Choong Wai Phwee And Others (Trustees of Cheng Liam Um Vegetarian Temple) v Chileon Pte Ltd

• Jurisdiction: Singapore
• Judge: G P Selvam J
• Judgment Date: 26 July 2000
• Neutral Citation: [2000] SGHC 151
• Date: 26 July 2000
• Subject Matter: Charity trustees selling trust land without express power of sale,Charities,Commissioner of Charities making order authorising sale of trust land under s 30,Charitable trusts,Whether trustees have power of sale without authorisation of court or Commissioner of Charities,Whether s 30 or s 24 the proper provision for such order,ss 24 & 30 Charities Act (Cap 37, 1995 Rev Ed)
• Docket Number: Originating Summons Nos 763 and
• Published date: 19 September 2003
• Defendant Counsel: Quek Mong Hua and Adeline Foo (Lee & Lee)
• Court: High Court (Singapore)
• Plaintiff Counsel: Lok Vi Ming and Raistlina Kwek (Rodyk & Davidson)

: Part I: The prelude

Introduction

Shanghai Road is situated off River Valley Road and is proximate to the prestigious Orchard Road and Tanglin area. The road is in the process of gentification. Chileon Pte Ltd, the defendants in this case, made collective sale agreements with the owners of nine properties at Shanghai Road yielding an aggregate land area of some 25,000 sq ft. They intend to construct a condominium of 48 flats. One of the properties, 24 Shanghai Road, houses a charity known as the Cheng Liam Um Vegetarian Temple (`the temple`). The temple charity was constituted by a trust deed made in 1927. The trustees of the temple charity entered into an agreement for the sale of the temple property to the defendants as part of the collective sale. The defendants have resiled from the agreements because their financiers at the eleventh hour pulled the carpet from under their feet. By domino effect all the other proposed sales also suffered the same paralysis. By OS 764/2000, the plaintiffs who are the present trustees of the temple charity seek an order against the defendant developers for the completion of the agreement for the sale of the temple property. By another originating summons, 763/2000, the owners of the other properties have also sought an order for specific performance of the agreements to sell their properties to the defendants. By way of a countermeasure, Chileon Pte Ltd by High Court Suit 335/2000/M commenced an action against all the nine vendors for the return of the deposit of $2,380,000 in the hands of their solicitors. Pleadings have closed in that action. It cannot proceed any further because of my decision in this case; the central issue in that case is res judicata.

The lawyers

Before I proceed further I should introduce the lawyers of the parties. The vendors of all the properties have retained Rodyk & Davidson (`Rodyks`). The purchasers were represented by David Ong & Partners (`David Ong`) in the matter of the sale and purchase. The purchasers had arranged for finance for the purchase and project from Hong Leong Finance Ltd and Singapore Finance Ltd (`the lenders`). Lee & Lee were their solicitors for the securitisation of the proposed loan. It was the intention of the purchasers to retain Lee and Lee to handle the sale of the condominium units. After the purchasers resiled from the sale and purchase they retained Lee and Lee to act for them in the three actions. By that engagement, Lee and Lee took on the task of defending and demonstrating their view of the law was the correct view.

The SAPAs

The properties that were to be sold were comprised of Nos 22, 26, 28, 30, 32, 34, 36, Lot 257N and Lot 958L Shanghai Road, Singapore. The legal owners of each property granted on 2 November 1999 an option to purchase to `Chileon Pte Ltd and/or nominees`. The aggregate price of all properties was $23,800,000. On 30 November 1999 Chileon exercised the option and paid the aggregate deposit of $2,380,000. Thereupon there arose a binding contract of sale and purchase in respect of each property. I shall use the acronym `SAPA` to refer to the sale and purchase agreements.

Glitch No 1

Then, there arose a glitch in relation to No 26 Shanghai Road. It was in the shape of an objection raised by the purchasers. It arose like this. The trust instrument, an indenture of conveyance dated 19 July 1927, contained this provision:

Now this Indenture Witnesseth that in consideration of the premises the said Tay Choon Tow hereby conveys unto the Trustees all the land and premises described in the Schedule hereto To Hold the same unto the Trustees in fee simple Upon Trust to manage the said land and premises and permit the same to be occupied for the purposes of the Cheng Liam Um Vegetarian temple and if not so occupied to let the same and to receive the rents profits and income thereof and pay and apply the same to the use and benefit of the said Cheng Liam Um Vegetarian temple and the members thereof.

It is to be noted that the trust instrument included an express power of letting but not sale. This gave concern to the lawyers of the purchasers and the two finance companies which agreed to lend moneys to the defendants.

The agreement provided for two completion dates. The first was 21 March 2000. The lack of power was discovered before that date; in fact it was spotted soon after David Ong received the title documents.

Application to the court

To surmount the glitch on 21 March 2000 the lawyers for the charity trustees made an ex parte application to the High Court seeking an order to empower the trustees to effect the sale. The application was made by OS 442/2000. The application was made ex parte under s 56(1) of the Trustees Act. It was filed on 22 March 2000 to be heard on the same day. The applicants informed the court of the urgency. In addition to the completion date, there was urgency for another reason - the sellers were in the market to purchase substitute properties. None wanted anything to go awry.

Rubin J, who took on the application, posed this question to counsel for the trustees of the temple before him:

Do you have to serve the papers on the A-G as guardian of charities. Does the property or the temple come within the purview of the Charities Act?

Obviously, what troubled Rubin J was s 9 of the Government Proceedings Act. The relevant part of that provision states that:

In the case of any alleged breach of any express or constructive trust for religious or charitable purposes, or where the direction of the court is deemed necessary for the administration of any such trust, the Attorney-General or two or more persons having an interest in the trust and having obtained the consent in writing of the Attorney-General, may institute a suit or be joined as a party in any existing suit on behalf of the Government or the public for the purpose of authorising the whole or any part of the trust property to be let, sold, mortgaged, charged or exchanged and obtaining such further or other relief as the nature of the case may require.

Counsel was unable to offer the information sought by Rubin J. Thereupon Rubin J adjourned the application `for the solicitor to make inquiries`. By reason of subsequent developments that application slumbered into silence.

Application to the Commissioner of Charities

Rodyks for the trustees took a look at the Charities Act (Cap 37) and made an application to the Commissioner of Charities under s 30(1) of the Charities Act. The section reads as follows:

Subject to this section, where it appears to the Commissioner that any action proposed or contemplated in the administration of a charity is expedient in the interests of the charity, he may by order sanction that action, whether or not it would otherwise be within the powers exercisable by the charity trustees in the administration of the charity; and anything done under the authority of that order shall be deemed to be properly done in the exercise of those powers.

On 23 March 2000 they asked the Commissioner to make an order in the following terms:

(1) that the sale of the property known as Cheng Liam Um Vegetarian temple at 26 Shanghai Road, Singapore 248195 by the abovenamed trustees of the said temple to Chileon Pte Ltd be authorised, notwithstanding the absence of a power of sale conferred on the trustees;

(2) that all expenses in relation to the sale be paid out of the sale proceeds; and

(3) that the trustees be authorised to apply the balance sale proceeds towards the purchase of an alternative property for the use and benefit of the Cheng Liam Um Vegetarian temple and its members.

In case the Commissioner was not prepared to make the order, they asked for an alternative order under s 31 of the Charities Act to authorise the trustees to make `an application to court for a power of sale to be conferred on the trustees for the aforesaid purpose`. The Commissioner was appraised of the direction made by Rubin J.

In the event the Commissioner made an order in terms sought by the trustees. The order was dated 31 March 2000.

Glitch No 2

Then arose another glitch. This time it arose in the shape of an objection from the financiers of the purchasers. On 5 April 2000 David Ong wrote to Rodyks as follows:

Our clients` mortgagees are of the view that the said order is inadequate in that it does not authorise the execution of the conveyance by the trustees. Further as the contract for sale was entered into at a time when the trustees had no capacity to sell, it should be approved and ratified by the Commissioner.

They wanted the Commissioner`s order to be amended to include a reference to the agreement to sell and a reference to the conveyance to be executed.

In an affidavit in these proceedings the defendants explained the objection in these words:

Both the defendants` intended mortgagees and the defendant were advised by their respective solicitors, which advice they accepted and relied upon, that the said order obtained by the temple trustees under s 30 of the said Act was inappropriate as the proper order should have been made under s 24(1) of the said Act where the Commissioner of Charities could exercise the concurrent jurisdiction of the High Court only with the consent of the Attorney General.

It would be appropriate to state the contents of s 24(1) now:

Subject to the provisions of this Act, the Commissioner may, with the consent of the Attorney-General, by order exercise the same jurisdiction and powers as are exercisable by the High Court in charity proceedings for the following purposes:

(a) establishing a scheme for the administration of a charity;

(b) appointing, discharging or removing a charity trustee or trustee for a charity, or removing an officer or employee; and

(c) vesting or transferring property, or requiring or entitling any person to call for or make any transfer of property or any...