British and Malayan Trustees Ltd v Lutfi Salim: Construction of Settlement for Income Distribution
In British and Malayan Trustees Ltd v Lutfi Salim bin Talib and others, the High Court of Singapore, on 20 November 2019, addressed an originating summons regarding the construction of a settlement established by Mr. Shaik Sallim bin Mohamed bin Sallim bin Talib. The core legal issue was determining the proper distribution of net income from the settlement after the death of a beneficiary, Shafeeq bin Salim Talib, who passed away without offspring. The applicant, British and Malayan Trustees Limited, sought direction on whether Shafeeq's share should be divided among all surviving income beneficiaries (pari passu interpretation) or only among those beneficiaries whose shares derived from the same child of the Settlor, Aisha (branch interpretation). The court preferred the branch interpretation, ruling that Shafeeq's share should accrue to his siblings, who are the surviving issue of Aisha.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Branch interpretation preferred; Shafeeq's share accrues to his siblings within Aisha's portion.
1.3 Case Type
Others (Succession and Wills)
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
The High Court addressed the construction of a settlement to determine how income should be distributed among beneficiaries after one passes without offspring.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| British and Malayan Trustees Limited | Applicant | Corporation | Application partially successful | Partial | Mak Wei Munn, Ong Hui Fen, Rachel |
| Lutfi Salim bin Talib | Respondent | Individual | Arguments upheld | Won | Daryl Ong Hock Chye, Valerie Seow Wei-Li |
| Abdul Aziz bin Amir Talib | Respondent | Individual | Arguments upheld | Won | Daryl Ong Hock Chye, Valerie Seow Wei-Li |
| Murtada Ali Salem Talib | Respondent | Individual | Arguments rejected | Lost | Lem Jit Min Andy, Ng Hua Meng, Marcus |
| Ameen Ali Salim Talib | Respondent | Individual | Arguments rejected | Lost | Lem Jit Min Andy, Ng Hua Meng, Marcus |
| Helmi Bin Ali Bin Talib | Respondent | Individual | Arguments rejected | Lost | Lem Jit Min Andy, Ng Hua Meng, Marcus |
| Saadaldeen Ali Salim Talib | Respondent | Individual | Arguments rejected | Lost | Lem Jit Min Andy, Ng Hua Meng, Marcus |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vincent Hoong | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Mak Wei Munn | Allen & Gledhill LLP |
| Ong Hui Fen, Rachel | Allen & Gledhill LLP |
| Daryl Ong Hock Chye | LawCraft LLC |
| Valerie Seow Wei-Li | LawCraft LLC |
| Lem Jit Min Andy | Eversheds Harry Elias LLP |
| Ng Hua Meng, Marcus | Eversheds Harry Elias LLP |
4. Facts
- Mr. Shaik Sallim bin Mohamed bin Sallim bin Talib created a settlement in 1933 to distribute income from immovable properties.
- The settlement provided for distribution of income among his family members and their descendants upon his passing.
- The settlement income is divided among the Settlor’s children, with sons receiving two portions and daughters receiving one.
- Aisha binte Salim bin Talib, a daughter of the Settlor, received one portion of the settlement income.
- Aisha passed away in 2008, and her portion was divided among her three sons.
- In 2014, Aisha’s son, Shafeeq, died without leaving any offspring.
- The court was asked to determine whether Shafeeq’s share should be divided among all surviving beneficiaries or only Aisha’s surviving children.
5. Formal Citations
- British and Malayan Trustees Ltd v Lutfi Salim bin Talib and others, Originating Summons No 163 of 2019, [2019] SGHC 270
6. Timeline
| Date | Event |
|---|---|
| Indenture made to distribute income from immovable properties. | |
| Aisha binte Salim bin Talib passed away. | |
| Shafeeq bin Salim Talib died without offspring. | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Construction of Settlement
- Outcome: The court adopted the branch interpretation, holding that Shafeeq's share should accrue to his siblings within Aisha's portion.
- Category: Substantive
- Sub-Issues:
- Interpretation of Clause 3(3)
- Meaning of 'issue'
- Meaning of 'per stirpes'
- Distinction between 'portion' and 'share'
- Application of Clause 3(7)
- Related Cases:
- [1995] 1 SLR(R) 375
8. Remedies Sought
- Declaration on the proper construction of the Settlement
9. Cause of Actions
- Interpretation of Trust Deed
10. Practice Areas
- Trusts
- Estate Planning
- Probate Litigation
11. Industries
- Legal Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| OCBC Trustee Ltd v Koh Boon Leong Francis and others | High Court | Yes | [1995] 1 SLR(R) 375 | Singapore | Cited to define the ordinary meaning of 'issue' as the descendants of the Settlor's daughter in all degrees. |
| Sammut and others v Manzi and others | N/A | Yes | [2009] 1 WLR 1834 | N/A | Cited to explain the meaning of 'per stirpes' in the context of distributing a gift to a person who predeceases the testator. |
| In re Tate | N/A | Yes | [1914] 2 Ch 182 | N/A | Cited as an example of a case where cross-remainder arose, but found to be irrelevant to the present case. |
| In re Hey’s Settlement Trusts | N/A | Yes | [1945] 1 Ch 294 | N/A | Cited as an example of a case where cross-remainder arose, but found to be irrelevant to the present case. |
| Commissioner of Probate Duties v Wilson | N/A | Yes | [1979] VR 592 | N/A | Cited to define the word 'accrue' as used to denote the addition of further rights or interests to existing rights or interests. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Settlement
- Settlor
- Beneficiary
- Portion
- Share
- Issue
- Per Stirpes
- Accruing
- Branch Interpretation
- Pari Passu Interpretation
- Original Beneficiary
- Remoter Issue
15.2 Keywords
- Trust
- Will
- Settlement
- Beneficiary
- Singapore
- Succession
- Distribution
- Income
- Construction
16. Subjects
- Trusts
- Wills
- Estate Planning
- Succession
17. Areas of Law
- Trust Law
- Succession Law
- Wills and Probate
- Construction Law