Tsu Soo Sin v Oei Tjiong Bin and Another

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 17 November 2008
• Neutral Citation: [2008] SGCA 46
• Date: 17 November 2008
• Subject Matter: Gifts,Whether notice to assignee required to complete equitable assignment,Whether completeness of gift dependent on donee's acceptance of gift,Equitable assignment,Application of maxim "equity is equality" to common law presumption of joint tenancy,Choses in Action,Assignment,Maxims,Donees,Whether assignees joint tenants or tenants in common,Donee's right to disclaim gift,Equity
• Docket Number: Civil Appeal No 4 of 2008
• Published date: 19 November 2008
• Defendant Counsel: Indranee Rajah SC and Daniel Soo (Drew & Napier LLC)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Michael Hwang SC and Katie Chung (Michael Hwang) and Brendon Choa (Acies Law Corporation)

17 November 2008 Judgment reserved

V K Rajah JA (delivering the judgment of the court):

1 This is an appeal against the decision of the trial judge (“the Judge”) in Suit No 514 of 2006 allowing the respondents’ claim against the appellant for the return of alleged loans totalling $870,000. The appellant is the legal representative of the estate of her late husband, Oei Boon Wan (“OBW”), who died intestate on 14 April 2002. The first respondent, Oei Tjiong Bin (also known and referred to here as “Tony Oei”), is an accountant by training who runs his own auditing firm, Tony Oei & Company, which he set up in 1972. Tony Oei, OBW’s elder brother, sued the appellant in her capacity as the legal representative of OBW’s estate for the return of $870,000 in loans allegedly extended to OBW through the second respondent, Siong Guan Company (Private) Limited (“the Company”). The Judge’s reasons for her decision in favour of the respondents on this issue are to be found in Oei Tjiong Bin v Tsu Soo Sin [2007] SGHC 215 (“the GD”). A further claim by the respondents against the appellant in her personal capacity is no longer a live issue. Accordingly, only the background facts pertinent to the present appeal will be recounted here.

Facts

2 The Company was incorporated on 28 September 1971 by Tony Oei and Wee Swee Hock. Tony Oei resigned as director in December 1972 but was reappointed on 16 March 1998. After the Company’s incorporation, Oei Tok Kek (Tony Oei and OBW’s father) (“OTK”) and Whang Ming Whee (Tony Oei and OBW’s eldest brother) (“Whang”) were appointed as directors. OTK was the major shareholder and chairman of the Company, and treated it as his own personal business, advancing moneys to the Company when he felt it needed funds and withdrawing moneys when he felt it had sufficient funds. OTK and Whang handled the Company’s operations. OTK was the quintessential Chinese family patriarch; he had three sons (Whang, Tony Oei and OBW) and four daughters; he neither involved any of his daughters in the Company’s business nor gave them any share of his estate in his will.

3 OTK’s favourite son was Whang. When Whang suddenly passed away on 23 September 1995, he was devastated. Not long after, OTK asked Tony Oei to move his auditing firm to the premises occupied by the Company. Tony Oei agreed and paid rent to the Company for his firm’s use of the Company’s premises. Whenever OTK made advances or withdrawals from the Company’s funds, he would direct the person in charge of the accounts to record the sums in the Company’s general ledgers under the name “Oei Tok Kek”. The Company’s cash books would contain credit and debit entries to reflect payments to or withdrawals from the Company. According to Tony Oei, OBW was never involved in the Company’s business although he was a shareholder (at the hearing, counsel informed us that Tony Oei and OBW each held 100,000 shares out of 1,500,000 shares at the time of OTK’s death). Tony Oei’s understanding was that the moneys advanced by his father to the Company were meant for OTK, Whang and Tony Oei himself as only the three of them were involved in the Company’s business. However, after Whang’s death, OTK added OBW’s name to the Company’s books, and between 1996 and 2003 entries were made under the names “Tony Oei/Oei Boon Wan”. Entries had earlier been made under two other “ledger accounts” reflected in the Company’s books: one in OTK’s sole name from 1994 to 1997, and another in the names of “Oei Tok Kek/Tony Oei” from 1995 which, upon the removal of OTK’s name in 1998, continued as “Tony Oei” from 1998 to 1999.

4 It is not disputed that OTK had OBW’s name added to the ledger in 1996 after Whang’s death. There is no evidence of him having expressly informed either OBW or Tony Oei of this addition, nor did he explain his intention for doing so. Tony Oei did not purport to know what his late father had precisely intended by adding OBW’s name, and in his testimony only “surmised that it was likely that the father included [OBW’s] name in case anything should happen to [Tony Oei] and [Tony Oei] died before [OBW]” [emphasis added] (see the GD at [7]). Ironically, it was the converse scenario that materialised when OBW passed away suddenly in 2002, less than three years after his father’s demise.

5 OTK’s will was dated 28 February 1997.[note: 1] In the will he bequeathed all his shares in the Company and another company, SLC Private Limited, to Tony Oei, with the residue of the estate to be divided equally amongst Tony Oei, OBW and Whang’s widow. Pertinently, the will did not provide specifically for the benefit of OTK’s advances to the Company, and the Company’s ledger continued to reflect credits and debits in the names of “Oei Tok Kek/Tony Oei” and “Tony Oei/Oei Boon Wan” even after the will was made. The first advance to be recorded under the names “Tony Oei/Oei Boon Wan” was a loan of $500,000 from OTK to the Company on 3 April 1996. On 31 December 1997, OTK transferred the remaining credit balance of $1m in his name to those of “Tony Oei/Oei Boon Wan”. On 6 March 1998 and 13 August 1999, Tony Oei made an advance of $500,000 in each instance to the Company; on both occasions the advance was recorded under the names “Tony Oei/Oei Boon Wan”. It is also relevant to note, however, that the second advance on 13 August 1999 came from a joint bank account in the names of OTK, Whang (who by then had passed away), Tony Oei and OBW. The Judge excluded both these advances from consideration on the basis that in each instance there was a resulting trust in favour of Tony Oei (at [104]–[105] of the GD), notwithstanding that OBW was the third surviving joint tenant of the bank account as of August 1999. She appeared to accept Tony Oei’s submission that there was a presumption of advancement from OTK to Tony Oei with respect to the moneys in this joint account because “[Tony Oei] recalled that the two signatories were himself and the father. The father had pre-signed cheques before he became ill and had instructed [Tony Oei] to countersign the cheques if [Tony Oei] needed money. [Tony Oei] submitted he had a right to use the moneys from the joint account in any manner he chose” (at [105]). OTK passed away on 12 October 1999. The very next day the Company repaid Tony Oei $300,000, debited against the names “Tony Oei/Oei Boon Wan”. Tony Oei appears to have initiated this move without notifying OBW.

6 Four advances from the Company to OBW followed this: first, on 29 December 1999, the Company issued a cheque of $300,000 payable to OBW (“the first loan”). According to Tony Oei, OBW had approached him for a loan though the reasons for this were neither volunteered nor queried. Tony Oei informed his brother that as the Company owed him substantial sums, he would arrange for the Company to advance the money. When the cheque dated 29 December 1999 was ready, Tony Oei arranged for it and the Company’s payment voucher to be passed to his sister, Ng Guat Hwa, who was said to be very close to OBW. OBW duly acknowledged receipt of the cheque by signing the Company’s payment voucher also dated 29 December 1999,[note: 2] which stated:

DEBIT A/c	Tony Oei/Oei Boon Wan
Pay To	Mr. Oei Boon Wan
Dollars	Three hundred thousand only.
In payment of	Return of Loan

7 In August 2000, OBW again allegedly approached his brother for a further loan of $300,000 (“the second loan”). As with the first loan and for the same reason, Tony Oei arranged for the Company to make the advance. He passed a cheque dated 15 August 2000 and a payment voucher to Ng Guat Hwa and OBW acknowledged receipt on the payment voucher. This payment voucher was largely similar to the first,[note: 3] stating:

DEBIT A/c	Tony Oei/Oei Boon Wan
Pay To	Mr. Oei Boon Wan
Dollars	Three hundred thousand only.
In payment of	A/C

As with the first loan, the second loan was duly recorded as a debit against the names “Tony Oei/Oei Boon Wan” in the Company’s ledger.

8 In September 2000, OBW allegedly requested yet another advance of $300,000 (“the third loan”) and received a cheque by the same process, accompanied by a payment voucher identical to that for the second loan. In March 2002, Ng Guat Hwa informed Tony Oei that OBW needed to borrow $270,000 (“the fourth loan”), and Tony Oei arranged for the Company to advance the money, just as he had done with the three previous loans. The fourth payment voucher, like the second and third ones, also indicated next to the printed words “In payment of” the typewritten word “A/C”.[note: 4] Shortly after this, OBW passed away suddenly on 14 April 2002. The Company repaid Tony Oei $5,000 and $2,000 on 15 and 17 April 2002 respectively, and he used the moneys for his brother’s funeral expenses. At the request of the Company’s auditors, OBW’s name was eventually removed from the ledger account after his demise.

9 The Company then made three more payments to Tony Oei totalling $57,584.91. The first cheque for $30,584.91 and two cheques for $13,500 each were debited against the names “Tony Oei/Oei Boon Wan”. On 7 November 2002, the Company paid $500,000 to Tony Oei, leaving a sum of $355,415.09 outstanding against the names “Tony Oei/Oei Boon Wan” as at 31 December 2002. On 1 August 2003, the Company ratified the loans amounting to $1,170,000 that had been made to OBW. On 29 December 2003, the Company repaid Tony Oei the remaining outstanding balance of $355,415.09. By then, OBW’s name had been removed from the Company’s ledger entries, leaving only Tony Oei’s name. As at 31 December 2003, the financial statements of the Company showed that no amounts “owed to director” remained.[note: 5]

10 On 11 August 2006, Tony Oei and the Company commenced the subject proceedings claiming against OBW’s estate the return of the second to the fourth loans:

Date	Amount
15 August 2000	$300,000
25 September 2000	$300,000
14 March 2002	$270,000
Total:	$870,000

11 The...