in respect of the properties. While it was relevant that the appellant was financially independent of the deceased and the nature of the relationship between the parties was not one of financial dependence, this was, nevertheless, not a determinative factor in applying the presumption of advancement. The entirety of the factual matrix must be taken into account in considering the strength of the presumption. In the instant case, it could not be denied that the deceased and the appellant had a close and caring relationship at the time of the acquisition of the properties which further strengthened the presumption of advancement.

18.6 In the instant case, the evidence adduced by the respondents was insufficient to rebut the presumption of advancement on the part of the deceased that the appellant should benefit from the operation of the rule of survivorship in respect of both properties. In the result, there should not be any resulting trust imposed on the properties and the appellant”s absolute ownership therein should be affirmed.

Indefeasibility of title and interests

18.7 The decision of the Court of Appeal in United Overseas Bank Ltd v Bebe bte Mohammad[2006] 4 SLR 884 was applied in resolving the question of the indefeasibility of a transfer and mortgage procured by fraud in Malayan Banking Bhd v Sivakolunthu Thirunavukarasu[2008] 1 SLR 149. The first defendant committed fraud in procuring the transfer of the other defendants” interest in a property to herself and the second defendant and subsequently mortgaging their respective interests in the property to the plaintiff to secure a loan made to the first defendant alone. In respect of the transfer, Mr Dass, the first defendant”s husband, on the record, acted as solicitor for the other defendants as transferors and for the second defendant as transferee, while Mr Chua, another solicitor, acted, on record, for the first defendant as transferee. Both Mr Chua and Mr Dass similarly acted, on record, for the first and second defendants respectively in the mortgage. However, both Mr Dass and Mr Chua did not actually act in the transfer or the mortgage. Neither did they participate in the fraud. Upon discovering the fraud of the first defendant, the plaintiff commenced action against all the defendants for, inter alia, a declaration that the mortgage was valid. The

second to fourth defendants counterclaimed for a declaration that the transfer and mortgage were invalid.

18.8 In allowing the plaintiff”s claim and dismissing the defendants” counterclaim, the High Court was of the view that where two members of a firm are spouses, a rebuttable presumption of undue influence will arise when one of them acts for the vendors and the other is the purchaser. It makes no difference and the position is the same in the instant case where neither the same solicitor nor the same firm acted for the first and second defendants. The court took the view (Malayan Banking Bhd v Sivakolunthu Thirunavukarasu[2008] 1 SLR 149 at [36]) that when a solicitor acts for clients who are selling a property to his wife, a rebuttable presumption of undue influence arises even if he does not act for his wife.

18.9 In the instant case, while it could be argued that the solicitor for the plaintiff would be cautious about M Dass & Co acting for the second defendant, who was offering his interest in the property to secure a loan to Mr Dass”s wife (the first defendant), and that a prudent solicitor should have taken action to eliminate the risk of undue influence, there was no wilful blindness or fraud in the plaintiff solicitor”s inaction. There was no suggestion that the plaintiff”s solicitor received any payment beyond the professional fees or that he had any interest in the transactions beyond being the plaintiff”s solicitor. The High Court took heed of the Court of Appeal”s advice in United Overseas Bank Ltd v Bebe bte Mohammad[2006] 4 SLR 884 at [35] for caution and restraint in alleging fraud against solicitors. It would be difficult to prove that a solicitor had turned a blind eye in order to assist a...