Ching Chew Weng Paul v Ching Pui Sim and Others

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Steven Chong JC
• Judgment Date: 04 December 2009
• Neutral Citation: [2009] SGHC 277
• Citation: [2009] SGHC 277
• Subject Matter: Trusts,Revenue Law
• Defendant Counsel: Chan Hian Young/Ramesh Kumar (Allen & Gledhill LLP),Sivakumar Murugaiyan (Madhavan Partnership)
• Docket Number: Suit No 594 of 2008
• Published date: 11 February 2010
• Plaintiff Counsel: Hri Kumar Nair SC/Wendell Wong/Wilson Wong (Drew & Napier LC)
• Date: 04 December 2009

4 December 2009 Judgment reserved.

Steven Chong JC:

Introduction

1 This case concerns the unfortunate quest of the plaintiff to recover assets which his father, the late Ching Kwong Kuen (“K K Ching”) had intended to leave behind for him when he reached the age of 30. In 1982, K K Ching transferred shares in various companies to his relatives pursuant to several oral trust arrangements to hold on trust for him. None of them was documented in any form whatsoever. In 1984, after K K Ching was diagnosed with terminal cancer, he gave oral instructions to his trustees to hold the assets on behalf of his son, the plaintiff instead. One of the companies, National Aerated Water Singapore Pte Ltd, was best known for bottling “Sinalco” and “Kickapoo”. K K Ching passed away in 1985 when the plaintiff was only 14 years old. After his death, the estate was embroiled in a litany of legal proceedings involving, inter alia, his divorced wife (OS 1144 of 1989), his elder son, the plaintiff’s brother (OS 246 of 1996) and the Commissioner of Estate Duty (OS 1240 of 1988). The extent of K K Ching’s wealth was expectedly the focal point in each of those proceedings.

2 Shortly before the plaintiff reached the age of 30, he began to take steps to recover the assets which he believed to be rightfully his. Unfortunately, he faced difficulties in the process, though not because any of the trustees were claiming ownership of the assets for themselves. As the trust arrangements were all made orally some years ago, there was some uncertainty whether the assets were held on trust for the estate of K K Ching or for the plaintiff.

3 I say that this case is unfortunate and perhaps even somewhat tragic because the plaintiff eventually had no choice but to commence the present proceedings against his cousin (the first defendant), his uncle (the second defendant) who passed away in October 2008 after the commencement of the proceedings, another uncle (the third defendant) who became blind in 1963 and his aunt (the fourth defendant) who was diagnosed with early stages of dementia in 2005. This observation is not intended to be a criticism of the plaintiff’s conduct in commencing the proceedings against his relatives. He was compelled to do so after exploring other avenues.

4 Such problems can of course be avoided if the wishes of a testator/settlor are properly documented and expressed in clear language. Otherwise litigation is almost inevitable. Instead of inheriting the wealth, the next generation will be “inheriting” unnecessary and traumatic litigation.

Background Facts

5 The plaintiff is the youngest son of the late K K Ching. The first defendant is the plaintiff’s first cousin. The second defendant is the plaintiff’s paternal uncle. He was one of the two executors of K K Ching’s estate. He passed away on 21 October 2008 after this action was commenced. Initially, he was represented in these proceedings. In fact, a defence was filed on his behalf. The defence was a bare denial which merely put the plaintiff to strict proof of his claim. After his death, the plaintiff applied for the fifth to ninth defendants to be substituted as parties for the purposes of the action against the estate of the second defendant. The fifth defendant is the wife of the second defendant while the sixth to ninth defendants are his children. The third defendant is also the plaintiff’s paternal uncle. He is the only remaining executor of K K Ching’s estate. The fourth defendant is the plaintiff’s paternal aunt.

6 The plaintiff commenced the present suit for, inter alia, recovery of property that he alleged was held on trust for him as beneficiary or in the alternative, on trust for his father’s estate of which he is a beneficiary under the Will executed by K K Ching on 24 November 1984 (“the Will”).

7 It is the plaintiff’s case that in or around 1982, K K Ching asked the first, second and fourth defendants, and they agreed, to hold shares in various companies on trust for K K Ching. At that time, the plaintiff was only 11 years old. Pursuant to this, K K Ching transferred the shares in the following companies to the first defendant in 1982 (“Trust Assets (A)”):

Company	shares	total issued; shares
K K Holdings (Pte) Ltd (“KK Holdings”)	2	50.00%
National Aerated Water Singapore Pte Ltd	72,270	5.16%
National Aerated Water Co Sdn Bhd	233,700	5.19%
Kwong Soon Engineering Company Pte Ltd; (“Kwong Soon Engineering”)	240,000	20.00%
Kheng Cheong & Co Pte Ltd	100,000	20.00%
Kheng Cheong & Co Sdn Bhd	10,000	20.00%
Siong Heng Realty Pte Ltd (“Siong Heng Realty”)	100[note: 1]	20.00%
Seng Realty & Development Pte Ltd	765,000[note: 2]	1.34%

8 K K Ching transferred a sum of $1m and the shares in the following companies to the second defendant in 1982 (“Trust Assets (B)”):

Company	shares	total issued; shares
KK Holdings	1	25.00%
National Aerated Water Singapore Pte Ltd	117,374	8.38%
Seng Heng Realty Pte Ltd	32,000[note: 3]	20.00%

9 K K Ching also transferred one share in K K Holdings to the fourth defendant in 1982 (“Trust Asset (C)”). Trust Assets (A), (B) and (C) are collectively referred to as the “Trust Assets”. The oral trusts created by K K Ching in 1982 are referred to collectively as the “1982 Trusts”, and each as the “1982 Trust”.

10 In or around late 1984, K K Ching learnt that he was suffering from terminal cancer. He executed the Will on 24 November 1984. He made specific bequests of cash to the plaintiff’s sister. He made further specific bequests of cash to the plaintiff and all his siblings to be held on trust for their education and maintenance. 90% of K K Ching’s residuary estate was left to the plaintiff when he reached the age of 30 while the other 10% was left to the plaintiff’s elder brother when he reached the age of 30. The Trust Assets were not included in the Will. On 27 August 2008, the plaintiff’s brother assigned his 10% share to the plaintiff. It is the plaintiff’s case that around the time K K Ching executed the Will, he informed the first, second and fourth defendants that he was terminating the 1982 Trusts and was creating new oral trusts under which the first, second and fourth defendants would hold the Trust Assets solely for the plaintiff’s benefit until he reached the age of 30 after which the Trust Assets were to be transferred to the plaintiff. The oral trusts created by K K Ching in 1984 to replace the 1982 Trusts are referred to collectively as the “1984 Trusts”, and each as the “1984 Trust”.

11 K K Ching passed away on 23 August 1985. Probate was granted to the second and third defendants on 18 April 1986.

12 In the current action, the plaintiff seeks the following orders if the court upholds the 1984 Trusts:

(a) an order that the Trust Assets be transferred to the plaintiff by the first, second and fourth defendants;

(b) an order that the first, second and/or fourth defendants provide to the plaintiff an account of all dividends, income, interests, and/or other payments arising from their respective portions of those Trust Assets; and

(c) an order for all sums found to be due to the plaintiff upon the taking of such account to be paid to the plaintiff.

13 Alternatively, the plaintiff seeks the following orders if the court upholds the 1982 Trusts:

(a) an order that the Trust Assets be transferred to the estate of K K Ching by the first, second and fourth defendants;

(b) an order that the first, second and/or fourth defendants provide to the estate of K K Ching an account of all dividends, income, interests, and/or payments arising from their respective portions of those Trust Assets;

(c) an order that the third defendant, as executor of the estate of K K Ching, administer the assets received into the estate in accordance with the Will including but not limited to declaring the same to the tax authorities for purposes of estate duty and paying any estate duty that may be levied on the same; and

(d) alternatively, an order that the third defendant be removed as executor of the estate of K K Ching and the plaintiff, or a person nominated by the plaintiff, be appointed in the third defendant’s place.

14 In addition, the plaintiff also seeks an order against the second and third defendants as executors and alternatively against the first, second and fourth defendants as trustees that they indemnify the estate of K K Ching against any penalties and/or interest for late settlement of estate duty in respect of the Trust Assets.

Creation of the 1982 Trusts

15 The first defendant has admitted that Trust Assets (A) were transferred to her in 1982 to be held on trust for K K Ching. The first defendant and the plaintiff both testified that the second defendant had admitted on various occasions that Trust Assets (B) were also transferred to him in 1982 to be held on trust for K K Ching. This was not challenged by the fifth to ninth defendants following the death of the second defendant. As for Trust Asset (C), it is the fourth defendant’s case that it was transferred to her in 1982 to be held on trust for K K Ching.

16 In the light of the evidence, it is indisputable that the 1982 Trusts were created in respect of the Trust Assets and I so find. The main factual dispute in the present suit is whether K K Ching gave oral instructions to the trustees in 1984 to substitute the trusts in favour of the plaintiff.

Were the 1982 Trusts replaced by the 1984 Trusts

17 Before examining the evidence in relation to this issue, it is perhaps relevant to bear the following in mind:

(a) There were in fact three separate 1982 Trusts. The first, second and fourth defendants were appointed separately by K K Ching to hold different shares/assets on trust for him. Likewise, in determining whether the 1982 Trusts were replaced by the 1984 Trusts, it is necessary to examine the evidence in relation to each of the three defendants. In other...