Phng Siew Hoon and Another v Phng Siew Lan

• Jurisdiction: Singapore
• Judge: Chan Sek Keong J
• Judgment Date: 17 September 1991
• Neutral Citation: [1991] SGHC 129
• Court: High Court (Singapore)
• Published date: 07 June 2012
• Year: 1991
• Plaintiff Counsel: Ronald Lee
• Defendant Counsel: Ng Wing Cheong
• Citation: [1991] SGHC 129

Judgment:

Coram: Chan Sek Keong, J.

GROUNDS OF JUDGMENT

This was an action by the personal representatives of the Estate of Phng Yen San, deceased, against the defendant for, inter alia, a declaration that she held the sum of $500,000 in trust for the Estate. The executrix is a daughter of the deceased. The executor is an advocate and solicitor.

The claim arose in the following circumstances. The deceased was a wealthy man. His family companies controlled, inter alia, two motor car franchises in Singapore and Malaysia. Another of his family companies owned the Yen San Building at Orchard Road. In early September 1984, the deceased returned from USA after medical treatment for acute emphysema. He was very ill. On 6.9.84, he was admitted into Gleneagles Hospital and on 29.9.84, he made a will in which he gave all his property on trust for his two wives and their children in equal shares,subject to certain substitutional gifts in the event of certain beneficiaries dying before him. The doctor in attendance gave a certificate dated 29.9.84 that the deceased was a person of sound mind, memory and understanding.

On 7.10.84, the deceased was discharged from Gleneagles Hospital. He lived at home until 30.10.84 when he was admitted to Mount Alvernia Hospital where he died on 11.12.84. Because of the deceased's medical condition, certain members of his family were concerned with the management of his companies and also his assets after his death. There was documentary evidence, originally adduced by the defendant, that the deceased's children in Singapore, including (1) his eldest son (PHS), (2) the executrix (PW2) and (3) the defendant, had held a meeting on 6.10.84 to discuss these matters. It was also attended by an accountant and an advocate and solicitor. The minutes of this meeting recorded, inter alia, that:

(a) a comprehensive report on the deceased's assets was to be prepared by the accountant, highlighting (a) estate duty, and other matters listed therein;

(b) that the deceased had agreed to close most of his 5 or 6 personal bank accounts, leaving extant the accounts with UOB, Macpherson branch, Citibank, Orchard Road branch, and Four Seas Bank, Head Office, and that PW2 would procure the closing of his accounts with Tat Lee Bank, UMBC Singapore and UMBC Malaysia.

There was nothing in the minutes which showed that the proposed closing of the deceased's accounts had anything to do with his need or desire to free his money in the banks for payment of estate duty. By early October the accountant had valued the deceased's assets at about $30 million, which information PW2 said she had relayed to the deceased. On this valuation, the estate duty payable would have been $2.5 million, assuming that the valuation was in respect of the Singapore assets only.

The following events took place subsequently:

(1) on 12.10.84, the deceased received a cheque in his favour for $2,753,332.00 drawn on the account of Asia Motors Pte Ltd as his retirement benefit from the said company; he then opened a new joint account with OCBC in the names of himself and his two sons, PHS and PHC, to be operated by him singly and by his sons jointly; he also at the same time drew two cheques for $1 million each, both in favour of PHS and caused the funds to be placed on fixed deposit in the name of PHS;

(2) on 2.11.84, PHS and PHC drew out from the OCBC account a cheque in favour of PHS for $750,000 and placed the proceeds thereof on fixed deposit in the name of PHS;

(3) on 30.10.84, the deceased drew a cheque (No 042741) on his account with UOB Macpherson branch for $500,000 in favour of his second wife (LSH), which cheque was cashed by her on 1.11.84;

(4) on 30.10.84, the deceased drew a cheque (No 042742) on the same UOB account for $500,000 in favour of the defendant: the cheque was cashed by her on 2.11.84; (5) on 29.11.84, Asia Motors Sdn Bhd made two payments of M$375,000 and M$423,958 by cash cheque to the deceased. The first was a repayment of "outstanding account" and the second was a gratuity. The proceeds of the first cheque were paid to CMS, the deceased's other wife who lived in Kuala Lumpur: the proceeds of the second cheque were paid to PHS and wife.

After the death of the deceased, these withdrawals came to the attention of the plaintiffs. They took the view that all the said sums of money referred to above were held on trust by the recipients for payment of estate duty. The first letter of demand to the defendant claiming the return of the said sum of $500,000 on that specific ground was only made on 10.4.86. The defendant denied the claim in her reply dated 16.4.86.

On 20.8.87, the plaintiffs commenced this action to recover the sum of $500,000 from the defendant. The cause of action is pleaded in Paragraphs 2, 3 and 4 of the Statement of Claim as follows:

"2. In early September 1984 upon his return to Singapore from the United States of America after medical treatment on his serious illness, the deceased engaged professionals to plan his estate and was fully aware that in order to prevent his bank accounts from being frozen in the event of his death, he had to transfer sufficient sums of money to his children and wife to be held by them as trustees for payment of estate duty.

3. At the request of the deceased, the Defendant, the deceased's second wife < LSH > , and his eldest son, < PHS > , orally agreed with him that they would hold in trust such sums of money to be given to them by him and would undertake to apply the same for payment of estate duty in Singapore and Malaysia upon his death.

4. Pursuant to the said agreement, the deceased made the following payments:-

(a) to LSH on or about the 30th day of October 1984 the sum of S$500,000.00 from his current account with the United Overseas Bank Limited (Macpherson Road Branch);

(b) to the Defendant on or about the 30th day of October 1984 the sum of S$500,000.00 also from his current account with the United Overseas Bank Limited (Macpherson Road Branch);

(c) to PHS on or about the 30th day of November 1984 the sums of M$375,000.00 and M$423,958.00 being dividends and retirement gratuity received by the deceased from Asia Motor (K.L.) Sdn Bhd and Asia Motor (Malacca) Sdn Bhd respectively. The sum of M$375,000.00 was subsequently handed by PHS to the deceased's daughter-in-law, CMS, who was advised to keep the same on trust to be used later for payment of the deceased's estate duty in Malaysia."

There were a number of surprising and wholly unsatisfactory features in the way in which the plaintiffs' claim was pursued prior to and at the hearing of this action. Counsel for the plaintiffs conducted his case as if there were no rules of practice or evidence. Firstly, whether or not the deceased had made the payment of S$500,000 to the defendant and the defendant had received the same on the basis of the agreement alleged in paragraph 4 of the Statement of Claim was obviously a question of fact.

The plaintiffs and their solicitors were aware of this from the defendant's letter of 16.4.86. Moreover, the defendant had deposed that the money was a gift to her in an affidavit filed on 8.9.87 in support of her application to stay the action on the ground that the plaintiffs had not proved the deceased's will. Notwithstanding these facts, the plaintiffs made an application for summary judgment on 4.11.87. Secondly, the plaintiffs' solicitor (who also appeared as counsel at the hearing) filed his personal affidavit deposing that there was no defence to the action when he knew that he had no personal knowledge whatever of the facts in dispute.

Thirdly, no member of the deceased's family filed any affidavit to support the allegations of the plaintiffs. Fourthly, after the defendant had filed her affidavit in reply to the olicitor's affidavit, the plaintiffs filed the affidavit of the executor (PW1). PW1 deposed to the statements in his affidavit as being true to the best of his knowledge and belief as an executor ofthe Estate, but without distinguishing knowledge from belief. Fifthly, at the trial, counsel led PW1 through his affidavit without any indication from either of them that PW1 did not have any personal knowledge of the facts relating to the payments by the deceased. PW1 confirmed his affidavit. At the end of his evidence, when questioned by the Court, PW1 admitted that his personal knowledge of the...