Court of Appeal · Decided 24 June 2014

Chan Yuen Lan v See Fong Mun

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[2014] SGCA 36Case no. Civil Appeal No 64 of 2013

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V K Rajah JA (delivering the judgment of the court):
Introduction
[1] Two persons in an intimate relationship, whether married or otherwise, often acquire real property for communal and/or familial and/or investment purposes. The property may be put in one person’s name only (a “single-name” case) or in the names of both persons (a “joint-names” case). One person may have contributed more to (or even all of) the purchase price of the property, or it may be that both have contributed equally. Alternatively, the parties may have had discussions on how much of a stake each of them should have in the property. Suppose that some (or many) years later, the relationship breaks down, and the parties then disagree over who is entitled to the beneficial ownership of the property. Suppose, further, that the legal owner(s) of the property never executed a declaration of trust in relation to the property. What then is the legal position?
[2] If the parties are married and they initiate matrimonial proceedings, matrimonial legislation applies, and each party will secure what the court determines is just and equitable from the pool of matrimonial assets (see s 112(1) of the Women’s Charter (Cap 353, 2009 Rev Ed)). If the parties are not married, then the dispute over the beneficial ownership of the property is simply determined by the usual applicable common law principles.
[3] Disputes of this nature – viz, disputes over the beneficial ownership of property which is used by parties in a marital, quasi-marital, familial or other intimate relationship, where the legal title to the property is vested in one or more of the parties – are the focus of this judgment. For conciseness, we shall, where appropriate in this judgment, refer to such disputes as “property disputes”, and as “domestic property disputes” specifically where they arise in a domestic context, ie, in relation to property which is used for domestic purposes (“domestic property”).
[4] In the present case, two octogenarians were involved in a tussle over the beneficial ownership of 24 Chancery Lane (“the Property”). The Property is registered in the wife’s sole name. It is said to be currently worth about $20m. An unusual feature of these proceedings is the fact that neither the wife nor the husband commenced – or indicated any intention to commence – matrimonial proceedings. The question of who is entitled to the beneficial ownership of the Property therefore falls simply to be decided by the applicable common law principles, ie, the law of trusts. For completeness, we should mention that, sadly, the wife passed away after the appeal was heard. Counsel nevertheless agree that this development has no bearing on the outcome of this appeal.
[5] At a broader level, this case provides an opportunity to revisit Lau Siew Kim v Yeo Guan Chye Terence and another [2008] 2 SLR(R) 108 (“Lau Siew Kim”). Over the course of the last few years, some issues have arisen in a number of High Court decisions as to the proper application of Lau Siew Kim. This appeal provides a useful opportunity for clarifying the legal position on those issues. We shall also examine a number of recent developments in this area of the law, some of which were canvassed by the trial judge (“the Judge”) in his judgment below (reported in See Fong Mun v Chan Yuen Lan [2013] 3 SLR 685 (“the Judgment”)).
The facts
Background
[6] The appellant, Mdm Chan Yuen Lan (“Mdm Chan”), and the respondent, Mr See Fong Mun (“Mr See”), married in 1957. Their three children, Mr See Hang Chong (“SHC”), Ms See Seow Meng (“SSM”) and Mr See Hung Yee (“SHY”), were born in 1958, 1960 and 1962 respectively. The children grew up in Singapore, but received their tertiary education abroad. SHC returned to Singapore in 1979; SSM, in 1982; and SHY, in 1984. Mr See, by his own admission, also had a mistress. He said that the affair started in 1988, while Mdm Chan said that her husband’s infidelity began in 1979 or 1980. To this day, Mr See still lives with his mistress.
[7] Mr See is a self-made man. He developed and owned an engineering business, and in 1955, he bought his first property, a house at 11 Borthwick Drive (“the Borthwick property”). He met Mdm Chan, a hairdresser, and married her in 1957. Mdm Chan quit her job to become a full-time homemaker in or around January 1958. Initially, Mr See and Mdm Chan lived in a rented unit at 15A Lorong 40 Geylang, but in 1967, this unit and the unit below (15 Lorong 40 Geylang) were purchased for $20,000 in Mdm Chan’s sole name. The units were subsequently sold in 1972 for $60,000.
[8] In 1969, Mr See bought two properties in his sole name. One was a house at 100 Joo Chiat Walk (“the Joo Chiat property”), while the other was a house at 41 Goldhill Avenue (“the Goldhill property”). According to Mr See, the Goldhill property was used as the family home. In the same year, Mr See incorporated See’s Engineering Company Pte Ltd (“SEPL”) to take over his engineering business. Mr See initially held 35% of SEPL’s shares and Mdm Chan, 20%, with the remaining 45% shareholding dispersed among Mr See’s extended family members.
[9] In November 1975, Mr See executed a written declaration of trust over part of his SEPL shares in favour of his three children. Mdm Chan did the same over part of her SEPL shares.
[10] Earlier, Mr See had in 1974 incorporated Tat Mun Pte Ltd (“TMPL”) to hold his property investments. Initially, Mr See and Mdm Chan held one share each in TMPL, but 50,000 shares were allotted to Mr See in 1975, making him the majority shareholder of TMPL. In that same year, the Borthwick property and the Joo Chiat property were transferred to TMPL. In 1980, all the SEPL shares held by Mr See’s extended family members were transferred to TMPL, making TMPL a 45% shareholder of SEPL.
[11] In late 1983, the Property was purchased in Mdm Chan’s name alone. The events surrounding this purchase (“the Purchase”) are described in greater detail below at [12]–[18].
Events surrounding the Purchase
[12] The circumstances surrounding the Purchase form the nub of the present dispute. In January 1983, Mr See turned 55. He became entitled to withdraw his Central Provident Fund (“CPF”) monies amounting to some $490,000, which he did. His affidavit evidence was that he wished at that time to purchase a bungalow where his entire immediate family could live together, so he instructed his eldest son, SHC, to begin looking for a suitable property.
[13] In August 1983, SHC located the Property. The asking price was $1.38m for the Property itself, with an additional $400,000 payable if the furniture and fittings were purchased as well. Mr See instructed SHC to take an option to purchase the Property for $1.78m. Such an option was duly given by the seller to SHC “and/or his nominee”. The option was exercised by SHC in September 1983.
[14] An important meeting then took place between Mr See, Mdm Chan and SHC around September or October 1983 (“the 1983 Meeting”). This was before completion of the Purchase. It is undisputed that the parties agreed at that meeting that the Property would be purchased in Mdm Chan’s sole name, and that Mdm Chan agreed then to provide a sum of around $250,000 (her estimate of her life savings at the time) for the Purchase.
[15] Mr See’s case (supported by SHC) was that the stated intention at the time of the 1983 Meeting was to minimise the amount he would have to borrow from banks, in order to avoid paying unnecessary interest. As a result, it was agreed at the 1983 Meeting that Mdm Chan would provide an interest-free loan of her life savings to Mr See, which would be repaid “in a year or two”. It was also agreed – on one condition – that the Property would be put in Mdm Chan’s sole name because Mdm Chan had expressed a desire to tell her friends that she had a house in her name. The condition was that Mdm Chan should acknowledge Mr See as the true owner of the Property. Mr See said that Mdm Chan agreed to this condition, and he then told SHC to instruct the lawyers to prepare the “appropriate documents”.
[16] Mdm Chan, on the other hand, narrated a very different version of the material events. She said that in exchange for providing her entire life savings for the Purchase, the Property was to be owned by her absolutely. There was no reason otherwise for her to take out all her life savings to fund the Purchase. Contrary to what Mr See contended, the money which she provided was not a loan. Indeed, at the 1983 Meeting, Mdm Chan had referred to the Property as “My Money. My House.” She needed the Property for financial security because of Mr See’s infidelity, and not because she had any intention of bragging to her friends that she owned a property in her name. According to Mdm Chan, Mr See agreed to this to appease her over his affair and his infidelity.
[17] After the 1983 Meeting, but three days before completion of the Purchase on 18 October 1983, Mdm Chan executed a power of attorney (“POA”) in respect of the Property. By this POA, Mdm Chan authorised Mr See and SHC to (among other things) “take charge of, manage and improve my property” and, in particular, sell the Property for such consideration as they saw fit and give receipts for the monies received.
[18] On 18 October 1983, the Purchase was completed. A contemporaneous handwritten note was prepared by SHC, who listed down the sources of the purchase price of the Property, which totalled $1,831,758.90. The breakdown recorded was as follows:
(a) $290,000 from Mdm Chan (it turned out that Mdm Chan had more than $250,000 in her life savings);
(b) $400,000 from a HSBC Bank term loan in Mdm Chan’s name (“the HSBC Term Loan”);
(c) $400,000 from TMPL’s overdraft facility with HSBC Bank (“the TMPL Overdraft”);
(d) $8,117.35 from an account jointly held by Mr See and SHC;
(e) $10,000 from SHC; and
(f) $723,641.55 from Mr See’s savings and CPF monies.
Events after the Purchase
[19] The parties and their three children moved into the Property soon after it was purchased.
[20] In July 1984, TMPL became the sole shareholder of SEPL. In November 1984, Mr See transferred all except one of his shares in TMPL to SHC, SSM and SHY.
[21] In 1986, about three years after the Purchase, TMPL sold the Joo Chiat property for $265,000.
[22] On 21 August 1988, Mr See purportedly dictated a memo (“the First Memo”) in which he stated that he was the owner of the Property, and that Mdm Chan was only holding the Property on his behalf (the full text of this memo can be found in the Judgment at [6]). In the First Memo, Mr See also instructed his three children not to make any direct or indirect claim against Mdm Chan in connection with the Property. The signatures of all three children – but not Mdm Chan – appeared at the bottom of this memo. On the same day, Mr See purportedly dictated another memo (“the Second Memo”) in which he stated that he had decided to distribute the shares in TMPL and SEPL to his children and sought, inter alia, confirmation from them that they would not remove him from his position as chairman and managing director of these companies. Again, the signatures of the three children appeared at the bottom of the Second Memo. At the trial below, SHC confirmed that he wrote the First Memo and the Second Memo (collectively, “the two Memos”). According to him, Mr See dictated the text to him in Cantonese and he then wrote it down in English.
[23] In the proceedings below, Mdm Chan (with the support of SHY, one of the signatories of the two Memos) disputed the creation of the First Memo. Her case was that the fictitious contents of that memo were written in only after the children’s signatures were executed so as to buttress Mr See’s position in the action.
[24] For many years, the status quo prevailed – the Property remained in Mdm Chan’s sole name, and the POA remained in force. Then, on 5 April 2011, Mdm Chan revoked the POA (she claimed that SHC was trying to obtain the title deeds to the Property in order to sell the Property). The revocation of the POA prompted Mr See to seek a declaration that the Property belonged to him beneficially.
The pleadings
[25] In his pleadings, Mr See averred that he had provided the whole of the purchase price of the Property (SHC seemed content to accept that the monies contributed by him could be attributed to Mr See). According to Mr See, the sum of $290,000 which he had obtained from Mdm Chan was merely a loan which was repaid about three years after the Purchase, when the Joo Chiat property was sold in 1986 (see [21] above) and the sale proceeds of $265,000 paid to Mdm Chan. Mr See also denied that the presumption of advancement applied in favour of Mdm Chan, relying on the 1983 Meeting, with the POA and the First Memo as evidence of this meeting. Mr See thus sought a declaration that Mdm Chan held the Property under a resulting trust for him.
[26] Mdm Chan conceded that she did not provide the entire purchase price of the Property. According to Mdm Chan, the Property was a gift from Mr See. She claimed that it was agreed that she would own the Property absolutely, and this was evidenced by her willingness to: (a) provide $290,000 in cash; and (b) allow her salary, bonuses and dividends from SEPL and TMPL, as well as possibly her CPF funds, to be applied towards the repayment of the HSBC Term Loan. In the alternative, Mdm Chan resisted Mr See’s claim on the basis that the presumption of advancement applied in her favour. Mdm Chan therefore counterclaimed for a declaration that she was the true owner of the Property.
The decision below
[27] In relation to the purchase price of the Property, the Judge found that:
(a) The $290,000 provided by Mdm Chan to Mr See for the Purchase was a loan which had been repaid in full to Mdm Chan. In making this finding, the Judge noted that Mr See was not able to produce any receipts evidencing repayment of the $290,000, but commented (at [8] of the Judgment) that that was “unsurprising” since the alleged repayment took place more than two decades ago. The Judge placed greater emphasis on the fact that Mdm Chan did not adduce any evidence refuting Mr See’s claim that the $290,000 had been repaid in full, and also did not allude to any requests for repayment over the years which were ignored by Mr See. The $290,000 therefore did not represent a direct contribution by Mdm Chan to the purchase price of the Property (see the Judgment at [8]).
(b) Even though the HSBC Term Loan was taken out in Mdm Chan’s name (see [18(b)] above), it was in fact Mr See who repaid that loan in full. The Judge also found that it had been agreed at the time of the Purchase that Mr See would be the one to repay the HSBC Term Loan. Therefore, the amount represented by this loan should be taken as Mr See’s direct contribution to the purchase price of the Property (see the Judgment at [8]–[9]).
(c) Although TMPL was the borrower in name in relation to the TMPL Overdraft (see [18(c)] above), it was undisputed that Mr See controlled TMPL. For all intents and purposes, TMPL could be equated with Mr See, and it would be entirely artificial to consider that the liability undertaken for the TMPL Overdraft was not a direct contribution from Mr See (see the Judgment at [9]).
(d) There was no credible evidence to indicate that Mdm Chan had in fact contributed to the repayment of either the HSBC Term Loan or the TMPL Overdraft. While SHY claimed that it was well known that Mdm Chan had contributed a “substantial sum” towards the Purchase either through “immediate financial contributions at the time of acquisition or subsequent repayment of the loans” (see the Judgment at [10]), SHY had no personal knowledge of this, having returned to Singapore only after the Purchase (see, likewise, [10] of the Judgment).
(e) In view of the above, the Judge was satisfied that Mr See had paid the whole of the purchase price of the Property (see the Judgment at [10]).
[28] In relation to the presumption of advancement, the Judge found that:
(a) The presumption of advancement was rebutted on the facts. There was no convincing reason why Mr See would spend so much money and incur substantial financial risks so that he could give a large house to a woman with whom his marriage existed in name only. A man nearing retirement age who had just fallen in love with another woman was unlikely in the circumstances to scrape together $1.8m from multiple sources to buy a house, which would undoubtedly have been his most expensive acquisition, as a gift to his wife in name (see the Judgment at [11]).
(b) The POA, when viewed in the light of the circumstances at the time of the Purchase, supported Mr See’s account that he did not intend to make an outright gift of the Property to Mdm Chan and that Mdm Chan accepted this arrangement (see the Judgment at [12]).
(c) Mdm Chan’s account that Mr See took from her $290,000, which was less than 20% of the purchase price of the Property, in exchange for placing the Property in her sole name was neither realistic nor credible (see the Judgment at [12]).
[29] In relation to the First Memo (see [22] above), the Judge found that:
(a) It was not possible from the face of the First Memo to conclude that it was forged. The only evidence on the authenticity or otherwise of this memo was the evidence of SHC (who had transcribed the memo and who said that it was genuine) and SHY (who said that the memo was a forgery and that he had never seen it until discovery). The Judge found SHC a more measured and candid witness than SHY, and saw no positive reason to believe SHY’s bare allegations (see the Judgment at [7]).
(b) In any event, the First Memo was of little probative value as it was executed five years after the Purchase and was of limited relevance in discerning either Mr See’s or Mdm Chan’s intentions at the time of the Purchase (see the Judgment at [12]).
[30] The Judge then went on to observe that:
(a) The facts of the case “indicated a classic situation of a common intention constructive trust – the defendant holding the legal title [o]n trust for the plaintiff pursuant to an express agreement as to beneficial ownership prior to the acquisition of the matrimonial home” (see the Judgment at [17]). The constructive trust analysis was “a sounder solution [than the resulting trust analysis] where proven express common intentions of the parties [were] concerned” (see the Judgment at [19]).
(b) Even though Mr See’s pleaded claim was based on a resulting trust rather than a constructive trust, he was still entitled to the Property. He had contributed the entirety of the purchase price of the Property and had not intended to give full beneficial ownership to Mdm Chan; the beneficial interest in the Property thus resulted back to him (see the Judgment at [19]–[20]).
The arguments on appeal
[31] On appeal, Mdm Chan submitted that the Judge erred when he relied primarily on the credibility of the witnesses in arriving at his decision that Mr See had full beneficial ownership of the Property. She contended that the Judge failed to appreciate the significance of the objective evidence in the form of certain contemporaneous documents (namely, the POA and handwritten notes by SHC). The inference properly drawn from those documents was that Mr See had agreed to gift the Property to Mdm Chan in return for the latter contributing her life savings and her future income from SEPL and TMPL to the Purchase – and the evidence showed that Mdm Chan had indeed paid a substantial part of the purchase price of the Property. In the alternative, Mdm Chan submitted, if there was no such agreement to gift the Property to her, she was still entitled to rely on the presumption of advancement, which was not rebutted by the objective evidence.
[32] In contrast, Mr See’s position on appeal was that the Judge rightly found that: (a) Mdm Chan had agreed to Mr See being the person who would repay the HSBC Term Loan; and (b) the $290,000 contributed by Mdm Chan was meant to be a loan which would be repaid by Mr See. Therefore, it was Mr See who had paid the entire purchase price of the Property, and the presumption of resulting trust arose in his favour. Independently of this presumption, Mr See submitted, there was also direct evidence, in the form of the POA as well as his and SHC’s evidence of what transpired at the 1983 Meeting, that he intended to retain beneficial ownership of the Property. Thus, Mr See never intended to benefit Mdm Chan, which was significant in two ways: it rebutted any presumption of advancement which Mdm Chan said arose in her favour, and more importantly, it gave rise to a resulting trust in Mr See’s favour.
[33] Notably, in his submissions before this court, Mr See abandoned any serious reliance on the First Memo, preferring instead to focus on the POA, SHC’s handwritten notes and the oral evidence given by himself and SHC. Mr See’s counsel conceded that the First Memo was hardly conclusive since Mdm Chan was not a signatory to it; moreover, it was executed five years after the Purchase. We should point out here that the Judge’s observation (at [12] of the Judgment) that the First Memo was adduced primarily to support Mr See’s original pleading that SHY was exercising undue influence on Mdm Chan was inaccurate. On the contrary, it was clear from Mr See’s own pleadings that he was relying on the First Memo to bolster his account of what took place at the 1983 Meeting.
Lau Siew Kim revisited
[34] As mentioned earlier, the arguments deployed before us centred on the device of the resulting trust. In particular, both parties relied on this court’s decision in Lau Siew Kim to bolster their submissions.
[35] In Lau Siew Kim, the appellant married the respondents’ father (“the father”) in December 2000. In April 2000, shortly before their marriage, the appellant and the father bought a property as joint tenants. This property was their matrimonial home, and a mortgage in both their names was taken out to part-finance the purchase. In March 2004, the appellant and the father bought another property as joint tenants. Again, a mortgage in both their names was obtained to part-finance the purchase. The father passed away intestate in November 2004, and the appellant, as the survivor, became the sole legal owner of both properties. The respondents, who were the father’s sons, sought a declaration that the appellant held the properties on trust for the father’s estate.
[36] This court approved of the view that a presumption of resulting trust arose when a person made a voluntary payment to another person or paid (wholly or in part) for the purchase of property which was vested in the other person (see Lau Siew Kim at [34] and [46]). Since the appellant and the father had contributed unequally to the purchase price of the properties, the presumption of resulting trust arose. However, on the facts, a strong presumption of advancement (due to the spousal relationship) also arose, which was not rebutted. Thus, the presumption of advancement itself rebutted the presumption of resulting trust, and the appellant held the properties absolutely (see Lau Siew Kim at [142] and [146]).
[37] In the proceedings below, Mdm Chan and Mr See sought to prove that they had each contributed financially towards the Purchase – Mdm Chan, that she had provided her life savings of $290,000 plus her dividends, salary and bonuses from TMPL and SEPL; and Mr See, that he had paid the whole of the purchase price of the Property. As mentioned earlier (at [27(e)] and [28] above), the Judge found that Mr See had contributed the whole of the purchase price, and that the presumption of advancement was rebutted on the evidence. Accordingly, he ruled that Mdm Chan held the whole of the Property on a resulting trust for Mr See.
What does the resulting trust respond to?
[38] Professor Robert Chambers (“Prof Chambers”), in his seminal book Resulting Trusts (Clarendon Press, 1997), argues that the resulting trust is a response to a lack of intention on the part of the person providing the purchase price to benefit the recipient (the “lack-of-intention analysis”). In other words, according to Prof Chambers, a resulting trust would arise whenever the intention of the transferor to benefit the recipient is vitiated or absent. This view has the judicial support of Lord Millett, who stated in the Privy Council case of Air Jamaica Ltd and Others v Joy Charlton and Others [1999] 1 WLR 1399 (at 1412):
[39] Proponents of the lack-of-intention analysis argue that it adequately explains why the different types of resulting trusts arise. For example, it explains both: (a) the purchase price resulting trust; and (b) the resulting trust that arises on the failure of an express trust to exhaust the entire beneficial interest. However, critics have argued that the lack-of-intention analysis expands the scope of resulting trusts beyond acceptable bounds (see Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (“Westdeutsche”) at 708–709). For example, if a resulting trust arises whenever the intention to benefit the recipient is vitiated, it is possible to argue that whenever X pays Y money while labouring under a mistake, a resulting trust would arise over the money because X’s intention to benefit Y has been vitiated by the mistake. Indeed, under a wider thesis espoused by the late Prof Peter Birks (in Unjust Enrichment (Oxford University Press, 2nd Ed, 2005) at p 305) and Prof Chambers (in Resulting Trusts at p 225) based on the lack-of-intention analysis, a resulting trust would arise as a proprietary response to certain instances of unjust enrichment.
[40] The other main competing (and more classical) view of the nature of resulting trusts was espoused by Lord Browne-Wilkinson in Westdeutsche. In Westdeutsche, a bank transferred substantial amounts of money to a local authority pursuant to swap agreements which were subsequently held to be ultra vires the local authority. Although it was not disputed that the bank was entitled to recover the monies, the question arose as to whether compound or simple interest was payable by the local authority. This in turn depended on whether the local authority held the monies as a trustee at the point of receipt on the basis of a resulting trust. In concluding that a resulting trust did not arise over the monies, Lord Browne-Wilkinson rejected the lack-of-intention analysis of the resulting trust. Instead, he explained (at 708) that a resulting trust arose from the presumed common intention of the parties (the “positive-intention analysis”):
[41] It has been suggested, however, that the positive-intention analysis is not easy to reconcile with the case law on resulting trusts. For instance, it is difficult to square this approach with the cases in which the transferor had a clear intention to part with the beneficial interest (eg, Vandervell v Inland Revenue Commissioners [1967] 2 AC 291). Further, there is no reason in principle why the recipient’s intention is relevant to the creation of a resulting trust, and Lord Browne-Wilkinson’s explanation blurs the distinction between resulting trusts and common intention constructive trusts. Extra-judicially, Lord Millett has also criticised Lord Browne-Wilkinson’s approach to resulting trusts in Westdeutsche as an “unduly narrow view” [emphasis added] (see Peter Millett, “Review Article: Resulting Trusts” (1998) 6 RLR 283 at p 284).
[42] The Judge, at [18] of the Judgment, expressed the opinion that “Lau Siew Kim was equivocal on whether the court was concerned with the transferor’s intentions or both parties’ presumed intentions under a resulting trust analysis”. In doing so, it appears that the Judge was alluding to the fact that this court in Lau Siew Kim, while endorsing Prof Chambers’ lack-of-intention analysis of the resulting trust, also referred to the decision of Lord Browne-Wilkinson in Westdeutsche.
[43] With respect, we disagree that Lau Siew Kim was equivocal. This court quite firmly stated (at [35] of Lau Siew Kim) that a resulting trust may arise independently of the presumption of resulting trust so long as it can be shown that the transfer was not intended to benefit the recipient, and conversely, a resulting trust may not arise if it can be shown that the transfer was indeed intended to benefit the recipient. The intention of the recipient is therefore irrelevant to the question of whether a resulting trust has arisen. Westdeutsche was referred to in Lau Siew Kim for the limited purpose of illustrating the circumstances in which a resulting trust is presumed to arise.
[44] As can be seen from [38]–[41] above, much ink has been spilt on the correct doctrinal basis of the resulting trust (see, for example, Prof Chambers’ views in Resulting Trusts; William Swadling, “Explaining Resulting Trusts” (2008) 124 LQR 72; and John Mee, “Presumed Resulting Trusts, Intention and Declaration” [2014] CLJ 86). We are of the view that going forward, the lack-of-intention analysis may potentially provide a more sensible basis for the principled yet pragmatic development of this equitable doctrine.
[45] In this regard, we note that several High Court cases have already interpreted Lau Siew Kim as an endorsement of the lack-of-intention analysis. For example, in Yong Ching See v Lee Kah Choo Karen [2008] 3 SLR(R) 957, Lai Siu Chiu J held at [41]:
[46] Similarly, in Lin Chao-Feng v Chuang Hsin-Yi [2010] 4 SLR 427, Judith Prakash J held at [16]:
[47] And more recently, Belinda Ang Saw Ean J held in United Overseas Bank Ltd v Giok Bie Jao and others [2012] SGHC 56 at [14]:
[48] That said, we are mindful that the courts should tread carefully in this area of the law because an unduly wide doctrine of resulting trusts and the potential blurring of the distinction between claims based on unjust enrichment and claims based on resulting trusts might have unsettling effects on the rights of third parties and the security of commercial transactions. For example, Prof Graham Virgo has pointed out in The Principles of the Law of Restitution (Oxford University Press, 2nd Ed, 2006) at p 598:
The relevance of presumptions when there is direct evidence
[49] Another issue which has arisen is the relevance of the twin presumptions of resulting trust and advancement where there is direct evidence of the intentions of the transferor. In the present case, the Judge’s conclusions on the parties’ intention were made on the basis of direct evidence adduced before him, and not through recourse to either the presumption of resulting trust or the presumption of advancement (see the Judgment at [16]).
[50] In Lau Siew Kim at [59], this court expressed the view that:
[51] The above passage was subsequently read by Lai J in Neo Hui Ling v Ang Ah Sew [2012] 2 SLR 831 (at [25]) as suggesting that “the two presumptions of resulting trust and advancement should only operate when there is no evidence from which to prove or infer the intention of the transferor”. We are in broad agreement with Lai J on this point. It is true that there can generally be no justification to resort to presumptions, however much they may reflect the norms, customs and mores of society, if the court is faced with the actual intentions and desires of the transferor. In Lau Siew Kim, the father was no longer alive; thus, it was necessary to rely on the presumptions and the circumstantial evidence in order to divine his intentions with respect to his contributions towards the purchase price of the properties in question.
[52] However, the question in every case where the claim is based on the existence of a resulting trust is still whether there is any direct evidence that may adequately reveal the intention of the transferor. In this regard, we endorse the observations of Chan Seng Onn J in Lim Chen Yeow Kelvin v Goh Chin Peng [2008] 4 SLR(R) 783 (at [116]) concerning the role of presumptions where the evidence, although available, is unsatisfactory or equivocal:
The type of contribution which gives rise to the presumption of resulting trust
[53] In Lau Siew Kim, this court affirmed (at [112]–[113]) that: (a) a resulting trust crystallised at the time the property in question was acquired; and (b) as a result, strict orthodoxy required the quantification of each party’s share of the beneficial interest in the property to be determined by reference to his financial contributions to the purchase price of the property at the time the property was acquired. This court then considered (at [114]–[117]) what amounted to a “direct” contribution to the purchase price and referred, inter alia, to the dicta of Peter Gibson LJ in the English Court of Appeal case of Curley v Parkes [2004] EWCA Civ 1515 (“Curley”) at [14]:
[54] Notwithstanding the conceptual straitjacket limiting the types of payments which can be treated as “direct” contributions to the purchase price of a property, this court sought to draw a distinction (at [116] of Lau Siew Kim) between: (a) contributions made to the repayment of a mortgage on the basis of an agreement made when the mortgage was taken out; and (b) payments made towards discharging a mortgage without any prior agreement, holding that only the situation in (a) could give rise to a beneficial interest in the property concerned by way of a resulting trust.
[55] On further reflection, we are minded to consider whether this ought to be relaxed further to take into account the realities of mortgage repayment. In Modern Land Law (Routledge, 9th Ed, 2014), Dr Martin Dixon (“Dr Dixon”) criticises the narrow view of mortgage repayments taken by Curley (viz, that mortgage repayments can never count as contributions towards the purchase price of the property), and argues persuasively that (at p 176):
He reiterates these views in his article “Resulting and constructive trusts of land: the mist descends and rises” [2005] Conv 79 (at pp 82–83) concerning the nature of mortgage repayments.
[56] We also note that in Stack v Dowden [2007] 2 AC 432 (“Stack”), a case which we return to in much greater detail below, Lord Neuberger of Abbotsbury suggested (at [117]) that equitable accounting could be invoked “in a suitable case” as a possible mechanism for retrospectively adjusting, after the date of acquisition of the property, the parties’ respective shares of the beneficial interest in the property in a manner which was consistent with the resulting trust analysis:
[57] The strict rule concerning the attribution of mortgage repayments (as evinced by, inter alia, Curley) was once again questioned by Lord Neuberger, this time sitting in the English Court of Appeal, in Laskar v Laskar [2008] 1 WLR 2695 (“Laskar”) (discussed briefly below at [141]). In considering how a £43,000 mortgage taken out in joint names ought to be treated in a resulting trust situation, Lord Neuberger observed at [27]:
The issues arising in this appeal
[58] In our view, considering that the parties pleaded their cases based solely on the doctrine of resulting trust, the following issues arise for our decision in this appeal:
(a) Did Mr See pay the whole of the purchase price of the Property (“Issue 1”)?
(b) Did Mr See intend to benefit Mdm Chan by the contributions which he made to the purchase price of the Property (“Issue 2”)?
(c) If the evidence on Issue 2 is unsatisfactory and inconclusive, did the presumption of advancement operate to rebut any presumption of resulting trust (“Issue 3”)?
[59] As mentioned earlier, although the Judge decided that Mdm Chan held the Property on a resulting trust for Mr See, he suggested (at [17] of the Judgment) that the facts also indicated “a classic situation of a common intention constructive trust”. In view of the upheaval in this area of the law in England, we propose to examine this suggestion briefly after considering the facts of the instant case.
Some preliminary observations
[60] As a preliminary point, we feel constrained to make some observations on the state of the evidence and the witnesses in this case. First, the daughter, SSM, was not called upon to testify at the trial. Her evidence would have been of assistance in relation to the question of the authenticity of the First Memo, of which she was a signatory.
[61] Second, the lawyer who drafted the POA was not called on to give evidence. According to Mr See, the lawyer no longer had any personal recollection of the POA. His evidence, if available, would have been of much assistance to the court in ascertaining the purpose of preparing the POA and what Mdm Chan understood by executing the POA.
[62] Third, SHY was studying abroad in 1983 and only returned to Singapore in 1984. He therefore had no personal knowledge of any of the events leading up to the Purchase and could not offer any admissible evidence on those events. As a result, Mdm Chan’s case rested principally on her own evidence and her submissions of law.
[63] Fourth, and as adverted to by the Judge (eg, at [10] of the Judgment), the oral testimony of Mdm Chan was not very helpful to the court as she had lost most, if not all, of her memory of the relevant events which transpired. Her common refrain in cross-examination was that she had forgotten or did not know what had happened at the material time. This is not, of course, meant to be a criticism of her in any way.
[64] Mdm Chan’s memory deficit underscores the fifth point that we wish to make here, which is that the events surrounding the Purchase took place some three decades earlier. That was a very long time ago. It was therefore understandable that the documentary evidence in this case was not complete. That said, we note that some potentially vital evidence was not adduced (whether due to the effluxion of time or to other reasons).
[65] We are acutely aware that an appellate court should be slow to overturn a trial judge’s findings of fact, especially where they hinge on the trial judge’s assessment of the credibility and veracity of witnesses, unless: (a) the findings can be shown to be plainly wrong; or (b) the conclusions reached by the trial judge are against the weight of the evidence; or (c) the inferences drawn by the trial judge are not supported by the primary or objective evidence on record. With regard to the trial judge’s assessment of the credibility and veracity of witnesses, this court very recently held in Sandz Solutions (Singapore) Pte Ltd and others v Strategic Worldwide Assets Ltd and others [2014] SGCA 27 (at [50]–[56]) apropos cases where the material events took place a long time ago:
[66] In reaching his decision, the Judge, having found SHY and Mdm Chan to be unreliable witnesses, was much more willing to give Mr See and SHC the benefit of the doubt whenever there were difficulties with their evidence. In contrast, difficulties with Mdm Chan’s evidence were not charitably assessed and were taken to buttress Mr See’s case.
[67] This brings us to our sixth observation. Our review of the evidence inclines us to respectfully disagree with the Judge’s assessment of Mr See’s and SHC’s credibility. We agree with counsel for Mdm Chan, Ms Engelin Teh SC, that whether the First Memo was fabricated had a material impact on the credibility of Mr See’s and SHC’s evidence. Mdm Chan contended that the First Memo was fabricated by Mr See and SHC to support Mr See’s version of what transpired at the 1983 Meeting. In support of this contention, SHY pointed out that the two Memos were both written on paper purporting to be “Circular Resolutions” of a company which was not named, and that he, SHC and SSM, being directors of SEPL and TMPL, were in the habit of pre-signing blank directors’ circular resolutions. SHY averred that the text of the First Memo was written only after the memo had been pre-signed by SHC, SSM and him.
[68] The Judge held (at [7] of the Judgment) that since “neither [SHC’s nor SHY’s] account was inherently unbelievable”, his finding as to whether the First Memo was fabricated “could only be based largely on credibility”. On that basis, he decided that the First Memo was not fabricated, but had no probative value as to the events which took place during the 1983 Meeting. With respect, having viewed actual copies of the two Memos tendered in evidence and having regard to the procedural history behind the production of these documents, we have grave doubts as to their authenticity.
[69] As mentioned, the First Memo was allegedly prepared on the same day as the Second Memo. A visual inspection of the Second Memo suggests that the body text was written only after the signatures of SHC, SSM and SHY were already on that memo as the last line was deliberately written closer to the penultimate line so as to avoid crossing over the signatures. In fact, some of the words in the last line appear to curve over the top of SHC’s signature in order to avoid crossing over his signature. In our view, this is somewhat suspicious and indicates that the Second Memo was probably fabricated. Given that the First Memo was written on the same day as the Second Memo, it would be reasonable to infer that the First Memo was likely to have been fabricated as well.
[70] Further, it was undisputed that the originals of the two Memos were inspected by Mdm Chan’s solicitors on 8 June 2012, and that following such inspection, notice was given by Mdm Chan’s solicitors on 18 June 2012 challenging the authenticity of these two documents. Notwithstanding that, on the first day of the trial, Mr See explained to the court that he had lost the originals of the two Memos, and confirmed the next day that he was still not able to find them. At no time was there an explanation by Mr See as to why he decided to take possession of these documents notwithstanding the notice of challenge as to their authenticity. This was highly suspicious, to say the least. Given these circumstances, we are of the view that the Judge ought to have drawn the appropriate adverse inferences against Mr See and SHC.
[71] This leads us to our seventh and final observation. On the whole, it appears to us that SHC and SHY were the real litigants behind this action, and that the respective cases put forth by Mr See and Mdm Chan were largely an attempt by SHC and SHY to reconstruct versions of the material events which would be favourable to their cause based on whatever documentary evidence there was available. We are therefore of the view that the evidence of Mr See, Mdm Chan, SHC and SHY as to the parties’ intentions had to be approached with extreme caution, and that the documentary evidence played a central role in this case.
Issue 1: Did Mr See pay the whole of the purchase price of the Property?
[72] We turn now to Issue 1. The Property is held in Mdm Chan’s sole name, and hence, she is deemed to be absolutely entitled to the Property unless the presumption of resulting trust arises. The question in the present appeal, however, is not whether the presumption of resulting trust applies – it patently does since Mdm Chan conceded that she did not contribute the whole of the purchase price of the Property. Instead, the question is whether Mr See contributed the whole of the purchase price. Where this is concerned, it is not in dispute that the funds listed at [18(d)]–[18(f)] above should be attributed to Mr See. We therefore turn to examine to whom the $290,000, the HSBC Term Loan and the TMPL Overdraft (ie, the items at [18(a)]–[18(c)] above) should be attributed.
The $290,000 contribution by Mdm Chan
[73] As mentioned, Mdm Chan’s case was that the $290,000 was her contribution of her life savings towards the purchase price of the Property, and not a loan. In this regard, besides relying on her own evidence, she pointed to a handwritten note made by SHC prior to the Purchase, which categorised the $250,000 as “CASH” from “MUM” (ie, Mdm Chan), and not as a “LOAN” (there is a $40,000 difference between the sum stated in that note and the amount eventually contributed by Mdm Chan because Mdm Chan subsequently found out that she actually had $290,000 in her life savings). The relevant parts of that handwritten note read as follows:
[74] In our view, the appropriate inference to be drawn from this handwritten note, which was used for the See family’s own reference, is that Mr See and SHC were discussing at that time how much they would have to borrow in the form of bank loans, in an attempt to minimise the amount of interest to be paid. Therefore, we are unable to accept Mdm Chan’s construction of the handwritten note as it is not supported by its context.
[75] Mdm Chan, however, made a valid point about one part of the Judge’s reasoning. The Judge believed Mr See’s account that Mdm Chan had advanced a loan, which was repaid in 1986 using the sale proceeds of the Joo Chiat property. Mdm Chan’s failure to request for repayment over the years was seen by the Judge as supporting the inference that Mr See had indeed repaid the said loan (see the Judgment at [8]). With respect, we find ourselves unable to agree with the Judge. Mdm Chan never said that she asked for repayment of the $290,000 which she contributed. In fact, her case rested on the premise that that sum was not lent to Mr See. Her failure to request for repayment was therefore at best equivocal.
[76] As there is no doubt that the $290,000 initially belonged to Mdm Chan, the burden was on Mr See – and not Mdm Chan – to show that that sum was properly characterised as a loan. In this regard, Mr See’s evidence that he agreed at the 1983 Meeting to take a loan from Mdm Chan was supported only by SHC’s evidence of what transpired at that meeting. There was no document executed pursuant to the alleged agreement that Mr See would take a loan of $290,000 from Mdm Chan, so what existed was a purported oral agreement. The only other evidence supporting the characterisation of the $290,000 as a loan was Mr See’s testimony that he repaid this loan in 1986 out of the proceeds of sale of the Joo Chiat property. SHC supported this story – in fact, it was SHC who claimed that he issued the cheque from TMPL for Mr See to sign and repay Mdm Chan. Yet, neither a copy of the said cheque nor the corresponding cheque stub was produced in evidence. Nor did Mr See produce any evidence from TMPL’s records to show that TMPL had indeed issued such a cheque to Mdm Chan. Given that the Joo Chiat property was sold for $265,000, it seems odd that no record was kept of the issuance of a cheque for such a large sum. In this regard, we note that Mdm Chan said in cross-examination that she had been repaid the $290,000. However, for the reasons stated above (at [63]), we would be hesitant to take Mdm Chan’s evidence at face value.
[77] Given that there was simply no documentary evidence whatsoever that the $290,000 from Mdm Chan was a loan or that it had been repaid, much came down to the self-serving statements of Mr See and SHC. In view of that, we respectfully disagree with the Judge’s conclusion that the $290,000 was properly characterised as a loan. On the contrary, we find that the $290,000 should properly be attributed to Mdm Chan as her contribution to the purchase price of the Property.
The TMPL Overdraft
[78] Mdm Chan’s case on the TMPL Overdraft of $400,000 was twofold. On the one hand, she argued that the whole of that overdraft should be attributed to her on the sole account of her having signed a guarantee for the overdraft. In the alternative, Mdm Chan pointed out that Mr See had conceded in cross-examination that there was an agreed arrangement between them whereby she was to receive about 65% of what he received from SEPL and TMPL, except for dividends and profit. She asserted that she allowed her future income from SEPL and TMPL to be applied towards the repayment of the TMPL Overdraft, and thus, part of that overdraft should be attributed to her as her contribution to the purchase price of the Property.
[79] SHC testified that the use of the $400,000 from the TMPL Overdraft was purely fortuitous as the plan was for TMPL to sell the Borthwick property and use its sale proceeds to partially fund the Purchase. However, as the completion date of the Purchase was one month before the completion date of the sale of the Borthwick property, the lack of synchronisation necessitated drawing down from the TMPL Overdraft as a form of bridging finance. SHC further testified that the TMPL Overdraft was repaid in November 1983 following the completion of the sale of the Borthwick property. This date was confirmed by SHC’s handwritten notes and was also accepted by Mdm Chan.
[80] It was not disputed that at the material time, Mr See owned all but one of the 50,002 shares in TMPL. On that basis, the Judge treated the use of the sale proceeds of the Borthwick property as Mr See’s direct contribution to the purchase price of the Property. Oddly, despite Mdm Chan’s contentions above, she did not challenge this finding. We therefore see no reason to interfere with the Judge’s finding on this point, and it necessarily disposes of both of Mdm Chan’s arguments on the TMPL Overdraft. Accordingly, we are in agreement with the Judge that that $400,000 overdraft should be attributed to Mr See.
The HSBC Term Loan
[81] It is not disputed that the HSBC Term Loan of $400,000 was granted to Mdm Chan and not Mr See. A letter from HSBC tendered in evidence shows that Mdm Chan executed a first registered mortgage for $1.4m over the Property to secure the payment obligations under the HSBC Term Loan as well as her guarantees of up to $1m in relation to an overdraft facility for SEPL and the TMPL Overdraft. Neither Mr See nor SHC were named as guarantors in HSBC’s letter and they did not claim to be.
[82] Subject to what we have discussed briefly at [53]–[57] above, the HSBC Term Loan would be attributed to Mr See if he can establish that: (a) he repaid this loan; and (b) he made repayment pursuant to an agreement which he had with Mdm Chan at the time the mortgage was taken out (see Lau Siew Kim at [116]).
Who repaid the HSBC Term Loan?
[83] SHC claimed that he issued cheques quarterly from SEPL and TMPL to Mr See for him to repay the HSBC Term Loan. There was no documentary evidence (such as cheque stubs) to support this. Notwithstanding this, Mdm Chan did not appear to deny that Mr See made those repayments. In any event, the Judge noted that there was no credible evidence that Mdm Chan had contributed to the repayment of this loan. Again, before this court, Mdm Chan asserted that she allowed her future income under her agreed arrangement with Mr See (see [78] above) to be applied towards the repayment of the HSBC Term Loan, which was in her name. However, she stopped short of claiming that Mr See agreed that he would use the sums representing her future income to repay the loan, and in any event, she had no documentary evidence to support such a contention. In the premises, we see no reason to disturb the Judge’s finding that it was Mr See who repaid the HSBC Term Loan.
Was there sufficient evidence of a prior agreement that Mr See would repay the HSBC Term Loan?
[84] SHC’s evidence was that at the 1983 Meeting, it was agreed that Mdm Chan need not worry about repaying the HSBC Term Loan (even though it was in her name) as Mr See would take care of that. There was no documentary evidence of this alleged agreement. Hence, there was only Mdm Chan’s evidence that she could not recall exactly what was agreed at the 1983 Meeting against the evidence of Mr See and SHC, both of whom said that it was with Mdm Chan’s agreement that Mr See took on the obligation of repaying the HSBC Term Loan.
[85] The Judge was of the view that Mdm Chan did not give a cogent reason as to why the parties would have reasonably accepted that she had the means to repay the HSBC Term Loan. By 1983, she had been a housewife for at least 25 years, and there was no evidence of her actual financial position. The Judge concluded that it was implausible that the parties would have agreed that Mdm Chan, who was dependent on the household income which Mr See gave her, would be responsible for discharging the HSBC Term Loan. We agree with the inference drawn by the Judge. It was inconceivable that Mdm Chan, a homemaker who had just contributed her entire life savings towards the purchase price of the Property, would have undertaken the risk of being personally exposed to HSBC without at least some form of tacit assurance from Mr See that he would be responsible for paying off the HSBC Term Loan.
[86] In any event, even if we were not prepared to find the existence of a prior arrangement that Mr See would pay off the HSBC Term Loan, given that Mr See repaid the whole of that loan by himself, we would be willing to consider the remedy of equitable accounting to adjust Mr See’s and Mdm Chan’s respective shares of the beneficial interest in the Property so as to attribute the $400,000 from the HSBC Term Loan to Mr See (see our discussion above at [53]–[57]).
[87] On that basis, we are of the view that the $400,000 from the HSBC Term Loan was properly attributed to Mr See.
Our conclusion on Issue 1
[88] In view of the foregoing analysis, we find that Mdm Chan contributed a total of $290,000 and Mr See, a total of $1,541,758.90 to the $1,831,758.90 purchase price of the Property. The starting point, therefore, is the presumption that Mdm Chan holds 84.17% of the beneficial interest in the Property on a resulting trust for Mr See.
Issue 2: Did Mr See intend to benefit Mdm Chan by his contributions to the purchase price of the Property?
[89] Given the existence of the presumption of the aforesaid resulting trust, we move on to consider whether Mr See intended to benefit Mdm Chan by his contributions to the purchase price of the Property. This depends on what was actually said at the 1983 Meeting, details of which can be found at [14]–[16] above. To recapitulate, Mdm Chan claimed that she wanted the Property to be put in her name because she was feeling insecure due to Mr See’s infidelity. It was therefore “inherently probable” that Mr See bought the Property in her name to appease her and to assuage his guilt.
[90] In our view, the main obstacle in Mdm Chan’s case was the existence of the POA (see [17] above). According to Mr See, at the 1983 Meeting, an agreement was reached between him and Mdm Chan that the Property would be put in her name so that she could brag about it to her friends – on condition that she acknowledged him as the true owner of the Property in an “appropriate legal document”. Mr See claimed that the POA, which was subsequently executed, was the embodiment of that acknowledgment. SHC confirmed that that was indeed how the POA came about. The Judge agreed with Mr See. He said that the POA, when viewed in the light of the circumstances at the time of the Purchase, supported Mr See’s account.
[91] On appeal, Mdm Chan challenged Mr See’s account of the events surrounding the execution of the POA on the basis that the POA could not be considered an “appropriate legal document”. She argued that:
(a) The POA was wholly ineffective to show that the designated attorney was the true beneficial owner of the Property. A declaration of trust should have been but was not used.
(b) That a declaration of trust should have been but was not used was even more glaring given that Mr See had executed a written declaration of trust not too long before the Purchase (see [9] above).
(c) The only reason why a power of attorney, and not a declaration of trust, was executed was because Mr See wanted at that time only to retain control over the Property and not to claim beneficial ownership over it as well. This could be seen from the fact that SHC was also named as one of the attorneys in the POA – there was no reason to do so if Mr See intended to retain beneficial ownership of the Property himself.
We appreciate the force of these arguments and agree with Mdm Chan that the POA is ineffective in showing the existence of any agreement between the parties that Mr See was to be the true beneficial owner of the whole of the Property.
[92] However, Mdm Chan’s submissions still do not explain why, if the Property was truly a gift to her, she willingly allowed Mr See to exercise control over the Property. Mdm Chan claimed that the POA was not explained or translated to her in Cantonese, and she therefore never understood the effect of the POA. In the proceedings below, the Judge took the view that Mdm Chan’s signature on the POA was prima facie evidence that she had acceded to its contents; moreover, the court must assume that the lawyer drafting the POA would have explained its effect to Mdm Chan. There being no evidence to the contrary apart from Mdm Chan’s words, we respectfully agree with the Judge that Mdm Chan did not discharge the burden (which lay on her) of proving that she did not understand the effect of the POA. We also agree with the Judge that Mdm Chan’s story was unrealistic and incredible – there was no convincing reason why Mr See, a man nearing retirement who had just begun an affair, would make the biggest purchase of his life, only to gift it to someone who was his wife in name only. We therefore find that Mr See had no intention to benefit Mdm Chan by his contributions to the purchase price of the Property.
[93] For the sake of completeness, we would add that any presumption of advancement in this case (which would have been weak in view of the state of the relationship between the parties at the time of the Purchase) would have been negated by the circumstances discussed above, and thus, it is unnecessary for us to deal with Issue 3 (at [58(c)] above).
The common intention constructive trust: a “sounder solution”?
[94] Our analysis at [58]–[93] above is sufficient to dispose of this appeal. We now turn to address the Judge’s comment (at [19] of the Judgment) that the common intention constructive trust analysis is “a sounder solution” than the resulting trust analysis. In coming to this view, the Judge referred to two recent English decisions: Stack and Jones v Kernott [2012] 1 AC 776 (“Jones”).
Overview of the common intention constructive trust
[95] The foundational authorities in English law on the common intention constructive trust are Pettitt v Pettitt [1970] AC 777 (“Pettitt”) and Gissing v Gissing [1971] AC 886 (“Gissing”). The common intention constructive trust was developed to mitigate the arithmetic rigour of the resulting trust when ascertaining property rights upon the breakdown of a relationship in the domestic context. At the time Pettitt and Gissing were decided, the Matrimonial Causes Act 1973 (c 18) (UK) (“the MCA 1973 (UK)”) had not been enacted yet, and the English courts lacked a flexible, discretionary power to depart from a strict application of hard-nosed property law when dividing matrimonial assets. The common intention constructive trust still remains relevant today in England in cases which fall outside the scope of matrimonial legislation.
[97] Lord Bridge’s dicta in Rosset was approved and applied by this court in Tan Thiam Loke v Woon Swee Kheng Christina [1991] 2 SLR(R) 595 (“Tan Thiam Loke”) at [18]. Under the approach in Rosset, X acquires a beneficial interest in a property by way of a common intention constructive trust when he relies to his detriment on a common intention that the beneficial interest in the property is to be shared. Such a common intention may: (a) arise from an express discussion; or (b) take the form of an inferred common intention, as evidenced by direct financial contributions by X to the purchase price of the property; or (c) in exceptional situations, arise from other conduct by X which gives rise to an implied common intention. Rosset, however, left it unclear where the resulting trust fit into the analysis. For example, since it appeared possible from Rosset that direct financial contributions to the purchase price of a property could lead to the acquisition of a beneficial interest in the property both under a resulting trust and a common intention constructive trust, it was uncertain whether the applicable principles for quantifying the parties’ respective shares of the beneficial interest in the two situations would be the same or different.
[98] There appears to have been a dearth of reported cases on common intention constructive trusts in Singapore ever since the decision in Tan Thiam Loke. One reason could be the perceived restrictive nature of this remedy following Rosset. Whatever the reasons, the court is generally constrained by the manner in which counsel decide to present their clients’ cases. For example, in Lau Siew Kim, both the appellant and the respondents were content to rely on the law of resulting trusts to resolve their dispute. Similarly, in this case, notwithstanding the Judge’s references to Stack and Jones, both Mr See and Mdm Chan, perhaps for reasons of economy, declined to take up his invitation to consider the applicability of the common intention constructive trust, and the appeal before us was argued purely on the basis of resulting trust principles. Nevertheless, we note that there have been cases of property disputes (as defined at [3] above) where the parties advanced their claims on the alternative bases of: (a) a resulting trust; (b) a common intention constructive trust; and (c) proprietary estoppel (see, for example, the recent case of Quek Hung Heong v Tan Bee Hoon (executrix for estate of Quek Cher Choi, deceased) and others and another suit [2014] SGHC 17 (“Quek Hung Hong”)).
[99] We acknowledge that the interaction between the resulting trust and the common intention constructive trust (and, dare we say, proprietary estoppel) is complex and confusing, and has given rise to much controversy (see, for example, the observations of Vinodh Coomaraswamy J in Quek Hung Hong at [116] and those of Chadwick LJ in Oxley v Hiscock [2005] Fam 211 at [71]). Further, we are mindful of the importance of identifying the correct default legal regime to apply to property disputes, especially in the domestic context. In this regard, we agree with what A J Cloherty and D M Fox said in their article “Proving a trust of a shared home” [2007] CLJ 517 (at p 518):
[100] It is thus hoped that the following discussion on the common intention constructive trust will provide some clarity for lawyers when advising their clients on this difficult area of the law.
The English position
[101] The House of Lords case of Stack and the UK Supreme Court case of Jones firmly establish that under English law, the common intention constructive trust is the more appropriate tool for quantifying each party’s share of the beneficial interest in domestic property disputes (as defined at [3] above) where the property concerned is a family home purchased in the joint names of a cohabiting couple. Both cases are difficult to reconcile with Pettitt, Gissing and Rosset, although none of the latter three cases has been overruled.
The decision in Stack
[102] The salient facts of Stack are as follows. S and D were in a 19-year relationship. They were not married and, hence, fell outside the scope of the MCA 1973 (UK). A few years into their relationship, D bought a house in her sole name, where the parties lived together and raised four children. The £30,000 purchase price of the house was financed by: (a) a £8,000 down payment from D’s building society account; and (b) a £22,000 mortgage in D’s name, which D repaid on her own. It was unclear whether S made any contributions to D’s building society account. Extensive improvements were made to the house. Although S was responsible for most of these renovations, it was difficult to put a figure on how much they affected the final sale value of the house. The house was sold some years later, and D received a net amount of about £66,000 from the sale. The parties subsequently bought another property in their joint names (“the joint-names property”) for £190,000. Over 65% of the purchase price of that property (ie, £129,000) came from funds in D’s building society account, which, at that time, included the £66,000 from the sale of the previous house. The balance of the purchase price came from a £65,000 loan secured by a mortgage in the joint names of D and S and two endowment policies, one in the parties’ joint names and the other, in D’s sole name. The interest on the mortgage and the premium on the endowment policy in the parties’ joint names (eventually totalling about £34,000) were paid by S. S contributed £27,000 and D, over £38,000 towards repayment of the mortgage loan. The parties did not execute a declaration of trust over the joint-names property. It was undisputed that both parties had a beneficial interest in that property; the issue in Stack. therefore, was simply the quantification of the parties’ respective shares of the beneficial interest. The judge at first instance held that the beneficial interest in the joint-names property should be split 50:50 between D and S. D appealed. The English Court of Appeal disagreed with the judge at first instance and held that the beneficial interest should be split 65:35 in favour of D. S then appealed. The House of Lords upheld the English Court of Appeal’s decision, but with Lord Neuberger adopting a different line of reasoning from that adopted by the other law lords (viz, Lord Hoffmann, Lord Hope of Craighead, Lord Walker of Gestingthorpe and Baroness Hale of Richmond (collectively, “the majority in Stack”)).
(1) The approach of the majority in Stack
[103] In what appears to be a recasting of the law as traditionally understood, the majority in Stack held that the resulting trust analysis ought not generally to play any role in the resolution of domestic property disputes. For instance, Lord Walker held (at [31] of Stack):
[104] Similarly, Baroness Hale, with whom the other members of the majority in Stack agreed, cited with approval (at [60] of Stack) the following passage from Kevin Gray & Susan Francis Gray, Elements of Land Law (Oxford University Press, 4th Ed, 2004) (“Elements of Land Law (4th Ed)”) at para 10.21:
[105] Baroness Hale continued (likewise at [60] of Stack):
[106] The majority in Stack held that in the domestic context, if the property concerned was held in joint names, the starting point was the presumption that the parties were also joint tenants in equity, regardless of whether or not they had made equal contributions to the purchase price of the property (cf the resulting trust approach, where there is a presumption that the beneficial interest in the property is held in proportion to the contributions made by each party to the purchase price, regardless of how the property is held in law). The burden, the majority in Stack held, was on the party seeking to displace the equal division of the beneficial interest to show that the parties had a different common intention, and this was “not a task to be lightly embarked upon” (see Stack at [68]). This was evidentially the case because the court was dealing with the allocation of property rights, an area where certainty in the law was a principal consideration. In fact, Baroness Hale went so far as to say (at [69] of Stack):
[107] In the same paragraph, Baroness Hale attempted to give a non-exhaustive list of factors which might shed light on the parties’ intentions:
(2) The minority approach in Stack
[108] Lord Neuberger, although agreeing with the majority in Stack on the result, disagreed with the use of the common intention constructive trust as the default analytical tool. He accepted that the nature of the relationship between the parties would have a bearing on the inferences to be drawn from their discussions and actions, and that the domestic context could give rise to very different factual considerations from the commercial context (see Stack at [103] and [107]). Nevertheless, he argued that: (a) the same principles should apply to assess the apportionment of the beneficial interest between legal co-owners, whether in a sexual, platonic, familial, amicable or commercial relationship (see Stack at [107]); and (b) consistency required the approach to be the same regardless of whether the property was held in the name of one party or in the names of all the parties (see Stack at [114]).
[109] Lord Neuberger argued that the question of “the ownership of the beneficial interest in property held in the names of two people” should be considered in “a structured way” (see Stack at [108]). He preferred to state that where the only evidence available was the extent of each party’s contributions to the purchase price of the property, the beneficial ownership of the property would be held in the same proportions as the parties’ respective contributions to the purchase price, ie, the resulting trust analysis would apply. To him, this was a matter of both principle and logic (see Stack at [110] and [114]).
[110] But, that was not to say that the common intention constructive trust analysis was irrelevant. Lord Neuberger was prepared to accept that if there was more evidence available than the parties’ respective contributions to the purchase price of the property, the court might be able to deduce an agreement or understanding amounting to an intention as to how the beneficial interest in the property would be held. In this way, the resulting trust could be rebutted by a common intention constructive trust (see Stack at [124]).

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Chan Yuen Lan v See Fong Mun

Grounds of decision

Introduction

The facts

Background

Events surrounding the Purchase

Events after the Purchase

The pleadings

The decision below

The arguments on appeal

Lau Siew Kim revisited

What does the resulting trust respond to?

The relevance of presumptions when there is direct evidence

The type of contribution which gives rise to the presumption of resulting trust

The issues arising in this appeal

(a) Did Mr See pay the whole of the purchase price of the Property (“Issue 1”)?

Some preliminary observations

Issue 1: Did Mr See pay the whole of the purchase price of the Property?

The $290,000 contribution by Mdm Chan

The TMPL Overdraft

The HSBC Term Loan

Who repaid the HSBC Term Loan?

Was there sufficient evidence of a prior agreement that Mr See would repay the HSBC Term Loan?

Our conclusion on Issue 1

Issue 2: Did Mr See intend to benefit Mdm Chan by his contributions to the purchase price of the Property?

The common intention constructive trust: a “sounder solution”?

Overview of the common intention constructive trust

The English position

The decision in Stack

(1) The approach of the majority in Stack

(2) The minority approach in Stack