Foo Jee Seng and others v Foo Jhee Tuang and another

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 28 October 2011
• Neutral Citation: [2011] SGHC 235
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 909 of 2010
• Year: 2011
• Published date: 08 December 2011
• Hearing Date: 12 April 2011,18 May 2011,21 March 2011
• Plaintiff Counsel: David De Souza and Kevin De Souza (De Souza Lim & Goh LLP)
• Defendant Counsel: Vangadasalam Ramakrishnan (V Ramakrishnan & Co),Tan Hee Liang and Tan Hee Joek (Tan See Swan & Co)
• Subject Matter: Trusts
• Citation: [2011] SGHC 235

Judith Prakash J:

At the centre of this controversy was the land and premises known as No 39 Lorong Marzuki, Singapore (“the Property”). It was the subject of an express trust contained in a will dated 8 May 1975 (“the Will”) made by one Foo Tai Joong (“the testator”), who was the father of all the parties before this court. The plaintiffs, who were beneficiaries under the trust, by this action sought to compel the first defendant, as trustee, to sell the Property and distribute the proceeds of sale in accordance with the terms of the Will. On 18 May 2011, I dismissed the plaintiffs’ application, and I now set out the grounds for my decision.

Background

The testator had sought by the Will to make provision for all the members of his family. The most significant asset in his estate was the Property and he devised the same to his wife, one Yap Wee Kien (“Mdm Yap”), and his son, the first defendant Foo Jhee Tuang, (together, “the Trustees”), to hold on trust for the named beneficiaries of the Will. These beneficiaries comprised the testator’s wife and all six of his children (“the Beneficiaries”), and the Will provided for them in the following terms: 1. I APPOINT my wife YAP WEE KIEN and my son FOO JHEE TUANG if and when he attains the age of 21 years to be my Executrix and Executor and Trustees of this my Will (hereinafter called “my Trustees”). 2. I GIVE and DEVISE my property known as No. 39, Lorong Marzuki, Singapore, unto my Trustees UPON TRUST to sell call in and convert the same into money with power to postpone the sale calling in and conversion thereof so long as they shall in their absolute discretion think fit without being liable for loss and to hold the net proceeds of the said sale and conversion upon the following trusts:-

(a) Upon trust to invest in their names in any investments authorised by law and to stand possessed of such investments and the said property if unsold.

(b) Upon trust to divide the net income from the said investments or the net rent and profits from the said property equally to my wife and children namely the said YAP WEE KIEN, FOO JEE FONG, FOO LEE LEE, FOO JEE SENG, FOO JHEE TUANG, FOO CHIN CHIN AND FOO JEE BOO.

(c) Upon trust to hold the said property or the net proceeds of sale and conversion thereof and any investments therefrom in trust to divide the same to my wife and the said children in equal shares.

The testator passed away on 5 May 1979, and Mdm Yap obtained a grant of probate on 30 November 1979 as one of the executors of the will. The first defendant was about 18 years old at the time of his father’s death, and leave was reserved to him to come in and prove the Will when he attained the age of 21 years. As it turned out, the first defendant only did so much later, when he obtained a grant of double probate on 4 March 2010. It was the first defendant’s position that as long as Mdm Yap was alive she administered the testator’s estate. It was only in 2009 some four years after Mdm Yap’s death in July 2005, that the first defendant learnt that he was entitled to act as executor of the testator’s estate.

By Mdm Yap’s will dated 18 May 2002 she bequeathed her share in the Property to three of her sons in the following proportions: two shares to the third plaintiff, and one share each to the first plaintiff and the first defendant. A title search conducted on 6 October 2010 revealed that the Property remained registered in Mdm Yap’s name “in trust”, and that there were three caveats lodged against the Property. The first was lodged on 11 March 2010 by the third plaintiff; the second was lodged on 19 March 2010 jointly by the first and second plaintiffs, and the third was lodged on 13 April 2010 by the second defendant who is a Beneficiary and the sister of the other parties. All the above caveats claimed an “Interest other than purchaser/mortgagee/charge”.

By Summons No 5672/2010/S filed in these proceedings on 6 December 2010, the first defendant sought inter alia an order that he be declared the sole surviving executor and trustee of the testator, and an order that he was entitled to have the Property conveyed to him by Transmission on Death of Proprietor. Orders in terms of the foregoing were granted on 21 March 2011.

The Property is situated on about 5029 square feet of land in the eastern part of Singapore, and its value had apparently appreciated from about $60,000 at the time of the testator’s death in 1979 to about $4 million in 2010. The current value of the Property belies its current shabby condition: it was described by the parties as a “single storey old wooden zinc roof landed home” in a “dilapidated state”. The Property has been partitioned into as many as ten rooms, and these rooms were rented out to provide a source of rental income for the family. This enterprise began during the testator’s lifetime and, after his death, continued under the oversight of Mdm Yap. After her death, it was continued by her sons, the first and third plaintiffs. Sometime after 2005, the first defendant took over the rent collection, although it is disputed as to when he did so. The plaintiffs alleged that the first defendant took over the rent collection in 2008, but the first defendant claimed that he only did so in September 2009. In any event, the amount of rent collected was not very high. According to the first defendant it ranged from $1,130 in September 2009 to $200 in September 2010. There was also the need to apply some of this rent toward the maintenance and upkeep of the Property, and after this was done the rental income did not amount to very much.

The proceedings

The plaintiffs Foo Jee Seng, Foo Li Li and Foo Jee Boo are, respectively, the testator’s second son, eldest daughter and fourth son. The defendants Foo Jhee Tuang and Foo Chin Chin are the plaintiffs’ siblings and, respectively, the testator’s third son and second daughter. The parties had another brother, one Foo Jee Fong (the testator’s eldest child), who was also named in the Will as a beneficiary, but who died intestate on 19 July 2007.

In this Originating Summons filed on 2 September 2010, the plaintiffs prayed inter alia for orders that the Property be sold; that the sale be committed to the plaintiffs, and that the first defendant be made to furnish proper particulars and accounts of the rent and profits from the Property from 2008 to the present time.

It was clear that the plaintiffs had initiated these proceedings against the first defendant in his capacity as trustee of the Property. However, as against the second defendant, the plaintiffs claimed that they decided to include her as a defendant only because they had not managed to contact her in relation to the proposed action and were thus unaware of her position on this matter. The plaintiffs claimed that they had not received any reply to either of two letters sent by their solicitors to the second defendant. The first letter sent on 2 February 2010 requested that second defendant state her position on the matter, and the second letter sent on 11 May 2010 informed the second defendant of a meeting between the plaintiffs and the first defendant at which the parties would seek to resolve the matter. Though the second defendant allegedly failed to respond to the letters, she lodged a caveat against the Property in her name on 13 April 2010. The second defendant also filed an affidavit on 22 October 2010, in which she stated that she was taking a neutral position. She did not take any active part in the proceedings thereafter.

The parties’ submissions

The thrust of the plaintiffs’ case was that the Property should be sold because, on the true construction of the Will, the testator’s intention was to provide for his wife and then infant children from the rental income of the Property. So long as the Property was generating a reasonable rental income, the Trustees could delay the sale of the Property. Counsel for the plaintiffs, Mr David De Souza, submitted that the rental income of the Property was no longer reasonable enough to justify withholding the sale of the Property any longer, and furthermore the children were now adults. Therefore, the Property should be sold and the sale proceeds distributed among the beneficiaries. To achieve this, Mr De Souza submitted that this court should order a sale of the Property pursuant to Order 80 Rule 2 of the Rules of Court (Cap 322, 2006 Rev Ed) (“ROC”).

Counsel for the first defendant, Mr Tan Hee Liang, contended that it would be inappropriate for the court to grant relief under O 80 r 2, because it was merely a procedural provision, and jurisdiction to engage O 80 r 2 must first be founded in s 56(1) of the Trustees Act (Cap 337, 2005 Rev Ed). According to Mr Tan, s 56 (1) requires that there be a lack of power on the part in the powers of the trustee to deal with the trust property in a certain manner before the court can exercise its discretion to authorise such dealings. In the present case, the Will had specifically imposed on the Trustees the duty to sell the Property and the power to postpone the sale, therefore no jurisdiction could be grounded in s 56(1). Mr Tan submitted that on the proper construction of the Will, the Property was meant to be used as an investment property, and the plain words of the Will conferred a power on the first defendant to postpone the sale as he thought fit. Furthermore, there was no reason to compel a sale of the Property since rental income was still being generated, and the first defendant had exercised his discretion in a bona fide manner.

The issues

Five issues had to be resolved in deciding whether the plaintiffs were entitled to the orders that they sought: (a) whether the trust in the Will was in the nature of a trust for sale, and if so, how this device operated in the context of a will; (b) what the ambit of the court’s power to supervise trustees in their exercise of their...