Toh Eng Tiah v Jiang Angelina and another appeal

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JCA
• Judgment Date: 05 March 2021
• Neutral Citation: [2021] SGCA 17
• Year: 2021
• Docket Number: Civil Appeals Nos 73 and 74 of 2020
• Published date: 10 March 2021
• Hearing Date: 18 January 2021
• Plaintiff Counsel: Lee Hwee Khiam Anthony and Wang Liansheng (Bih Li & Lee LLP)
• Defendant Counsel: Mahesh Rai s/o Vedprakash Rai and Wong Wan Kee Stephania (Drew & Napier LLC)
• Court: Court of Appeal (Singapore)
• Citation: [2021] SGCA 17
• Subject Matter: Inter vivos,Intention to create legal relations,Gifts,Sham,Contract

Andrew Phang Boon Leong JCA (delivering the judgment of the court):

This is an appeal concerning an intense – albeit brief – love affair gone awry. The parting was not amicable, to say the least, and the present proceedings are the result of both claim and counterclaim by the two former lovers. In the midst of the legal battle, two specific legal topics, as we shall see, take centre stage.

The first focuses on whether moneys transferred between the parties were gifts. If they were, then that would be the end of any claim because the essence of a gift is that, once transferred, it cannot (in the absence of some vitiating factor such as fraud or some independent agreement) be retrieved.

The other relates to an old legal chestnut – the parol evidence rule. In the Singapore context, the aforementioned rule is statutorily embodied within the Evidence Act (Cap 97, 1997 Rev Ed) (“EA”). In this appeal, its precise role has to be ascertained in the context of an alleged sham contract (which, although it has been addressed in passing before, appears to have been raised squarely for consideration for the first time in a Singapore court in this case). This – in turn – raises for this court the issue whether extrinsic evidence is admissible in this case and, if so, what the juridical basis is for the admission of such evidence. It might be useful, even at this preliminary juncture, to note that the parol evidence rule itself prohibits the introduction of parol or other extrinsic evidence to add to, vary or contradict a written instrument or contract; put simply, the express terms of the contract are to be found only in the written contract itself. As has been observed, “[t]he rationale for this rule is probably grounded on the objective theory of contract and (on a practical level) the attendant promotion of certainty as well as ensuring that only the best evidence possible is admitted” (see Andrew B L Phang & Goh Yihan, Contract Law in Singapore (Wolters Kluwer Law & Business, 2012) at para 993). The important point to note for the purposes of the present appeal is that the application of the parol evidence rule presupposes the existence of a contract in the first place. Hence, it follows that if the contract is indeed a sham, there is no existing contract to speak of (as, ex hypothesi, the parties had no intention to create legal relations, which is an essential element in the formation of a valid and binding contract), and the parol evidence rule is therefore not even engaged. We will elaborate upon this particular point later in this judgment.

So much by way of the briefest of capsule summaries of the present appeal, which is against the decision of the High Court judge (“the Judge”) in Toh Eng Tiah v Jiang Angelina [2020] SGHC 65 (“the Judgment”). We turn now to set out the facts and background, followed by the Judge’s decision.

Facts and background The parties

The appellant in CA/CA 73/2020 (“CA 73”) and the respondent in CA/CA 74/2020 (“CA 74”) is Mr Toh Eng Tiah (“Mr Toh”), who was the plaintiff below. The respondent in CA 73 and the appellant in CA 74 is Ms Angelina Jiang (“Ms Jiang”), the defendant below.

Mr Toh and Ms Jiang met each other sometime in November 2016. At the time, Mr Toh was around 55 years old and was married to one Mdm Chong Lee Yee (“Mdm Chong”). He had three grown children from a previous marriage. He was a businessman and the director and shareholder of a number of companies, including ST Paper Resources Pte Ltd (“Mr Toh’s company”). Ms Jiang was around 30 years old and was a licenced property agent and manager of a construction and engineering company. She was the owner of a property at 13 Prome Road at the material time. The parties entered into a romantic relationship sometime around 20 December 2016.

The money transferred

It was not disputed that Ms Jiang received money from Mr Toh on a number of occasions between December 2016 and March 2017. Mr Toh passed the money to her in various ways and we refer to these collectively as “transfers”, a neutral term. The transfers can be categorised into two classes: (a) general transfers of money between December 2016 and March 2017 (“General Transfers”); and (b) transfers related to the intended purchase of a property at 9 Hillcrest Road (“9 Hillcrest Transfers”).

The General Transfers are summarised in the following table:

Item	Date	Method of transfer	Amount ($)
1.	On or around 19 December 2016	Cheque	200,000
2.	On or around 22 December 2016	Tele-transfer	20,000
3.	On or around 28 December 2016	Cash	20,000
4.	29 December 2016	Tele-transfer	13,000
5.	3 January 2017	Cheque	10,000
6.	6 January 2017	Cheque	65,000
7.	6 January 2017	Cash	35,000
8.	10 January 2017	Cheque	50,000
9.	12 January 2017	Cheque	150,000
10.	24 January 2017	Cheque	82,000
11.	31 January 2017	Cheque	158,532
12.	6 March 2017	Tele-transfer	16,000
Total	819,532

It suffices here to note that apart from Item 1, which was remitted to Ms Jiang to assist her in purchasing a shophouse at 315 Balestier Road, the General Transfers were intended to be used for various expenses and to pay off debts that Ms Jiang owed.

Between January and February 2017, Ms Jiang also transferred various sums totalling $95,000 to Mr Toh. This amount formed part of Ms Jiang’s counterclaim.

There were four transfers related to the purchase of 9 Hillcrest Road, as follows (we continue the numbering from the table above):

Item	Date	Method of transfer	Amount ($)
13.	26 January 2017	Cheque	30,800
14.	27 February 2017	Cheque	123,200
15.	21 March 2017	Cheque	250,000
16.	24 March 2017	Cheque	872,000
Total	1,276,000

While the parties disputed the purpose for which 9 Hillcrest Road was being purchased, the facts surrounding that transaction are not controversial. On 12 January 2017, Mr Toh wanted to purchase 3H Hillcrest Road for $2,830,000, and issued a cheque for $28,300 as payment for the option fee. The parties then went to see 9 Hillcrest Road the next day and decided to buy it instead. Thus Mr Toh forfeited the option fee for 3H Hillcrest Road. On 26 January 2017, Mr Toh issued a cheque of $30,800 (being 1% of the purchase price of 9 Hillcrest Road) (Item 13 above) and the option to purchase was issued in Ms Jiang’s name. On 16 February 2017, Mr Toh passed a cheque for $123,200 to Ms Jiang through her solicitors handling the purchase and Ms Jiang used this to exercise the option. This cheque, however, was countermanded. It was only on 27 February 2017 that a new cheque for $123,200 was issued and then later handed to the vendor (Item 14 above).

When there were issues with the financing of the purchase, various proposals were considered and rejected by the parties. Sometime between 23 and 27 February 2017, they ultimately decided that some terms should be documented. On 27 February 2017, Ms Jiang instructed her solicitor, Mr Christopher Yong (“Mr Yong”) from Legal Solutions LLC/Kennedys Law, to begin preparing a formal document, and on 28 February 2017, she informed Mr Toh that she had done so. Thereafter a series of drafts was exchanged between Ms Jiang’s lawyers and Mr Toh’s lawyer, Ms Pamela Chong (“Ms Chong”) from Infinitus Law Corporation (“Infinitus Law”) (see the Judgment at [85]–[96]). These drafts resulted in what was called the Loan Facilities Agreement (“the LFA”). It suffices to note here that both sides had included terms in the LFA that appeared to protect their respective interests. Before the LFA was signed, Mr Toh passed a cheque of $250,000 to Ms Jiang (Item 15 above).

The LFA was signed on 24 March 2017 before a Commissioner for Oaths. The first recital of the LFA stated that Ms Jiang wished to invest in property and in particular in 9 Hillcrest Road. The third recital stated that at Ms Jiang’s request, Mr Toh had agreed to provide her with a loan facility. We summarise the key terms of the LFA as follows: The loan facility granted under the LFA was in the amount of $2m. Out of that sum, it was stated that Mr Toh had already advanced $1,128,000 by March 2017 (this included the $250,000 advanced on 21 March 2017) and that the remainder would be disbursed by cashier’s order or cheque for $872,000 (cl 2.2). There was to be no interest chargeable (cl 2.3), and the loan facility was stated to be the purpose of purchasing 9 Hillcrest Road (cl 2.4). The loan facility was to be fully repaid upon either the sale of 13 Prome Road or on the redemption date (ie, 10 years from the date of full disbursement of the loan facility or upon occurrence of an event of default per cl 1), whichever was earlier. However, if Ms Jiang wished to sell 13 Prome Road, Mr Toh was to be given the right of first refusal at a price to be mutually agreed with reference to the market price (cl 3.1). If Mr Toh agreed to purchase 13 Prome Road, Ms Jiang would be entitled to set off the loan against that purchase price (cl 3.2). If it was sold to a third party, the loan was to be deducted and paid from the sale proceeds. If Mr Toh passed away before the redemption date, the loan was to be deemed to be fully repaid and Ms Jiang’s obligations fully extinguished (cl 4).

The sum of $1,128,000 mentioned in cl 2.2 had been arrived at by adding Items 1 to 15 together then deducting the $95,000 which Ms Jiang had transferred to Mr Toh. This gave a figure of $1,128,532 which was then rounded down to $1,128,000.

On 24 March 2017, after the LFA was signed, Mr Toh handed a cheque for $872,000 to Ms Jiang (Item 16 above). Ultimately, however, the purchase of 9 Hillcrest Road did not go through – by a letter dated 31 March 2017, Ms...