Goh Koon Suan v Heng Gek Kiau and Others

• Jurisdiction: Singapore
• Judge: Yong Pung How CJ
• Judgment Date: 14 December 1990
• Neutral Citation: [1990] SGHC 110
• Docket Number: Suit No 1640 of 1989
• Date: 14 December 1990
• Year: 1990
• Published date: 19 September 2003
• Plaintiff Counsel: Kan Ting Chiu and Ng Thin Wah (Ng Thin Wah & Partners)
• Citation: [1990] SGHC 110
• Defendant Counsel: Goh Joon Seng (Goh Poh & Partners)
• Court: High Court (Singapore)
• Subject Matter: Proceedings vexatious and an abuse of the process of the court,Solicitor's knowledge of dispute over beneficial ownership of property,Civil Procedure,Pleadings,Whether solicitors liable as constructive trustees,O 18 r 19 Rules of the Supreme Court 1970,Striking out,Trusts,Constructive Trustees,Application to strike out statement of claim

Cur Adv Vult

This was an appeal against the assistant registrar`s order on 30 October 1989 striking out the plaintiff`s statement of claim against the second, third, fourth and fifth defendants on the ground that `the proceedings are vexatious or alternatively that they are otherwise an abuse of the process of the court` .

Since about 27 October 1983 the first defendant, who is a Malaysian woman, has been registered as the owner of a flat (the property) known as 2 Suffolk Road, #06-03 Suffolk Apartment, Singapore 1130. Almost the entire purchase price had been paid by the plaintiff, with whom she had cohabited for many years and by whom she had a son. As the Singapore immigration authorities later imposed restrictions on her travel from Malaysia to Singapore, she executed on 19 October 1988 a power of attorney in favour of the plaintiff empowering him, amongst other things, to manage and sell the property. Acting under the power of attorney, the plaintiff entered into an agreement for the sale of the property for $280,000, the sale to be completed on or before 20 July 1989.

The first defendant learnt about the proposed sale and on or about 18 July 1989, before the sale could be completed, she instructed a law firm (the firm) of which the second, third, fourth and fifth defendants (the second to fifth defendants) were partners to revoke the power of attorney and to take over the conduct of the sale. Accordingly, on 20 July 1989 the firm gave notice to the plaintiff and to Hilborne & Co (Hilborne), the plaintiff`s solicitors, that the power of attorney had been revoked by the first defendant. The letter to Hilborne also put them on notice that the proceeds of sale should be paid by way of cashier`s orders in favour of the first defendant and directed Hilborne on completion of the sale to forward the proceeds of sale to the firm. On 21 July 1989 the firm wrote again to Hilborne that they had been instructed to take over the conduct of the sale, and requested Hilborne to forward to them all papers relating to the sale on the usual undertaking to preserve their lien for costs.

On 21 July 1989 Hilborne replied that their client, the plaintiff, was claiming the proceeds of sale as the beneficial owner of the property, and that they were therefore unable to release the proceeds of sale as requested, and were holding the proceeds of sale under their client account until the matter could be resolved. On the same day, in reply, the firm wrote to Hilborne denying the plaintiff`s claim, and requiring Hilborne to forward all papers relating to the sale and also the $28,000 being the 10% deposit of the purchase price which had already been received by Hilborne. On 22 July 1989 Hilborne wrote to the firm that they would hand over the papers and the 10% deposit on condition that the firm would hold the proceeds of sale as stakeholders pending the resolution of the plaintiff`s claim.

On 24 July 1989 two letters were written by the firm to Hilborne. These two letters and Hilborne`s reply to them of the same date are of particular relevance to one respect of the dispute between the parties in this appeal. The first of the firm`s letters to Hilborne, which was in reply to Hilborne`s letter of 22 July 1989, was faxed at 10.32am and is claimed by the plaintiff to support his claim against the second to fifth defendants. This letter reasserted their client, the first defendant`s stand as the legal and beneficial of the property, but also said that, ` to enable completion of the sale and purchase and without prejudice to the aforesaid, we are willing to hold the sale proceeds as stakeholder pending the resolution of the rights of the respective parties to the abovementioned property `. The firm therefore asked for all the papers and for a cheque for the 10% deposit of $28,000. Later the same day, however, having taken their client`s proper instructions on the matter, the firm wrote a second letter to Hilborne which was faxed at 3.13pm. This letter referred to Hilborne`s letter of 22 July 1989 and to their own earlier letter of the same date. After reciting their client`s instructions that she was the legal and beneficial owner and that Hilborne`s client did not have any interest whatsoever in the property, the letter said ` in the circumstances, we shall not be holding the proceeds of sale as stakeholder `. On receiving this, Hilborne wrote on the same day 24 July 1989 claiming on behalf of the plaintiff a beneficial interest in the proceeds of sale. They also claimed that they would want to hold the 10% deposit as stakeholders, and that they would not release the papers or the 10% deposit to the firm unless the firm was prepared to undertake to hold the proceeds of sale as stakeholders. They would also want the firm to undertake to pay the plaintiff`s legal costs and expenses on the m atter.

The next move in the sequence was that on 26 July 1989 the firm wrote to Hilborne undertaking to pay the plaintiff`s legal costs and expenses if such costs and expenses were incurred by the plaintiff on the first...