Lau Sheng Jan v Lau Cheok Joo: Trust Termination & ABSD Avoidance

In Lau Sheng Jan, Alistair v Lau Cheok Joo Richard and another [2023] SGHC 196, the General Division of the High Court of Singapore addressed an application by Lau Sheng Jan, Alistair to terminate a trust established by his parents, Lau Cheok Joo Richard and Sng Gek Hong Cynthia. The court, presided over by Goh Yihan JC, considered whether the trust was a sham to avoid Additional Buyer’s Stamp Duty (ABSD) or genuinely intended to benefit the applicant. The court allowed the application, finding the trust was not a sham and was meant to benefit the applicant.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court allowed the applicant's application to terminate a trust, finding it was not a sham or created to avoid Additional Buyer’s Stamp Duty (ABSD).

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lau Sheng Jan, AlistairApplicantIndividualApplication allowedWon
Lau Cheok Joo RichardRespondentIndividualApplication dismissed against respondentLost
Sng Gek Hong CynthiaRespondentIndividualApplication allowedNeutral

3. Judges

Judge NameTitleDelivered Judgment
Goh YihanJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Lim Kim HongKim & Co
Lim Teng JieKim & Co
Chan Yu XinWongPartnership LLP
Andrea Ang Si MinWongPartnership LLP

4. Facts

  1. The applicant sought to terminate a trust established by his parents.
  2. The respondents, the applicant's parents, are separated.
  3. The first respondent objected to the trust's termination.
  4. The trust deed was executed on 27 July 2020.
  5. The trust held a property for the applicant's sole benefit.
  6. The applicant claimed the trust was to gift him a legacy property.
  7. The first respondent alleged the trust was to avoid Additional Buyer’s Stamp Duty (ABSD).

5. Formal Citations

  1. Lau Sheng Jan Alistair v Lau Cheok Joo Richard and another, Originating Application No 492 of 2022, [2023] SGHC 196

6. Timeline

DateEvent
Respondents entered into an option to purchase the Property
Respondents jointly engaged solicitors to draft and execute the Trust
Alleged Loan Agreement signed
Relationship between the respondents became rocky
Second respondent stated that she was agreeable to the applicant’s proposal
First respondent stated that he wished to let the court decide on the application
First respondent filed a reply affidavit objecting to the application
Hearing date
Hearing date
Judgment reserved

7. Legal Issues

  1. Termination of Trust
    • Outcome: The court allowed the application to terminate the trust.
    • Category: Substantive
    • Sub-Issues:
      • Application of the rule in Saunders v Vautier
    • Related Cases:
      • (1841) 4 Beav 115
      • [2013] SGHC 261
      • [2011] SGHC 179
  2. Sham Trust
    • Outcome: The court found that the Trust Deed was not a sham.
    • Category: Substantive
    • Related Cases:
      • [2013] 2 SLR 715
      • [1967] 2 QB 786
      • [2013] 1 P & CR 238
  3. Illegality
    • Outcome: The court found that the Trust was not created for an illegal purpose.
    • Category: Substantive
    • Sub-Issues:
      • Avoidance of Additional Buyer’s Stamp Duty (ABSD)
    • Related Cases:
      • [1994] 1 AC 340
      • [2017] AC 467
      • [2014] 3 SLR 609
      • [2018] 1 SLR 363

8. Remedies Sought

  1. Declaration that the Trust be terminated
  2. Transfer of the Property from the respondents to the applicant

9. Cause of Actions

  • Application for Termination of Trust

10. Practice Areas

  • Trusts
  • Litigation

11. Industries

  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Saunders v VautierCourt of ChanceryYes(1841) 4 Beav 115England and WalesCited for the rule that a sole beneficiary of a trust, who is of full age and mental capacity, can terminate the trust and direct the trustees to transfer the trust property to them.
Re Singapore Symphonia Co Ltd & othersHigh CourtYes[2013] SGHC 261SingaporeCited to illustrate the application of the rule in Saunders v Vautier.
Neoh Raymond Dennis v Liew Leong Wan and anotherHigh CourtYes[2011] SGHC 179SingaporeCited to support the application of the rule in Saunders v Vautier unless the trust itself was illegal and unenforceable.
Chng Bee Kheng and another (executrixes and trustees of the estate of Fock Poh Kum, deceased) v Chng Eng ChyeHigh CourtYes[2013] 2 SLR 715SingaporeCited for the general concept of a sham trust.
Snook v London and West Riding Investments LtdEnglish Court of AppealYes[1967] 2 QB 786England and WalesCited for the definition of a sham.
Pankhania v Chandegra (by her litigation friend, Ronald Andrew Eagle)English Court of AppealYes[2013] 1 P & CR 238England and WalesCited for the elements of a sham trust.
National Westminster Bank plc v Jones and othersEngland and Wales High Court (Chancery Division)Yes[2001] 1 BCLC 98England and WalesCited for the presumption against holding a provision or document a sham.
Tinsley v MilliganHouse of LordsYes[1994] 1 AC 340United KingdomCited for the formal reliance principle, which was later departed from.
Public Prosecutor v Intra Group (Holdings) Co IncHigh CourtYes[1999] 1 SLR(R) 154SingaporeCited for the application of the formal reliance principle.
Patel v MirzaUK Supreme CourtYes[2017] AC 467United KingdomCited for the 'range of factors' test in the context of common law illegality.
Bowmakers Ltd v Barnet Instruments LtdEngland and Wales Court of AppealYes[1945] KB 45England and WalesCited in relation to the formal reliance principle.
Hall v HebertSupreme CourtYes[1993] 2 SCR 159CanadaCited for the reasoning that the question is whether allowing recovery for something illegal would produce inconsistency and disharmony in the law.
Nelson and another v Nelson and othersHigh CourtYes[1995] 132 ALR 133AustraliaCited for the rejection of the formal reliance principle in the trusts context.
Ting Siew May v Boon Lay Choo and anotherCourt of AppealYes[2014] 3 SLR 609SingaporeCited for the rejection of the formal reliance principle in the contractual context and the framework for applying the illegality defence.
Ochroid Trading Ltd and another v Chua Siok Lui (trading as VIE Import & Export) and anotherCourt of AppealYes[2018] 1 SLR 363SingaporeCited for the two-stage framework on the illegality defence in the contractual context.
In re Watson, decdEngland and Wales High Court (Chancery Division)Yes[1973] 1 WLR 1472England and WalesCited as an example of trusts which are adverse to religion and morality.
Attorney-General v PearsonCourt of ChanceryYes(1817) 3 Mer 353England and WalesCited as an example of trusts contrary to succession law.
In re BeardEngland and Wales High Court (Chancery Division)Yes[1908] 1 Ch 383England and WalesCited as an example of trusts which impose a condition divesting the interest of a devisee or legatee if he enters into the naval or military services of the country.
Knight and another v Knight and othersEngland and Wales High Court (Chancery Division)Yes[2019] 2 P & CR D33England and WalesCited as an example of a trust created for an illegal purpose.
Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and othersSingapore International Commercial CourtYes[2020] 4 SLR 85SingaporeCited for the principle of stultification.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Stamp Duties Act 1929 (Cap 312, 2006 Rev Ed)Singapore
Stamp Duties Act 1929 (Cap 312, 2006 Rev Ed)Singapore
Supreme Court of Judicature Act 1969Singapore
Evidence Act 1893Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Trust Deed
  • Additional Buyer’s Stamp Duty (ABSD)
  • Saunders v Vautier
  • Sham Trust
  • Illegality
  • Beneficiary
  • Trustee
  • Property

15.2 Keywords

  • Trust
  • ABSD
  • Saunders v Vautier
  • Property
  • Singapore
  • Illegality
  • Sham

17. Areas of Law

Area NameRelevance Score
Trust Law90
Saunders v Vautier80
Sham Trust70
Illegality60
Property Law40
Contract Law30
Civil Procedure20

16. Subjects

  • Trusts
  • Real Estate
  • Stamp Duty
  • Tax Avoidance