Chng Bee Kheng v Chng Eng Chye: Trust Deed Validity & Beneficial Ownership Dispute

In Chng Bee Kheng and another (executrixes and trustees of the estate of Fock Poh Kum, deceased) v Chng Eng Chye, the High Court of Singapore addressed a dispute over the beneficial ownership of a property at 7 Robin Walk. The plaintiffs, Chng Bee Kheng and another, as executrixes and trustees of Mdm Fock Poh Kum's estate, claimed the property was held on trust for the estate. The defendant, Chng Eng Chye, Mdm Fock's son and the legal owner, argued the trust deed was a sham. The court, presided over by Justice Chan Seng Onn, ruled in favor of the plaintiffs, finding the trust deed valid and enforceable.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiffs

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

High Court case regarding the beneficial ownership of a property held under a trust deed. The court ruled in favor of the plaintiffs.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chng Bee KhengPlaintiffIndividualClaim AllowedWon
Chng Eng ChyeDefendantIndividualClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chan Seng OnnJudgeYes

4. Counsels

Counsel NameOrganization
Lionel LeoWongPartnership LLP
Alvin YeoWongPartnership LLP
Sim Bock EngWongPartnership LLP
Cavinder BullDrew & Napier LLC
Foo Yuet MinDrew & Napier LLC
Daniel CaiDrew & Napier LLC

4. Facts

  1. Mdm Fock was the mother of the Plaintiffs and the Defendant.
  2. The Property was purchased for $260,000.
  3. The Property was registered in the Defendant’s sole name on 11 March 1974.
  4. A Trust Deed was executed by the Defendant on 23 February 1974.
  5. The Trust Deed stated that the purchase price of the Property was provided by Mdm Fock.
  6. The Trust Deed stated that the Property was transferred to the Defendant to be held on trust for Mdm Fock.
  7. The Trust Deed was discovered in Mdm Fock’s safe deposit box after her death.

5. Formal Citations

  1. Chng Bee Kheng and another (executrixes and trustees of the estate of Fock Poh Kum, deceased) v Chng Eng Chye, Suit No 860 of 2011, [2013] SGHC 48

6. Timeline

DateEvent
Mdm Fock married Mr Chng Gim Cheng
Mr Chng paid $26,000 deposit for the Property
Defendant and Far Eastern Bank paid second and third tranches for the Property
Transfer of the Property executed and lodged; Trust Deed executed
Property registered in the Defendant’s sole name
Defendant married Augustine Chng and she moved into the Property
Overdraft facility at Far Eastern Bank cleared and account closed
2nd Plaintiff moved out of the Property
Mr Chng passed away
Mdm Fock executed her will
Mdm Fock passed certificate of title to Augustine
Mdm Fock passed away
2nd Plaintiff opened Mdm Fock’s safe deposit box and discovered the Trust Deed
2nd Plaintiff distributed copies of the Will to the family
Meeting held at 1st Plaintiff’s home to discuss administration of Mdm Fock’s estate
Defendant wrote a letter to the Plaintiffs
Plaintiffs responded with a letter proposing a meeting
Meeting took place at the Defendant’s office
Plaintiffs’ solicitors wrote to the Defendant for the return of the Property to Mdm Fock’s estate
Plaintiffs commenced proceedings
Judgment reserved

7. Legal Issues

  1. Validity of Trust Deed
    • Outcome: The court held that the Trust Deed was valid and not a sham.
    • Category: Substantive
    • Sub-Issues:
      • Sham trust
      • Intention of settlor
      • Beneficial ownership
    • Related Cases:
      • [1967] 2 QB 786
  2. Estoppel
    • Outcome: The court held that the Plaintiffs were not estopped from asserting beneficial interest in the Property.
    • Category: Substantive
    • Sub-Issues:
      • Estoppel by representation
      • Proprietary estoppel
      • Estoppel by convention
      • Estoppel by acquiescence

8. Remedies Sought

  1. Declaration that the Property is held on trust by the Defendant for the Plaintiffs as the executrixes and trustees of Mdm Fock’s estate
  2. Return of the Property to Mdm Fock’s estate

9. Cause of Actions

  • Breach of Trust
  • Declaration of Trust

10. Practice Areas

  • Trusts
  • Estate Planning
  • Civil Litigation
  • Beneficial Ownership

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lord Advocate v BlantyreHouse of LordsNo[1879] 4 App Cas 770United KingdomCited for the principle that the weight of evidence depends on rules of common sense.
Yeong Ah Chee v Lee Chong Hai & AnorMalaysian Supreme CourtNo[1994] 2 MLJ 614MalaysiaCited for the proposition that for a trust to be valid, the settlor must vest the trust property in the trustee completely, both in law and equity.
Cheu Kuok King v Jurudaya Construction Sdn BhdHigh Court of KuchingNo[2007] 4 MLJ 720MalaysiaCited for the proposition that there was no valid trust because the defendant settlor of the trust was not the registered owner of the property at the time the trust deed was executed.
Keech v SandfordCourt of ChanceryYesKeech v Sandford (1726) Sel Cas Ch 61England and WalesCited as authority that a lease over land may be the subject matter of a trust.
Re Ralli’s WTChancery DivisionYes[1964] 1 Ch 288England and WalesCited as authority that a settlor who had a remainder interest under another trust could create a valid trust over that remainder interest.
Snook v London and West Riding Investments LtdCourt of AppealYes[1967] 2 QB 786England and WalesCited for the definition of a 'sham' in law, requiring a common intention among parties to create a false appearance of legal rights and obligations.
Yorkshire Railway Wagon Company v MaclureCourt of AppealYesYorkshire Railway Wagon Company v Maclure (1882) 21 Ch D 309England and WalesCited for the principle that if a transaction is a bona fide real transaction intended by both sides to operate according to its tenor, it is not illegal unless prohibited by statute or void by law.
TKM (Singapore) Pte Ltd v Export Credit Insurance Corp of Singapore LtdHigh CourtYes[1992] 2 SLR(R) 858SingaporeCited for the test to ascertain whether documents represent the true relationship between parties, focusing on the intention to create legal relationships and whether parties acted according to the documents' apparent purpose.
Koon Seng Construction Pte Ltd v Chenab Contractor Pte Ltd and anotherHigh CourtYes[2008] 1 SLR(R) 375SingaporeCited for applying the test in TKM (Singapore) Pte Ltd v Export Credit Insurance Corp of Singapore Ltd to determine if documents represent the true relationship between parties.
Hitch v StoneHigh CourtYes[2001] STC 214England and WalesCited for the principle that the test of whether parties intend their agreement to be a sham is subjective and that the court may have regard to a wider category of evidence, such as the parties’ subsequent conduct.
AG Securities v Vaughan and othersHouse of LordsYes[1988] 3 WLR 1205United KingdomCited for the principle that subsequent actings of the parties may be looked at for the purposes of determining whether or not parts of the agreements are a sham in the sense that they were intended merely as ‘dressing up’ and not as provisions to which any effect would be given.
In re Esteem SettlementJersey Court of AppealYes(2003) JLR 188JerseyCited for the principle that the relevant common intention generally refers to the intention of the settlor and the trustee.
Shalson and others v Russo and othersHigh CourtYes[2003] EWHC 1637England and WalesCited for the principle that the relevant common intention generally refers to the intention of the settlor and the trustee.
A v A and St George Trustees Limited and othersHigh CourtYes[2007] EWHC 99England and WalesCited for the principle that a beneficiary’s intention subsequent to the formation of a trust may transform what was a properly constituted trust which was not ab initio a sham into a sham, if all the beneficiaries to the trust must join together with the trustees in that sham purpose.
W T Ramsay Ltd v Inland Revenue CommissionersHouse of LordsYes[1982] AC 300United KingdomCited for the principle that to say that the Trust Deed is a sham means that while the Trust Deed professed to accord beneficial ownership to Mdm Fock, it in fact meant something different in that the true beneficial owner of the Property was the Defendant and not the person stated on the face of the Trust Deed.
Official Assignee v WilsonNew Zealand Court of AppealYes[2008] 3 NZLR 45New ZealandCited for the principle that a person cannot benefit from their own improper or unlawful activities.
Au Phin Yeang v Kan Tak Fee, Ng Ah Hoe, Foo Lin YinSupreme Court of the Federated Malay StatesYes[1934] FMSLR 5MalaysiaCited for the principle that the defence of fraud could only be pleaded by an innocent party.
Shi Fang v Koh Pee HuatCourt of AppealYes[1996] 1 SLR(R) 906SingaporeCited for the principle that a person who seeks to recover property transferred by him for an illegal purpose can lead evidence of his dishonest intention whenever it is necessary for him to do so provided that he has withdrawn from the transaction before the illegal purpose was carried out.
Tribe v TribeCourt of AppealYes[1996] 1 Ch 107England and WalesCited for the principle that a person who seeks to recover property transferred by him for an illegal purpose can lead evidence of his dishonest intention whenever it is necessary for him to do so provided that he has withdrawn from the transaction before the illegal purpose was carried out.
Perpetual Executors and Trustees Association of Australia Ltd v WrightHigh Court of AustraliaYes(1917) 23 CLR 185AustraliaCited for the principle that the doctrine of locus poenitentiae applies where no creditors were deceived.
Painter v Hutchinson and anotherHigh CourtYes[2007] EWHC 758England and WalesCited for the principle that the plaintiff’s argument that her declaration of trust was a sham was allowed by the court because the declaration of trust was never shown to the Inland Revenue.
Midland Bank PLC v WyattHigh CourtYes[1995] 1 FLR 696England and WalesCited for the principle that a party who displays reckless indifference to a sham will also be considered to be a party to the sham.
Ashmore, Benson Pease & Co Ltd v AV Dawson LtdCourt of AppealYes[1973] 1 WLR 828England and WalesCited for the principle that the requisite degree of assent in terms of knowledge of and participation in the sham purpose is necessary to preclude a party from relying on a trust deed.
Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank LtdCourt of AppealYes[1982] QB 84England and WalesCited for the proposition that there is some authority for a single unified test for estoppel.
Hong Leong Singapore Finance Ltd v United Overseas Bank LtdHigh CourtYes[2007] 1 SLR(R) 292SingaporeCited for the principle that in deciding whether a proprietary estoppel had arisen, unconscionability was an overarching inquiry.
United Overseas Bank Ltd v Bank of ChinaHigh CourtYes[2006] 1 SLR(R) 57SingaporeCited for the elements of estoppel by representation.
Singapore Telecommunications Ltd v Starhub Cable Vision LtdHigh CourtYes[2006] 2 SLR(R) 195SingaporeCited for the elements of estoppel by convention.
Travista Development Pte Ltd v Tan Kim Swee Augustine and othersHigh CourtYes[2008] 2 SLR(R) 474SingaporeCited for the elements of estoppel by convention.
Nasaka Industries (S) Pte Ltd v Aspac Aircargo Services Pte LtdHigh CourtYes[1999] 2 SLR(R) 817SingaporeCited for the circumstances that must be present to raise estoppel by acquiescence.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Trust Deed
  • Beneficial Ownership
  • Sham Trust
  • Estoppel
  • Settlor
  • Trustee
  • Executrix
  • Trustees
  • Creditors
  • Intention
  • Representation
  • Acquiescence

15.2 Keywords

  • Trust
  • Property
  • Beneficial Ownership
  • Singapore
  • High Court
  • Estate
  • Deed
  • Sham
  • Estoppel

17. Areas of Law

Area NameRelevance Score
Trust Law95
Sham Trust90
Wills and Probate85
Estate Administration80
Succession Law75
Property Law70
Estoppel60

16. Subjects

  • Trusts
  • Property
  • Equity
  • Civil Litigation