Chai Choon Yong v Central Provident Fund Board and Others

CourtCourt of Three Judges (Singapore)
JudgeChao Hick Tin JA
Judgment Date28 March 2005
Neutral Citation[2005] SGCA 13
Citation[2005] SGCA 13
Subject MatterWords and Phrases,Nomination,Section 25(2) Central Provident Fund Act (Cap 36, 2001 Rev Ed), Wills Act (Cap 352, 1996 Rev Ed),Whether to adopt literal or purposive approach to interpretation of s 25(2) of CPF Act,Whether reference to "written law" in s 25(2) of CPF Act including Wills Act or referring to intestacy law,Rule 4 Central Provident Fund (Nominations) Rules (Cap 36, R 1, 1998 Rev Ed),Whether nomination invalidated by failure to observe formal requirements,"Written law",Whether member required to sign form in presence of two witnesses,Whether procedure for attestation of nomination form under r 4 of CPF Rules mandatory or directory,Whether witnesses required to see each other attesting to member's signing of form,Beneficiary,Provident Fund
Defendant CounselMichael Khoo SC, Josephine Low and Andy Chiok (Michael Khoo and Partners),Kamala Ponnampalam and Beverly Wee (Insolvency and Public Trustee's Office),Chia Ti Lik (Chia Ngee Thuang and Co)
Plaintiff CounselTan Chee Kiong (Seah Ong and Partners)
Date28 March 2005
Published date28 March 2005
Docket NumberCivil Appeal No 93 of 2004

28 March 2005

Lai Siu Chiu J (delivering the judgment of the court):


1 This was an appeal against the decision of Belinda Ang Saw Ean J (see [2004] 2 SLR 416) dismissing the application of Chai Choon Yong (“the appellant”) for her daughter’s Central Provident Fund (“CPF”) nomination to be declared null and void. Leave to appeal was granted on 20 September 2004 under s 34(2)(a) of the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed), as the sum involved was less than $250,000. We dismissed the appeal and now give our reasons.

Background facts

2 The appellant is the mother of Wang Lee Jun (“Wang”) who passed away on 15 April 2001. Wang, a single lady, had lived with the second respondent, Lai Weng Kwong (“Lai”), for many years before her demise; they were not married. In her last will made on 2 December 1996, Wang appointed Lai as the executor of her will and also made him the sole beneficiary of her estate. On 2 August 1988, Wang nominated Lai to receive all the moneys in her CPF account (“Wang’s CPF moneys”). In the column “Relationship to member” in the nomination form, Wang described Lai as a “friend”. The nomination form showed that there were two witnesses, Wong Jee Koh (“Wong”), who was Wang’s brother, and Yeo Chow Wah (“Yeo”), who was Wang’s sister-in-law.

3 Upon receiving the nomination form, the Central Provident Fund Board (“the Board”) sent Wang a letter asking if she would like to include her next-of-kin as nominees. Wang replied to confirm that Lai was her choice of nominee. According to the Board, the officer handling Wang’s file then contacted Wang to explain the implications of her nomination. The officer had the impression that Wang understood the effect of her decision.

4 After Wang’s demise, a grant of probate to her estate was granted to Lai on 9 November 2001. The appellant then filed Originating Summons No 173 of 2003 (“the OS”) on 13 February 2003 to challenge the validity of Wang’s nomination, arguing that Wang’s signature was not witnessed in the presence of two witnesses, as stipulated by s 25(1) of the Central Provident Fund Act (Cap 36, 2001 Rev Ed) (“the CPF Act”) read with r 4 of the Central Provident Fund (Nominations) Rules (Cap 36, R 1, 1998 Rev Ed) (“the CPF Rules”), which provisions are substantially the same as those as at 2 August 1988. Yeo and Wong gave evidence, by way of two statutory declarations, to state that:

(a) Wang passed them a folded nomination form without showing them the contents of the form, including Wang’s signature;

(b) Wang did not sign the form in their presence; and

(c) they each signed the form without the presence of the other witness.

The appellant reasoned that as there was no subsisting nomination, Wang’s CPF moneys should therefore be paid to the Public Trustee for disposal according to the Intestate Succession Act (Cap 146, 1985 Rev Ed). Under s 7 of this Act, the appellant would be entitled to a share of Wang’s CPF moneys.

5 In response, Lai (who was the second defendant in the OS) maintained that the nomination was valid. He further argued that even if the nomination was invalid, Wang’s CPF moneys should be paid to him as the sole beneficiary under Wang’s will. The Board, being the custodian of Wang’s CPF moneys, was sued as the first defendant. Its position was that there was a subsisting and valid nomination and consequently, it was obliged to pay Wang’s CPF moneys over to Lai. The third defendant was the Public Trustee, who was joined as a party to the proceedings here and below, to state its general position on these matters.

The decision below

6 Ang J dismissed the appellant’s application after deciding on two main issues:

(a) Did Chai have the locus standi to challenge the CPF nomination?

(b) Was there a valid nomination?

Did Chai have the locus standi to challenge the CPF nomination?

7 Ang J first set out the relevant provisions of the CPF Act. Section 15(5) states:

After the death of a member of the Fund, a person nominated by that member in accordance with section 25 (1) shall be entitled to withdraw such portion of the sum standing to the credit of that member in the Fund as is set out in the memorandum executed in accordance with that section.

8 Next, s 25 elaborates on the issue of nomination:

(1) Any member of the Fund may by a memorandum executed in the prescribed manner nominate a person or persons to receive in his or their own right such portions of the amount payable on his death out of the Fund under section 20 (1) or of any shares designated under section 26 (1) as the memorandum shall indicate.

(2) If, at the time of the death of a member of the Fund, there is no person nominated under subsection (1), the total amount payable out of the Fund shall be paid to the Public Trustee for disposal in accordance with any written law for the time being in force.

[emphasis added]

9 Section 24(3A) further provides that:

All moneys paid out of the Fund on the death of any member of the Fund shall be deemed to be impressed with a trust in favour of —

(a) the person or persons nominated under section 25 (1) by the deceased member, if any; or

(b) the person or persons determined by the Public Trustee in accordance with section 25 (2) to be entitled thereto,

but shall, without prejudice to the operation of the Estate Duty Act (Cap. 96), be deemed not to form part of the deceased member’s estate or to be subject to his debts.

10 According to Saniah bte Ali v Abdullah bin Ali [1990] SLR 584 (“Saniah bte Ali”), the instrument of nomination is an effective direction by a CPF member to the Board to pay his CPF moneys to the person nominated by him. L P Thean J (as he then was) held that the general scheme of the CPF Act was to treat the CPF moneys of a member as a species of property separate and distinct from his other property. It could not be disposed of by an instrument inter vivos or by a will. Upon the death of a CPF member, his CPF moneys did not form part of his estate nor was it subject to his debts. It was thus decided in this case that “written law” in the then equivalent of s 25(2) must refer to the CPF Act or an enactment governing succession to the estate of the deceased member.

11 Approving the above pronouncements, Ang J concluded that the payment of CPF moneys to a nominee on the death of a member operated by force of the provisions of the CPF Act and not as a testamentary disposition under the member’s will. She based this holding on the following reasons:

(a) It was clear that the CPF Act restricted a testator’s freedom of testamentary disposition of his CPF moneys. A construction of the statute that permitted a testator to dispose of his CPF moneys in a will would defeat the purpose of the CPF Act.

(b) A testator could only make a testamentary disposition of assets which were beneficially owned by him at the time of his death. CPF moneys were outside this equation. There was no separate statutory provision in the Wills Act (Cap 352, 1996 Rev Ed) that operated as a testamentary disposition of the deceased’s estate. A will that was properly executed according to the Wills Act was hardly an “enactment governing succession to the estate of the deceased member” (see Saniah bte Ali at 590, [11]).

12 Accordingly, Ang J decided that unless the CPF moneys were disposed of by a member by nomination before his demise, it would be paid out to the Public Trustee for distribution under the Intestate Succession Act (or according to Muslim law in the case of a Muslim deceased). Consequently, the appellant, as Wang’s surviving parent, had an interest in the CPF moneys and had the locus standi to bring the present proceedings to challenge Wang’s nomination.

Was there a valid nomination?

13 Ang J first considered whether a nomination subsisted at the time of Wang’s death. According to s 25(1) of the CPF Act and r 4 of the CPF Rules, the nomination form has to be signed by the member in the presence of two witnesses who shall attest the signature of the member. Ang J was of the view that there was no clear and cogent evidence to rebut the presumption of due execution. Yeo and Wong’s evidence had to be viewed with caution as they might benefit directly or indirectly from a failed nomination. Ang J also doubted the veracity of their evidence. She noticed that Yeo’s signature had encroached into the place for Wang’s signature. It was therefore difficult to see how the form could have been folded to cover Wang’s signature. In addition, Ang J did not see the need for Wang to fold the nomination form. The two witnesses claimed that Wang wanted to cover up the name of the nominee. However, the name of the nominee was on the reverse side of the form.

14 Ang J further held that the outcome would not change even if she had reached the opposite view that the presumption of attestation had been rebutted. Drawing a distinction between a CPF nomination and a will, Ang J observed that the specific consequences of non-compliance with the CPF Rules were not stated. At most, non-compliance would attract a fine under s 61 of the CPF Act. Parliament therefore could not have intended that non-compliance with the formalities of the CPF Act would result in an invalid nomination.

15 Turning to the use of the word “shall” in r 4 of the CPF Rules, Ang J stated that one should not merely look at the language of the statute to decide whether r 4 was mandatory or directory. She relied on Regina v Secretary of State for the Home Department, Ex parte Jeyeanthan [2000] 1 WLR 354 (“Jeyeanthan”), where Lord Woolf MR said that the conventional approach of dividing requirements into either mandatory or directory did not address the more important question of what the legislator intended the consequence of non-compliance with the procedural rules to be. Lord Woolf decided that the court should determine whether there had been substantial compliance with the statutory requirement, whether non-compliance was capable of being waived, and if it was not, the...

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