Lee Hiok Woon and another (sued as executors and trustees of the estate of Lee Wee Nam, deceased) and Others v Lee Hiok Ping and Others

JurisdictionSingapore
Judgment Date22 July 1993
Date22 July 1993
Docket NumberCivil Appeal No 19 of 1992
CourtCourt of Appeal (Singapore)
Lee Hiok Woon and others
Plaintiff
and
Lee Hiok Ping and others
Defendant

[1993] SGCA 52

L P Thean J

,

S Rajendran J

and

Warren L H Khoo J

Civil Appeal No 19 of 1992

Court of Appeal

Civil Procedure–Appeals–Further evidence–Whether “special circumstances” exist–Order 57 r 13 (2) The Rules of the Supreme Court 1970–Trusts–Trustees–Duties–Mixing of trust assets with trustee's personal assets–Burden of proving ownership of assets

In early 1927, three brothers, Lee Wee Kheng (“Wee Kheng”), Lee Wee Nam (“Wee Nam”) and Lee Wee Kiat (“Wee Kiat”), formed a partnership known as Wee Kee Kongsi (“the Kongsi”). The Kongsi's movable properties were at all times held in the name of Wee Nam. Shortly before his death, on 26 August 1963, Wee Nam transferred a block of 12,240 shares in the Oversea-Chinese Banking Corp Ltd (“the OCBC block”) to Lee Hiok Kee Pte Ltd. In August 1963, he also transferred two lots of shares in the Overseas Union Bank Ltd, with one lot to Lee Hiok Kee Pte Ltd and the other lot to Lee Hiok Tng (the third appellant) (“the OUB block”). Wee Nam died on 23 January 1964.

Under the written partnership agreement of 31 January 1927, the shares were divided between Wee Kheng, Wee Nam, Wee Kiat and the Ser Teck Ting Chai Kee, a trust fund (“the Trust”). The partnership agreement provided for yearly accounts and profits to be distributed to the partners, although half of the distributable profits would be retained to each partner's account. Clause 1 provided that the salary, bonus or reward paid to each partner was “exclusive” to him and cl 8 provided:

It is agreed that should the company desire to increase its shares in other firms or have a share in other firms or in any new firm or establish new business under new firms, such venture shall be carefully considered by the three Wee Keng brothers and shall only be carried out upon unanimous agreement having been reached among them. Should there be disapproval by any one of the three brothers, no such venture shall be carried out. In the event of any one of the brothers being desirous of embarking on such venture, he may do so of his own volition whereby it shall have nothing to do with the company.

The respondents claimed an interest in the two blocks of shares based on the Trust's interest in the shares. The trial judge held that the OCBC and OUB blocks of shares belonged beneficially to the Kongsi. The appellants appealed and sought to adduce further evidence before the Court of Appeal.

Held, dismissing the appeal:

(1) There was no manifest error by the trial judge and the further evidence sought to be adduced was clearly available at the time of trial and could with reasonable diligence have been adduced at the trial. Even if admitted, the evidence would have had little effect on the case. The motion to adduce further evidence was dismissed with costs: at [14] and [17].

(2) If Wee Nam had wanted to have beneficial ownership in respect of the shares in the OCBC block, cl 8 of the partnership agreement would require that he obtain the approval of his brothers. In the absence of any evidence showing such approval and in the absence of any evidence as to how Wee Nam acquired beneficial ownership in the shares in the OCBC block, on a balance of probabilities, the shares still belonged to the Kongsi: at [24].

(3) The inception of a fiduciary relationship between trustee and beneficiary brought with it duties including the duty of keeping an account of property subjected to the trust. If the trustee mixed the trust property with his own, he was at fault and bore the burden of showing clearly which assets were his beneficially: at [31].

(4) There was ample material before the trial judge for him to conclude that the OCBC block still belonged to the Kongsi and he did not misdirect himself in any material sense. The trial judge was also justified in concluding that the disputed OUB shares belonged to the Kongsi: at [37] and [42].

Armory v Delamirie (1722) 1 Str 505; 93 ER 664 (folld)

Bigsby v Dickinson (1876) 4 Ch D 24 (refd)

Ladd v Marshall [1954] 1 WLR 1489; [1954] 3 All ER 745 (refd)

Lupton v White (1808) 15 Ves Jun 432; 33 ER 817 (folld)

Tilley's Will Trusts, In re; Burgin v Croad [1967] Ch 1179 (folld)

Rules of the Supreme Court 1970, The O 57 r 13 (2) (consd);O 59 r 19

Richard McCombe QC, Leslie Chew and Malcolm Lim (Khattar Wong & Pnrs) for the defendants/appellants

Michael Burke-Gaffney QC and B Mohan Singh (B Mohan Singh & Co) for the first to fourth plaintiffs/respondents

Nicholas Patten QC and Giam Chin Toon (Wee Swee Teow & Co ) for the fifth to seventh plaintiffs/respondents.

Judgment reserved.

S Rajendran J

(delivering the judgment of the court):

1 In this appeal, the appellants contend that the trial judge below was wrong in his conclusion that certain shares in two major Singapore banks which were registered in the name of Lee Wee Nam, deceased (“Wee Nam”) on 18 July 1962 belonged beneficially to a partnership known as the Wee Kee Kongsi (“the Kongsi”). This appeal is part of wider litigation concerning the ownership and management of the assets of Wee Nam's estate and that of his brother, Lee Wee Kheng, deceased (“Wee Kheng”). The course of events leading to this appeal is fully set out in the judgment below and for the purpose of clarity, we shall deal directly with the question at hand only, and will refer to the other aspects of the judgment below where necessary.

2 The essential background to the consideration of the ownership of the shares can be stated briefly. Wee Kheng, Wee Nam and their younger brother, Wee Kiat, came to Singapore at the end of the last century to seek their fortune. In early 1927, the brothers entered into partnership in the Kongsi. The partnership arrangements in the Kongsi were contained in a document in Chinese dated the 28th day of the 12th Lunar Year in the year of Peng Yin (31 January 1927). The recital records that the brothers agreed to “amalgamate our hard earned and accumulated savings and businesses” and “We further declare that all the properties purchased in the names of the brothers or partners and all the shares held in partnership businesses with other firms and all rents and loans receivable are listed under 22 items which shall be taken as the capital of this company”. The 22 items are then spelt out. It is sufficient for our purposes to note that none of the 22 items are shares in the same banks as the shares concerned in this appeal.

3 The agreement went on to provide that the 22 items held in the names of the various brothers were held on behalf of the Kongsi and that all appreciation or depreciation in their value and all profits and losses from them would only affect or concern the Kongsi and not the brothers in their personal capacity. The shares in the partnership were divided as follows:

(a) Ser Teck Ting Chai Kee (“STTCK”), a trust fund for the worship of the brothers' ancestors, held two shares;

(b) Wee Kheng held four shares;

(c) Wee Nam held four shares; and

(d) Wee Kiat held three shares.

4 The agreement provided for yearly accounts and profits to be distributed to the partners, although half of the distributable profits would be retained to each partner's account. Clause 1 of the agreement provided that the salary, bonus or reward paid to each partner was “exclusive” to him and cl 8 provided:

It is agreed that should the company desire to increase its shares in other firms or have a share in other firms or in any new firm or establish new business under new firms, such venture shall be carefully considered by the three Wee Keng brothers and shall only be carried out upon unanimous agreement having been reached among them. Should there be disapproval by any one of the three brothers, no such venture shall be carried out. In the event of any one of the brothers being desirous of embarking on such venture, he may do so of his own volition whereby it shall have nothing to do with the company.

5 Wee Kiat died in May 1927. In October 1940, Wee Kiat's estate executed a deed of release with Wee Kheng and Wee Nam wherein the estate of Wee Kiat for a consideration withdrew from the Kongsi and relinquished all interests therein. After this release, the shares in the Kongsi were then re-adjusted as follows: Wee Kheng 9? 21,Wee Nam 8? 21 and STTCK 4? 21. It is common ground that Wee Kheng and Wee Nam continued to treat the 1927 agreement as binding. The brothers also had joint interest in other business ventures but those interests are not material to the determination of the shares in question.

6 The Kongsi's immovable properties were transferred to a company known as Lee Brothers (Wee Kee) Pte Ltd (“Lee Brothers”) in 1950. The brothers and their families were the only shareholders in the company. The movable properties in the Kongsi were at all times held in the name of Wee Nam. The reason given for this is that Wee Kheng moved to Bangkok in 1909 and he only returned to Singapore in 1954 where he lived until his death on 18 July 1962. No explanation was given for the maintenance of the status quo after his return to Singapore. At any rate, it is common...

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