Shi Fang v Koh Pee Huat

• Jurisdiction: Singapore
• Judge: Chao Hick Tin J
• Judgment Date: 22 April 1996
• Neutral Citation: [1996] SGCA 28
• Date: 22 April 1996
• Subject Matter: Whether court entitled to take offer into account when assessing costs,Whether presumption of advancement rebutted,Wife's share,Civil Procedure,Whether nominal award ought to be disturbed,Family Law,Matrimonial home,Whether agreement, arrangement or understanding between husband and wife that house was to be shared beneficially proved,Without prejudice offer,Judge finding it difficult to place monetary value on wife's contributions,Division of assets,Costs,Trusts,Husband's minority shareholdings in company controlled by father,Matrimonial assets,Constructive trusts,Alleged reliance by wife on husband's promise for share of house,Division,House acquired prior to marriage and extensively renovated by husband's father,s 106(5) Women's Charter (Cap 353),Nominal award to wife,Whether she and the husband improved the house during marriage,Without prejudice offer not made on Calderbank basis,Presumption of advancement,Son admitting he held property on resulting trust for father,Shareholding acquired prior to marriage
• Docket Number: Civil Appeal No 172 of 1995
• Published date: 19 September 2003
• Defendant Counsel: Anamah Tan and Lim Li-Lian (Ann Tan & Associates)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Michael Hwang and Irene Wu (Allen & Gledhill)

Cur Adv Vult

There were two sets of proceedings before the High Court. First, there was S 1400/93, in which the respondent (the husband) sought, inter alia, a declaration that the house No 15, Jalan Pelepah (the house), which was registered in his name, was held by him in trust for his father, Khor Nai Tor (the father), an order requiring the appellant (the wife) to withdraw a caveat lodged by her on the property, and an order that the wife, who was then in occupation of the house, be required to deliver possession thereof. The second set of proceedings arose in DP 2323/93, in which the wife claimed maintenance and a share of the matrimonial assets consequent upon the dissolution of her marriage with the husband. The suit came on first for hearing, and in response to the trial judge`s suggestion the parties agreed that the evidence in one set of proceedings would be used for the purpose of the other, as there were common issues of fact in both sets of proceedings. Both sets of proceedings wereheard before the same judge, and at the conclusion, in a reserved judgment, the learned judge dismissed the claim of the husband in S 1400/93 and awarded to the wife a lump sum maintenance of $240,000 and a sum of $10,000 as her share of certain of the matrimonial assets in the divorce proceedings; but the learned judge made no order as to costs in both sets of proceedings. Against his decision, the wife has now appealed.

The facts

The material facts which are not in dispute have been set out in detail in the judgment below and we respectfully adopt the account thereof as narrated by the learned judge. The husband is the eldest of three sons of a family which has substantial wealth in shipping business. The family and its business are presided over by the husband`s father. The wife is a Chinese national who has since November 1990 been a permanent resident of Singapore. Her parents are researchers at a social science academy in Beijing. The wife and the husband first met in Beijing in July 1987. At that time, the husband was studying in the United States of America. The wife was a tour guide, working with a state travel organization. In the course of the next two and a half years, they kept in touch with each other over the telephone, and during his university vacations, the husband visited the wife in Beijing.

Eventually the parties were married in February 1990 in Beijing. In June 1990, the husband brought the wife to Singapore. They stayed at the house No 15, Jalan Pelepah, which is a semi-detached house situate at the rear of No 19, Jalan Pelepah where the husband`s parents live.

Unfortunately the marriage soon came under a severe strain; there were frequent quarrels between the couple and their relationship seriously deteriorated. In July 1991 the wife returned to China for a visit, and in the following month the husband spoke to her on the telephone and requested her to delay returning to Singapore. Arising from that conversation she became anxious and returned to Singapore in the same month. She found that the lock to the house No 15, Jalan Pelepah, had been changed and that her personal belongings had been removed and left in a room in No 19, Jalan Pelepah. She was not allowed to move back to the house, and she stayed with the husband`s parents for a few days at No 19, Jalan Pelepah. However, she was resolute in regaining possession of the house No 15, Jalan Pelepah and did so on her own: she scaled the wall and reinstalled herself there.

Thereafter, she sought legal advice, and on 3 October 1991 through her solicitors she lodged a caveat on the house. She claimed an interest as a beneficial co-owner on the ground that the property was the matrimonial home of herself and the husband, that she had a right of occupation, and that there was a constructive trust in her favour arising from the husband`s conduct and representation to her that she would have a beneficial interest in the house. In September 1992 the husband initiated proceedings in OS 829/92 seeking, inter alia, an order that the wife be required to withdraw the caveat. At the hearing, an order was made directing the originating process to proceed as if it had been commenced by a writ and that pleadings be filed. However, no further steps were taken by either of the parties in those proceedings. In June 1993, the husband took out a writ against the wife in S 1400/93. Following that in September 1993, the wife filed a petition fordivorce based on the husband`s desertion, which was not contested by the husband. A decree nisi was granted on 26 January 1994 and ancillary matters, namely, maintenance and division of matrimonial assets, and also costs were adjourned for further hearing. Suit No 1400 of 1993 came on for hearing and following that, these ancillary matters were heard and pursuant to the agreement evidence adduced at the hearing of the suit was used at the hearing of the ancillaries. The learned judge delivered his judgment on 10 October 1995 dealing with the issues in both sets of proceedings. On further hearing as to costs, the learned judge ordered that each party bear his or her own costs in both sets of proceedings. As regards the OS 829/92 a formal order was made on 27 October 1995 for the discontinuance of those proceedings.

The appeal

Before us three main issues have been raised, namely:

(i) whether there is a constructive trust of a share in the house in favour of the wife,

(ii) whether the wife is entitled to a share in the house under s 106 of the Women`s Charter (Cap 353), and

(iii) whether the wife`s share to the husband`s interests in the Lian Huat group of companies should be more than $10,000 having regard to the extent of the wife`s contributions to the growth of the business of Lian Huat group of companies.

There was also a subsidiary issue relating to the order as to costs made below.

Constructive trust

Mrs Tan for the husband raised a preliminary objection that there was no appeal from the judgment in S 1400/93 and hence the court has no jurisdiction to hear the wife on the issue of constructive trust. This objection had no merit and we dismissed it. In our view, short of a formal order for consolidation, S 1400/93 and DP 2323/95 were effectively consolidated below. The evidence in the suit was used for the purpose of hearing the ancillary matters in the divorce proceedings and there were common issues of fact in both sets of proceedings. The constructive trust was raised by the wife as a defence to the claim by the husband in relation to the house, and her claim of a share in the house was part of the real question in controversy between the parties in the divorce proceedings. The question whether or not there was a constructive trust obviously had a decisive bearing on the division of that property under s 106 of the Women`s Charter (Cap 353). The learned judge dealt with the issues raised in these proceedings as if the proceedings had been consolidated, and there was only one judgment covering both proceedings.

We now turn to consider the substantive issue of constructive trust. The house was purchased in 1983 at a price of $530,000. At that time, the husband was still studying in the United States. The purchase and finance therefor were arranged by the father. The money for the purchase of the house came from Unison Shipping Co Pte Ltd (Unison Shipping), one of the companies owned and controlled by the father. The payment was expressly reflected in the contemporaneous corporate records of the company as a loan to the husband and not to the father. Subsequently, when the company was seeking a listing on The Stock Exchange of Singapore Ltd, the husband confirmed in a letter to the company that he owed the balance of the loan and undertook to repay it on demand. A demand was made in March 1992 by the company for the repayment of the loan. According to the father that was done to `get back the house`; but nothing was in fact done to recover the loan. Neither did the husband ever make any repayment to Unison Shipping. The father`s evidence was that he never intended that his son should have to undertake a personal liability for the loan, and that the loan was in fact for his account.

The learned judge found that the purchase money was provided by the father, and that the father retained full control of the house like a true owner. The property was put in the son`s name simply to make it appear that it was the husband`s when it was not, and the object of the exercise was to evade estate duty payable on the death of the father. The learned judge said:

It seems clear from the father`s evidence that the reason why the property was put in the son`s name was, simply, to make it appear that it was the husband`s when it was not. It is a fair inference from what he himself says that the intention was to keep the property away from the notice of the estate duty authorities in the hope that it would not be taken into account as part of his estate when it should be as he will have remained the true owner retaining complete control of the property. As part of the scheme, documents such as the company resolution of 1 August 1983 and the letter of undertaking of 8 August 1989 were generated to show that the son took the loan from the company when there was never any intention to hold him to it.

On the father`s own evidence, the transaction does not appear to be a bona fide gift inter vivos which would take the property out of the pale of estate duty legitimately in accordance with the provisions of the Estate Duty Act.

Certain consequences flow from this finding. Since the house was bought with funds provided by the father, there was a presumption of resulting trust of that property in favour of the father. But as between the father and the son, this presumption was displaced by the presumption of advancement in favour of the son. Hence, the father was presumed to have made a gift of the house to the...