Hongkong Bank Trustee (Singapore) Ltd v Tan Farrer and Others

• Jurisdiction: Singapore
• Judge: Chan Sek Keong JC
• Judgment Date: 19 January 1988
• Neutral Citation: [1988] SGHC 6
• Docket Number: Originating Summons No 193 of 1985
• Date: 19 January 1988
• Published date: 19 September 2003
• Year: 1988
• Plaintiff Counsel: HM Dyne (Donaldson & Burkinshaw)
• Citation: [1988] SGHC 6
• Defendant Counsel: TPB Menon (Oehlers & Choa),CC Tan (Tan Rajah & Cheah),KS Lo (Allen & Gledhill),David Hew (Tang & Tan)
• Court: High Court (Singapore)
• Subject Matter: Stirpital division of capital of trust fund,Whether trust fails,Trust created by will,Purposes become impossible to perform,Status of trust property,Status of property bequeathed,Trusts,Purpose trusts,Conditions,Succession and Wills,Whether trusts contrary to Accumulations Act 1800

Cur Adv Vult

Clause 11 of the will of Ho Sok Choo Neo made on 22 December 1930 provided as follows:

I give and devise unto my trustees my plantation in Holland Road Singapore wherein my father the late Ho Yang Moh deceased was buried together with the temple and other buildings erected thereon and also together with the sum of Dollars Ten thousand ($10,000) in cash such land forming the plantation and such cash to be held by them upon the following trusts, namely:

(a) Upon trust to invest the said cash in any form of investment authorized by law for trust funds and to hold the said cash and the investments for the time being representing the same and the said land and plantation temple and buildings for the period following, namely, for and during the lives of all the descendants of His Majesty George the Fifth living at that date of my death and the further period of twenty (20) years from the date of the death of the last survivor of an such descendants.

(b) During the last mentioned period to receive the income from the said cash investments and plantation and to apply the same for the purpose of keeping the said plantation clean weeded and in good and clean condition and for the purpose of keeping the said temple and buildings and the graves thereon in a good and decent state of repair and to employ and pay gardeners and others for the purpose.

(c) At the expiration of the said period to hold the said plantation land buildings cash and investments upon trust for all my male descendants then living as tenants-in-common in equal shares per stirpes.

By cl 21 of her will, the testatrix declared that `if any legacies or bequests hereinbefore contained shall fail for any reason whatsoever then the property thereby devised or bequeathed shall fall into and form part of my residuary estate`.

The testatrix died on 18 September 1931 and left surviving her two natural sons, viz Edward Tan Tat Min and Farrer Tan Kong Min. Probate of her will was granted to the executors named therein on 6 November 1931. On 15 March 1974, the plaintiffs were appointed the sole trustee in substitution for and in place of the former trustees.

The land comprising the plantation mentioned in cl 11 of the will and on which was situated the temple, the buildings and the graves was compulsorily acquired by the government on 14 February 1980. In consequence, the purposes of the trust created by cl 11 became impossible of performance when the government resumed ownership of the said land.

The trust fund now consists of investments in stocks and shares and in cash. As at 17 August 1987, the capital value of the fund was approximately $1,816,000 and the total accrued income was approximately $286,000.

The plaintiffs/trustees, being in doubt as to how the trust fund should be continued to be applied, have now taken out this application for the determination by the court of the following questions:

1 Whether, upon the true construction of cl 11 of the said will and the events which have happened, the trust has failed.

(2) Whether, upon the true construction of cl 11 of the said will and the events which have happened,

(i) the trust should be wound up; or

(ii) the trustee should maintain the trust until the expiration of the trust period as stipulated in cl 11(a) of the said will, by the natural effluxion of time; or

(iii) the trust should fall into and form part of the residuary estate of the said deceased.

3 That if the answer to question 2 above be in terms of sub-para (i), that it may be determined whether the trustee should distribute both the capital and the income of the trust fund:

(i) as to one half to the first, second and third defendants as tenants-in-common in equal shares and as to the other half to the fourth and fifth defendants as tenants-in-common in equal shares; or

(ii) to all the living male descendants of the testatrix as tenants-in-common in equal shares per stirpes.

4 That if the answer to question 2 above be in terms of sub-para (ii), that it may be determined whether the income of the trust should be:

(i) accumulated until the distribution date; or

(ii) distributed to the first defendant and the fourth defendant as tenants-in-common in equal shares until the date of distribution; or

(iii) distributed as to one half to the first defendant and all his male descendants living before the date of distribution, and as to the other half to the fourth defendant and all his male descendants living before the date of distribution; or

(iv) distributed in any other, and, if so, which way.

The male descendants of the testatrix alive at the date of this application are her son, Farrer Tan Kong Min, his sons, Christopher Man Hsien Tan and Jonathan Man Sui Tan, her grandson Peter Tan Man Fui (son of Edward Tan Tat Min, deceased), her great grandson, Edwin Tan Tsun Wing (son of Peter Tan) and they are respectively the first, second, third, fourth and fifth defendants herein.

The sixth defendant, Chye Cheng Tan, an advocate and solicitor, was appointed on 23 January 1987 by order of court in place of LAJ Smith (who died on 5 November 1986) to represent the interests of the male descendants not yet born of the testatrix, who would be entitled to benefit under cl 11 if the trust expired by the natural effluxion of time.

At the outset of the hearing, counsel for the plaintiff made an application that the estate of Edward Tan, deceased, be separately represented by counsel. The application was supported by counsel for the first defendant on the ground that if the income or the capital of the trust fund were to go to the next of kin or into the residuary estate under the will, his interest would be affected. The application was also supported by the sixth defendant on the ground that otherwise any decision of the court would not be binding on him. I made no order on the application as I was of the view that the interest of the estate of Edward Tan in the trust fund was indirectly represented and therefore sufficiently protected either by the representation in these proceedings of the brother, the first defendant, or the son, the fourth defendant. Also, I was not inclined to accept the argument that any decision of the court would not be binding on the estate of Edward Tan as a sufficient ground for appointing separate counsel.

The submissions of counsel for the parties are summarized below.

Counsel for the plaintiffs quite properly took a neutral stance in these proceedings, but nevertheless made the following submissions in order to assist the court: (1) the trust declared by cl 11 was valid as it did not infringe the rule against perpetuities or the rule relating to accumulations; (2) the object of the trust having failed, the income falls into residue under cl 21 to be distributed in accordance with its terms but the capital must be kept intact until the...