Chee Yin Meh v Sim Guan Seng and others

• Jurisdiction: Singapore
• Judge: Justin Yeo AR
• Judgment Date: 24 October 2018
• Neutral Citation: [2018] SGHCR 14
• Citation: [2018] SGHCR 14
• Court: High Court (Singapore)
• Published date: 01 November 2018
• Docket Number: Originating Summons No 906 of 2018 (Summons No 4259 of 2018)
• Plaintiff Counsel: Ms Lee Ping and Ms Shirin Swah (Shook Lin & Bok LLP)
• Defendant Counsel: Mr Alexander Yeo and Mr Chew Jing Wei (Allen & Gledhill LLP)
• Subject Matter: Civil Procedure,Discovery of Documents,Trusts,Constructive Trusts
• Hearing Date: 16 October 2018,08 October 2018

Justin Yeo AR:

This decision concerns an application for specific discovery (“the Application”), in which the central issue was as follows: should a party claiming a beneficial interest in a piece of property under an alleged common intention constructive trust be ordered to give discovery of documents relating to her financial contributions towards that property?

On 16 October 2018, I granted the discovery sought subject to certain limitations as described in [38] below, and now provide written grounds for my decision.

Background

The piece of property in question (“the Property”) was purchased and registered in the sole name of Mr Fan Koh Him (“Mr Fan”) in May 2011. The payments towards the purchase price and renovation costs of the Property were made out of the following bank accounts and loans: 1% of the purchase price (ie the option fee) was paid out of an Oversea-Chinese Banking Corporation account held jointly in the names of Mr Fan and the Plaintiff (“the OCBC Joint Account”) in May 2011, with another 15% of the purchase price paid out of the same account in August 2011. 4% of the purchase price (ie the exercise fee) was paid out of a Post Office Savings Bank account held jointly in the names of Mr Fan and the Plaintiff (“the POSB Joint Account”) in May 2011. 80% of the purchase price was to be paid by way of a mortgage loan from DBS Bank, which was taken out in Mr Fan’s sole name (“the DBS Mortgage Loan”). The renovation costs were paid entirely from a separate loan from DBS Bank, which was also taken out in Mr Fan’s sole name (“the DBS Renovation Loan”).

Mr Fan was subsequently adjudged bankrupt on 30 March 2017. Mr Sim Guan Seng, Mr Khor Boon Hong and Mr Goh Yeow Kiang Victor (“the Defendants”) were appointed as private trustees pursuant to the bankruptcy order. The Defendants sold the Property in the process of realising the assets of Mr Fan’s estate.

On 25 July 2017, the then-solicitors for Mr Fan’s wife, Mdm Chee Yin Meh (“the Plaintiff”), wrote to the Defendants, demanding that the Defendants account for the sale proceeds of the Property and distribute half of the sale proceeds to the Plaintiff on the basis that the Plaintiff had a beneficial interest in a half-share of the Property. In the letter, the Plaintiff’s then-solicitors emphasised that Mr Fan and the Plaintiff had “shared the cost of purchasing and renovation expenses of the [Property]”, and that at all times, Mr Fan intended to acquire the Property jointly and equally with the Plaintiff notwithstanding his sole legal title to the Property. The Plaintiff’s then-solicitors further emphasised that the Plaintiff would be “collating documents evidencing loan servicing payments and her financial contributions to the payment of the Purchase Price of the [Property]”. The letter enclosed more than 30 pages of documents, which included cheque stubs, cashier’s orders, mortgage loan agreements and a summary of cash transfers by the Plaintiff to one of the accounts.

On 11 October 2017, the Plaintiff’s then-solicitors wrote to the Defendants’ solicitors, enclosing another 100 pages of documents “evidencing loan servicing payments, [the Plaintiff’s] financial contributions to the payment of the Purchase Price of the [Property] and further relevant documents”.

On 24 July 2018, the Plaintiff brought an Originating Summons (“the OS”), seeking a declaration of her beneficial interest in a half-share of the Property on the basis of a common intention constructive trust. She further sought an order that the Defendants transfer half of the sale proceeds to her, after giving an account of the costs and disbursements incurred in the sale process. In the Plaintiff’s affidavit filed in support of the OS (“the Plaintiff’s OS Affidavit”), she averred that both she and Mr Fan had a common intention for the Property to be jointly owned by both of them. She also set out in considerable detail the financial arrangements in relation to the payment of the purchase price and renovation costs of the Property. This revealed a complex web of financial arrangements involving several bank accounts and loans, which allegedly underlay the payment arrangements stated in [3] above. A brief summary of these underlying financial arrangements is as follows: From 2011 to 2015, the 15% paid out of the OCBC Joint Account came from a CIMB Bank account held jointly in the names of Mr Fan and the Plaintiff (“the CIMB Joint Account”). The funds for the CIMB Joint Account, in turn, came from a term loan from CIMB Bank (“the CIMB Loan”). The DBS Loan, the CIMB Loan and the DBS Renovation Loan were serviced by the balance of the disbursement under the CIMB Loan itself, as well as funds from the POSB Joint Account. From 2016 to 2017, the DBS Loan and the DBS Renovation Loan were serviced by funds from the POSB Joint Account and a POSB account held solely in Mr Fan’s name (“Fan’s POSB Account”). In turn, the funds in the POSB Joint Account and Fan’s POSB Account allegedly came from the Plaintiff’s cash deposit as well as other DBS and UOB accounts held solely in the Plaintiff’s name.

In the light of the web of financial arrangements, the Defendants’ solicitors repeatedly requested the Plaintiff to furnish documents required for identifying the transactions and the source of the funds in the various accounts. The most recent request was made on 17 August 2018. The Plaintiff again objected to providing the documents sought, thus resulting in the Application being taken out on 13 September 2018.

As a footnote, given the extent of factual disagreement in relation to the Plaintiff’s financial contributions, it was somewhat puzzling that the substantive dispute was proceeding by way of an OS rather than a writ. However, the distinction did not have any impact on my decision, as neither party contended that discovery principles operated differently in an OS situation. Indeed, O 24 r 4(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”) specifically states that the court may make a discovery order under O 24 r 1 of the Rules of Court regardless of the mode of commencement of proceedings (ie “whether begun by writ, originating summons or otherwise”).

The Application

By way of the Application, the Defendants sought specific discovery of documents that would enable them to determine the sources of the funds for the OCBC Joint Account (from 1 January 2011 to 30 September 2011), the POSB Joint Account (leading up to and after May 2011), the DBS Loan (from 2011 to 2017) and the CIMB Loan (from 2011 to 2017). The Defendants specified that the documents sought included documents that would enable the identification of those who had deposited money into or received monies withdrawn from the accounts in question.

In the lead up to the hearing, the Defendants independently managed to obtain account statements for some of the accounts held solely and in joint names by Mr Fan, as set out in the 4 October 2018 affidavit of Mr Goh Yeow Kiang Victor. As such, they were able to reduce the scope of the requests to the account statements which they had hitherto been unable to obtain from the various banks.

The Plaintiff resisted the Application on the basis that the documents sought were irrelevant for determining whether a common intention constructive trust arose, and that the discovery sought was in any event unnecessary.

Issues

The Application gave rise to two issues: First, whether documents relating to the Plaintiff’s financial contributions in the purchase and renovation of the Property were relevant for determining the existence of the alleged common intention constructive trust. Second, whether the discovery sought was necessary.

First Issue: Whether the documents sought were relevant

The main issue in the OS concerned whether the Plaintiff had a beneficial interest in a half-share of the Property on the basis of a common intention constructive trust. The first issue in the Application was therefore whether documents relating to the Plaintiff’s financial contributions in the purchase and renovation of the Property were relevant for determining the existence of the alleged common intention constructive trust.

Parties’ Arguments

Counsel for the Plaintiff, Ms Lee Ping (“Ms Lee”), submitted that the documents sought were irrelevant to the OS. The key authority she relied on was the High Court decision of Lai Hoon Woon (executor and trustee of the estate of Lai Thai Lok, deceased) v Lai Foong Sin and another [2016] SGHC 113 (“Lai Hoon Woon”). In particular, she cited the following observations of the court (Lai Hoon Woon at [95]):

A common [intention] constructive trust arises when A relies to his detriment on a common intention that the beneficial interest in a property is to be shared. Such an intention may (a) arise from express discussion; (b) take the form of an inferred common intention, as evidenced by direct financial contributions by A to the purchase price; or (c) in exceptional situations, arise from other conduct by A which gives rise to an implied common intention…. The conduct necessary for a common intention need not always be financial, though relevant non-financial contributions would be the exception. The focus remains very much on the financial contributions of the parties. A key difference between common intention constructive trusts and resulting trusts is that in the former the division of beneficial interest does not follow a strict arithmetic calculus but is along the lines of the parties’ express, inferred or implied common intention. … [emphasis added]

Relying on this passage, Ms Lee made two related arguments: First, as the Plaintiff was proceeding on the basis of common intention constructive trust (contra resulting trust), on the authority of Lai Hoon Woon, it would be incorrect to engage in “strict arithmetic calculus” to determine the extent of the Plaintiff’s beneficial...