Wee Chiaw Sek Anna v Ng Li-Ann Genevieve

• Jurisdiction: Singapore
• Judgment Date: 28 June 2013
• Date: 28 June 2013
• Docket Number: Civil Appeal No 140 of 2012
• Court: Court of Appeal (Singapore)

Wee Chiaw Sek Anna

Plaintiff

and

Ng Li-Ann Genevieve (sole executrix of the estate of Ng Hock Seng, deceased) and another

Defendant

[2013] SGCA 36

Chao Hick Tin JA

,

Andrew Phang Boon Leong JA

and

Tan Lee Meng J

Civil Appeal No 140 of 2012

Court of Appeal

Contract—Misrepresentation—Exaggeration—Husband stated in affidavit of assets that he would pay RM 1,200 in maintenance for each of his two children despite his financial position—Whether husband's statement was mere exaggeration or actionable misrepresentation

Contract—Misrepresentation—Fraudulent—Husband did not reveal earnings of more than US$25,000,000 to wife during marriage and divorce proceedings—Wife did not ask for division of assets—Whether husband fraudulently misrepresented his financial state to wife—Whether wife relied on husband's misrepresentation when she decided to forgo division of assets

Family Law—Matrimonial assets—Division—Husband entered into two contracts for US$25,000,000 and RM 900,000 during marriage—Part of contract sum vested in husband after separation—Whether such assets were susceptible to division during divorce proceedings

Restitution—Unjust enrichment—Wife allegedly forwent division of assets as a result of husband's fraudulent misrepresentation—Husband's moneys could otherwise have gone to wife on division—Husband's moneys settled into trusts—Whether trustees had been unjustly enriched at wife's expense

Trusts—Constructive trusts—Remedial constructive trust—Wife allegedly forwent division of assets as a result of husband's fraudulent misrepresentation—Wife lost opportunity to ask for share of husband's assets—Husband's moneys settled into trusts before his death—Whether remedial constructive trust could now be declared over assets in trusts

The appellant (‘the Appellant’) was the ex-wife of Ng Hock Seng (‘the deceased’), whose estate was represented by the first respondent. The Appellant and the deceased had been married for ten years before they separated on 7 December 1998. As part of their agreement to separate, the deceased undertook to pay for the medical insurance and all educational expenses (including overseas boarding school expenses) of the two children of the marriage. Prior to their separation, the deceased entered into two agreements for the consideration of US$25,000,000 and RM 900,000 respectively. Part of the US$25,000,000 vested in the deceased after the date of separation. The deceased did not reveal the existence of the two agreements to the Appellant, either during the marriage or in the course of their correspondence during the divorce proceedings. The deceased subsequently filed an affidavit of assets and means (‘the Affidavit’) as part of the divorce proceedings, where he stated that he was willing to pay RM 1,200 per child in maintenance ‘ [d]espite his financial position’. The Appellant claimed that the deceased had made fraudulent misrepresentations, intending to induce her to forgo division of assets. The Appellant claimed that she had relied on these fraudulent misrepresentations when she agreed not to ask for division of assets. She relied, in the main, on two sets of documents which she alleged contained the said fraudulent misrepresentations (viz, the correspondence between the deceased and the Appellant after 7 December 1998 and the Affidavit).

Nine years after the divorce was made absolute, the Appellant brought the present claim for fraudulent misrepresentation against the first respondent, after finding out about the moneys that the deceased had earned under the two agreements. The deceased died in 2004. Prior to his death, he settled the moneys earned under the two agreements into four trusts. The Appellant also brought suit against two of these trusts, which now bear some of the (potential) fruits of her claim in fraudulent misrepresentation. She claimed that the trustees (the second respondent) were unjustly enriched as a result of the deceased's fraudulent misrepresentation, as the moneys which they now held would otherwise have been hers if she had not been induced to forgo division. The Appellant also asked for a remedial constructive trust to be imposed over two of the trusts. The second respondent asserted, inter alia, the defence of laches, as the Appellant had waited nine years to bring this claim.

The trial judge dismissed all the Appellant's claims. She found that the Appellant was not induced to forgo division as the impression that the deceased was a man of straw was wholly the Appellant's own perception and not a result of any representation. She also found that the Appellant's claim in unjust enrichment was elusive as the court had no power to determine what the Appellant would have received on division given the passage of time since the divorce. The trial judge reasoned that the moneys the deceased received under the two agreement were not, in any event, matrimonial assets available for division. Moreover, the trial judge found that the funds had been comingled over the 12 years since they were set up, and no proprietary remedy could be asserted over either of the trusts. The Appellant appealed against the trial judge's findings in fraudulent misrepresentation and unjust enrichment.

Held, dismissing the appeal:

(1) Dishonesty was an essential element in the claim of fraudulent misrepresentation and required a high standard of proof. Recklessness was not sufficient to prove fraud. The testimony and credibility of the representor was essential as an indication of his subjective state of mind: at [30], [34] and [52].

(2) In assessing whether an alleged representation was made, the words used had to be read in their particular context, with reference to the purpose for which the document in which they were contained was made. The representor had to also have subjectively believed, however unreasonable that belief might be, that the statement made was false: at [36], [37] and [40].

(3) Reliance was the logical end of inducement, but viewed from a different vantage point. The question of inducement was approached from the perspective of the representor (here, the deceased). The question of reliance was approached from the perspective of the representee (here, the Appellant) ; in particular, reliance looks at the actions of the representee arising from a state of mind or will engendered by the representation concerned. For fraud to be made out, the representor (here, the deceased), had to have had the intention to induce, and the representee (here, the Appellant), had to have relied on the alleged representation. It followed that the representor and representee's testimony and credibility constituted a crucial part of the enquiry: at [43], [44], [47], [52] and [53].

(4) The deceased's correspondence with the Appellant related specifically to the issue of care and control, custody and maintenance of the two children of the marriage. Ascertaining assets for division was clearly not the intention of either party in the correspondence. The deceased tried to negotiate a lower monthly maintenance only in light of his contribution to the children's educational expenses. He took no pains to hide his financial assets, and gave direct answers to the Appellant's questions relating to support of the children. Viewed in its proper context as an attempt to settle the outstanding issue of care and control, maintenance and custody of the children, the deceased's statements were not a representation that he was impecunious. It was moreover evident that the deceased regarded the moneys under the two agreements as his own moneys, rather than moneys available for division, and so could not have intended to deliberately hide those earnings from the Appellant: at [61], [63], [64] and [66] to [68].

(5) The deceased's statement in the Affidavit that he could pay RM 1,200 in maintenance for each of his two children ‘ [d]espite his financial position’, whilst literally conveying the impression that the deceased was not in the financial position to pay a higher sum for maintenance of Joshua and Azura, was merely a form of exaggeration or posturing, and, looked at in this context, was not a misrepresentation to begin with. In any event, even assuming that the deceased had made a misrepresentation, his state of mind was important in ascertaining whether or not he had been guilty of fraud. Where a statement was ambiguous, the representee (here, the Appellant) had the burden of proving that the representor (here, the deceased) understood and intended those words in the sense alleged (viz, that the deceased had no assets to divide) in the context in which they were made. In this case, the context was set by the correspondence between the parties prior to the filing of the Affidavit, viz,to settle the sole outstanding issue of care and control, maintenance and custody of the children. Division was thus no longer a live issues operating on the minds of the deceased and the Appellant. The deceased thus could not have intended to deceive the Appellant with this statement. The phrase ‘ [d]espite my financial position’ which formed the crux of the Appellant's case was, at its highest, an ambiguous statement made in a different context, viz,that of attempting to secure a reduction in monthly maintenance: at [71], [82] to [84] and [87].

(6) The Appellant could not have relied on the statement as she had already closed her mind to the possibility that the deceased could have assets to divide. There was no evidence that the Appellant had interpreted the words in the sense in which they were false, rather than as an exaggerated statement that the deceased could not pay regular maintenance of RM 7,500 for both children. At the very most, any representation on his part would have affirmed her already settled course of action, but could not have induced or persuaded her as she had already made up her mind: at [86], [91] and [94].

(7) The moneys earned under the...