Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v Liu Cho Chit (No 2)

CourtHigh Court (Singapore)
JudgeWoo Bih Li JC
Judgment Date29 September 2000
Neutral Citation[2000] SGHC 199
Citation[2000] SGHC 199
Docket NumberSuit No 862 of 1998
Date29 September 2000
Defendant CounselWoo Tchi Chu (Robert WH Wang & Woo), Harpal Singh and Ee Von The (Harpal Wong & M Seow)
Plaintiff CounselMichael Khoo SC and Josephine Low (Michael Khoo & Partners)
Published date19 September 2003
Subject MatterRestitution,Constructive trusts,s 29(1)(c) Limitation Act (Cap 163, 1996 Ed),Whether executrix and agent correct parties in these proceedings,Whether plaintiff knows or could have discovered mistake,Whether action time-barred,Whether doctrine applies in Singapore,Whether unreasonable delay or negligence by plaintiff in pursuing claims,Remedial constructive trusts,Limitation Act (Cap 163, 1996 Ed) s 22(1)(b)Limitation of Actions,s 22(1)(b) Limitation Act (Cap 163, 1996 Ed),Particular causes of action,s 6(1)(a)Limitation Act (Cap 163, 1996 Ed),Failure of consideration,Unreasonable delay or negligence,s 6(7) Limitation Act (Cap 163, 1996 Ed),Moneys had and received,Mistake,Limitation of Actions,Whether such trust established,s 22(1)(b) Limitation Act (Cap 163, 1996 Ed) Limitation of Actions,Contracting parties,Trusts,Civil Procedure,Executrix of deceased owner of company suing agent of person who received moneys,s 32 Limitation Act (Cap 163, 1996 Ed),Equity,Total failure of consideration,Whether time of defendant's discovery of mistake relevant

: The plaintiff, Mdm Ching, is the executrix of the estate of Tan Geok Tee, deceased (`Tan`).

The claim in this action is based on facts which go as far back as 1972. It is therefore necessary for me to go into the background facts, most of which are found in the judgment of the Court of Appeal in Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v Liu Cho Chit & Anor [2000] 1 SLR 517 .


In 1972, a company called Peng Ann Realty Pte Ltd (`Peng Ann`) purchased a large parcel of land situate at Kampong Chai Chee comprising lots 21-26, 4-4, 4-7, 120, 121, 122, 123 and 221 of Mukim 28, having an area of 186.7 acres. The company was specifically incorporated to purchase the land. The defendant was at that time a shareholder and the managing director of the company. The purchase price was $1,090,000 and the agreement for sale and purchase was made on 18 July 1972 with completion scheduled to take place on 27 October 1972. Two days after the sale and purchase agreement was made, that is on 20 July 1972, two of the lots, namely, lots 221 and 4-4, with a total area of about 5.8 acres, were gazetted by the Government for acquisition; some neighbouring and other lands were also included in the gazette notification. As a result, the defendant and his co-directors were apprehensive that there might be a further acquisition by the Government of the other lots which Peng Ann had bought. They therefore decided to sell the remaining lots of the land.

In December 1972, the defendant was introduced to Tan and following negotiations between them, a sale and purchase agreement was made on 23 January 1973 between Peng Ann and Collin Investment Pte Ltd (`CIP`), whereby Peng Ann agreed to sell to CIP three of the lots, namely, lots 21-26, 4-7 and 123 (`the three lots`) having a total area of about 178 acres, at the price of $2,050,000 (`the main agreement`). CIP was one of Tan`s family companies. The defendant and Tan also orally agreed to develop jointly a portion of lot 21-26 containing an area of approximately 5 acres, zoned permanently residential (`the joint venture site`). The terms of their joint venture were subsequently reduced in writing and made in the names of the defendant`s wife, Mdm Lim, and Tan`s daughter, Collin. These terms were embodied in four written agreements (collectively called `the joint venture agreements`), and I need to mention only three of them.

The first was an agreement whereby the joint venture site was sold by CIP to Mdm Lim and Collin at the price of $50,000. Special condition 1 provided that the purchasers on behalf of the vendor would immediately apply for subdivision of lot 21-26 so as to delineate the joint venture site separately from the remainder of the lot, and that the costs and expenses in respect thereof would be borne by the purchasers. This sub-sale agreement was signed by Tan on behalf of CIP, and by the defendant on behalf of Mdm Lim. Tan was supposed to have signed on behalf of Collin but the copy I have seen does not have his signature on behalf of Collin.

The second was a pre-incorporation agreement, under which Mdm Lim and Collin were to procure the incorporation of a company to be called Collden Realty Private Limited (`Collden`), with an authorised capital of $2m. The pre-incorporation agreement was signed by the defendant on behalf of Mdm Lim and Tan on behalf of Collin.

The third agreement was expressed to be made between Mdm Lim and Collin of the one part and Collden of the other, under which Mdm Lim and Collin were to convey the joint venture site to Collden in return for certain shares credited as fully paid to be allotted to Mdm Lim and Collin respectively. This agreement was signed only by the defendant and Tan on behalf of Mdm Lim and Collin respectively; it was not signed by anyone representing Collden. All the agreements were backdated to 23 January 1973, being the same date on which the main agreement was executed.

It was not in dispute that neither Mdm Lim nor Collin was aware of the joint venture or the agreements signed on their behalf.

The sale under the main agreement was completed on 14 March 1973 and all the three lots were conveyed on the written direction of Tan (presumably on behalf of CIP) to Collin Development Pte Ltd, another company of Tan.

CIP was subsequently called Lee Kai Investments Pte Ltd and Collin Development Pte Ltd was subsequently called Lee Tat Development Pte Ltd (`Lee Tat`).

On 23 July 1976, the three lots conveyed to Lee Tat, except a portion of 4.2 acres, were acquired by the Government, and compensation in the sum of $2,500,000 was awarded. The unacquired land comprised: (a) a portion of 3.7 acres of the joint venture site; and (b) another portion of about 21,808 sq ft of land, also part of Lot 21-26, which was immediately adjoining the joint venture site and zoned rural. The entire area of the unacquired land was subsequently resurveyed and was described as resurvey Lot 1606 (`the property`). As it transpired, the joint venture did not materialise. Neither the defendant nor Tan, and of course nor Mdm Lim nor Collin, took any step to implement the terms of the other joint venture agreements. Thus, the joint venture was effectively abandoned by the defendant and Tan.

It was only in 1980 that their interests in developing the property revived. However, negotiations between them eventually failed, as they could not agree on the development plans. All this while, the defendant claimed Mdm Lim had a share or interest in the property. He claimed that in 1981 as a result of the differences of opinion between him and Tan he offered to sell his wife`s share in the property to Tan and in April 1981 Tan invited him to Hong Kong, where after some negotiations Tan agreed, on behalf of Lee Tat, to buy his wife`s share at the price of `S$3.8m net of tax`. Tan further agreed to pay a sum of $2m by 24 April 1981 and the balance two months later.

On 23 April 1981, in Hong Kong, Tan handed to the defendant two cashier`s orders amounting to the sum of US$642,451.04 (equivalent to S$1,368,420.70 at the then exchange rate of approximately S$2.13 to US$1). The defendant claimed that the sum of US$642,451.04 (or S$1,368,420.70) was a part payment of the purchase price. He further claimed that thereafter he called Tan asking for payment of the balance of the purchase price but Tan informed him that his (Tan`s) wife, Mdm Ching, was not happy with the agreed price, as she felt that it was too high. Tan then asked the defendant to sign and the defendant signed a letter dated 28 April 1981 prepared by Tan`s general manager in Singapore. This letter was addressed to Lee Tat and instructed and authorised Lee Tat to bank in a cashier`s order for US$293,555.99. The cashier`s order was to be deposited into the defendant`s current account with Ka Wah Bank Ltd in Hong Kong.

The US$293,555.99 was equivalent to S$625,274.26 (at the exchange rate of S$2.13 to US$1). Taking into account the S$1,368,420.70 (US$642,451.04) already received by the defendant, the payment of US$293,555.99, if made, would have brought the total payments to the defendant to S$1,993,694.96, close to the S$2m (out of the S$3.8m) that was supposed to have been received by the defendant by 24 April 1981.

According to the defendant, Tan would make this payment when his wife had cooled down, but this sum of US$293,555.99 was never paid.

There was correspondence between April 1981 and April 1983 which I shall refer to later.

On 25 August 1983, Fook Gee Finance Co Ltd (`Fook Gee`) instituted an action in Suit 4141/83 (`the 1983 action`) against the defendant claiming the sum of US$642,451.04. Fook Gee alleged to have lent this sum to the defendant. The defendant admitted receiving this sum from Tan and pleaded that at all material times Tan was acting for Lee Tat or alternatively as principal (see para 2 of the amended defence in that action). He also pleaded that he, acting on behalf of his wife Mdm Lim, had agreed to sell her share in the property to Tan `acting as aforesaid` (see para 3 of the amended defence). He further alleged that Tan had paid him the sum as a part payment of the purchase price of Mdm Lim`s share in the property. The defendant also pleaded in the alternative that, if the sum was a loan, it was void and unenforceable by virtue of the Money Lenders Ordinance of Hong Kong. Although the main defence to the claim in that action was the sale, the defendant did not take, or cause Mdm Lim to take, at that time, any action to recover the balance of the purchase price.

It was only about one year thereafter, on 23 June 1984, that Mdm Lim took action by instituting Suit 4149/84 (`the 1984 action`) against four parties, ie Lee Tat, Tan, Lee Kai and Collin claiming, inter alia, the balance of the purchase price. In para 24 of the amended statement of claim, Mdm Lim asserted that Tan, acting at all material times either for and on behalf of Lee Tat or alternatively as principal, had orally agreed to purchase her share in the property or alternatively her interest in a particular agreement for S$3.8m net of tax.

Both suits were tried together as the evidence and events which transpired were inextricably linked. The trial judge found that Mdm Lim had acquired an interest in the property and that through the defendant she had entered into an agreement to sell it to Lee Tat in 1981. She also found that the sum of US$642,451.04 (or S$1,368,420.70) paid to the defendant in 1981 was a part payment of the purchase price and not a loan. Mdm Lim was granted judgment in the 1984 action for S$2,431,579.10 against Lee Tat `only`. This sum represented the balance of the purchase price of S$3.8m (see paras 117 to 120 of the judgment in the 1983 and 1984 actions). Against this decision, Lee Tat, Mdm Ching, representing the estate of Tan, and Lee Kai appealed to the Court of Appeal in CA 94/97.

As for the claim by Fook Gee for the sum of US$642,451.04, the trial judge found that the sum came...

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