Xu Zhigang v Wang Fang

• Jurisdiction: Singapore
• Judge: Audrey Lim J
• Judgment Date: 19 November 2020
• Neutral Citation: [2020] SGHC 254
• Court: High Court (Singapore)
• Docket Number: Suit No 196 of 2019
• Published date: 25 November 2020
• Year: 2020
• Hearing Date: 16 July 2020,02 July 2020,21 July 2020,17 July 2020,14 July 2020,09 July 2020,31 August 2020,23 July 2020,15 July 2020,07 July 2020,30 June 2020,08 July 2020,01 July 2020,03 July 2020
• Plaintiff Counsel: Tan Chee Meng SC, Jenny Tsin, Ho Wei Jie and Ephraim Tan Hui Rong (WongPartnership LLP)
• Defendant Counsel: Lee Eng Beng SC, Jeremy Gan Eng Tong, Doreen Chia Ming Yee and Tao Tao (Rajah & Tann Singapore LLP)
• Subject Matter: Trusts,Express trusts,Gifts,Presumptions against,Resulting trusts,Equity,Estoppel,Promissory estoppel
• Citation: [2020] SGHC 254

Audrey Lim J: Background

The plaintiff (“Xu”), a Chinese national and businessman, had an extra-marital affair with the defendant (“Wang”) from 2014 to 2017. In 2019, Xu commenced this suit to claim that two sums totalling US$9.6 million, an apartment and a car, which were with Wang, belonged to him. Wang claimed that he had gifted them to her.

The parties first met on a flight in 2011, where Wang was working as a flight attendant. They met again around September 2013 and thereafter communicated more frequently. Between December 2013 and February 2014, Xu transferred money to Wang, totalling about $4,198,000.¹ Wang used the money to purchase an apartment at The Interlace (“the Apartment”) and a Mercedes Benz (“the Car”), both registered in her name. The Option to Purchase (“OTP”) for the Apartment was signed on 12 December 2013 while the Car was purchased around 14 January 2014.² Around end January to early February 2014, Xu and Wang spent time together in China, including visiting Wang’s parents during Chinese New Year (“CNY”). They began a romantic relationship in early to mid February 2014 (“the Relationship”).³

In February 2014, Wang discovered that Xu had a relationship with one Wang Cong. She was very upset and wanted to break up with him. Xu informed her that he was no longer with Wang Cong but Wang Cong was still working in Eastport Petrochemical (Singapore) Pte Ltd (“Eastport”), of which he was then the main shareholder.⁴ In January 2014, when Wang was working with United Overseas Bank (“UOB”), Xu procured employment for her at Eastport. Wang was employed at Eastport from around April or May 2014 to June 2016 and was paid a monthly salary of $10,000 although she did not do any substantive work.⁵

Around 2 July 2014, US$2.6 million belonging to Xu was transferred to Wang (“1st USD Sum”).⁶ In January 2015, Xu was to receive some funds from Eastport. He gave instructions for the funds to be transferred to Hao Huanchun (“Hao”), his chauffeur and assistant in China, who then transferred US$9 million to Wei Jinzhi (“Wei”), Xu’s employee. On Xu’s instructions, Wei then transferred US$7 million to Wang (“2nd USD Sum”) around 4 February 2015. The Relationship ended in November 2017.⁷ The 1st and 2nd USD Sums will be collectively referred to as “the USD Sums”.

Applicable legal principles

Wang claimed that the USD Sums, Apartment and Car (“the Properties”) were gifts to her. Conversely, Xu claimed that she held them on trust for him, relying on express trust, presumption of resulting trust, resulting trust and common intention constructive trust.

A valid gift inter vivos is made when there is an intention to gift and delivery of the precise subject matter of the gift (Lee Hiok Tng (in her personal capacity) v Lee Hiok Tng and another (executors and trustees of the estate of Lee Wee Nam, deceased) and others [2001] 1 SLR(R) 771 at [35]). The court will objectively assess the donor’s subjective intentions at the time of the property transfer (Tan Yok Koon v Tan Choo Suan and another and other appeals [2017] 1 SLR 654 (“Tan Yok Koon”) at [83]).

An express trust arises when there is certainty of intention, subject matter and object of the trust. In relation to certainty of intention, it is the substance and not the form of the alleged settlor’s words and conduct that is important, and his intention to create a trust may be inferred from his words or conduct and from the surrounding circumstances (see The State-Owned Company Yugoimport SDPR (also known as Jugoimport-SDPR) v Westacre Investments Inc and other appeals [2016] 5 SLR 372 at [55]–[56]). A presumption of resulting trust arises when one party has paid (wholly or partly) for the purchase of a property vested in the other party. A resulting trust may arise independently of a presumption of resulting trust if it can be shown that the transfer was not intended to benefit the recipient. The intention of the recipient is irrelevant to whether a resulting trust has arisen (see Chan Yuen Lan v See Fong Mun [2014] 3 SLR 1048 at [36], [43] and [44]). For a common intention constructive trust, there must be a common intention between the parties as to how the beneficial interest of the property is to be held and this intention may be express or inferred (Su Emmanuel v Emmanuel Priya Ethel Anne and another [2016] 3 SLR 1222 at [83]).

The analysis of whether any of the Properties were intended to be gifts to Wang or held on trust for Xu would essentially depend on whether there is sufficient evidence to show that the transferor (Xu) had intended to benefit the recipient (Wang) on a particular property.

Parties’ arguments regarding the Apartment and Car Xu’s version

Xu claimed that a presumption of resulting trust arose as he paid for the Apartment and Car. Alternatively, a resulting trust arose, and/or there was a common intention constructive trust, as parties had a common understanding that Xu would be the beneficial owner of the Apartment and Car, and that he had no intention to give them to Wang.⁸

Xu had purchased the Apartment for Wang to stay to improve her living conditions as he regarded her as a close friend and sibling. He also wanted his own place to stay whenever he was in Singapore. Wang and he viewed properties in November 2013, and he decided to purchase the Apartment on the same day that he viewed a similar unit at The Interlace. He bought the Apartment based on his preferences. Xu asked Wang to register the Apartment in her name out of convenience, as she lived in Singapore and he wanted her to help him handle the administrative matters concerning its purchase, renovation and fitting. Contrary to Wang’s claim, Xu did not inform Wang that the Apartment was her birthday gift. At the time he decided to purchase the Apartment in November 2013, the Relationship had not commenced and he did not know when Wang’s birthday was.⁹

Sometime in December 2013, Xu told Wang that he wanted to buy a car and he would let her drive it; he did not tell her that he was buying it for her. He decided to purchase a car as he needed to meet customers in Singapore and Eastport did not have a company car. Wang and he went to view cars around end December 2013 to early January 2014. He asked Wang to handle the administrative matters and register the Car in her name, for the same reasons pertaining to the Apartment.¹⁰ The decision to purchase the Car was also made before the Relationship started.

Wang’s version

Wang claimed that the Apartment and Car were unconditional gifts to her, or alternatively, that Xu had represented to her that they were gifts and he is now estopped from resiling from the said representation.¹¹

In early December 2013, Xu asked Wang when her birthday was. When she told him that it was on 10 December, Xu said that he would visit her on that day. He also asked her to arrange to view properties together and said that he would buy her a property for her birthday. Xu arrived in Singapore on 10 December 2013 and they viewed properties on 11 and 12 December. After viewing The Interlace, Wang stated that she liked it whereupon Xu said that he would buy the Apartment for her as a birthday gift.¹²

After signing the OTP for the Apartment on 12 December 2013, Xu said he would buy a car for Wang. They went to the car showroom on the same day to look for a Mercedes Benz but the model was not available. Xu thus asked Wang to order a car based on her preference.¹³ Around 4 January 2014, Wang saw the Car at the showroom and called Xu (who was in China), and Xu told her to buy it. She signed the sales agreement on 14 January 2014 and paid for the Car with the monies that Xu had transferred to her (see [2] above).

Findings on the Apartment and Car

I find, on balance, that Xu had intended to give the Apartment to Wang as a birthday present and that Xu had also bought the Car for her.

When the viewing of apartments took place and choice of apartment

The circumstances surrounding the purchase of the Apartment support Wang’s case that it was her birthday gift and that Xu had informed her as such.

I accept that when Wang told Xu that her birthday was on 10 December, he said he would buy her a property and asked her to arrange to view properties. Wang had booked his flights and arranged with a property agent to view properties, and the parties viewed The Interlace and another property. Xu was in Singapore from 10 to 13 December 2013 which coincided with Wang’s birthday¹⁴ and the OTP for the Apartment was signed shortly after her birthday.

I disbelieve that Xu had already decided to purchase the Apartment in November 2013 before he knew about Wang’s birthday.¹⁵ The phone messages showed that Wang first spoke to the property agent (“Liu”) on 9 December 2013, a day before Xu came to Singapore, to arrange to view The Interlace and another development with Xu. The records show that they viewed these two properties on 11 December, and it is undisputed that Xu viewed The Interlace with Wang on that date.¹⁶ Although Xu denied that he was present when Wang signed the OTP whilst Wang claimed that he was there,¹⁷ this was immaterial to the present issue. More likely than not, Xu was with Wang when she signed the OTP, as he had come to Singapore to spend time with her and they had looked for an apartment together. Xu admitted that he came for a birthday meal with Wang and gave her a jade bangle of about RMB 500,000 as a birthday gift.¹⁸

I also find that Xu had bought the Apartment for Wang because she liked it and not because of his preference. Until just before the viewing of properties, Xu did not inform Wang or Liu of any requirements of the property that he wanted to buy. He claimed that it was only after viewing a property at Orchard Road (ie, the Urban Resort), that he told Liu that he wanted a property with a patio and Liu then made some last minute calls to view The Interlace, and that all these happened...