Lee Koon v Seah Yong Chwan: Specific Bequest of Company Shares & Liquidation Surplus Dispute
In Lee Koon v Seah Yong Chwan, the High Court of Singapore addressed a dispute over the distribution of a liquidation surplus following the winding up of Teow Aik Realty (S) Pte Ltd. The plaintiff, Lee Koon, the widow of Seah Eng Teow, sued Seah Yong Chwan, the executor of the estate, claiming that a specific bequest of company shares in the will was defeated by the winding up of the company, and thus the liquidation surplus should fall into the residuary estate, of which she was the beneficiary. The court dismissed the plaintiff's claim, holding that the specific legatees had an existing interest in the assets.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's claim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Dispute over whether a specific bequest of company shares was defeated by the company's winding up. The court ruled the liquidation surplus did not fall into the residuary estate.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Lee Koon (by her attorneys Seah Teong Kang and Seah Chiew Tee) | Plaintiff | Individual | Claim Dismissed | Lost | |
| Seah Yong Chwan (executor of the estate of Seah Eng Teow, deceased) | Defendant | Individual | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Edmund Leow | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- The Deceased owned 1.2 million shares in Teow Aik Realty (S) Pte Ltd.
- The Deceased bequeathed 1,000,000 shares to the defendant, 100,000 to the plaintiff, and 100,000 to Chiew Tee in his will.
- The plaintiff was also named the residuary beneficiary of the estate.
- The Company's shareholders applied to put it into winding up two days before the will was executed.
- The High Court ordered the company to be wound up.
- A liquidation surplus was distributed to the members of 15.488 cents per share.
- The Shares were never transferred to the legatees at any time.
5. Formal Citations
- Lee Koon (by her attorneys Seah Teong Kang and Seah Chiew Tee) v Seah Yong Chwan (executor of the estate of Seah Eng Teow, deceased), Originating Summons No 875 of 2013, [2013] SGHC 285
6. Timeline
| Date | Event |
|---|---|
| Teow Aik Realty (S) Pte Ltd incorporated. | |
| Will dated. | |
| Company's shareholders applied to put it into winding up. | |
| High Court ordered winding up. | |
| Seah Eng Teow passed away. | |
| Surplus paid to the estate of the Deceased. | |
| Defendant sent cheques to plaintiff and Chiew Tee. | |
| Plaintiff sent a letter of demand to the defendant. | |
| Plaintiff filed originating summons. | |
| Defendant sent a third fresh cheque for $15,488. | |
| Judgment reserved. |
7. Legal Issues
- Specific Bequest
- Outcome: The court held that the specific legatees had an existing interest in the liquidation surplus, and therefore the gift did not fail.
- Category: Substantive
- Sub-Issues:
- Ademption
- Distribution of Assets
- Liquidation Surplus
- Related Cases:
- [2007] 3 SLR(R) 614
- [1992] 1 SLR(R) 970
- [1970] Ch 277
- [1965] AC 694
- Residuary Estate
- Outcome: The court held that the liquidation surplus did not fall into the residuary estate.
- Category: Substantive
8. Remedies Sought
- Declaration that the Sum forms part of the residuary estate
- Order that the defendant transfer the Sum to the plaintiff
9. Cause of Actions
- Breach of Trust
- Declaratory judgment
10. Practice Areas
- Estate Planning
- Probate Litigation
- Corporate Law
- Trust Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Jiangshan Investment Consortium Ltd (in liquidation) | High Court | Yes | [2007] 3 SLR(R) 614 | Singapore | Cited for the proposition that a shareholder in a winding up is not the legal or beneficial owner of the surplus funds in liquidation and that this surplus is not a debt or a chose in action but constitutes a type of property distinct from shares. |
| Re Fry | Chancery Division | Yes | [1946] Ch 312 | England and Wales | Cited for the proposition that where a transferor is required by statute to obtain prior approval before there can be a share transfer, no beneficial right to the shares can pass to the intended donee until such approval is obtained. |
| Low Gim Har v Low Gim Siah | High Court | Yes | [1992] 1 SLR(R) 970 | Singapore | Relied upon by the defendant as being on all fours with the present case, regarding the distribution of assets after a company winding up and the rights of shareholders. |
| Re Leigh’s Will Trusts | Chancery Division | Yes | [1970] Ch 277 | England and Wales | Cited as support for the conclusion that the holder of a chose in action obtains some kind of “interest” in the fruits of the chose in action once ascertained. |
| Commissioner of Stamp Duties (Queensland) v Livingston | Privy Council | Yes | [1965] AC 694 | Australia | Cited as establishing propositions regarding the ownership of property in an unadministered estate and the rights of residuary legatees. |
| Official Receiver In Bankruptcy v Schultz | High Court of Australia | Yes | (1990) CLR 306 | Australia | Approved Re Leigh and discussed the 'interest' a beneficiary has in an unadministered estate. |
| Re Hemming | High Court | Yes | [2009] Ch 313 | England and Wales | Followed Re Leigh and Livingston regarding the interest of a residuary legatee in the assets of an estate before administration is complete. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Wills Act (Cap 352, 1996 Rev Ed) | Singapore |
| Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Specific bequest
- Liquidation surplus
- Residuary estate
- Winding up
- Shares
- Legatee
- Executor
- Chose in action
- Beneficial ownership
- Transmission
15.2 Keywords
- Wills
- Probate
- Company Law
- Liquidation
- Singapore
- Bequest
- Shares
- Estate
- Residuary
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 90 |
| Estate Administration | 85 |
| Wills | 75 |
| Company Law | 70 |
| Succession Law | 60 |
16. Subjects
- Wills
- Trusts
- Company Law
- Liquidation
- Probate