Ong Siew Lay v Ong Boon Chuan

JurisdictionSingapore
JudgeWoo Bih Li J
Judgment Date23 April 2009
Neutral Citation[2009] SGHC 99
CourtHigh Court (Singapore)
Year2009
Citation[2009] SGHC 99
Plaintiff CounselJames Ponniah and Leong Sue Lynn (Wong & Lim)
Defendant CounselMichael Khoo SC, Josephine Low and Andy Chiok (Michael Khoo & Partners)
Subject MatterTrusts
Published date05 May 2009

23 April 2009

Woo Bih Li J:

Introduction

1 The plaintiff Ong Siew Lay (“Siew Lay”) and the defendant Ong Boon Chuan (“Boon Chuan”) are siblings. Siew Lay claimed $2 million being the purchase price of shares in Tong Guan Food Products Pte Ltd (“the Company”) said to be held by their mother, Madam Chai Ah Chee @ Chua Ah Chee (“Madam Chai”) in trust for her. Boon Chuan did not dispute that he bought the shares for $2 million but asserted that the shares belonged beneficially to Madam Chai. Although he purported to pay the $2 million, the money was returned to him, allegedly to let him use it for his real property development business and on the basis that he was to return it as and when Siew Lay required the same.

The background

2 The late Ong Tong Guan (“Mr Ong”) had ten children with Madam Chai. They are:

Name

Relationship

Year of Birth

Ong Siew Hua (“Siew Hua”)

Daughter

1953

Ong Leong Chuan (“Leong Chuan”)

Son

1954

Boon Chuan

Son

1956

Ong Heng Chuan (“Heng Chuan”)

Son

1957

Ong Siew Kuan (“Siew Kuan”)

Daughter

1958

Ong Teck Chuan (“Teck Chuan”)

Son

1959

Ong Siew Chin (“Siew Chin”)

Daughter

1960

Ong Siew Ann (“Siew Ann”)

Daughter

1962

Ong Eng Chuan (“Eng Chuan”)

Son

1963

Siew Lay

Daughter

1965



3 Mr Ong started a sole proprietorship, Tong Garden Product Services, selling snack food under the “Tong Garden” brand in the 1960s. The business was later incorporated to form the Company. Shares in the Company were initially held by Mr Ong, Madam Chai and some of the ten children.

4 In 1984, Mr Ong fell seriously ill. Shortly before he passed away, he called for a meeting to distribute his assets (“the Meeting”). Madam Chai, Leong Chuan and Boon Chuan were present at the Meeting. Siew Kuan was supposed to attend but did not as she was ill that day. At the meeting, Mr Ong gave oral instructions as to how his shares in the Company were to be distributed. In brief, Mr Ong had instructed that his shares be split amongst his children, with 20% going to each of the boys, and 10% to each of the girls, except Siew Hua who had by then married into another family with a competing business. The consequences from his instructions, however, were later contested and led to a dispute between Leong Chuan and the rest of the family in Suit No. 1633 of 1999 (“Suit 1633”) and Originating Summons No. 1944 of 1999 (“OS 1944”). They were also contested in the current action. I shall elaborate later on the contests.

5 Mr Ong passed away on 24 July 1984. The 165,000 shares of the Company which were registered under his name were transferred to Heng Chuan (25,000 shares), Teck Chuan (100,000 shares) and Siew Chin (40,000 shares). Boon Chuan also transferred 40,000 shares of the Company under his name to Leong Chuan because he (Boon Chuan) already had a stake in another related company.[note: 1] Likewise, the youngest brother Eng Chuan was to receive a stake in another related holding company.[note: 2] The registered shareholding structure before and after Mr Ong’s demise as at 30 April 1983 and 3 July 1984 was as follows:

Name

As at 30/4/83

Transfer

As at 3/7/84

Mr Ong

165,000

Shares transferred out

0

Madam Chai

50,000

No change

50,000

Leong Chuan

110,000

Transfer of 40,000 shares from
Boon Chuan

150,000

Boon Chuan

40,000

Shares transferred out

0

Heng Chuan

75,000

Transfer of 25,000 shares from
Mr Ong

100,000

Siew Kuan

50,000

No change

50,000

Teck Chuan

0

Transfer of 100,000 shares from
Mr Ong

100,000

Siew Chin

0

Transfer of 40,000 shares from
Mr Ong

40,000

490,000



6 In 1987, each of the shareholdings of Madam Chai, Leong Chuan, Heng Chuan and Teck Chuan doubled by an issue of shares from the Company. So, for example, Madam Chai received another 50,000 shares making her total 100,000 shares.

7 However, Mr Ong’s death only marked the beginning of family strife. Several of the Ong siblings then involved in the Company constantly quarrelled over its management, and as a result, Siew Kuan and Siew Chin sold all their shares in the Company to Leong Chuan, Heng Chuan and Teck Chuan a few years later in 1991.

8 In 1999, Madam Chai sold the shares she held in the Company to Boon Chuan for $2 million. The payment was made in the following manner. On 8 March 1999, Boon Chuan issued a cheque for $1 million to Madam Chai. The cheque was cleared on 9 March 1999 and credited into Madam Chai’s UOB joint account with Siew Lay. On 9 March 1999, Madam Chai returned the $1 million to Boon Chuan by way of a cashier’s order. Again on 9 March 1999, Boon Chuan issued another cheque for $1 million to Madam Chai as payment of the balance. The cheque was cleared on 10 March and credited into Madam Chai’s UOB joint account with Siew Lay. On 10 March 1999, Madam Chai again returned $1 million to Boon Chuan by way of a cashier’s order. The share transfer form was dated 31 March 1999. Madam Chai passed away on 5 December 1999.

Suit 1633

9 The Ong family’s disputes finally came to a boil and led to two related law suits, Suit 1633 and OS 1944 (collectively referred to as “the Two Actions”), pitting Mr Ong’s eldest son, Leong Chuan, against most of the rest of the family.

10 Suit 1633 was a claim by the Company against Leong Chuan for breach of fiduciary duties. The Company initially sought a number of remedies in relation to the alleged misuse of company funds. However, during the course of the trial, the Company and Leong Chuan agreed to appoint an accountant to determine the veracity of all but one of the allegations of misuse of funds. The only remaining issue before the court was whether Leong Chuan had misused $100,000 of the Company’s money for the purchase of 10% of the shares in the Company from Siew Ann. This involved determining whether Leong Chuan held 10% of the shares in the Company on trust for Siew Ann. Siew Lay was subpoenaed by Leong Chuan to be a witness in the suit; Siew Kuan and Boon Chuan also testified. Boon Chuan had affirmed an Affidavit of Evidence-In-Chief (AEIC) in Suit 1633 stating:

6 At the meeting, my father told us that he wanted to give his sons a 20% share each in the Plaintiffs while his daughters would get a 10% share each. However, since I was involved in a related family business, I was to get shares in that company instead of the Plaintiffs. Another brother, Ong Eng Chuan was to receive shares in another company instead of the Plaintiffs as well.

7 I am therefore able to confirm that [Ong Siew Ann] was to receive 10% of the Plaintiffs’ shareholding. However, [Ong Leong Chuan] had suggested to my father that he should hold that [Ong Siew Ann’s] 10% on trust for her and my mother would another sister, Ong Siew Lay’s 10% share on trust for her.

11 Justice Tan Lee Meng (“Justice Tan”) allowed the claim, and found that Leong Chuan held 10% of the shares in the Company on trust for Siew Ann. In his judgment (the “Suit 1633 Judgment”), Justice Tan held that:

10 Boon Chuan said that in accordance with his father’s instructions, three of his brothers, namely the defendant, Heng Chuan and Teng Chuan, each got 20% of the shares in the plaintiff company while the remaining 40% was split equally between his four sisters, Siew Kuan, Siew Chin, Siew Ann and Siew Lay, with each getting 10%. He added that Siew Lay’s 10% was to be held on trust for her by their mother while Siew Ann’s 10% was to be held on trust for her by the defendant. This explains why 30% of the shares in the plaintiff company were registered in the defendant’s name.

25 The defendant also alleged that it was not true that his late mother held 10% of the shares in the plaintiff company on trust for another of his sisters, Siew Lay. He said that his siblings lied about the existence of this trust in favour of Siew Lay in order to reinforce their claim that he held 10% of the shares in the plaintiff company in favour of Siew Ann. He also pointed out that after the shares in his mother’s name were sold for $2 million to his brother, Boon Chuan, the money was returned to Boon Chuan. He thus submitted that the sale of shares to Boon Chuan was a sham transaction. It was pointed out that in his affidavit of evidence-in-chief in another action, OS No 1944 of 1999, Boon Chuan had said that his late mother wanted to sell the shares to distribute the proceeds to “some of the children”. However, this does not give the complete picture. In para 25 of the affidavit in question, Boon Chuan made it clear that his mother held the shares on trust for Siew Lay. If his mother had actually distributed the proceeds of the sale of the shares, Siew Lay’s rights would have been infringed. Boon Chuan and his other siblings were not asked to clarify the position during cross-examination.

27 Siew Lay also testified that after her shares had been sold to her brother, Boon Chuan, she invested the proceeds of the sale in Boon Chuan’s business. When cross-examined as to who made the decision to sell and to invest the money, she said:

Q. Did your mother tell you that the shares would be sold and that a big sum of money would come in?

A. It was my idea for the shares to be sold. My mother always asked me whether I wanted shares or money. I said I wanted money.

Q. When was the decision made as to what to do with the $2 million?

A. When my elder brother decided to buy my mother’s shares and subsequently, my mother discussed with me.

Q. What is the rate of interest?

A. It has not occurred to me what is the rate of interest. He is my brother and I did not impose the rate of return. I believe that if his company makes a profit, he would share the profits according to his conscience. I did tell him that if I need my money back, he would have to return it to me.

28 I accept that Siew Lay’s late mother held 10% of the shares in the plaintiff company on trust for her. In any case, it was not...

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    ...Sim [2010] 2 SLR 76 (refd) Chong Poh Siew v Chong Poh Heng [1994] 3 SLR (R) 188; [1995] 1 SLR 135 (refd) Ong Siew Lay v Ong Boon Chuan [2009] SGHC 99 (refd) Osman bin Din v PP [1995] 1 SLR (R) 419; [1995] 2 SLR 129 (folld) PP v Tan Kok Siong Robin [2004] SGDC 224 (refd) Quek Hung Heong v Ta......
  • Ching Chew Weng Paul v Ching Pui Sim and Others
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    • 4 Diciembre 2009
    ...is not the correct provision to govern the 1984 Trusts. A similar observation was made by Woo J in Ong Siew Lay v Ong Boon Chuan [2009] SGHC 99 (“Ong Siew Lay”) where the court dealt with an oral disposition also made in 1984. As astutely observed by Woo J in Ong Siew Lay, the correct provi......
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    • High Court (Singapore)
    • 25 Agosto 2014
    ...provision would be s 9 of the English Statute of Frauds 1677 (c 3) (UK) (“the Statute of Frauds”): Ong Siew Lay v Ong Boon Chuan [2009] SGHC 99 at ][52]–[54]; Ching Chew Weng Paul v Ching Pui Sim and others [2010] 2 SLR 76 at [40]. Section 9 of the English Statute of Frauds 1677 states: And......
  • Ching Chew Weng Paul v Ching Pui Sim and Others
    • Singapore
    • High Court (Singapore)
    • 4 Diciembre 2009
    ...is not the correct provision to govern the 1984 Trusts. A similar observation was made by Woo J in Ong Siew Lay v Ong Boon Chuan [2009] SGHC 99 (“Ong Siew Lay”) where the court dealt with an oral disposition also made in 1984. As astutely observed by Woo J in Ong Siew Lay, the correct provi......

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