Teo Ai Choo v Leong Sze Hian

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 26 March 1986
• Neutral Citation: [1986] SGCA 4
• Docket Number: Civil Appeal No 14 of 1984
• Date: 26 March 1986
• Year: 1986
• Published date: 19 September 2003
• Plaintiff Counsel: Nigel Hague and Molly Lim (Chang & Co)
• Citation: [1986] SGCA 4
• Defendant Counsel: Christopher Bathurst and Ronnie Quek (Shook Lin & Bok)
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether written agreement for sale and purchase on basis that appellant to hold property on trust for respondent or outright sale,Civil Procedure,Findings of trial judge,Whether contrary to evidence,Trust or outright purchase,Two directly contradictory versions,Oral agreement,Evidence,Assignment of mortgaged house,Appeals,Sale of land,When findings should not be disturbed by appellate court,Findings of fact by trial judge,Contract,Land,Evidence of contract of sale,Proof of evidence,Findings of fact

Cur Adv Vult

This appeal concerns the beneficial ownership of a single storey semi-detached house known as 59 Walmer Drive, Singapore (the property) held under a 999-year leasehold commencing from 1 January 1953. On 5 November 1979 the leasehold was transferred under the Land Titles Act (Cap 276) by the respondent to the appellant in certain circumstances which we will have to go into in some detail later in this judgment.

The parties to these proceedings had known each other for some eight years and at the time of the transfer of the legal title they were deeply in love and, as found by the learned trial judge, it was generally accepted by all concerned that their close relationship would blossom into matrimony. However, within a matter of some two months of the transfer and after the appellant was away in Hawaii on a two-year scholarship course, the respondent broke off his relationship with the appellant and married another party one year later. Disputes predictably arose over the beneficial ownership of the property. The appellant took steps to sell the property and on learning of this, the respondent filed a caveat under the Torrens System to protect his interest and his possession of the property: see [1982] 2 MLJ 12 . In response, the appellant on 13 October 1981 served on the respondent a notice to quit the property.

Both of them separately commenced proceedings in the High Court which were consolidated and the respondent`s action was properly tried first since the burden of proof was upon him to discharge. The respondent claimed that in the course of 11/2 months before the written agreement for sale and purchase between them was signed on 1 September 1979, the appellant had expressly and orally agreed that the leasehold would be transferred to her as if it was a sale so that she could raise sufficient monies by a new mortgage to enable him to pay off the existing mortgagees which had taken steps to exercise their mortgagee right of sale. It was part and parcel of the agreement that he would reimburse her and pay for all the legal and other expenses relating to the discharge of the existing mortgage, the sale and purchase, the new mortgage and the repayment of the new loan and interests by monthly instalments. He also claimed that it was agreed that he would pay for the outgoings, such as the yearly property tax of the property and that he would continue to occupy the property. Claiming that the appellant had orally agreed to hold the property after the transfer upon trust for his benefit, the respondent in his action sought a declaration that the appellant was the trustee of the property for his benefit and for an order that she transfer the property to him upon his payment of an monies necessary to discharge the new mortgage.

The appellant, on the other hand, in her action asserted that it was an outright sale, that the written agreement of sale and purchase save for some unimportant errors or omissions reflected the true bargain between them and that the respondent had agreed to pay in addition to the outgoings of the property a monthly rent of $500 while she was away in Hawaii pursuing her scholarship studies. At the conclusion of a seven-day trial, judgment was entered in favour of the respondent against which this appeal was brought.

Two grounds of appeal have been canvassed before us. First it was contended that the findings of fact of the learned trial judge that the property was held by the appellant on trust for the respondent was contrary to the evidence. Alternatively, and this was a new contention brought up for the first time before us, it was submitted that the said finding necessarily involved the respondent having to rely upon an illegal or immoral contract to support his claim, in which case this court should deny him its aid and process.

In dealing with the first ground of appeal, we think it necessary to say something about the legal principles applicable to a claim such as the respondent`s. The principles involved are those in the law of contract and the law of trusts. The oral agreement must be supported by consideration: otherwise it fails as nudum pactum . The claim of the respondent was not founded on the basis of a voluntary declaration of trust on the part of the appellant. The claim of the respondent was based on an oral agreement in which it was expressly intended that she would hold the property upon trust for him and which, if established on the evidence, was binding and enforceable.

Bearing in mind the nature of the respondent`s claim, we think it instructive to refer to what Lord Diplock had said in Gissing v Gissing [1970] 2 All ER 780 at p 789:

Any claim to a beneficial interest in land by a person, whether spouse or stranger, in whom the legal estate in the land is not vested must be based on the proposition that the person in whom the legal estate is vested holds it as trustee on trust to give effect to the beneficial interest of the claimant as cestui que trust. The legal principles applicable to the claim are those of the English law of trust ...

Dealing with the situation where an express agreement has been made on the way the beneficial interest shall be held, Lord Diplock`s further analysis appearing on page 790 is helpful for our present purposes even though the dispute in our case is not between spouses:

This is why it has been repeatedly said in the context of disputes between spouses as to their respective beneficial interests in the matrimonial home, that if at the time of its acquisition and transfer of the legal estate into the name of one or other of them an express agreement has been made between them as to the way in which the beneficial interests shall be held, the court will give effect to it - notwithstanding the absence of any written declaration of trust. Strictly speaking this states the principle too widely, for if the agreement did not provide for anything to be done by the spouse in whom the legal estate was not to be vested, it would be a merely voluntary declaration of trust and unenforceable for want of writing. But in the express oral agreements contemplated by these dicta it has been assumed sub silentio that they provide for the spouse in whom the legal estate in the matrimonial home is not vested to do something to facilitate its acquisition, by contributing to the purchase price or to the deposit or the mortgage

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