Ong Siew Lay v Ong Boon Chuan: Trust over Shares in Tong Guan Food Products

In Ong Siew Lay v Ong Boon Chuan, the High Court of Singapore heard a claim by Ong Siew Lay against her brother, Ong Boon Chuan, for $2 million, representing the purchase price of shares in Tong Guan Food Products Pte Ltd. Ong Siew Lay claimed that their mother, Madam Chai, held the shares in trust for her, and that Ong Boon Chuan had purchased the shares but the money was to be returned to him and then repaid to her on request. The court found in favor of Ong Siew Lay, ordering Ong Boon Chuan to pay her $2 million plus interest and costs.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Ong Siew Lay sued Ong Boon Chuan for $2 million, claiming it was the purchase price of shares held in trust for her. The court ruled in favor of Ong Siew Lay.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ong Boon ChuanDefendantIndividualJudgment against DefendantLost
Ong Siew LayPlaintiffIndividualJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudgeYes

4. Counsels

Counsel NameOrganization
Josephine LowMichael Khoo & Partners
Andy ChiokMichael Khoo & Partners
Michael Khoo, SCMichael Khoo & Partners
James PonniahWong & Lim
Leong Sue LynnWong & Lim

4. Facts

  1. Mr. Ong had ten children with Madam Chai.
  2. Mr. Ong started a sole proprietorship, Tong Garden Product Services, selling snack food under the “Tong Garden” brand in the 1960s.
  3. In 1984, Mr. Ong fell seriously ill and called for a meeting to distribute his assets.
  4. Mr. Ong instructed that his shares be split amongst his children, with 20% going to each of the boys, and 10% to each of the girls, except Siew Hua.
  5. The 165,000 shares of the Company which were registered under his name were transferred to Heng Chuan, Teck Chuan and Siew Chin.
  6. In 1999, Madam Chai sold the shares she held in the Company to Boon Chuan for $2 million.
  7. The payment was made and then returned to Boon Chuan.
  8. Boon Chuan sent two text messages to Siew Lay in 2005 regarding the shares.

5. Formal Citations

  1. Ong Siew Lay v Ong Boon Chuan, Suit 404/2007, [2009] SGHC 99

6. Timeline

DateEvent
Tong Garden Product Services, a sole proprietorship, started by Mr. Ong
Shareholding structure of Tong Guan Food Products Pte Ltd as at this date
Mr. Ong fell seriously ill
Meeting held to distribute Mr. Ong's assets
Mr. Ong passed away
Shareholdings of Madam Chai, Leong Chuan, Heng Chuan and Teck Chuan doubled by an issue of shares
Siew Kuan and Siew Chin sold their shares in the Company to Leong Chuan, Heng Chuan and Teck Chuan
Boon Chuan issued a cheque for $1 million to Madam Chai
Madam Chai returned $1 million to Boon Chuan by way of a cashier’s order
Boon Chuan issued another cheque for $1 million to Madam Chai
Madam Chai returned $1 million to Boon Chuan by way of a cashier’s order
Share transfer form dated
Madam Chai passed away
Siew Lay signed a receipt
Boon Chuan sent two text messages to Siew Lay
Siew Lay sent Boon Chuan an SMS message asking for $50,000
Suit 404/2007 filed
Justice Lee Seiu Kin made an order regarding s 7(2) of the Civil Law Act
Siew Kuan and Siew Lay provided testimony
Boon Chuan provided testimony
Judgment Date

7. Legal Issues

  1. Trust over Shares
    • Outcome: The court found that Madam Chai held the shares in her name on trust for Siew Lay.
    • Category: Substantive
  2. Applicability of Statute of Frauds
    • Outcome: The court held that Boon Chuan could not use s 9 Statute of Frauds to deny Siew Lay’s claim.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Trust
  • Claim for Purchase Price of Shares

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Food and Beverage

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tsu Soo Sin nee Oei Karen v Ng Yee HoonHigh CourtYes[2008] SGHC 30SingaporeCited regarding the argument that s 7(2) CLA was not applicable because her equitable interest in the shares had been converted into cash of $2 million.
Re Estate of Tan Kow Quee (alias Tan Kow Kwee)N/AYes[2007] 2 SLR 417SingaporeCited for the argument that equity would not permit a statute to be used as an instrument of fraud in a consensual family arrangement.
Koh Kim Eng v Lim Geok YianN/AYes[2001] 4 SLR 219SingaporeCited for the argument that Boon Chuan is a constructive trustee of the money.
Grey v Inland Revenue CommissionersHouse of LordsYes[1960] AC 1England and WalesConsidered whether the word “disposition” in s 53(1)(c) LPA 1925 means “grants and assignments” in s 9 of the Statute of Frauds.
Vandervell v IRCN/AYes[1967] 2 AC 291N/ACited for the purpose of s 9 Statute of Frauds and s 7(2) CLA is to prevent equitable interests from being the subject of hidden oral transactions and to enable trustees to ascertain the beneficiaries.
Rochefoucald v BousteadN/AYes[1897] 1 Ch 196N/ACited as an example where the maxim has been applied that equity would not allow the Statute of Frauds to be used as an instrument of fraud.
Re Duke of MarlboroughN/AYes[1894] 2 Ch 133N/ACited as an example where the maxim has been applied that equity would not allow the Statute of Frauds to be used as an instrument of fraud.
Di Pietro v Official Trustee in BankruptcyN/AYes[1995] 59 FCR 470N/ACited as an example where the maxim has been applied that equity would not allow the Statute of Frauds to be used as an instrument of fraud.
Leong Sze Hian v Teo Ai ChooN/AYes[1984-1985] SLR 345SingaporeCited as an example where the maxim has been applied that equity would not allow the Statute of Frauds to be used as an instrument of fraud.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed)Singapore
s 9 of the English Statute of Frauds 1677England and Wales

15. Key Terms and Keywords

15.1 Key Terms

  • Trust
  • Shares
  • Tong Guan Food Products Pte Ltd
  • Beneficial Interest
  • Statute of Frauds
  • Oral Disposition
  • Purchase Money

15.2 Keywords

  • Trust
  • Shares
  • Family Dispute
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Trust Law75
Company Law30
Succession Law25
Contract Law20

16. Subjects

  • Trusts
  • Equity
  • Company Law