See Fong Mun v Chan Yuen Lan

• Jurisdiction: Singapore
• Judgment Date: 06 May 2013
• Date: 06 May 2013
• Docket Number: Suit No 298 of 2012
• Court: High Court (Singapore)

See Fong Mun

Plaintiff

and

Chan Yuen Lan

Defendant

[2013] SGHC 99

Choo Han Teck J

Suit No 298 of 2012

High Court

Trusts—Resulting trusts—Nature of presumed resulting trust—Whether presumed resulting trust was appropriate property device when parties gave direct evidence of their intentions at time of purchase of property

Trusts—Resulting trusts—Presumed resulting trust—Property conveyed into sole name of wife—Husband advancing full purchase price of property—Whether presumption of advancement rebutted by evidence of lack of donative intent

The plaintiff and defendant were husband and wife. The defendant held a property located at 24 Chancery Lane (‘24 Chancery Lane’) in her sole legal name. 24 Chancery Lane was purchased in August 1983 for $1,831,758.90, and the defendant signed a power of attorney (‘POA’) three days before the completion of the purchase of the property, granting the plaintiff and their eldest son full powers to take charge of, manage and improve 24 Chancery Lane. On 5 April 2011, the defendant revoked the POA.

The plaintiff brought an action for a declaration that the defendant held 24 Chancery Lane on a resulting trust for him on the ground that he had paid for the entire purchase price of the property. The plaintiff's accounts indicated that the purchase price was derived from various sources, including a $290,000 loan from the defendant, $741,758.90 in cash from the plaintiff's CPF and bank accounts, a $400,000 seven-year term loan from HSBC Bank (‘HSBC’) in the defendant's name and a $400,000 overdraft from HSBC extended to Tat Mun Pte Ltd (‘TMPL’), a company incorporated by the plaintiff to manage his property investments. The defendant counterclaimed that she was the full beneficial owner of 24 Chancery Lane on the basis that she had made substantial financial contributions to the purchase of the property, and alternatively relied on the presumption of advancement. The defendant claimed that the plaintiff had an extramarital affair with his secretary and when the plaintiff asked her for money to purchase 24 Chancery Lane, she had told him ‘my money, my name’ and the plaintiff had agreed to this arrangement.

Held, allowing the claim and dismissing the counterclaim:

(1) The plaintiff had made full payment for the loans from the defendant and HSBC and there was no credible evidence that the defendant had in fact contributed to the repayment of the HSBC loans. The defendant's loan did not constitute a direct contribution by the defendant to the purchase price as it was advanced to the plaintiff as a loan and repaid. Although the term loan was in the defendant's name, the parties had agreed that the plaintiff would repay the loan and he had in fact done so. It was implausible that the parties would have instead agreed that the defendant would pay off the loan instalments as the defendant was dependent on household income from the plaintiff. The amounts paid towards discharging the term loan were thus the plaintiff's direct contributions to the purchase price. As the plaintiff was at the material time the owner of all but one of TMPL's 50,002 shares and controlled TMPL, TMPL could be equated to the plaintiff and the liability undertaken for the overdraft also constituted the plaintiff's direct contribution to the purchase price: at [8] to [10].

(2) The defendant's case that the plaintiff intended 24 Chancery Lane to be a gift for her as he felt guilt-ridden by his affair was inherently improbable in the circumstances. There was no convincing reason why the plaintiff, nearing retirement age, would have incurred substantial financial risks to give a large house to a woman with whom his marriage existed in name only. The presumption of advancement was thus rebutted: at [11].

(3) There was sufficient evidence to support the plaintiff's account that the parties' agreement at the time of purchase was that the plaintiff would be the owner of 24 Chancery Lane although the legal title was in the defendant's sole name and that the POA was signed pursuant to this agreement. The defendant's account that the plaintiff took $290,000 from her in exchange for placing the property in her sole name was neither realistic nor credible: at [12].

(4) The presumption of advancement gave the recipient of property an advantage which, if not neutralised, operated to form the basis of proof. However, presumptions should not be raised as a matter of course when both parties were present and competent to testify as to their respective knowledge and intentions relating to the purchase; the court would then evaluate their evidence and the credibility of the opposing testimonies. The presumption of advancement could not be given greater weight than supported by the objective evidence: at [15].

(5) The plaintiff was entitled to 24 Chancery Lane on the basis of the pleaded resulting trust. The plaintiff contributed the entirety of the purchase price and did not intend to give full beneficial ownership to the defendant; the beneficial interest thus ‘resulted’ back to the plaintiff: at [19] and [20].

[Observation: The facts of the case indicated a common intention constructive trust as there was an express agreement on beneficial ownership prior to the acquisition of the matrimonial home, but the plaintiff had only pleaded a resulting trust. The English authorities held that claims to beneficial interests in the family home should be made under a constructive trust based on the intentions of the parties and that the presumption of resulting trust was not consistent with this approach. Although the Court of Appeal decision of Lau Siew Kim v Yeo Guan Chye Terence[2008] 2 SLR (R) 108 (‘Lau Siew Kim’) endorsed the resulting trust approach in the matrimonial context, Lau Siew Kim did not allude to the nature of the trust that would apply where the presumptions of resulting trust and advancement were displaced or where it was not necessary to apply the presumptions because direct evidence was available: at [17].

The court in Lau Siew Kim observed that the two presumptions responded solely to the intentions of the party who provided the consideration for the property, and the fact that gave rise to the resulting trust was a lack of intention of the transferor to benefit the recipient. In contrast, Lord Browne-Wilkinson suggested in Westdeutsche Landesbank Girozentrale v Islington London Borough Council[1996] AC 669 that the resulting trust arose from the presumed common intentions of the parties. Lau Siew Kim was equivocal on whether the court was concerned with the transferor's intentions or both parties' presumed intentions under a resulting trust analysis, and left open the question of how the presumed resulting trust was consistent with the common intention constructive trust: at [18].]

Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763 (refd)

Jones v Kernott [2012] 1 AC 776 (refd)

Lau Siew Kim v Yeo Guan Chye Terence [2008] 2 SLR (R) 108; [2008] 2 SLR 108 (refd)

Stack v Dowden [2007] 2 AC 432 (refd)

Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (refd)

Lim Seng Siew (instructed), Lai Swee Fung and Susan Tay (Uni Legal LLC) for theplaintiff

Jones Simon Dominic and Jayagobi s/o Jayaram (Grays LLC) for the defendant.

Judgment reserved.

Choo Han Teck J

1 This is a case about an old folks' home - a very large and expensive house located at 24 Chancery Lane (‘24 Chancery Lane’) purchased for $1,831,758.90 in August 1983 by the 86-year-old plaintiff, then 55 years old, in the sole name of his wife, the 88-year-old defendant, then 57 years old. The plaintiff claimed that 24 Chancery Lane is presently worth about $20 m, although no formal valuation was conducted before trial. The parties married more than 50 years ago and have three children. The eldest, a son named See Hang Chong (also known as Cliff) (‘Hang Chong’), is 55 years old. Their daughter See Seow Meng (‘Seow Meng’) is 53 years old, and their youngest son, See Hung Yee (‘Hung Yee’), is 51 years old. The plaintiff retired many years ago. He rose from being a machinist to an owner of a machine repair shop, and eventually developed that into a successful engineering business. He was a thrifty man, and by 1955 he had bought his first property, a house at 11 Borthwick Drive (‘the Borthwick property’). The defendant was a hairdresser before she married the plaintiff.

2 The plaintiff married the defendant in 1957. After they got married, they lived in a rented unit at 15 A, Lorong 40 Geylang (‘the Geylang property’) and sometime in 1967 the plaintiff bought the Geylang property from their landlord. The plaintiff paid $20,000 for it. In 1969 the plaintiff bought two properties in his sole name: a house at 100 Joo Chiat Walk (‘the Joo Chiat property’) and a house at 41 Goldhill Avenue (‘the Goldhill property’). The plaintiff is still the owner of the Goldhill property. It is on a 4,500 square feet piece of land and cost $65,500 in 1969. The plaintiff sold the Geylang property in 1972 for $60,000 and gave $20,000 to the defendant.

3 The...