Sheares Betty Hang Kiu v Chow Kwok Chi and Others

• Jurisdiction: Singapore
• Judgment Date: 28 February 2006
• Date: 28 February 2006
• Docket Number: Originating Summons No 863 of 2004
• Court: High Court (Singapore)

Sheares Betty Hang Kiu

Plaintiff

and

Chow Kwok Chi and others

Defendant

[2006] SGHC 34

V K Rajah J

Originating Summons No 863 of 2004

High Court

Trusts–Express trusts–Constitution–Whether deed of family arrangement and deed of trust constituting testamentary disposition or perfectly constituted trust–Trusts–Trust estate–Whether settlor's interest in testator's estate before testator's estate administered capable of being subject of trust constituted by settlor

A testator (“the Testator”) died leaving a will (“the Testator's Will”) under which a sum was assigned to his daughter, the plaintiff, while the rest of his estate was devised and bequeathed to his wife (“the Settlor”) and his three sons (“the defendants”). However, this distribution engendered friction and dissatisfaction among the Testator's children and the Settlor decided to make fresh arrangements to redistribute her share of the Testator's estate as well as some of her own assets amongst her four children (the plaintiff and the defendants, collectively “the Beneficiaries”).

The Settlor executed a deed of family arrangement (“DFA”), a deed of agreement (“DOA”) and a deed of trust (“DOT”) (collectively “the Deeds”). Pursuant to the DFA and DOT, the Settlor declared herself to be trustee of all properties (“the Trust”) that she had inherited from the Testator, as well as certain movable and immovable assets that she owned (collectively “the Assets”). The Assets settled in the Trust were expressly set out in the respective schedules to the DFA and DOT (“the Schedules”). Clause 6 of the DOT also provided that upon the death of the Settlor, her personal representatives were to convey all the assets to her children, with the plaintiff receiving 10% of the assets and the remaining 90% to be shared among the defendants equally. The defendants were appointed by the Settlor as her personal representatives in her last known will (“Last Will”). After the Settlor's death, the defendants also became the executors of the Testator's Will.

The plaintiff sought, inter alia, an order that the defendants provide “proper particulars” and an account of the Assets. On the other hand, the defendants denied that the Trust had been properly constituted. They asserted that, even if effective, the DOT was a mere testamentary disposition and that the DOT, in particular cl 6 thereof, had been superseded by the Settlor's Last Will wherein she had left all her property to them in equal shares except for the sum of $500,000 set aside for the plaintiff. The issues before the court were: (a) whether the DOT and DFA were valid and enforceable and if so, whether they covered assets outside Singapore; and (b) whether the DOT and DFA covered the Settlor's own assets as well as the assets she had inherited under the Testator's Will.

Held, allowing the application:

(1) The Settlor's intention to create a trust was unequivocal. There could be no doubt that the Settlor was at the material time aware of the distinction between trusts and wills. It was plain that the Settlor's intention in executing the DFA and the DOT was to provide for what was in her view a more equitable distribution of the family assets: at [13] and [14].

(2) The arrangement entered into was not a mere ordinary contractual or trust arrangement, but a family arrangement. Given the Settlor's and her children's manifest intentions at the material time, the Deeds should not be interpreted with an excessive degree of formalism. The task of the court in construing such documents was to resolve, upon a fair reading of the documents, what the Settlor's intention was, and to give effect to it: at [17].

(3) The DFA and DOT had to be construed as one transaction. The intention of the Settlor was to be gathered from the tenor of the Deeds as well as the relevant circumstances at the time the trust was created. It was also a prosaic proposition that if a particular construction of a document would render it ineffectual thereby frustrating the apparent object of that document, while another construction ex facie less appropriate, looking at the words themselves, would produce a different effect, the latter interpretation was to be applied, if it could possibly be supported by anything in that document: at [19].

(4) It was plain that the subject matter of the Trust was confined to and limited by the Schedules. The DFA was not intended to and did not cover other assets of the Settlor and the Settlor was at liberty at all material times to dispose of these and other assets not embraced by the Schedules by means of a testamentary disposition. Her subsequent wills were to that extent neither entirely bereft of substance nor of effect: at [20] and [21].

(5) The objects or beneficiaries of the Trust were also clearly defined. Paragraph 5 of the recital of the DFA and cl 1 of the DFA declared and confirmed that the Settlor held the Assets in the Schedules “as a Trustee for all Beneficiaries holding the said assets in trust for them”: at [22].

(6) The Trust had been declared with the utmost clarity and precision and was a completely constituted trust. Once declared, the Settlor retained only the legal interest or the bare equitable title mutatis mutandis and the beneficial interest in the Assets was conveyed to the beneficiaries of the Trust. Like a gift, a completely constituted trust was immediately binding upon the Settlor and his personal representatives unless a power of revocation had been expressly reserved: at [24].

(7) Clause 6 did not amount to a stand-alone testamentary disposition that failed to comply with the Wills Act. Clause 6 should not be read in isolation, but had to be construed in the context of both the entire scheme as well as the DFA and the DOT. The Settlor was simply providing for the termination of income distribution upon her demise. The Assets were then to be distributed among the Beneficiaries in clearly stipulated proportions: at [27].

(8) The acid test as to whether an instrument possessed a testamentary character was whether the instrument was revocable. The arrangement in the instant scenario clearly failed that test. It was incorrect for the defendants to assert that the Settlor had retained residual control over the “remainder interest” of her assets that would arise upon her demise. Section 6 of the Wills Act did not apply to the creation and administration of a trust. All the Settlor was required to do for the purposes of constituting a valid trust in this case was to furnish in writing provision for the disposal of land in accordance with s 7 of the Civil Law Act (Cap 43, 1999 Rev Ed): at [28].

(9) Generally speaking, whenever a declarant identified the objects, subject matter as well as the manner in which such subject matter should be dealt with, he created a trust unless he clearly reserved a right to revoke it. In the present case it was clearly the Settlor's intention, as manifested by cl 2 of the DOT, for the DFA and the DOT to have immediate effect. It therefore mattered not if performance or some part thereof was to take place on or after the Settlor's death: at [33].

(10) The right of a beneficiary to have the estate properly administered was described as a chose in action that could be the subject of a settlement. In the circumstances, the Settlor was able to promptly and immediately convey to the Beneficiaries immediately upon execution of the DFA and the DOT all her interests and rights in the estate of the Testator: at [38].

(11) Even assuming arguendo that the Settlor's interest in the Testator's estate could not have been conveyed, the defendants have conveniently chosen to ignore the fact that the other Assets particularised in the Schedules were capable of being instantly conveyed by way of an inter vivos trust. The plaintiff was therefore entitled, at the very least, to an account for all the remaining assets stated in the Schedules. The defendants had absolutely no basis to turn down any such request for particulars of their administration of the Settlor's estate: at [38].

Baird (Luvinia) v Baird (Dickson) [1990] 2 AC 548 (refd)

Beyer v Beyer [1960] VR 126 (refd)

Cock v Cooke (1866) LR 1 P & D 241 (refd)

Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694 (refd)

Ellenborough, In Re [1903] 1 Ch 697 (refd)

Hamilton, In re [1895] 2 Ch 370 (refd)

Leigh's Will Trusts, In re [1970] Ch 277 (refd)

Manks v Whiteley [1912] 1 Ch 735 (refd)

Marshall (Inspector of Taxes) v Kerr [1995] 1 AC 148 (refd)

Wonnacott v Loewen (1990) 44 BCLR (2d) 23; 1990 CanLII 976 (folld)

Yeap Cheah Neo v Ong Cheng Neo (1875) LR 6 PC 381; 1 Ky 326 (refd)

Civil Law Act (Cap 43, 1999 Rev Ed) s 7

Wills Act (Cap 352, 1996 Rev Ed) s 6 (2)

Tan Kok Quan SC and Ang Wee Tiong (Tan Kok Quan Parttnership) for the plaintiff

Kenny Chooi and Kelvin Fong (Yeo-Leong & Peh LLC) for the first and second defendants

Tan Siah Yong (Piah Tan & Partners) for the third defendant.

V K Rajah J

1 Chow Cho Pon (“the Testator”) died on 3 August 1997 leaving a will dated 12 January 1994 (“the Testator's Will”). Under the terms of the Testator's Will, his wife Grace Chow (“the Settlor”) and a senior lawyer (collectively “the Original Trustees”) were appointed as executors and trustees. After assigning a sum of $1,000 to his daughter (the plaintiff), the Testator devised and bequeathed:

(a) his half share in 35 Ridout Road, Singapore to the Settlor free of all debts and all estate and other duties; and

(b) his residuary estate whatsoever and wheresoever other than and excluding property in Australia but including 217 and 217A Queens Road Central, Hong Kong and 42 Jervois Street, Hong Kong to the following persons in the shares as apportioned below:

i Grace Chow (wife)	-	2 shares
ii Chow Kwok Chi (son)	-	2 shares
iii Chow Kwok Chuen (son)	-	1 share
iv Chow Kwok Ching (son)	-	2 shares

2...