Low Gim Siah and Others v Low Geok Khim and Another

• Jurisdiction: Singapore
• Judgment Date: 22 December 2006
• Date: 22 December 2006
• Docket Number: Civil Appeal No 40 of 2006
• Court: Court of Appeal (Singapore)

Low Gim Siah and others

Plaintiff

and

Low Geok Khim and another

Defendant

[2006] SGCA 45

Chan Sek Keong CJ

,

Andrew Phang Boon Leong JA

and

Lai Siu Chiu J

Civil Appeal No 40 of 2006

Court of Appeal

Family Law–Advancement–Presumption–Father and adult son holding bank accounts jointly–Whether presumption of advancement applying such that money in joint bank accounts amounting to gift from father to son upon father dying intestate–Whether presumption of advancement rebutted–Trusts–Resulting trusts–Father and adult son holding bank accounts jointly–Money in joint bank accounts provided entirely by father–Whether money vesting in son or in father's estate upon father's death–Whether son holding joint bank accounts on resulting trust for father's estate

The deceased (“LKT”) held money in six bank accounts (“Account 1” to “Account 6” respectively) jointly with one of his sons (“LGB”). Account 1 was opened on 4 March 1983, whilst Accounts 2 to 5 were opened using funds from Account 6 between 25 February and 19 April 1995. Account 6, itself, was opened on 23 March 1990.

After LKT died intestate, the joint administrators of the estate of LKT (“the Estate”), viz the first respondent (“LGK”) and one Low Geok Beng (“Geok Beng”), brought this action to determine the respective rights of the Estate and LGB to the money in the six joint accounts. Subsequently, Geok Beng was discharged as joint administrator, leaving LGK as the sole administratrix of the Estate. The appellants, namely the children of LKT's two elder sons who had predeceased him, took the position that LGB held the money in the bank accounts on a resulting trust for the Estate while LGB took the view that, as the surviving holder of the six joint accounts, he was entitled to the beneficial ownership of the money in them.

In the High Court, the appellants argued that LKT did not have the requisite mental capability to open five of the accounts, namely Accounts 2 to 6 respectively, as he had been suffering from advanced dementia. The appellants also contended that even if he did have the requisite mental capacity to do so, LKT had no intention to open the said accounts as joint accounts with LGB. Finally, the appellants took the position that even if LKT did intend to open those five accounts as joint accounts with LGB, the presumption of advancement should not be applied in favour of LGB, or in any event, was rebutted on the facts. The sole issue before the trial judge with respect to Account 1 was whether LGB held the money in the joint account beneficially or on a resulting trust.

The trial judge found in favour of LGB, holding that the money in the six bank accounts vested beneficially in him as the surviving joint-account holder upon LKT's death. The appellants appealed against the trial judge's decision on five grounds, namely: (a) that the trial judge was wrong in finding that LKT had the requisite mental capacity to open Accounts 2 to 6; (b) that even if LKT did have the requisite mental capacity to open such accounts, he did not intend to open Account 6 as a joint account; (c) that given LKT's mental state, the presumption of advancement had not been a sensible guide to determine LKT's intention in opening Accounts 2 to 6; (d) that the trial judge had been wrong to apply the presumption of advancement to the six accounts as LGB was self-supporting and not financially dependent on LKT when the accounts were opened; and (e) that the presumption of advancement was rebutted on the facts.

Held, allowing the appeal:

(1) While LKT's actions of opening Accounts 2 to 5 in 1995 made no commercial sense and were inexplicable except on the basis that his mental state had deteriorated to the extent that he had not been fully aware of the commercial consequences of his own actions, even though he might have had the mental capacity to open banking accounts, this fact was not critical to the primary issue in this case. Instead, since the money in Accounts 2 to 5 came from Account 6, LKT's mental condition in 1990 was of greater significance: at [20] to [21].

(2) There was no basis for counsel for the appellants to challenge the correctness of the trial judge's finding of fact that there was insufficient evidence to show that LKT did not know that he was opening a joint account with LGB in 1990: at [22].

(3) As the presumption of advancement was premised on the moral or equitable obligation of one party to support or make provision for another rather than the existence of financial dependence, it was prima facieapplicable to the six accounts by virtue of the relationship between LKT and LGB: at [33] and [46].

(4) The proper principle to apply in relation to rebutting the presumption of advancement was that the more readily the presumption may be inferred from the relationship, the greater was the evidence needed to rebut it and, conversely, the less readily the presumption was inferable, the lesser was the evidence needed to rebut it: at [47].

(5) As LKT had full and complete dominion over the money in the six joint accounts throughout his life, the presumption that LKT intended for LGB to have the money in the joint accounts upon his death was rebutted: at [51].

[Observation: In a number of English and Singapore decisions, the courts had held that because of changed social conditions, the presumption of advancement may be rebutted by very little evidence. In the court's view, the cases where the presumption of advancement was held to have lost its robustness or diminished in importance were cases concerning joint contributions by married couples in acquiring the matrimonial home or properties acquired using joint savings, and were not concerned with the traditional and well-established categories of father-and-child and husband-and-wife relationships where one party was under a moral or equitable obligation to support the other party: at [43].

Given that the presumption of advancement had been applied in England in such relationships for over two centuries and justified on the basis of a moral or equitable obligation on the part of one to care for the other and that such moral obligations could not have changed even if social conditions had changed, it was difficult to accept an argument that in modern Singapore, fathers and husbands had somehow changed their paternal or marital obligations so radically that the presumption was no longer applicable or should not be applied. Indeed, in the case of such relationships where one party was financially dependent on the other, there was no reason to treat the presumption of advancement as having lost its robustness or diminished in its vigour, and there was no reason why it should not be applied to resolve questions of title in the absence of any evidence indicating otherwise: at [44].]

Ang Toon Teck v Ang Poon Sin [1998] SGHC 67 (not folld)

Bennet v Bennet (1879) 10 Ch D 474 (folld)

Harrods Ltd v Tester [1937] 2 All ER 236 (distd)

Hepworth v Hepworth (1870-71) LR 11 Eq 10 (refd)

McGrath v Wallis [1995] 2 FLR 114 (distd)

Murless v Franklin (1818) 1 Swans 13; 36 ER 278 (folld)

Neo Tai Kim v Foo Stie Wah [1981-1982] SLR (R) 222; [1980-1981] SLR 215, CA (refd)

Neo Tai Kim v Foo Stie Wah [1985-1986] SLR (R) 48, PC (distd)

Pauling's Settlement Trusts, In re [1964] Ch 303 (refd)

Pettitt v Pettitt [1970] AC 777 (distd)

Phng Siew Hoon v Phng Siew Lan [1991] SGHC 129 (refd)

Russell v Russell [1975] 4 WWR 517 (refd)

Saylor v Madsen Estate (2006) 261 DLR (4th) 597 (folld)

Sidmouth v Sidmouth (1840) 2 Beav 447; 48 ER 1254 (folld)

Teo Siew Har v Lee Kuan Yew [1999] 3 SLR (R) 410; [1999] 4 SLR 560 (not folld)

Michael Khoo SC and Ong Lee Woei (Michael Khoo & Partners) and Jimmy Yap (Jimmy Yap & Co) for the appellants

Tan Kay Kheng, Sim Bock Eng and Joyce Lim (Wong Partnership) for the first respondent

Manoj Sandrasegara, Tan Mei Yen, Benjamin Gaw, Tan Mingfen and Jeremy Leong (Drew & Napier LLC) for the second respondent.

Judgment reserved.

Chan Sek Keong CJ

(delivering the judgment of the court):

1 This is an appeal by the grandchildren of one Low Kim Tah (“LKT”), who died intestate, against the decision of the trial judge in Originating Summons No 826 of 2003 (Low Geok Khim v Low Geok Bian [2006] 2 SLR (R) 444 (“Low Geok Khim”)) that the money in six joint accounts held in the names of LKT and his youngest son, one Low Geok Bian (“LGB”), vested beneficially in LGB as the surviving joint account holder upon LKT's death on 6 December 1997.

2 This appeal raises an important issue as to the current state of the law in Singapore regarding the application of the presumption of advancement in a father-and-child relationship. The joint administrators of the estate of LKT (“the Estate”), viz, one Low Geok Khim (“LGK”) and one Low Geok Beng (“Geok Beng”), brought this action to determine the respective rights of the Estate and LGB to the money in the six joint accounts totalling $4,471,144.28. Subsequently, Geok Beng was discharged as joint administrator, leaving LGK, who is the first respondent in this appeal, as the sole administratrix of the Estate. LGK and LGB and Geok Beng are three of the ten children of LKT. The particulars of the six joint accounts as at the date of the death of LKT are as follows:

(a) POSB Account No 042-07218-5 opened on 4 March 1983 - $221,207.11 (“Account 1”);

(b) OCBC Easisave Account No 516-054889-001 opened on 25 February 1995 - $2,004,604.97 (“Account 2”);

(c) OCBC Easisave Account No 516-054889-002 opened on 25 February 1995 - $2,004,604.97 (“Account 3”);

(d) OCBC Easisave Account No 516-054889-003 opened on 11 March 1995 - $114,441.89 (“Account 4”);

(e) OCBC Easisave Account No 516-054889-004 opened on 19 April 1995 - $114,072.52 (“Account 5”); and

(f) OCBC Fixed Deposit Account No 516-549706-501 opened (with an initial sum of $3,000,000) on 23 March 1990 - $12,212.82 (“Account 6”).

3 The...