Ong Teck Soon (executor of the estate of Ong Kim Nang, deceased) v Ong Teck Seng and another

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Steven Chong JA
• Judgment Date: 05 May 2017
• Neutral Citation: [2017] SGHC 95
• Citation: [2017] SGHC 95
• Defendant Counsel: The second defendant in person.,Kasi Ramalingam (Raj Kumar & Rama)
• Docket Number: Suit No 651 of 2016
• Subject Matter: Unjust enrichment,Restitution,Damages,Interest,Limitation of actions,Conversion,Tort,Particular causes of action,Civil Procedure
• Plaintiff Counsel: Andrew John Hanam (Andrew LLC)
• Date: 05 May 2017
• Hearing Date: 13 March 2017,14 February 2017,15 February 2017
• Published date: 10 May 2017

Steven Chong JA: Introduction

This is a claim brought by one of the two executors of the will of the late Ong Kim Nang (“the Testator”) against the first defendant for the unauthorised issuance of two cheques which resulted in the withdrawals of moneys from the Testator’s OCBC Bank Account No XXX-XXXXXX-001 (“the OCBC account”). The second defendant is the other executor of the said will (“the Will”) and was added as a necessary party as she was unwilling to provide her consent to be added as a plaintiff. All the parties in this action are siblings and children of the Testator. It should be stated at the outset that there is no dispute as regards the validity of the Will.

Under the Will, the Testator made specific provisions for the distribution of his estate to his wife, Mdm Tan Ai Cheng (“Mdm Tan”), and his seven children, including the parties to this action. In particular, he left all the moneys in his bank accounts to Mdm Tan absolutely. The first defendant claimed that three days before the Testator’s passing, the Testator, “in contemplation of his impending death”, instructed him to use pre-signed cheques to draw a cheque of $500,000 (“the gift cheque”) to himself as a gift and a further cheque of $613,000 (“the trust cheque”) to be held on trust for Mdm Tan’s expenses and for the upkeep of the family property at No 9 Guok Avenue, Singapore 119639 (“the family property”). These two cheques effectively emptied the OCBC account, save for a token balance of about $5,000.

The pivotal issue is whether the burden is on the first defendant to prove that the two cheques were authorised by the Testator or on the plaintiff to disprove otherwise. As the withdrawals were made more than six years prior to the institution of the proceedings, there is a further question whether the claims are time-barred in any event, which in turn depends on whether the period of limitation should not begin to run until after discovery of the concealed fraud, if any.

Background facts

The Testator passed away on 28 May 2010. Under his Will dated 28 October 2003, the Testator gave all moneys held in his thirteen bank accounts and time deposits to Mdm Tan absolutely (subject to the right of survivorship operating in favour of any joint account holders).¹ These moneys amounted to $2,606,077.19 in total, of which the moneys under the gift cheque and the trust cheque comprised about half.²

The Testator also gave life interests in the family property to Mdm Tan and the second defendant. Along with the first defendant’s family, they were living in the family property at the time of the Testator’s death. The interest in the remainder of the family property was to be divided equally among the plaintiff, the first defendant and the Testator’s sixth child, Ong Teck Huat. The residue of his estate, including shares in various Singapore and Malaysia listed companies, was also to be divided equally among the plaintiff, the first defendant and Ong Teck Huat.

Mdm Tan passed away on 25 November 2013.³ Under Mdm Tan’s will, the residue of her estate (including the moneys inherited from the Testator) is to be distributed equally among the plaintiff, the first defendant and Ong Teck Huat.⁴ It is undisputed that if the plaintiff prevails in this action, the sums will be restored to the Testator’s estate, paid into Mdm Tan’s estate and subsequently distributed to the beneficiaries under Mdm Tan’s will.

In this action, the plaintiff claims that the first defendant made unauthorised disposals of the following assets belonging to the Testator’s estate: The gift cheque of $500,000; The trust cheque of $613,000; and Two Rolex Oyster watches, one “half-gold” and one “full-gold” (“the two Rolex watches”).

The two cheques

There is no dispute that the two cheques were drawn on the Testator’s OCBC account on 31 May 2010. It is also not disputed that the identity of the payees and the sums for the two cheques were filled in by the first defendant. The gift cheque was made out as a cash cheque and was dated 25 May 2010. It was encashed and deposited into the first defendant’s POSB Savings Account No XXX-XXX84-0 (“the first defendant’s POSB savings account”) at first instance. The trust cheque was made payable to Mdm Tan and was likewise dated 25 May 2010. It was initially deposited into DBS Bank Account No XXX-X-XXX320 which was jointly held by Mdm Tan and the first defendant’s wife (“Mdm Tan’s joint account”). On or about 9 July 2010, the sum of $615,000 was withdrawn from Mdm Tan’s joint account and deposited into POSB Bank Account No XXX-XXX51-0 belonging to the first defendant and his wife.

The only disputed factual issue in relation to the two cheques is whether the issuance of the two cheques and the withdrawals thereunder were authorised by the Testator as claimed by the first defendant. According to the first defendant, the Testator’s instructions were conveyed to him orally at the hospital on 25 May 2010 and he had prepared the cheques on those instructions in the Testator’s presence, without any other witnesses. The second defendant claims to have no personal knowledge of the Testator’s instructions even though she visited the Testator at the hospital daily during his last days.

The plaintiff commenced this suit after he discovered in November 2014 that the moneys under both cheques had been deposited into the first defendant’s POSB savings account and Mdm Tan’s joint account in May 2010. According to him, he found out about the withdrawals only sometime in May 2011 when the estate’s solicitors, Wee Swee Teow & Co, was preparing the schedule of assets for the Testator’s estate (“the Schedule of Assets”). The matter was revisited in 2014 when the family was preparing to apply for a grant of probate for Mdm Tan’s estate. It was then that the plaintiff obtained images of the two cheques upon the advice of the estate’s solicitors. It is worth noting that this account expressly contradicts the defendants’ narrative, namely that the first defendant had informed all his siblings of the Testator’s instructions at the Testator’s funeral on 2 June 2010.⁵ More will be said about this alleged disclosure below.

Rolex watches

In addition to the moneys withdrawn under the two cheques, the plaintiff also seeks delivery up of the two Rolex watches. This claim was introduced pursuant to Amendment No 1 to the statement of claim. Under the Will, the two Rolex watches form part of the residue of the estate which is to be distributed equally among the plaintiff, the first defendant and Ong Teck Huat. The first defendant accepts that prima facie, both watches belonged to the Testator.⁶ The issue here is whether the two Rolex watches were gifted to the first defendant during the Testator’s lifetime, such that the watches did not form part of the estate at the point of the Testator’s death. This claim was introduced late in the day because the plaintiff only learned of the first defendant’s gift allegation on or about 24 July 2016.⁷

Abandoned claim for the cheque of $20,000

A claim for an additional cheque of $20,000 was initially pleaded but was withdrawn by the plaintiff at the start of the trial after speaking to his uncle, Mr Oan Chim Seng (“Mr Oan”). This cheque was payable in cash and, according to the images of the cheque, was deposited into the first defendant’s account.⁸ According to the first defendant, the Testator had issued a cheque of $20,000 in April 2010 (when he was still alive) to reimburse Mr Oan in respect of his agreed contribution for the funeral expenses of a relative in China.⁹ For some unknown reason, that cheque was dishonoured. The Testator purportedly instructed the first defendant on 25 May 2010 to issue a fresh cheque for $20,000 to Mr Oan to reimburse him.¹⁰

It is common ground that when the first defendant allegedly prepared the $20,000 cheque on 25 May 2010, he had intended to deposit this cheque into his own personal account and would thereafter issue his own personal cheque to reimburse Mr Oan for the $20,000.¹¹ From Mr Oan’s affidavit of evidence-in-chief (“AEIC”), this was in fact how he received the $20,000 – through a personal cheque issued from the first defendant’s account.¹²

The plaintiff dropped the claim in respect of this $20,000 cheque only after obtaining independent verification that $20,000 was in fact received by Mr Oan.¹³ It is necessary to emphasise that the plaintiff did not concede that the Testator had instructed the first defendant to prepare the $20,000 cheque for Mr Oan on 25 May 2010. This has not been suggested by the first defendant in any event. All that the plaintiff has accepted is that $20,000 was in fact paid to Mr Oan, and therefore this payment was legitimate.

Cause of action

The plaintiff’s claim in relation to the two cheques is based on the tort of conversion and/or an action for unjust enrichment. Initially, the plaintiff’s AEIC alleged that the issuance of the cheques was “unauthorised and in breach of trust as pleaded”¹⁴ and the first defendant had taken the sums of $500,000 and $613,000 out of the Testator’s account in “breach of trust”¹⁵ [emphasis added]. However, counsel for the plaintiff, Mr Andrew Hanam, confirmed at the start of the trial that there is in fact no pleaded claim for breach of trust.¹⁶ Another allegation initially pursued for forgery of the cheques was also abandoned after the plaintiff accepted that the signatures on the cheques were indeed the Testator’s.¹⁷

The essence of the plaintiff’s case is encapsulated in one terse pleading in the statement of claim: “the withdrawals of monies on the [two] cheques were made by the [first] [d]efendant and were unauthorized [sic]”.¹⁸ On this basis, the plaintiff seeks “[r]estitution” of the $1,113,000 paid under the two cheques.¹⁹ As the Court of Appeal clarified in Alwie Handoyo v Tjong Very Sumito and another and another appeal [2013] 4 SLR 308 (“Alwie Handoyo”) at [126], restitution...