LS Investment Pte Ltd v Majlis Ugama Islam Singapura

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 08 September 1998
• Neutral Citation: [1998] SGCA 55
• Docket Number: Civil Appeal No 246 of 1997
• Date: 08 September 1998
• Published date: 19 September 2003
• Year: 1998
• Plaintiff Counsel: K Shanmugam SC and Ronald Choo (Allen & Gledhill)
• Citation: [1998] SGCA 55
• Defendant Counsel: Mizra Namazie and Tan Teng Muan (Mallal & Namazie)
• Court: Court of Appeal (Singapore)
• Subject Matter: Judgments and orders,Charitable trust by Muslim,s 39 Supreme Court of Judicature Act (Cap 322),Whether trustees of wakaf had authority to manage or administer wakaf property,Whether acquiescence by respondent to sale of wakaf property,Whether respondent estopped in respect of redevelopment works carried out to property by appellant,Charitable trusts,Acquiescence necessary to raise estoppel,Defences,Acquiescence,Muslim Law,Whether property constituted valid wakaf under Muslim law,Constituent elements of wakaf,ss 58 & 59 Administration of Muslim Law Act (Cap 3),Civil Procedure,Equity,s 59(1) Trustees Act (Cap 337),Administration of Muslim Law Act (Cap 3),Whether case should have proceeded as if begun by writ as questions of fact involved and witnesses should be cross-examined,Elements of estoppel,Vesting of legal title to wakaf properties in Majlis Ugama Islam Singapura under Administration of Muslim Law Act (Cap 3),Evident that parties prepared to let matter be decided on basis of affidavit evidence,Failure of respondent to inform appellant of its interest in property prior to latter's redevelopment works,Whether trustees of wakaf could obtain sanction of court under s 59 Trustees Act (Cap 337) for sale of wakaf property,No application for cross-examination of witnesses,Trusts,Wakaf created by will,Order for retrial

Judgment:

CHAO HICK TIN J

Cur Adv Vult

(delivering the judgment of the court): This appeal raises the question whether a certain leasehold property, which income thereof is dedicated to certain specified objects, constituted a valid wakaf under Muslim law and whether the property was validly sold and assigned by the trustees to the appellant under a contract dated 9 July 1993. The respondent, Majlis Ugama Islam Singapura, (Majlis) claims that the property is the subject of a wakaf, that the legal title to it vested in the Majlis by virtue of ss 58 and 59 of the Administration of Muslim Law Act (Cap 3)(AMLA) and that the purported sale by the trustees passed no title to the appellant. The Majlis is a body corporate established under AMLA to administer all wakafs and Muslim charitable trusts.

2. Background

We will first set out the facts giving rise to this action. On 21 November 1911 one Sharifah Shaikah bte Syed Omar bin Ali Aljunied (the testatrix) made a will, the relevant part of which reads as follows (translation in English is not in dispute):

She [ie the testatrix] directs to distribute her estate according to Islamic law and after settling her debts, if she is indebted, to purchase with the balance of the one third of her estate a house or a shop and apply the net income of same for payments for holding celebration of the memorials of her, her father the late Syed Omar bin Ali Aljunied, her mother the late Sharifah Alaweyyah bte Abdullah Alkaff and her daughter Sharifah Baheyyah bte Ali Aljunied, free supply of ten vessels of zamzam water in the holy mosque of Mecca, furnishing a mat for Kor`an reciters every night for the period between the third and the fourth prayers and engaging annually somebody to perform the pilgrimage and al-omrah (homage) on her behalf.

She directs that dollars three hundred only $300 out of the nett income of her trusted property in Singapore be added to the nett income of the property purchased for the balance of the one third mentioned above if the latter income is not sufficient to carry all her said directions and the balance after the fulfillment of such directions is to be applied for charity and benevolence in general.

3.It will be noted that the will referred to her trusted property. That was in reference to a settlement made by the testatrix on 4 June 1903 where a number of her properties were placed on trust. Nothing in the present action concerns that.

4.The testatrix died on 11 September 1912. In compliance with her testamentary directions, her executors in 1913 purchased two leasehold properties to be held on trust for the purposes directed in her will. One of them was acquired by the State in May 1978 and the other, which is located at No 49 Temple Street (hereinafter called `the property` or `the Temple Street property` as the context may require) formed the subject of the present dispute.

5.In 1990 the trustees of the property were two brothers, Syed Salim bin Junid Aljunied (Salim) and Syed Hamid bin Junied (Hamid) and they are distant relatives of the testatrix. On 16 January 1991 the solicitors for Majlis wrote to the two trustees to ask, inter alia, for a copy of the will to ascertain whether the property was wakaf property. Apparently at the time Salim was away in Saudi Arabia. There was some doubt if that communication reached Hamid. The request was repeated to Hamid on 4 June 1992 and 28 July 1992, followed by further reminders. On 20 November 1992 Hamid`s solicitors, M/s Bernard Rada & Lee (BRL) replied stating that Hamid did not have a copy of the will and was making inquiries about the will. On 18 December 1992, BRL informed the Majlis` solicitors that their client could not find the original Will or obtain a copy. BRL also stated that they had searched the records of the High Court for the years 1912 to 1916 without success and had also written to the previous solicitors for a copy of the Will and were waiting for a reply. In spite of further reminders, BRL never reverted thereafter.

6.Then on 16 June 1993, unknown to the Majlis, Hamid by deed appointed Syed Hashim bin Abdulkader Alhadad (Hashim) as the new trustee in place of Salim on the ground that Salim had `since 1982 left the Republic of Singapore to reside permanently abroad`.

7.On 9 July 1993 Hamid and Hashim, as trustees, entered into a sale and purchase agreement (the agreement) to sell the property to the appellant with vacant possession for a sum of $800,000. A deposit of 5% of the purchase price was required to be paid upon execution of the agreement. The agreement referred to the will of the testator and the fact that the executors/trustees were to utilize a third of her residual estate to purchase a house or shophouse for the purposes set out in the will. The sale to the appellant was expressly stated to be subject to the sanction of the court.

8.On 2 September 1993, by way of an ex-parte application, Hamid and Hashim applied to the High Court under s 59 of the Trustees Act (Cap 337) that they be empowered to sell the property and to purchase another property with the proceeds thereof. A copy of the translation of the will of the testatrix was exhibited in the affidavit filed in support of the application. An order in terms was granted by the High Court on 11 October 1993. The sale to the appellant was completed on 29 November 1993. The deed of assignment was lodged with the Registry of Deeds on 1 December 1993.

9.On 2 December 1993, the Majlis lodged a caveat against the property claiming as lawful owner of the property under s 59 of AMLA.

10.On or about 4 December 1993 the Majlis came to know of the sale of the property effected by Hamid and Hashim to the appellant. Subsequently correspondence ensued, with the Majlis seeking to obtain further information regarding the will and the accounts of the trust.

11.On 23 March 1995 the appellant instituted OS 285/95 (the present proceedings) seeking an order to expunge the caveat lodged by the Majlis and an injunction to prohibit the Majlis from lodging any further similar caveats against the property. The appellant said that it was only in or about February 1995, when the appellant was seeking to re-sell the property, that it learned of the caveat lodged by the Majlis. Majlis never, after December 1993, wrote to the appellant about its interest in the property. The appellant admitted that it knew the property was subject to a trust created by the testatrix in her will and that the trustees were not empowered to dispose of the property under the will.

12.After having purchased the property the appellant, in ignorance of the existence of the caveat lodged by the Majlis, proceeded with re-development works. The appellant said it had incurred a re-development cost of $543,740.63 including a sum of $100,000 as tenant compensation.

13. Decision below

In the court below Judith Prakash J ruled, following this court`s decision in Abdul Rahman bin Mohamed Yunoos v Majlis Ugama Islam Singapura [1995] 2 SLR 705 , that although the trust was created in 1912, as the dispute arose in 1995 it had to be construed in the light of s 63(1) of AMLA which provides that where any question arises as to the meaning of any instrument creating or affecting any Muslim charitable trust such question shall be determined in accordance with the provisions of Muslim law. She held that there was in this case a valid Muslim charitable trust or wakaf and that in view of ss 58 and 59 of AMLA the property automatically vested in the Majlis `without any conveyance, assignment or transfer whatever.` As the trustees no longer had any right or title to deal with the property, other than to carry out the trusts as directed by the testatrix in her will, the purported sale to the appellant was void. The fact that the trustees obtained an order of court under s 59(1) of the Trustees Act empowering them to sell the property did not confer title in the trustees if they did not have any. Section 59(1) of the Trustees Act only applied `where in the management or administration of any property vested in trustees `. She said that the plaintiff (the appellant) could probably have a claim against the other property which the trustees had bought with the proceeds of sale, but she was not expressing a firm view on that.

14.The learned judge also held that the doctrine of bona fide purchaser for value had no application in the circumstances of this case as it only `protects a purchaser of a legal interest in a property from claimants to a beneficial interest in the same property when such purchaser can show that he bought the legal estate in good faith for value and without knowledge of the beneficial interest.` In any case she also found on the evidence that the appellant was not a bona fide purchaser. If the appellant`s solicitors had done a proper tracing of title the appellant would have noticed that the property was purchased for the purposes of trusts declared in the will of the testatrix. Furthermore, in a April/May 1993 issue of the Law Society`s circular, attention of members of the Society was drawn to the provision of AMLA regarding the Majlis` interest in properties subject to any Muslim charitable trust or wakaf. Thus she held there was constructive knowledge on the part of the appellant`s solicitors and accordingly of the appellant. Enquiries should have been made by the appellant with the Majlis.

15.For these reasons the learned judge refused to grant any relief to the appellant and instead declared that the leasehold interest in the property vested in the Majlis and ordered that the registration of the deed of assignment lodged by the appellant on 1 December 1993 be expunged.

16. Issues before us

Two main questions are canvassed before us. First, what is the nature of the trust created by the will of the testatrix. If it is a wakaf then following s 59 of the AMLA, legal title in the estate vests automatically in the Majlis and the trustees would have...