Hwa Soo Chin v Personal Representatives of the Estate of Lim Soo Ban, deceased

• Jurisdiction: Singapore
• Judge: K S Rajah JC
• Judgment Date: 11 April 1994
• Neutral Citation: [1994] SGHC 97
• Docket Number: Originating Summons No 784 of 1993
• Date: 11 April 1994
• Published date: 19 September 2003
• Year: 1994
• Plaintiff Counsel: Peter Chan (JYP Chia & Co)
• Citation: [1994] SGHC 97
• Defendant Counsel: Marvyn Bay Boon Teik,Soh Tze Bian
• Court: High Court (Singapore)
• Subject Matter: Resulting trusts,Cy-pres doctrine,Charities,Whether deceased held property on resulting trust for creche,Charities Act (Cap 37),ss 11 & 13 Vesting of property in Public Trustee,Defunct charitable trust,Whether qualifies as charity,Property conveyed to deceased,Duties,Object of creche to provide care for children and promote welfare of children,Application of cy-pres doctrine,Property purchased for children's creche,Purchase price partly paid from donations,Presumed,Trusts,ss 3 & 46 Trustees Act (Cap 337),Duty to account,Recognition of trustee's contribution to establishment and running of trust,Conduct and administration,Trustees,Special circumstances,Whether trustee entitled to remuneration due to special circumstances,Charitable trusts,Whether beneficial to society

This case is concerned with the ownership of Lot 18-3, Town Subdivision 26, also known as No 10 Balmoral Road (`the property`). After hearing counsel, I said that I would furnish written grounds of decision at a later date, and made the following orders:

(i) the property be applied cy-pres under s 11 of the Charities Act (Cap 37);

(ii) the property be vested in the Public Trustee pursuant to s 13 of the Charities Act and be sold by the Public Trustee to enable cy-pres to be applied;

(iii) that the Public Trustee be at liberty to engage solicitors and other persons to be his agents for the purpose of doing such acts as he deems necessary or expedient for the realization of the property that is the subject matter of the proceedings, and that all costs so incurred shall be paid out of the sale of the proceeds of the property;

(iv) that the loan made by the late Mr Lim Soo Ban to the creche to purchase the property in the early 1950s be repaid by the Public Trustee to his estate with interest at 8% from the date of purchase of the property to the date of judgment;

(v) the estate of the late Mr Lim Soo Ban be ordered to give an account to the Public Trustee of the loans and interest referred to in (iv) above to enable the Public Trustee to make repayment of the same;

(vi) all loans and monetary contributions made by the plaintiff to the creche to purchase the property in the 1950s and for the purposes of the creche and the property and all property tax and maintenance costs paid by the plaintiff in respect of the property be repaid by the Public Trustee to the plaintiff with interest at 8% per annum from 1950 out of the sale proceeds of the property until date of judgment;

(vii) the plaintiff give an account to the Public Trustee of the loans, monetary contributions, property tax and maintenance costs in respect of the property above for the Public Trustee to make repayment of the same;

(viii) the costs of all the parties should be taxed on an indemnity basis and be paid out of the trust fund represented by the trust property or the sale proceeds;

(ix) the balance of the sale proceeds of the property after deducting the sums referred to above be applied cy-pres and handed over by the Public Trustee to the creche fund which has been established by the Ministry of Community Development to be used by the Director of Social Welfare for the establishment and promotion of the child care facilities and child welfare services in Singapore.

I made no orders on the originating summons. By Civil Appeal No 188 of 1993, the plaintiff has appealed against the whole of my decision. In addition, by Civil Appeal No 191 of 1993 the Attorney General has appealed against my refusal to grant two orders prayed for by state counsel:

(i) for the plaintiff to give an account to the Public Trustee of all the rental income received by her from the lease of the property to Lambert Driving School; and

(ii) for the plaintiff to repay to the Public Trustee all the rental income received by her from the lease of the property to Lambert Driving School together with interest at such rate as the court thinks fit and for the Public Trustee to be allowed to set off the rental income against the sums payable by the Public Trustee to the plaintiff.

I now give my reasons in full.

The facts

In 1948, Hwa Soo Chin (`the plaintiff`) came to Singapore from Shanghai, where she had practised as a doctor and as a result, possessed a great deal of experience dealing with young children. Upon arrival, she formed the view that there was a pressing need for the establishment of a place where the children of poverty-stricken parents could be cared for whilst their parents were at work. She soon found others who shared her opinion and in consequence, the Overseas Chinese Creche (`the creche`) was founded by 54 persons in early 1951. At the time of its establishment the creche did not require registration under the then Societies Ordinance (Cap 217). The chairman of the first management committee was one Lim Soo Ban (`Lim`), and the plaintiff was the assistant secretary and medical officer in charge. There were eleven members in the management committee, all of whom were volunteers.

Subsequently, the need arose for a site at which to locate the creche, and the property was chosen by Lim and the plaintiff for this purpose. The agreed purchase price was $75,000. The first $31,000 was raised with the aid of donations. Lim then agreed to arrange a loan of $30,000 from Lee Wah Bank Ltd (`Lee Wah Bank`). However, Lee Wah Bank were reluctant to loan money if the conveyance was made to trustees on behalf of the creche. Owing to this, it was agreed that the property should be registered in Lim`s name. In order to obtain the full purchase price, Lim then personally loaned the creche an additional $14,000. It was agreed amongst the members that Lim was to be paid interest for his loan. As a result, on 10 August 1951, the property was conveyed to Lim Soo Ban, who then mortgaged it to Lee Wah Bank. After the purchase the property was renovated under the supervision of the plaintiff. According to the plaintiff, she spent at least $30,000 out of her own pocket for the renovation works.

On 12 December 1952, Lim was adjudged bankrupt. To prevent any dealings by the Official Assignee concerning the property, the plaintiff paid the latter $14,000 out of her own funds on 8 September 1953. On 10 September 1953, the plaintiff was informed by the Official Assignee that he no longer had interest in the property and that he was prepared to transfer the title of the property to any new trustee of the creche subject to Lee Wah Bank`s consent as mortgagee. Lim passed away a short while after.

The plaintiff continued to run the creche and manage the property until the early 1960s when the creche ceased operations. Throughout this period the plaintiff resided at the creche, which she managed with a staff of seven to 18 nurses, workers and part-timers. At the height of its enrolment, the creche had 80 children whose parents paid a nominal fee which was dependent upon financial ability, ranging from $10-$50 per month. From time to time, the creche received small donations. Two charity shows were also organized to raise funds. As funds were scarce, the plaintiff used approximately $2,000 per month of her own funds for the daily expenses.

Sometime in the early 1960s, demand lapsed and the creche terminated operations. On 19 September 1963, after the creche had ceased operations, the plaintiff agreed to lease the property to one Yap Pian, who operated Lambert Driving School from the premises. In return the lessees paid the salaries of the two employees who remained on the premises to look after the property. The lease commenced from 1 November 1963 for a period of four years at a monthly rental of $200. This lease was renewed at the end of the four-year period and has continued until the present. The agreement named the creche as landlord of the property and was signed by the plaintiff `for and on behalf of the landlord`. However, each monthly payment was received by the plaintiff, who also issued the receipts in her own name and kept the payments for her own purposes.

In 1973, the plaintiff attempted to revive the creche with the aid of her solicitors Wee Swee Teow & Co. Her application was refused by the Registrar of Societies by a letter dated 20 April 1976 which reads:

I refer to your application for registration of the proposed `Overseas Chinese Creche` and regret to inform you that registration of the proposed creche under the provisions of the Societies Act is not approved.

Please draw your clients` attention to the provisions in the law for the imposition of heavy penalties on organizers and members of unregistered societies. The organizer and members of the `Overseas Chinese Creche` should therefore cease all activities in connection with the creche.

Subsequently, in 1978, Lee Wah Bank decided to realize its security. A special notice dated 2 May 1978 was sent to Lim`s Official Assignee as well as the creche. It was addressed to `The mortgagor and all persons interested in 10 Balmoral Road` and demanded payment of the amount outstanding together with interest within 30 days from service of the notice. The plaintiff through her solicitors CB Yeow & Co forwarded a cheque of $31,988.87 to Lee Wah Bank. Lee Wah Bank acknowledged receipt and confirmed that they would reconvey the property to the beneficiary of the property as determined by the court.

On 24 March 1981, the plaintiff filed originating summons no 157 of 1981. The reliefs sought were a declaration that Lim had held the property on trust for the creche, an inquiry into the assets of the defunct creche, and lastly a declaration that the plaintiff was entitled to the residuary assets of the creche. Proceedings were adjourned several times after the commencement of the action owing to insufficient evidence, and finally discontinued without any conditions by an order of court dated 28 July 1993.

On 19 August 1993, the plaintiff commenced this action. The plaintiff prayed for the following reliefs:

(1) That a statutory declaration by the plaintiff that she has been in undisturbed and exclusive possession or receipt of the rents and profits of the said land as of right without giving any acknowledgement of any right of any other person thereto for a period of over 12 years next before the commencement of this action be approved.

(2) That the defendant`s right of recovery of that land and premises known as 10 Balmoral Road, Singapore (Lot 18-3 Town Subdivision 26) is barred by virtue of the provisions of the Limitation Act (Cap 163).

(3) That the defendant`s rights and title to the said land together with that of his...