Tan Boon Teck Donald v Lum Shih Kai

• Jurisdiction: Singapore
• Judge: Christopher Tan JC
• Judgment Date: 08 December 2023
• Docket Number: Originating Application No 956 of 2023
• Court: High Court (Singapore)

Tan Boon Teck Donald

and

Lum Shih Kai

[2023] SGHC 347

Christopher Tan JC

Originating Application No 956 of 2023

General Division of the High Court

Succession and Wills — Construction — Executor of estate seeking order to sell estate's property notwithstanding restriction against sale in will — Whether court empowered to sanction sale of estate's property notwithstanding restriction against sale in will — Section 4 Conveyancing and Law of Property Act 1886 (2020 Rev Ed)

Succession and Wills — Construction — Executor of estate seeking order to sell estate's property notwithstanding restriction against sale in will — Whether court empowered to sanction sale of estate's property notwithstanding restriction against sale in will — Section 56(1) Trustees Act 1967 (2020 Rev Ed)

Trusts — Variation — Inherent jurisdiction of court — Executor of estate seeking order to sell estate's property notwithstanding restriction against sale in will — Whether court should exercise its inherent powers to vary or disregard terms of trust

Held, dismissing the application:

(1) Section 4 of the Conveyancing and Law of Property Act 1886 (2020 Rev Ed) empowered the court to make an order on any question arising out of or connected with a contract for the sale of land (not being a question affecting the contract's validity or existence). However, this provision was inapplicable on the facts as the focal point of the application was not on the contract of sale but the Testatrix's will, which was the instrument conferring title to the Property: at [16] and [17].

(2) The court could exercise its inherent powers to vary the terms of a trust under certain circumstances. These powers should be invoked only in exceptional circumstances and not be exercised simply because the act or transaction concerned would be beneficial to the trust. Ultimately, the court's inherent powers in this context should be exercised to give effect to the intentions of the settlor or testator, as expressed in the trust instrument or will, and not used to arrogate to the court any overriding power to disregard or rewrite the instrument's clauses. The exercise of the court's inherent powers was not justified on the facts as it would ride roughshod over the explicit wishes of the Testatrix: at [21] and [23].

(3) Section 56(1) of the Trustees Act 1967 (2020 Rev Ed) allowed the court to supplement gaps in the trustee's powers even outside of pressing exigencies. However, while this provision could empower trustees to do what the absence of power impeded them from doing, it could not be used to authorise acts or transactions that were expressly forbidden by the trust instrument. This provision was inapplicable on the facts as any sale of the Property within three years of the Testatrix's demise had been expressly forbidden by the will. There was also no overriding intention by the Testatrix within the will that would be frustrated by adherence to the three-year moratorium: at [28], [29] and [31].

Case(s) referred to

Downshire Settled Estates, Re; Chapman's Settlement Trusts, Re; Blackwell's Settlement Trusts, Re[1953] Ch 218 (folld)

Hughes and Ashley's Contract, Re[1900] 2 Ch 595 (refd)

Leo Teng Choy v Leo Teng Kit[2000] 3 SLR(R) 636; [2001] 1 SLR 256 (distd)

Nalpon Zero Geraldo Mario, Re[2013] 3 SLR 258 (refd)

Ng Eng Ghee v Mamata Kapildev Dave[2009] 3 SLR(R) 109; [2009] 3 SLR 109 (refd)

Rajabali Jumabhoy v Ameerali R Jumabhoy[1998] 2 SLR(R) 434; [1998] 2 SLR 439 (folld)

Roberto Building Material Pte Ltd v Oversea-Chinese Banking Corp Ltd[2003] 2 SLR(R) 353; [2003] 2 SLR 353 (refd)

Tan Han Yong v Kwangtung Provincial Bank[1993] 1 SLR(R) 255; [1993] 1 SLR 971 (refd)

Tippett's and Newbould's Contract, Re(1887) 37 Ch D 444 (refd)

Facts

The claimant was the sole executor and trustee of the estate of his late sister (“the Testatrix”). The main asset in her estate was a condominium unit (“the Property”) which was subject to a mortgage securing an overdraft loan owed by the Testatrix to the United Overseas Bank Ltd (“UOB”). Although UOB had earlier obtained an order for the delivery of vacant possession of the Property on account of an outstanding overdraft, UOB did not enforce the order while the Testatrix was alive. The Testatrix also owed sums to the management corporation (“MC”) overseeing the condominium development.

While the Testatrix's will empowered the executor to sell the Property, there was an express prohibition against the sale of the Testatrix's immovable property within three years of her death. However, as the estate possessed insufficient cash to service the mortgage and the debt owing to the MC, the claimant decided to sell the Property, granting the defendant an option to purchase the Property. After this option was exercised by the defendant, his solicitors discovered the restriction on the sale of the Property in the Testatrix's will and asked the claimant to obtain a court order sanctioning the sale.

The claimant brought the present application for an order that the sale of the Property be completed on the scheduled completion date, notwithstanding the restriction in the Testatrix's will.

Legislation referred to

Conveyancing and Law of Property Act 1886 (2020 Rev Ed) ss 4(1), 4(2) (consd)

Trustees Act (Cap 337, 1985 Rev Ed) s 59(1)

Trustees Act 1967 (2020 Rev Ed) s 56(1) (consd)

Trustees Act 1925 (c 19) (UK) s 57

Vendor and Purchaser Act 1874 (c 78) (UK) s 9

Tan Jing Poi and Leow Wei Jie Andy (Keystone Law Corporation) for the Claimant;

Selina Yap Sher Lin and Sasipriya D/O Shanmugamnanda (Harry Elias Partnership LLP) for the Defendant.

8 December 2023

Christopher Tan JC:

1 This was an application by the Claimant (“the Application”) for an order to complete the sale of a condominium apartment at 79 Farrer Drive (“the Property”). The Property was the main asset in the estate of the Claimant's late sister (“the Testatrix”), of which the Claimant was the sole executor and trustee. The Application was made to surmount an express restriction in the Testatrix's will (“the Will”) prohibiting the sale of the Property within three years of her death.

2 I dismissed the Application and now provide the grounds of my decision.

Background facts

3 The Testatrix passed away on 22 January 2023. The Will, which was dated 21 July 2000, named the Claimant and one other person as the executors and trustees of the Testatrix's estate. As that other person predeceased the Testatrix, the Claimant was left as the sole executor and trustee. According to the schedule of assets annexed to the grant of probate (issued to the Claimant on 29 May 2023), the Testatrix owned only two assets: (a) the Property, which was valued at $3.2m at the time of her death; and (b) a DBS account containing $3,712.73.

4 The Property was subject to a mortgage securing an overdraft loan owing from the Testatrix to United Overseas Bank Ltd (“UOB”). On 26 May 2017, UOB obtained an order (“ORC 3359”) for the delivery of vacant possession of the Property to UOB, on account of the outstanding overdraft, although it appears that UOB did not seek to enforce the order while the Testatrix was still alive. Apart from the overdraft loan owed to UOB, the Testatrix also owed sums to the management corporation (“the MC”) overseeing the condominium development in which the Property was situated, arising from unpaid fees levied for the condominium's management and sinking funds, as well as cumulative interest on these fees.

5 Clause 8 of the Will empowered the executors to sell the Testatrix's immovable property, including the Property. Under the Will, the proceeds from such sales were to go towards the Testatrix's residuary estate, which (after payment of outstanding liabilities) was to be used to set up a Christian fund (“the Fund”). Pertinently, cll 8(a) and 8(i) contained an express prohibition against the sale of the Testatrix's immovable property within three years of her death, except in certain situations. For convenience, I reproduce the relevant parts of cl 8 below:

8. Subject to the payment of all my debts, legacies testamentary, funeral expenses and estate duty payable upon or by reason of my death and subject to the abovementioned bequests, I devise and bequeath upon trust all my remaining monies, shares, unit trusts, properties movable and immovable whatsoever and wheresoever situate (hereinafter called ‘my Estate’) to my Trustees to carry out the directions, acts and conditions following:-

a) to sell call in convert into cash as part of my Estate (except that my Trustees will not sell [the Property] or any of my immovable property wherever situate within the first three years of my demise), with the power to sell all or part thereof and to postpone at their discretion as they shall think fit, if possible to achieve a profit but without any liability for loss;

b) with the proceeds from such sale or conversion and such of my Estate as is not disposed of to hold and set up a fund to be known as FLORENCE TAN [ie, the name of the Testatrix] CHRISTIAN EVANGELISM FUND (hereinafter referred to as ‘the Fund’), to be used for the propagation of the Gospel of the Lord Jesus Christ;

c) The following shall comprise the management committee (‘the Committee’) responsible for the administration control and distribution of the Fund (as is herein in my Will described or set out):- [there were four members of the Committee: the Claimant and his three other siblings]

…

g) Monies required to be invested by the Fund may at the discretion of the Committee be applied or invested in fixed deposits with Banks and Finance Companies or in the purchase of such trustee approved stocks, funds, bonds, shares, securities or other investment of property of whatsoever nature and wheresoever situate as the Committee shall deem fit and proper.

…

i) Under no circumstances shall my Trustees or the Committee be empowered to sell [the Property] or any of my...