Banque Indosuez v Madam Sumilan Awal also known as Aw Kim Lan and Others

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 20 January 1998
• Neutral Citation: [1998] SGHC 22
• Court: High Court (Singapore)
• Published date: 20 February 2013
• Year: 1998
• Plaintiff Counsel: Scott Thillagaratnam and Navinder Singh (Joseph Tan Jude Benny & Scott)
• Defendant Counsel: Molly Lim and Selena Tan (Wong Tan & Molly Lim),Foo Soon Yien (Tommy Lee & Partners/Bernard Rada & Partners)
• Citation: [1998] SGHC 22

Judgment:

Cur Adv Vult

1. This case arose from an application for interpleader relief by the Singapore branch of a French bank, Banque Indosuez (the ‘Bank’), upon being faced by competing claims to the monies in two bank accounts held in the joint names of one Suandi Khongsi (‘SK’), now deceased, and his wife, Madam Sumilan Awal (‘Awal’).

The facts

2. SK, a wealthy businessman, and Awal, previously a factory worker, were at all material times Indonesian nationals and residents. They were married in Indonesia on 17 September 1968. There were no children from their marriage. Awal was SK’s second wife; his first wife died in 1963 and he had nine children (four sons and five daughters) from that first marriage. Before their marriage, SK and Awal entered into a pre-nuptial agreement (the ‘PNA’) which provided that there would be no community of property and each spouse was to continue holding his or her property separately.

3. In 1982, SK and Awal visited the Bank; a fixed deposit account was opened in the names of SK ‘and/or’ Awal (the ‘fixed deposit account’). Both of them signed an application form dated 10 February 1982; a space titled ‘Special Instructions’ in this form was filled in with the words ‘anyone named above’. There was apparently no other documentation providing for the contractual terms governing this account; no evidence of such documentation was led by the Bank or any other party. It appears that SK deposited about S$200,000 in the fixed deposit account at or around the time it was first opened. Further sums of money in various currencies were deposited into this account by SK over the years.

4. On 2 April 1982, shortly after the fixed deposit account was opened, SK made a will whereby he bequeathed 15% of all his properties to Awal and to each of his four sons: Alwi, Kosatria, Lazuardi and Kurniadi. The remaining 25% was to be used to found a ‘Social Foundation’ to pay for the education of his children and his grandchildren.

5. In October 1986, SK and Awal again visited the Bank, this time to open a joint savings account (the ‘savings account’), in the names of SK ‘and/or’ Awal. The application form for this account, which again was signed by both of them, stated: ‘This account is to be operated by us jointly and/or severally with benefit of survivorship’. It also referred to the Bank’s ‘Rules and Regulations’ for savings accounts; paragraph 7 of these Rules and Regulations provided, ‘Joint accounts shall be operated by the depositors jointly and/or severally with the benefit of survivorship’.

6. SK passed away in Medan on 11 November 1991. A few days later, the Bank received a fax dated 18 November 1991 purportedly from SK’s ‘heirs’. The fax informed the Bank that SK had died, and was accompanied by a death certificate from a Medan hospital; it further requested the Bank to ‘please freeze all [SK’s] credits accounts and deposits’. A few months later, the Bank received another fax (dated 4 January 1992) from the ‘heirs’, with a copy of SK’s will for the Bank’s perusal.

7. The Bank also received a letter dated 22 January 1992 from solicitors acting for Alwi, SK’s eldest son. This letter, purportedly ‘for estate duty purposes’ sought confirmation that SK operated an account jointly with Awal, the amount standing in the account at the date of his death and also whether SK had any other accounts with the Bank. It also put the Bank on notice that no transactions were to be carried out with SK’s accounts pending the finalisation of the grant of probate. The Bank did not reply to this letter because of the secrecy provisions of the Banking Act (Cap. 19).

8. Representatives (2) from the Bank met with Awal in Medan on 23 April 1992. What transpired at that meeting is disputed -- Awal alleged that the Bank merely informed her of a third party claim against the monies in the accounts and hence she could not withdraw the monies, the Bank alleged that she was specifically informed it was Alwi who was claiming. It is however common ground that at the meeting she was shown a draft of an authorisation letter which, if she signed, would allow the Bank to disclose particulars of the accounts to Alwi; on the Bank’s advice, she did not sign it.

9. Slightly over two years later, on 19 May 1994, Awal visited the Bank in Singapore with Lazuardi, Kurniadi and one Subijaty (the wife of Kosatria, who died in February 1991); she wanted to withdraw the monies in the joint accounts and transfer them to several other accounts; the Bank refused this request. The Bank gave her a slip of paper showing the amounts then being held in the accounts. There was a balance of S$593.40 in the savings account, while the sums held in various currencies in the fixed deposit account were the equivalent of over S$18m.

10. The Bank’s solicitors apparently wrote a letter dated 31 May 1994, requesting Awal to produce a grant of probate or letters of administration together with an estate duty clearance certificate to enable the Bank ‘to process payment to the Estate’. Awal did not reply -- she claimed she never received this letter. Her solicitors wrote to the Bank on 1 July 1994, claiming the right to withdraw the joint account monies on the basis of her position as survivor and asking for the necessary procedure to withdraw the monies. On 3 August 1994 the Bank’s solicitors replied stating that applying for interpleader relief was the best course of action; on the same day, it wrote to all claimants giving notice of its intention to seek interpleader relief. In response, Awal’s solicitors again demanded payment, alleging that the Bank’s refusal to pay was wrongful, and stating that Awal’s participation in the interpleader proceedings was without prejudice to any rights against the Bank.

11. The Bank commenced interpleader proceedings on 24 August 1994 pursuant to O 17 rr 1 and 3 of the Rules of the Supreme Court, naming Awal as the first defendant, the estate of SK the second and Awal the third defendants and, requiring them inter alia to, state the nature and particulars of their respective claims to the monies in the accounts. The Bank originally applied for the Official Assignee to represent the estate as it had difficulties identifying and effecting service on the proper representatives of the estate. However, on 22 November 1994, a consent order was made by K S Rajah JC (the ‘consent order’) that for the purposes of the hearing, the third defendant Alwi, would represent the estate. The consent order also set out the following issues, to be tried between the parties:

1. Whether upon the death of SK, Awal is entitled to the funds standing to the credit of the joint accounts held at the Bank in the names of SK and Awal?

2. Whether upon the death of SK, the estate is entitled to the funds standing to the credit of these joint accounts?

3. Whether Awal holds the same in trust for the estate?

4. Whether the Bank is in breach of its duty to Awal by failing to release the funds standing to the credit of those joint accounts?

5. Whether the Bank should be made to account to Awal for all loss and damage suffered by reason of the Bank’s wrongful refusal to release the said funds?

6. Whether an account should be taken between Awal and the Bank as to:-

(a) the total funds standing to the credit of the joint accounts; and

(b) the question of damages payable by the Bank to Awal.

12. Some explanation is needed regarding Alwi’s representation of the estate in these proceedings. There appears to be an ongoing dispute as to who should be appointed as executor in Indonesia. SK originally appointed his second son, Kosatria, as executor in his will. Unfortunately, Kosatria died on 4 February 1991, predeceasing SK who died in November that same year. In December 1992, upon Kurniadi’s application, a Medan court made a declaration setting out a list of 10 persons as SK’s ‘heirs’, but no order was made as to who would be executor. In June 1995, several members of SK’s family reached an agreement appointing Alwi and Kurniadi joint executors of SK’s estate. However, Alwi later applied to a Medan court to be appointed sole executor on the ground, inter alia, that Kurniadi had neglected the administration of the estate; his application was granted on 13 January 1997. In response, Kosatria’s heirs, Awal and Lazuardi revoked the joint appointment of Alwi and Kurniadi as joint executors and appointed Kurniadi the sole executor. They also obtained a Medan court order revoking the order obtained by Alwi on 13 January 1997 (from the same judge who had granted the revoked order) and declaring Kurniadi the sole executor, on the grounds, inter alia, that they had been unaware of Alwi’s earlier application and Alwi had misused his powers as executor. Alwi alleged that this later order is not yet in force because he is appealing to the Supreme Court of Indonesia, and he produced a letter from the Medan court to that effect. In view of the letter, I am unwilling to find, as Awal contended, that Kurniadi should now be treated as the only lawful representative of SK’s estate; I shall proceed on the basis that the right to represent SK’s estate is still disputed and will eventually have to be determined by an Indonesian court.

13. Kurniadi, Lazuardi and Subijaty (representing Kosatria’s estate) all filed affidavits stating that, despite being the major beneficiaries to SK’s estate, they are not disputing Awal’s entitlement to the monies in the joint accounts -- in accordance with what they believe to be SK’s intentions -- and opposing Alwi’s representation of the estate in these proceedings. They, together with Awal, alleged that Alwi is a greedy person who, by his efforts to become sole executor in Indonesia, was trying to wrest control of SK’s properties for his own benefit, and they were suspicious of his attempts to present arguments on behalf of the estate in the hearing before me. At the hearing, Alwi said that he is merely arguing for the monies in...