Chye Seng Kait v Chye Seng Fong

• Judge: Vinodh Coomaraswamy J
• Judgment Date: 20 April 2021
• Docket Number: Suit No 428 of 2018
• Court: High Court (Singapore)

Chye Seng Kait

and

Chye Seng Fong (executor and trustee of the estate of Chye You, deceased)

[2021] SGHC 83

Vinodh Coomaraswamy J

Suit No 428 of 2018

General Division of the High Court

Probate and Administration — Personal representatives —Liabilities —Beneficiary alleging that executor failed to inquire into certain transactions from deceased's bank accounts —Whether executor breached his duty

Probate and Administration — Personal representatives —Liabilities —Beneficiary alleging that executor failed to inquire into distribution of sale proceeds of property of deceased —Whether executor breached his duty

Succession and Wills — Construction — Clause in will providing that joint accounts belonged to surviving co-owner by virtue of right of survivorship —Whether clause made absolute gift of joint accounts to surviving co-owner

Held, dismissing the application:

(1) While it was true that an executor's duty to call in the assets of the estate was a fiduciary duty, this was a duty owed as executor, not as trustee. Breach of this duty was therefore strictly speaking, not a breach of trust because the executor had yet to assume the role of trustee of those assets. However, even though breach of this duty was not a breach of trust, an executor could be liable to account on the wilful default basis where his breach was a devastavit causing loss: at [12] and [13].

(2) The construction of cl 2 of the Will. In construing a will, the court sought to ascertain and give effect to the testator's intention as expressed in his will, read as a whole in light of any admissible extrinsic evidence. On a proper construction of cl 2 of the Will, the father made an absolute gift of the CMJ Joint Accounts to CMJ. First, the father declared to whom the jointly owned properties “shall” belong. This imperative language showed that the father's intent was actively to make a gift, not passively to state that he was content with the legal position which would obtain in any event when a right of survivorship operated by law. Second, to construe cl 2 as merely reiterating the legal position that would obtain when a right of survivorship operated by law would render cl 2 entirely superfluous. In construing a will, the court would seek to give effect to every word on the premise that a testator did not will in vain. CSF therefore did not breach his duty to make sufficient inquiry into the CMJ Joint Accounts: at [40] to [43] and [54].

(3) The double portions contention. The presumption against double portions provided that a parent's gift by will, that gift being a portion, was adeemed when he provided a portion to the child during his lifetime. This form of ademption was based on the rebuttable presumption that a testator who was a parent (or a person in loco parentis) did not intend to provide double portions to his children. The testator was presumed to have intended the portion provided during the testator's lifetime as a substitution for the legacy. However, this form of ademption applied only where the will predated the inter vivos gift because the inter vivos gift accelerated the enjoyment of the provisions of the will. CSK's argument that the presumption against double portions applied in the present case because the father had made an inter vivos gift to CMJ a decade before his death failed. The reason was that the Will was made after the inter vivos gift: at [45] to [48].

(4) The sale proceeds of the Killiney property. Proprietary interests under a resulting trust crystallised at the time of purchase and did not fluctuate as and when a party made payments towards reducing the loan over time. In this regard, the identity of the borrower or mortgagor was not determinative of the parties' agreement or understanding as to who was to repay the loan. In addition, subsequent conduct might be evidence of the agreement or understanding. Here, CSK failed to prove that there existed any clear agreement or common understanding between the father and CMJ at the time the Killiney property was purchased. There was also no evidence that the father paid any of the loan instalments. There was therefore no purchase price resulting trust in favour of the father. CMJ was entitled to 50% of the net proceeds of sale of the Killiney property. CSF had therefore discharged his duty to inquire into the disposal of the proceeds of sale of the Killiney Property: at [61], [63], [64] and [67] to [73].

[Observation: Alternatively, words could be read out for repugnance, inconsistency or senselessness in the context where they were clearly contrary to the intention expressed in the will. Therefore, cl 2 could also be construed as if the phrase “by virtue of the right of survivorship” were omitted. This would make the imperative nature of the donative intent expressed in cl 2 even clearer: at [44].

Clause 4 also did not undermine the preferred construction of cl 2. Clause 4 of the Will provided that the father had made “sufficient provisions” for his wife and CMJ. The purpose of cl 4 was to explain why only CSK and CSF were named as residuary legatees in the Will: at [49] to [53].]

Case(s) referred to

Chan Yuen Lan v See Fong Mun [2014] 3 SLR 1048 (folld)

Foo Jee Boo v Foo Jhee Tuang [2016] SGHC 260 (folld)

Goh Nellie v Goh Lian Teck [2007] 1 SLR(R) 453; [2007] 1 SLR 453 (folld)

Hayes' Will Trusts, Re [1971] 1 WLR 758 (refd)

Lau Siew Kim v Yeo Guan Chye Terence [2008] 2 SLR(R) 108; [2008] 2 SLR 108 (folld)

Lee Yoke San v Tsong Sai Sai Cecilia [1992] 3 SLR(R) 516; [1993] 1 SLR 602 (folld)

Low Ah Cheow v Ng Hock Guan [2009] 3 SLR(R) 1079; [2009] 3 SLR 1079 (folld)

Low Gim Siah v Low Geok Khim [2007] 1 SLR(R) 795; [2007] 1 SLR 795 (refd)

Ng Kwok Seng v Mei Ling Ng [2015] 8 MLJ 455 (refd)

Saylor v Madsen Estate (2006) 261 DLR (4th) 597 (refd)

Sharp v Lush [1879] 10 Ch D 468 (refd)

Su Emmanuel v Emmanuel Priya Ethel Anne [2016] 3 SLR 1222 (folld)

Tan Yok Koon v Tan Choo Suan [2017] 1 SLR 654 (refd)

Facts

The plaintiff, Chye Seng Kait (“CSK”), and the defendant, Chye Seng Fong (“CSF”), were brothers. Their father's will (“the Will”) named CSF as the executor of the estate (“the Estate”). CSF valued the Estate at $1.7m. CSK believed that the likely value was instead $7m. He therefore brought this action against CSF alleging that CSF had breached his duty as executor to make sufficient inquiry to ascertain the Estate's assets.

CSK alleged that CSF had breached this duty in two areas. The first alleged breach was in relation to two bank accounts (“the CMJ Joint Accounts”) which the father held jointly with his youngest daughter, Chye Moi June (“CMJ”). CSK alleged that CSF failed to make sufficient inquiry into the disposal of money in the CMJ Joint Accounts. In response, CSF argued that there was no need to make any inquiries because cl 2 of the Will made an absolute gift of the CMJ Joint Accounts to CMJ. Clause 2 of the Will provided, among other things, that any joint accounts in financial institutions held by the father shall belong to his surviving co-owner “by virtue of the right of survivorship”.

The second alleged breach was in relation to the distribution in 2007 of the net proceeds of the sale of a property which the father had purchased with CMJ as tenants in common in equal shares in 1999 in Killiney Road (“the Killiney property”). CSK alleged that CSF failed to make sufficient inquiry into the distribution of the net proceeds, which were divided equally between the father and CMJ. The father had paid 50% of the purchase price of the Killiney property in cash. CMJ paid 16% of the purchase price in cash and from her Central Provident Fund account, funding the remaining 34% by taking a bank loan secured by a mortgage over the Killiney property.

The relief which CSK sought for the alleged breach of CSF's duty was an order for CSF to account for the Estate either on the wilful default basis or the common account basis. In the alternative, CSK sought an order removing CSF as executor of the Estate and appointing either himself or such other person as the court saw fit in CSF's place.

Legislation referred to

Mental Capacity Act (Cap 177A, 2010 Rev Ed)

Lim Seng Siew and Lip Wei De Eric (OTP Law Corporation) andLai Swee Fung (UniLegal LLC) for the plaintiff and defendant-in-counterclaim;

Michael Khoo SC and Josephine Low (Michael Khoo & Partners) andAndy Chiok (JHT Law Corporation) for the defendant and plaintiff-in-counterclaim.

20 April 2021

Vinodh Coomaraswamy J:

Introduction

1 The plaintiff and the defendant are brothers. Their father died in 2015. His will named the defendant as the executor of the estate. The schedule of assets which the defendant annexed to the father's grant of probate values the estate at $1.7m. The plaintiff believes that the value of the father's estate is substantially more than $1.7m. The plaintiff points out that the father was a fairly successful property developer in his lifetime. The plaintiff therefore puts the likely value of the father's estate at $7m. The plaintiff now brings this action against the defendant seeking relief for what he asserts are the defendant's breaches of duty as executor.

2 I have dismissed the plaintiff's claim. I have found that the defendant has not breached any of his duties as executor. The plaintiff has appealed against my decision. I now give my reasons in full.

The parties' cases

The plaintiff's case

3 The plaintiff's case is that one of the defendant's duties as executor of the father's estate is to make sufficient inquiry in order to identify the assets of the estate. The relief which the plaintiff seeks for the defendant's alleged breach of this duty is an order for the defendant to account for the father's estate either on the wilful default basis or the common account basis. In the alternative, the plaintiff asks...