Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v Liu Cho Chit and Another Appeal

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 12 January 2000
• Neutral Citation: [2000] SGCA 1
• Docket Number: Civil Appeals Nos 111 and 112 of 1999
• Date: 12 January 2000
• Year: 2000
• Published date: 19 September 2003
• Plaintiff Counsel: Michael Khoo SC and Josephine Low (instructed) and Jimmy Yap (Donaldson & Burkinshaw)
• Citation: [2000] SGCA 1
• Defendant Counsel: Harpal Singh and Teh Ee-Von (Harpal Wong & M Seow)
• Court: Court of Appeal (Singapore)
• Subject Matter: Res Judicata,Remedies,Whether failure to make claim in earlier suit against non-party an abuse of process,Claim for restitution on constructive trust,Pleadings,Trusts,Civil Procedure,Whether claim frivolous, vexatious or abuse of process of court,whether amendment should be allowed,Extended doctrine of res judicata,Whether proceedings precluded by doctrine of,Amending statement of claim,Constructive trusts,True basis for operation of extended doctrine

(delivering the grounds of judgment of the court): Introduction

There were two appeals before us. The first, CA 111/99, was brought against the decision of the High Court dismissing the appellant`s appeal against the decision of the assistant registrar in which the assistant registrar struck out the appellant`s statement of claim and dismissed the action. The second, CA 112/99, was brought against the High Court`s decision dismissing the appellant`s appeal against the decision of the same assistant registrar in which he disallowed the application by the appellant for leave to amend her statement of claim. We allowed both appeals and now give our reasons.

The facts

The appellant is the widow of one Tan Geok Tee, deceased, and sues in her capacity as the executrix of his estate. These proceedings were commenced in the wake of the decision of the Court of Appeal in two appeals, namely, CA 93 and 94/97, reported in Fook Gee Finance Co Ltd v Liu Cho Chit and another action [1998] 2 SLR 121 . The two appeals arose from the decision of the High Court in two suits, which were tried together. The first was Suit 4141/83, in which a Hong Kong company, Fook Gee Finance Co Ltd (`Fook Gee`) claimed against one Liu Cho Chit (`Liu`) (who is the respondent in the present appeals) the sum of US$642,451.04 as a loan. The claim was dismissed with costs by the High Court, and against this decision Fook Gee appealed in CA 93/97. The second was Suit 4149/84, in which the plaintiff was Liu`s wife, Lim Siam Soi (`Lim`), and she sued four parties, namely, Lee Tat Development Pte Ltd (`Lee Tat`), Tan Geok Tee (`Tan`) (who had since died and was represented by his wife, Ching Mun Fong (`Ching`), the appellant in the present appeals), Lee Kai Investments Pte Ltd (`Lee Kai`) and Collin Tan (`Collin`), Tan`s daughter. Lim claimed, inter alia, as against all the defendants a declaration that Lee Tat held certain property known as Lot 1606 of Mukim 28 having an area of approximately five acres on trust for her and Collin in equal shares, or alternatively as against Lee Tat and Tan the sums of S$631,579.10 and S$1,800,000 representing the balance of the purchase price of her share in the property. The High Court allowed the alternative claim and gave judgment in favour of Lim in the sum of S$2,431,579.10, and against that decision, Lee Tat, Ching representing the estate of Tan, and Lee Kai appealed in CA 94/97.

The relevant facts which led to the two appeals were fully set out in the judgment of this court and were briefly these. 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, 407, 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. Liu 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, Liu 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, Liu was introduced to Tan and following negotiations between them, a sale and purchase agreement was made on 23 January 1973 between Peng Ann and Lee Kai, then known as Collin Investment Pte Ltd, whereby Peng Ann agreed to sell to Lee Kai three of the lots, namely, lots 21-26, 407 and 123 (`the three lots`) having a total area of about 178 acres, at the price of $2,050,000 (`the main agreement`). Lee Kai was one of Tan`s family companies. Liu and Tan also orally agreed to develop jointly a portion of lot 21-26 containing an area of approximately 4.6 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 Liu`s wife, Lim, and Tan`s daughter, Collin. These terms were embodied in four written agreements (collectively called `the joint venture agreements`), and we need to mention only three of them. The first was the sub-sale agreement whereby a part of lot 21-26, namely, the joint venture site, was sold by Lee Kai to Lim and Collin at the price of $50,000. The sub-sale agreement by special condition 1 provided that the purchasers on behalf of the vendor would apply for subdivision of lot 21-26 so as to delineate the site separately from the remainder of the lot, and that the costs and expenses in respect thereof would be borne by the purchasers. The sub-sale agreement was signed by Tan on behalf of Lee Kai, and by Tan and Liu on behalf of Collin and Lim respectively. The second was a pre-incorporation agreement, under which Lim and Collin were to procure the incorporation of a company, Collden Realty Pte Ltd (`Collden`), with an authorised capital of $2m. Similarly, the pre-incorporation agreement was signed by Liu on behalf of his wife and Tan on behalf of his daughter. The third agreement was expressed to be made between Lim and Collin of the one part and Collden of the other, under which 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 Lim and Collin respectively. This agreement was signed only by Liu and Tan on behalf of Lim and Collin respectively; it was not signed by anyone representing Collden. All the four 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 Collin nor Lim was aware of the joint venture or the agreements signed on their behalf, and were only nominees for their father and husband respectively. 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 Lee Kai) to Lee Tat, then known as Collin Development Pte Ltd, another company of Tan.

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 (`Lot 1606`). As it transpired, the joint venture did not materialise. Neither Liu nor Tan, and of course nor their respective nominees, took any step to implement the terms of the sub-sale agreement or any of the other joint venture agreements. Neither Lim nor Collin, and nor Liu and Tan on their behalf respectively, did anything to cause or procure the joint venture site to be conveyed to Lim and Collin pursuant to the sub-sale agreement; nor did they procure the incorporation of Collden as required by the pre-incorporation agreement. Thus, the original joint venture agreements were never performed; in fact the joint venture was abandoned by Liu and Tan.

It was only in 1980 that Liu`s and Tan`s interests in developing Lot 1606 revived. However, negotiations between them eventually failed, as they could not agree on the development plans. All this while, Liu claimed that he (or his wife) had a share or interest in Lot 1606. Liu 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 land to Tan, and in April 1981 Tan invited him to Hong Kong, where after some negotiations Tan agreed to buy his wife`s share at the price of `$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 Liu 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). Liu claimed that Tan agreed to buy Lim`s share in Lot 1606 for $3.8m and the sum of US$642,451.04 (or S$1,368,420.70) was a part payment of the purchase price. Liu 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 was not happy with the agreed price, as she felt that it was too high. Tan then asked Liu to sign a letter dated 28 April 1981 prepared by his general manager in Singapore, authorising the payment by Lee Tat to Liu of the sum of US$293,555.99 by way of a cashier`s order. According to Liu, Tan would make this payment when his wife had cooled down, but this sum was never paid to Liu.

On 25 April 1983, Fook Gee instituted an action in Suit 4141/83 against Liu claiming the sum of US$642,451.04 alleged to have been lent to Liu. Liu admitted receiving this sum from Tan, but averred that it was a part payment of the purchase price of Lim`s share in Lot 1606 which Tan had agreed to purchase from her. In the alternative, 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 was a sale, Liu did not take, or cause Lim to take, at that time, any action to recover the balance of the purchase price. It was only about one year thereafter that Lim took action by instituting Suit 4149/84 against Lee Tat, Tan, Lee Kai and Collin claiming, inter alia, the balance of the purchase price.

Both suits were tried together as the evidence and events which...