Ho Kon Kim v Lim Gek Kim Betsy: Breach of Trust & Mortgage Dispute
In Ho Kon Kim v Lim Gek Kim Betsy, the Singapore Court of Appeal heard two appeals: one by Mdm Ho Kon Kim against Ms Betsy Lim Gek Kim and RHB Bank Bhd, and another by Mr James Leslie Ponniah and Mr Wong Ann Pang against a costs order. Mdm Ho claimed breach of trust against Ms Lim and knowing receipt of trust property against RHB, related to a property sale agreement where Mdm Ho was to receive a house in return. The court allowed Mdm Ho's appeal, finding Ms Lim in breach of trust and RHB holding part of the property on constructive trust for Mdm Ho. The court also allowed the appeal by Mr Ponniah and Mr Wong, setting aside the costs order against them.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Both appeals allowed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding breach of trust and mortgage dispute over property sale. Court found a constructive trust existed, favoring Ho Kon Kim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ho Kon Kim | Appellant | Individual | Appeal Allowed in Part | Partial | Michael Khoo, Josephine Low |
| Lim Gek Kim Betsy | Respondent | Individual | Appeal Allowed | Lost | M Amaladass, Sivakolunthu, Gn Chiang Soon |
| William Lai & Alan Wong | Respondent | Law Firm | Claim Dismissed | Dismissed | Leslie Chew, Lionel Tay, Esther Ling |
| RHB Bank Bhd | Respondent | Corporation | Appeal Allowed | Lost | |
| James Leslie Ponniah | Other | Individual | Appeal Allowed | Won | |
| Wong Ann Pang | Other | Individual | Appeal Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of Appeal | No |
| L P Thean | Justice of Appeal | No |
| Yong Pung How | Chief Justice | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Michael Khoo | Michael Khoo & Partners |
| Josephine Low | Michael Khoo & Partners |
| M Amaladass | M Dass & Co |
| Sivakolunthu | M Dass & Co |
| Gn Chiang Soon | M Dass & Co |
| Leslie Chew | Khattar Wong & Partners |
| Lionel Tay | Khattar Wong & Partners |
| Esther Ling | Khattar Wong & Partners |
| C R Rajah | Tan Rajah & Cheah |
| Chew Kei-Jin | Tan Rajah & Cheah |
| Tan Kok Quan | Tan Kok Quan Partnership |
| Chia Boon Teck | Tan Kok Quan Partnership |
4. Facts
- Mdm Ho was the registered proprietor of a property at 124 Branksome Road.
- Mdm Ho agreed to sell two-thirds of the property to Ms Lim, with a house to be built on the remaining one-third for Mdm Ho.
- Ms Lim obtained an overdraft facility from OCBC, secured by a mortgage on the entire property.
- Ms Lim discharged the OCBC mortgage and re-mortgaged the property to RHB for her company's benefit.
- RHB was aware of Mdm Ho's interest in the property and included a clause in the regulating agreement to protect it.
- Ms Lim became insolvent, and the construction of the house for Mdm Ho was not completed.
5. Formal Citations
- Ho Kon Kim v Lim Gek Kim Betsy and Others and Another Appeal, CA 164/2000,167/2000, [2001] SGCA 62
6. Timeline
| Date | Event |
|---|---|
| Dr. Foo Chee Guan purchased the property at 124 Branksome Road. | |
| Robert defaulted on interest payments to Keppel Finance Ltd. | |
| Mdm Ho was introduced to Ms Lim and Mr Wee. | |
| Derby offered to buy two-thirds of the property for $4.2m and a house. | |
| Mdm Ho accepted $88,000 from Derby as earnest money. | |
| Mdm Ho gave written permission to Derby to apply for planning permission. | |
| Mr Wong sent a draft option to WLAW for consideration. | |
| Ms Leong returned the draft option to Mr Wong with amendments. | |
| Mdm Ho signed the option. | |
| Derby sent a letter to WLAW indicating the plot selected by Mdm Ho. | |
| Ms Lim paid Mdm Ho $332,000 and exercised the option. | |
| Sale of the property to Ms Lim was completed and mortgaged to OCBC. | |
| Ms Lim discharged the OCBC mortgage and re-mortgaged it to RHB. | |
| Planning permission was granted for the erection of three detached houses. | |
| Mdm Ho vacated the property. | |
| Mr Wong informed WLAW that Mdm Ho had vacated the property. | |
| Mr Wong sent another letter requesting OCBC's permission to lodge a caveat. | |
| Mr Wong lodged a caveat on the property. | |
| Construction works on the property had ceased. | |
| Civil Appeal No 164 of 2000 and Civil Appeal No 167 of 2000 were filed. | |
| Decision Date |
7. Legal Issues
- Breach of Trust
- Outcome: The court found that Ms Lim committed a breach of trust in relation to Mdm Ho's equitable interest in the property.
- Category: Substantive
- Sub-Issues:
- Want of probity
- Detriment to vendor
- Disposition of trust property
- Constructive Trust
- Outcome: The court imposed a constructive trust on RHB in respect of Mdm Ho's interest in the property.
- Category: Substantive
- Sub-Issues:
- Unconscionable conduct
- Knowing receipt of trust property
- Repudiation of interest
- Indefeasibility of Title
- Outcome: The court held that the indefeasibility of title did not prevent claims in personam against the registered proprietor.
- Category: Substantive
- Sub-Issues:
- Exceptions to indefeasibility
- Fraud
- Action in personam
- Wasted Costs Order
- Outcome: The court set aside the order for wasted costs against Mr Ponniah and Mr Wong.
- Category: Procedural
- Sub-Issues:
- Improper conduct
- Unreasonable conduct
- Negligence
8. Remedies Sought
- Monetary Damages
- Declaration of Trust
- Specific Performance
9. Cause of Actions
- Breach of Trust
- Knowing Receipt of Trust Property
10. Practice Areas
- Commercial Litigation
- Real Estate Law
- Trusts and Estates
- Conveyancing
- Mortgages
11. Industries
- Real Estate
- Banking
- Legal Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tataurangi Tairuakena v Mua Carr | New Zealand Supreme Court | Yes | [1927] NZLR 688 | New Zealand | Cited for the principle that the indefeasibility of title does not affect contracts or trusts created by the registered proprietor. |
| HSBC Trustee (Singapore) v Lycee Francais de Singapour | Singapore Court of Appeal | Yes | [1996] 2 SLR 24 | Singapore | Cited for approving the principle in Tataurangi Tairuakena v Mua Carr regarding indefeasibility of title. |
| Gibbs v Messer | Privy Council | No | [1891] AC 248 | United Kingdom | Cited for the principle that persons dealing with a registered proprietor are not required to investigate the history of the title. |
| Teo Siew Peng v Neo Hock Pheng | High Court of Singapore | No | [1999] 1 SLR 293 | Singapore | Cited for the exceptions to indefeasibility of title, including fraud and claims in personam. |
| Grgic v Australian and New Zealand Banking Group Ltd | New South Wales Court of Appeal | Yes | [1994] 33 NSWLR 202 | Australia | Cited for the definition of fraud in the context of Torrens system legislation. |
| Frazer v Walker | Privy Council | Yes | [1967] 1 AC 569 | United Kingdom | Cited for the principle that registration confers indefeasibility of title, but does not deny claims in personam. |
| Bahr v Nicolay (No 2) | High Court of Australia | Yes | [1988] 164 CLR 604 | Australia | Extensively discussed and relied upon for the principle that a purchaser who takes title with notice of an unregistered interest and agrees to be bound by it is subject to that interest. |
| Binions v Evans | English Court of Appeal | Yes | [1972] Ch 359 | England and Wales | Cited for the principle that a purchaser who takes land subject to a contractual license holds it on constructive trust for the beneficiary. |
| Lyus v Prowsa Developments | English High Court | Yes | [1982] 2 All ER 953 | England and Wales | Cited for the principle that a purchaser who acquires land with a stipulation to honor a prior contract holds the land on constructive trust to give effect to that contract. |
| Barnes v Addy | English Court of Appeal | No | [1874] LR 9 Ch App 244 | England and Wales | Cited for the principle that strangers are not made constructive trustees unless they receive trust property or assist with knowledge in a dishonest design. |
| Ridehalgh v Horsefield | English Court of Appeal | Yes | [1994] Ch 205 | England and Wales | Cited for the three-stage test for wasted costs orders against legal representatives. |
| Tang Liang Hong v Lee Kuan Yew | Singapore Court of Appeal | Yes | [1998] 1 SLR 97 | Singapore | Cited for approving the tests and propositions of law laid down in Ridehalgh v Horsefield regarding wasted costs orders. |
| Assets Co v Mere Roihi | Privy Council | No | [1905] AC 176 | United Kingdom | Cited for the definition of fraud as actual fraud, not constructive or equitable fraud. |
| Waimiha Sawmilling Co (in liquidation) v Waione Timber Co | Privy Council | No | [1926] AC 101 | United Kingdom | Cited for the definition of fraud as actual fraud, not constructive or equitable fraud. |
13. Applicable Rules
| Rule Name |
|---|
| O 59 r 8 Rules of Court |
| O 59 r 8(1) Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Land Titles Act (Cap 157, 1994 Ed) | Singapore |
| Land Titles Act (Cap 157, 1994 Ed) s 46(1) | Singapore |
| Land Titles Act (Cap 157, 1994 Ed) s 46(2) | Singapore |
| Land Titles Act (Cap 157, 1994 Ed) s 47(1) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Constructive Trust
- Equitable Interest
- Indefeasibility of Title
- Mortgage
- Breach of Trust
- Regulating Agreement
- Sale Agreement
- Caveat
- Facility Agreement
- Plot 3
15.2 Keywords
- breach of trust
- mortgage
- land titles act
- constructive trust
- indefeasibility
- singapore
- property law
16. Subjects
- Trust Law
- Property Law
- Civil Litigation
- Banking Law
17. Areas of Law
- Trusts
- Land Law
- Civil Procedure
- Legal Profession
- Registration of Title
- Constructive Trusts