Cheo Yeoh & Associates LLC and another v AEL and others

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 26 May 2015
• Neutral Citation: [2015] SGCA 29
• Date: 26 May 2015
• Docket Number: Civil Appeal No 114 of 2014
• Published date: 04 June 2015
• Plaintiff Counsel: Chandra Mohan, Jonathan Cheong and Tan Ruo Yu (Rajah & Tann Singapore LLP)
• Hearing Date: 15 January 2015
• Defendant Counsel: Andrew Ho Yew Cheng (Engelin Teh Practice LLC)
• Court: Court of Appeal (Singapore)
• Subject Matter: Succession and wills,revocation,construction,negligence,causation,Tort,conditional

Chao Hick Tin JA (delivering the judgment of the court): Introduction

This is an appeal against the decision of the High Court in AEL and others v Cheo Yeoh & Associates LLC and another [2014] 3 SLR 1231 (“the Judgment”). It concerns a claim in professional negligence against a firm of solicitors in which the trial judge (“the Judge”) ruled in favour of the client. At the conclusion of the oral hearing, we reserved judgment.

The facts

[X] (“the Testator”) was an Indonesian businessman. He was married to [Y]. He died in 2010, and is survived by six children (four sons, [S], [M], [D] and AEN, and two daughters, AEL and AEM) and fifteen grandchildren. AEL, AEM and AEN are the first three plaintiffs in the action and the first three respondents in this appeal. During his lifetime, the Testator made two wills for the distribution of his and [Y]’s assets in Singapore (“the Singapore Estate”). The first will was made together with [Y] on 16 November 1990 and shall be called the “Old Will”. After the passing of [Y] on 29 January 2005, the Testator sought the help of Mr Johnny Cheo Chai Beng (“Cheo”), the 2nd appellant, to draft a second will. This will be called the “New Will”.

The Testator passed away on 24 November 2010 and AEL communicated the news to Cheo on 2 December 2010 (the Judgment at [16]).¹ Upon hearing the news, Cheo advised AEL to file for a grant of probate on the New Will and AEL did so on 22 March 2011. However the application was rejected as the New Will was executed only before a single witness (ie, Cheo only) when under s 6(2) of the Wills Act (Cap 352, 1996 Rev Ed) (“Wills Act”) two or more witnesses are required to be present at the execution of a will for it to be valid.

On 5 May 2011, Cheo informed AEL via email of the rejection of the application for probate on the New Will and also advised her to apply for letters of administration:²

The Court has just pointed out that your father’s signature in his Will was witnessed by 1 person instead of 2 persons. This is contrary to Section 6 of the Wills Act in Singapore. As such you cannot rely on the Will.

From my recollection at that time, I had prepared the Will and the arrangement was for your late father to sign this at the offices of Citibank in Singapore. He was to have procured a Citibank officer to sign as his second witness to the Will. I left Citibank’s offices earlier as I had another engagement. Apparently he did not get the bank officer to also witness his signature.

Nonetheless, your present options are as follows:

1) to rely on the Indonesian Will if it covers all properties. In this respect could we have [a] copy of the Indonesian Will to see if it covers all assets/properties, although you have said that the Indonesian Will only covers the Indonesian properties. 2) otherwise we can apply to the Singapore Court for Grant of Letters of Administration (instead of probate) on the basis that no Will was made. Instead of an executor (if there is a Will), an administrator will be appointed to handle the distribution. The distribution will then be subject to Indonesian law. Nonetheless, the person entitled to the property/assets under Indonesian law can file a Notice of Disclaimer to say that they decline their entitled share and instead want to give their share to the intended beneficiaries under the Will. In this way, effect will be given to your late father’s Will.

The Administrator(s) can then distribute accordingly.

On 9 May 2011, AEL was advised by Cheo to obtain an affidavit from Indonesian lawyers to confirm that (a) the Testator was domiciled in Indonesia; (b) his children are entitled under Indonesian law to apply for the Grant of the Letters of Administration; and (c) the distribution can be made under Indonesian law.³ AEL obtained the legal advice from Sura & Kantor Hukum Associates (“the Indonesian lawyers”) at a cost of 50m rupiah. Subsequently, she and AEN hired a new solicitor, Mr Siaw Kheng Boon (“Mr Siaw”), who applied for the letters of administration on their behalf. This was granted by the Singapore High Court on 7 September 2011 (the Judgment at [19]).

The Singapore Estate, which comprised solely of money with a value of A$1,798,888.12, was distributed to the Testator’s children according to the Intestate Succession Act (Cap 146, 1985 Rev Ed) (“the ISA”). The result of this was that [M] and [D], who would not have received anything under the New Will (“the Unintended Beneficiaries”), inherited money under intestacy because the New Will was invalid. As for [S], he received more under intestacy than he would have received under the New Will. On the other hand, AEL, AEM, AEN (ie, the first three Respondents) and the 4th to 18th Respondents (“the Grandchildren”), who were the intended beneficiaries under the New Will, suffered varying degrees of losses – the first three Respondents obtained a lesser amount than they would have received under the New Will, and the Grandchildren got nothing. The sums that the various parties would have inherited under the Old Will, the New Will and the ISA are set out hereunder in a comparison chart for convenience:

	New Will	Old Will	Intestacy
[M]	0%	10%	16.67%
[D]	0%	10%	16.67%
[S]	10%	10%	16.67%
AEL (1st Respondent)	20%	10%	16.67%
AEM (2nd Respondent)	20%	10%	16.67%
AEN (3rd Respondent)	20%	20%	16.67%
Grandchildren (4th to 18th Respondent)	30%	30%	0%

As can be seen, the Respondents inherited in total 50.01% of the Singapore Estate under intestacy as compared to 90%, which was what they would have got under the New Will. Their loss would have been just 20% if probate had been obtained in relation to the Old Will. This latter scenario will be relevant when we come to consider the Appellants’ case that the Respondents should have obtained probate under the Old Will and thus mitigated their losses (see [38]−[46] below).

The decision below

The Respondents sued the Appellants (the 2nd Appellant being Cheo and the 1st Appellant being the firm in which Cheo was then a partner) in the High Court for negligence which they claimed led to their losses. Their case was that Cheo owed them a duty of care in supervising the execution of the New Will and he had breached that duty when there was only one witness to the execution of the New Will instead of two or more as required by law. Alternatively, the Respondents alleged that Cheo also breached his duty of care by drafting the New Will without expressly appointing AEL and AEN as executors and instead only naming them as “trustees”. In the Respondents’ view, Cheo’s breaches of duty caused them to lose 39.99% of the Singapore Estate which they would otherwise have inherited. In addition, they also sought to be reimbursed by Cheo in respect of the sum of 50m rupiah which they had incurred in engaging the Indonesian lawyers consequent to the invalid New Will.

In defence, the Appellants contended in their pleadings that: Cheo had only been engaged to assist in drafting the New Will and not executing it. Accordingly, Cheo only owed a duty of care to the Testator and not the beneficiaries of the New Will since the latter were third parties to the solicitor-client relationship and no proximity existed between them and Cheo under the framework enunciated by this court in Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 (“Spandeck”). Moreover, policy considerations also militated against imposing a duty of care on Cheo in the circumstances. The New Will’s invalidity did not mean that the Singapore Estate had to be distributed according to the ISA and the Respondents could still have, amongst themselves, distribute the Singapore Estate in accordance with the New Will. Alternatively, the Respondents could have obtained probate on the basis of the Old Will which they were able to produce in the proceedings and hence mitigated their losses.

The Appellants also disputed that they should be held responsible for the 50m rupiah incurred in hiring the Indonesian lawyers.

The Judge found that the Appellants were liable for all the losses suffered by the Respondents. First, he held that the Appellants owed a duty of care to the Respondents, relying on the Court of Appeal’s decision in Anwar Patrick Adrian and another v Ng Chong & Hue LLC and another [2014] 3 SLR 761 (“Anwar”) where it was observed that solicitors could owe duties to beneficiaries in appropriate cases (the Judgment at [58]–[100]). Second, he found that the Appellants had breached their duty of care as Cheo had failed to properly supervise the execution of the New Will (the Judgment at [106]). Third, he also found that Cheo’s negligence had caused the Respondents’ loss as the Respondents had tried and failed to obtain probate on the New Will and could not have obtained probate based on the Old Will (the Judgment at [122]–[157]). The Appellants were thus held to be liable to the Respondents for the difference for what they would have inherited under the New Will as compared with their entitlement under intestacy, plus the 50m rupiah spent on the Indonesian lawyers (the Judgment at [158] and [166]). The Appellants appealed and some interesting points of law have been raised thereby touching on the presumption of revocation, the presumption against intestacy, and the doctrine of conditional revocation (also known as the doctrine of dependent relative revocation) and on how these concepts interact with each other.

The parties’ cases

In this appeal, the Appellants’ points of contention are that: the Respondents and the Unintended Beneficiaries had collaborated to manufacture a claim against them; the Respondents could have mitigated their losses by voluntarily distributing the Singapore Estate according to the division spelt out in the New...