Kuek Siang Wei v Kuek Siew Chew

• Jurisdiction: Singapore
• Judgment Date: 13 August 2015
• Date: 13 August 2015
• Docket Number: Civil Appeal No 167 of 2014
• Court: Court of Appeal (Singapore)

Kuek Siang Wei and another

Plaintiff

and

Kuek Siew Chew

Defendant

[2015] SGCA 39

Sundaresh Menon CJ

,

Andrew Phang Boon Leong JA

and

Steven Chong J

Civil Appeal No 167 of 2014

Court of Appeal

Deeds and Other Instruments—Deeds—Family arrangements—Examples of types of family arrangements—Effects of treating particular agreement as family arrangement—Agreement to give effect to testamentary wishes of deceased person—Agreement to amicably resolve dispute between family members—Whether failure to disclosure material facts before execution of deed

Legal Profession—Conflict of interest—Solicitor representing estate—Solicitor's duties towards potential beneficiaries other than individual who approached him—Whether solicitor's handling of administration of estate fell short of expected standard

Mr Kuek Ser Beng (‘Mr Kuek’) passed away in January 2007 without leaving a will. He was married to Mdm Lim Swee (‘Mdm Lim’) and they had three children together, a son (Kuek Hock Eng (‘Hock Eng’)) and two daughters (Kuek Siew Chew (‘the Respondent’) and Kuek Siew Eng (‘Siew Eng’)). He also had a second family with Mdm Goh Ah Pi (‘Mdm Goh’), with whom he had five children.

Approximately two months after Mr Kuek's death, the members from Mdm Lim's side of the family (‘the first family’) found in Mr Kuek's safe, a note written by him (‘the Note’). The Note set out Mr Kuek's wishes as to how his assets were to be distributed among the surviving members of the first family and members of Mdm Goh's side of the family (‘the second family’). The Note was not a valid testamentary instrument. Hence, Mr Kuek's estate stood to be distributed in accordance with the regime set out in the Intestate Succession Act (Cap 146, 1985 Rev Ed) (‘the ISA’).

A number of Mr Kuek's assets were particularised in the Note. The balance of the (‘the residuary estate’) was to be given to Hock Eng's two sons (Kuek Siang Wei (‘the First Appellant’) and Kuek Yong Wei) under the division envisaged in the Note. The residuary estate turned out to be the largest part of Mr Kuek's estate. Therefore, Hock Eng and his family stood to receive the bulk of Mr Kuek's estate under the Note. Mdm Lim and her two daughters (namely, the Respondent and Siew Eng) stood to receive $200,000 each under the Note which was a fraction of their entitlement had the estate been distributed in accordance with the intestacy regime set out in the ISA. Hence, the Respondent, Mdm Lim and Siew Eng stood to lose the most if Mr Kuek's estate was distributed according to the Note instead of according to the intestacy regime set out in the ISA.

Almost two months after Mr Kuek's death, all the parties named in the Note, including the members of the second family, signed a letter of consent (‘the Letter of Consent’) indicating their agreement to abide by Mr Kuek's wishes as set out in the Note. However, in April 2010, the second family reneged on the Letter of Consent. Mdm Goh claimed, instead, that the second family was entitled to half of Mr Kuek's estate under the intestacy regime set out in the ISA and lodged a caveat against the estate. She also filed an application for one of her daughters, Kuek Geok Hua (‘Geok Hua’), and herself to be added as co-administrators of the estate.

Hock Eng and his wife, Mdm Ho Per Jong (‘Mdm Ho’), then sought the assistance of M/s Sankar Ow & Partners LLP to resist Mdm Goh's application and negotiate a settlement with the second family. Mr Chia, a solicitor at that firm, was in charge of the matter. Mr Chia met Hock Eng, Mdm Ho, Siew Eng and the Respondent at his office on 13 May 2010. At that meeting, Mr Chia in effect told them that the court would likely accept the Letter of Consent as valid and, as a result, bind the parties to the distribution reflected in the Note. On this basis, the second family's attempt to set aside the Letter of Consent and migrate to the intestacy regime under the ISA was not likely to be successful. However, contrary to this and unknown to the Respondent, Mr Chia subsequently sent a letter to Hock Eng alone on 18 May 2010, in which he expressed a notably different view concerning the Letter of Consent. He stated that there was a ‘real risk’ that the application filed on behalf of Mdm Goh for herself and her daughter, Geok Hua, to be added as co-administrators of the estate, which had been made with a view to realising the second family's rights under the ISA instead of proceeding on the basis of the Note, would be successful.

The solicitor representing the second family, Mr Singham wrote to Mr Chia asking for a list of all the assets in Mr Kuek's estate. Mr Chia had a meeting with only Hock Eng and Mdm Ho on 18 June 2010, where he drew up the said list which he eventually sent to Mr Singham by way of a letter dated 23 June 2010. The list was drawn up based on documents which the solicitor previously handling the winding up of Mr Kuek's estate had given Mr Chia. Mdm Ho helped to obtain those documents and she passed them to the previous solicitor sometime before September 2007.

Thereafter, Mr Singham wrote to Mr Chia and conveyed the second family's proposal that the estate be divided on an equal basis between the first and second families in exchange for the second family's withdrawal of its caveat against the estate and its application for Mdm Goh and Geok Hua to be added as co-administrators. Members of the first family rejected this proposal. They executed a deed of consent (‘the Deed of Consent’) to authorise the First Appellant and Kuek Tsing Hsia (‘the Second Appellant’) (collectively, ‘the Appellants’) to negotiate with the second family with a view to amicably resolving the dispute between the two families. Mr Chia dealt exclusively with Hock Eng's family after the Deed of Consent was executed. He contended that he had been instructed that Mdm Ho would and did keep the Respondent, Siew Eng and Mdm Lim informed of the details of the negotiations with the second family.

Negotiations between the two families culminated in the execution of a deed of family arrangement (‘the Deed of Family Arrangement’) which set out how the estate was to be distributed. The only amendment that was made to the second family's initial proposal that the estate be divided equally between the two families was for a sum of $1.65 m, which Mr Kuek wanted to be distributed to various persons named in the Note, to be set aside.

Mr Chia called a meeting at his office on 7 May 2012 (‘the 7 May 2012 meeting’) with the members of the first family in order to give those members of the family who were entitled to a share of the sum of $1.65 m their respective cash entitlements pursuant to the arrangements reflected in the Deed of Family Arrangement. At this meeting, Siew Eng questioned Mr Chia about whether the second family would be adhering to the Note. The Respondent made repeated efforts to establish precisely how much larger a share of Mr Kuek's estate the members of the second family would receive under the settlement reached with them. Mr Chia did not directly or fully answer those questions. At the end of the meeting, the Respondent and Siew Eng refused to accept the two cheques for $200,000 each that had been prepared in their favour and left Mr Chia's office.

The Respondent eventually commenced an action to have the Letter of Consent, the Deed of Consent and the Deed of Family Arrangement set aside. The Judicial Commissioner (‘the Judge’) set aside the three instruments. The Appellants appealed against his decision. The main issue on appeal was whether the Judge's decision to aside the Deed of Consent should be affirmed. The Judge considered that deed to be a family arrangement and analysed its validity on that footing. He set it aside on the ground that the Respondent had not been informed about the full value of Mr Kuek's estate before she signed that deed.

Held, dismissing the appeal:

(1) A family arrangement was an agreement between members of the same family which was intended to confer some benefit upon the family. Often, such agreements involved one or more of the parties to the agreement putting the greater interest of the family before their own so as to confer some benefit upon the family. Examples of categories of agreements that would commonly be treated as family arrangements included: (a) agreements between members of the same family, pursuant to which one or more of them agreed to compromise doubtful or disputed rights so as to preserve peace and harmony within the family, which would be disrupted if the disputing members of the family were instead to litigate their disputes in court; (b) agreements between members of the same family to preserve family property; (c) agreements which were entered into to safeguard the honour of the family; and (d) agreements entered into between the surviving descendants of a deceased person to give effect to testamentary wishes which the deceased expressed before his death in a manner that was not and could not take effect as a will: at [45] , [47] , [51] , [54] and [55] .

(2) A family arrangement which was reduced into writing would not be interpreted with an excessive degree of formalism. Rather, the court would apply the rules of construction to ascertain the parties' intentions and, so far as possible, endeavour to give effect to them: at [59] .

(3) A family arrangement had to be supported by valid consideration. Although the court would not scrutinise the pecuniary worth of the consideration too closely, the court could set aside a family arrangement if the inadequacy of the consideration was so gross as to lead the court to conclude that a party to the agreement was unduly influenced into entering into the agreement, or entered into the agreement believing it to be something radically or fundamentally different from what it turned out to be (ie, the inadequacy of the consideration was so gross that the court could infer the vitiating factor of...