Leo Teng Choy v Leo Teng Kit and Others

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 17 November 2000
• Neutral Citation: [2000] SGCA 63
• Date: 17 November 2000
• Subject Matter: Whether s 56(1) Trustees Act (Cap 337) conferred powers on trustees,Principles of construction of wills,Whether s 56(1) subject to s 2(2)- Whether court should invoke s 56(1) to authorise sale,Succession and Wills,Whether sale expedient and consonant with overriding intention of testator,Whether ordinary trust or trust for sale created,Construction,Whether interest of beneficiaries contingent in nature,Powers,ss 2(2) & 56(1) Trustees Act (Cap 337),Trustees,Trusts
• Docket Number: Civil Appeal No 26 of 2000
• Published date: 19 September 2003
• Defendant Counsel: Molly Lim SC and Lim Chee Kiang (Lim & Ching)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Harry Elias SC and Kesavan Nair (Harry Elias Partnership)

(delivering the judgment of the court): Introduction

This is an appeal against the decision of Lai Siu Chiu J, on the construction of a Will, where she authorised the sale of a property of a testator located at No 42 Phillips Avenue (`the property`).

The facts

The testator was one Leo Ann Peng (LAP). LAP made his Will on 26 March 1970 and died some 19 years later on 28 September 1989. He left behind his widow and five sons. Four sons are involved in this proceeding but not the fifth (the eldest), as the latter was given only $1 under the Will. In his Will, LAP appointed two sons, Leo Teng Kit (the first respondent) and Leo Teng Choy (the appellant) to be his trustees.

LAP purchased the property in 1956. He resided there until his death. The property was his only substantial asset. During much of his lifetime, the family lived together at the property, but as the sons grew up and got married and due to overcrowding, one son, Leoh Teng Hee (the second respondent) and his wife moved out of the family home in 1980 and have since lived on their own.

Sometime in 1992, the first respondent and his family moved out of the property. In September 1992, LAP`s widow, who was also the children`s mother, Heng Took Kin, suffered a stroke and was hospitalised. It would appear that after Mdm Heng`s discharge, the appellant refused to take her back. Instead, she went to live with the second respondent. Another son, Leo Tang Foh (the third respondent) moved out of the property in about the same year, leaving the appellant (together with his wife and children) in sole occupation.

In December 1996, the first respondent visited the property and found that the appellant had thrown away all the furniture and belongings of the respondents and their mother, which were at the property. The appellant said he threw them away because they were infested with termites. A survey report was furnished in support thereof. In view of the fact that everybody had moved out except the appellant, the first respondent tried to sort out with the appellant on how to deal with the property, without success.

Eventually, the three respondents decided, together with their mother, that the best course would be to sell the property and to distribute the proceeds equally between the four sons (the appellant and the three respondents). Thus, in April 1999 the respondents filed an originating summons for an order to sell the property. The respondents also filed a statutory declaration, made by their mother about two years earlier on 5 July 1997, in support of their application. At the time the mother made the statutory declaration, she was examined by a consultant psychiatrist who certified that she was mentally fit to make the declaration. On 7 July 1999, the mother passed away.

The statutory declaration was made by the mother in anticipation that litigation would ensue between the four sons. In it she confirmed the allegations made by the first respondent that the appellant had a violent temper and a violent disposition towards his brothers and their families.

On 15 February 2000, after hearing arguments and considering the affidavits filed by the parties, the judge below ordered that the property be sold at a price of not less than $3.75m and that the proceeds were to be divided equally between the four brothers. In coming to her decision, Lai Siu Chiu J held that the Will created a trust for sale of the property and that cl 3 merely postponed the sale.

The clauses in the Will which are pertinent to the present proceeding are the following:

2 I give and devise my land and house No 42, Phillips Avenue, Singapore unto my trustees upon trust to stand possessed of the same and to allow my wife Heng Took Kin and my sons Leo Teng Kit, Leoh Teng Hee, Leo Teng Choy and Leo Tang Foh to reside therein free of rent provided each of my said sons shall pay one-fourth share of all rates, taxes, charges and expenses on repairs as shall from time to time be incurred.

3 I direct that my said land and house No 42 Phillips Avenue, Singapore, shall not be sold, rented out or in any way converted into cash unless and until unanimously agreed upon by my said sons Leo Teng Kit, Leo Teng Hee, Leo Teng Choy and Leo Tang Foh in which event the net proceeds of sale from the said land and house shall be distributed to my said sons in equal shares.

4 In the event of the death of any of my aforesaid sons either before my death or after my death but before the said land and house is sold his share shall be divided among his children in equal shares and if there be no children his share shall revert to the surviving beneficiaries in equal shares.

...

6 Subject to the payment of my debts, funeral and testamentary expenses, I devise and bequeath all the residue and remainder of my real and personal estate whatsoever and wheresoever situate to my said sons, Leo Teng Kit, Leoh Teng Hee, Leo Teng Choy and Leo Tang Foh in equal shares absolutely.

The appeal

The appellant is dissatisfied with the order made on 15 February 2000 and has therefore appealed to this court. He challenged the ruling of the court below that there is here a trust for sale. His contention is that there could be no sale until and unless all the four beneficiaries agreed. Each of the four beneficiaries, together with their mother, had the right to reside therein.

Trust for sale

In coming to her decision that there was here a trust for sale, but only that the sale was postponed, Lai Siu Chiu J relied upon the cases, Duke of Marlborough v A-G (No 2) [1945] Ch 145 and Rajabali Jumabhoy & Ors v Ameerali R Jumabhoy [1998] 2 SLR 439 .

However, there is a significant difference between the clauses in Marlborough , and the clauses in the Will of LAP. In Marlborough , cl 3 of the deed provided that land was conveyed to and was held by trustees upon an express trust `to sell the same`. Such a provision is missing in the Will here. Furthermore, cl 11 of the deed in Marlborough provided that:

Notwithstanding anything herein contained, no sale of any hereditaments for the time being subject to the trusts hereof ... shall (except in pursuance of an order of the court) be made by the trustees or trustee without the previous consent in writing of the present Duke during his life and after the death of the present Duke without the previous consent in writing of the person in whom the Dukedom of Marlborough settled by the said Act ... shall for the time being be vested thereunder if such person shall be of full age.

It was in view of the express provision in cl 3 that Morton LJ said that the consent of the Duke was intended to regulate the exercise of the trust for sale but not to prevent the trust for sale from being an immediate trust. He also declared `if there is an immediate trust for sale, whether subject to consent or not, the trust operates at once to effect a conversion ... It is also well settled that the existence of a power to postpone sale does not prevent conversion taking place.`

Marlborough was applied in Rajabali Jumabhoy where there was also an express provision of a trust for sale. There, the relevant clauses of the settlements read as follows:

1 The settlor hereby conveys unto the trustees ... property ... upon trust that they shall with the consent of the settlor ... and with the consent of the survivor of them ... sell the same in such manner as they may think proper with power nevertheless to postpone the sale so long as in their discretion they may think fit.

2 The trustees shall hold the net proceeds of sale of the said property ... upon trust that they shall invest the same.

This court held that a trust for sale was created. Applying Marlborough we also said in that case:

Although a power was given to the trustees to decide when the property should be sold, such power would not prevent a trust for sale from being created. Equally, the requirement of Rajabali`s consent for the sale made no significant impact on whether or not the settlement created a trust for sale, as this related to the timing of the sale and did not affect the overriding direction that the property should be sold.

It...