Kay Swee Pin v N g Kong Yeam [2019] SGHC 223

Mdm Kay Swee Pin (“Kay”) filed this suit against her former partner, Mr Ng Kong Yeam (“Ng”), for reimbursement of money that she paid on his behalf. As Ng is non compos mentis, his son Mr Ng Chun San, also known as Gabriel (“Gabriel”), appeared as his litigation representative.

Kay claims she should be reimbursed for two items: first, a sum of S$36,792.98 that she paid to the Inland Revenue Authority of Singapore (“IRAS”) on behalf of Ng for his 2013 taxes; second, legal fees amounting to HK$1,416,395 in relation to a Hong Kong lawsuit that Ng initiated in December 2011, for which she was appointed his “next friend”, the equivalent of a litigation representative, in August 2013.

Ms Luo Ling Ling, counsel for Ng, submits that there is insufficient evidence that Kay had paid the IRAS tax bill and in any event, she did so voluntarily. As for the legal fees, Ms Luo submits that there was no evidence that Kay paid the fees or that Kay had incurred the expenses herself.

Ng’s IRAS Notice of Assessment dated 10 July 2013 indicated that tax of S$36,792.98 was due on 10 August 2013. Kay produced an extract of her bank statements showing a cheque withdrawal of S$36,792.98 on 6 August 2013. After the trial, Mr Clement Ong, counsel for Kay, sought leave to adduce a copy of a cheque for S$36,792.98 written by Kay in favour of IRAS. I granted leave to produce this.

The evidence shows that Kay paid Ng’s taxes on his behalf. The cheque drawn from Kay’s account specifies the same amount due in the Notice of Assessment, down to the exact cent. Ng’s taxes were paid as IRAS never pursued the matter, and Gabriel has no knowledge as to who paid for it. The question then is whether there is a legal basis for Kay to be reimbursed.

Mr Ong submits that Kay is entitled to the sum on the basis of “indebtedness/reimbursement”. Reimbursement is not a freestanding claim, but a remedy aimed at preventing the unjust enrichment of a defendant (SHC Capital Ltd v NTUC Income Insurance Co-operative Ltd [2010] 4 SLR 965 at [38]). Mr Ong also submits that Kay is entitled to the sum on the basis of unjust enrichment. A claim in unjust enrichment requires (a) the enrichment of the defendant, (b) at the expense of the plaintiff, and (c) circumstances which make the enrichment unjust (Benzline Auto Pte Ltd v Supercars Lorinser Pte Ltd and another [2018] 1 SLR 239 at [45]). Here, the key dispute is over the third element, and Kay must show that she had acted out of legal compulsion or necessity in a way that renders Ng’s enrichment unjust.

Kay did not tell Ng’s family about the IRAS Notice and also admitted in cross-examination that there was no legal obligation on her part to pay Ng’s taxes. She insisted that she had acted to protect Ng’s interests. At the material time, Kay and her daughter were Ng’s donees under a Lasting Power of Attorney dated 28 December 2011 (“the LPA”). The LPA was subsequently cancelled on 31 October 2014, when it was discovered that Kay had forged Ng’s signature on the document.

Legal compulsion was addressed in Cosmic Insurance Corp Ltd v Ong Kah Hoe (trading as Ong Kah Hoe Industrial Supplies) and another [1997] 3 SLR(R) 1 at [30], where the High Court held that for a plaintiff to recover any payment that discharges a defendant’s debt to a third party on the grounds of legal compulsion, the plaintiff must show that:

In the present case, Kay was not compellable by law because, as she conceded, IRAS had no claim against her. Kay may have been Ng’s donee under the LPA, but she had forged Ng’s signature on the document.

Alternatively, Mr Ong submits that it was necessary for Kay to pay Ng’s taxes. The common law does not, outside of cases involving emergencies, permit recovery for expenses incurred in the unsolicited management of the affairs of another (Higgins, Danial Patrick v Mulacek, Philippe Emanuel and others and another suit [2016] 5 SLR 848 at [59]). There must be an element of urgency in the situation.

I find that there was urgency in the present case. The cheque in question was dated 6 August 2013, merely four days before the taxes were due. Although Kay had relinquished the responsibility of caregiving for Ng by July 2013, Ng and his family were based in Malaysia and may not have made payment by the deadline. I find that, in the circumstances and given Kay and Ng’s prior relationship, she had acted reasonably by paying his taxes in compliance with IRAS’ instructions. Ng would clearly be unjustly enriched if Kay was not reimbursed the S$36,792.98.

I next deal with the Hong Kong legal fees, which Ms Luo divides into four categories:

Although Kay claims she paid a total of HK$1,416,395, Ms Luo submits, and I accept, that there was a refund of HK$25,500 on 20 February 2017, and so the actual figure is HK$1,390,895.

Kay claims that Tsang, a friend, paid the Category 1 sum first on Kay’s request and Kay then repaid Tsang. Tsang was not called as a witness and there was no evidence of any communication between Kay and Tsang. The payment was made on 26 June 2012, and the first medical report on Ng’s mental capacity is dated 5 October 2012. Ng may have paid Tsang back himself, and Gabriel, as Ng’s litigation representative, will naturally have no knowledge of this. Evidence from Tsang would have supported Kay’s claim, and I do not accept Kay’s bare assertion that she had paid Tsang since it would not have been difficult for her to find some corroborative evidence.

Ms Luo submits that the money used to pay the Category 2 sum belonged to Ng as it was paid out of the Joint Account. Kay claimed the money belonged solely to her and Ng was merely a signatory. Joint bank account holders are each entitled to all the moneys in a joint account, and so the money legally belonged to both Ng and Kay. Kay’s bare assertion that it belonged solely to her, with no documentary proof, is untenable, and I agree with Ms Luo that the Category 2 sum was not paid at Kay’s expense.

As for the Category 3 sum, Ms Luo submits that S$90,000 was moved from the Joint Account to Kay’s personal account on 19 August 2013 for the purpose of bearing the legal fees, and therefore the money used to pay the sum belonged to Ng as well. Kay denied transferring the money for this purpose, and claimed that she regularly transferred money between her accounts for her own convenience. I find it unlikely that payments from 9 October 2013 to 15 January 2016 amounting to HK$677,475 can be traced back to a single transfer in August 2013. I accept Kay’s explanation that she regularly moved money between her accounts and given that the Category 3 sum was paid from her personal account, I accept that it was paid at her expense.

Ms Luo concedes that Kay paid the Category 4 sum but submits that Kay had already been ordered to bear this personally in a decision of the Hong Kong court by Recorder Jason Pow, SC, and is attempting to relitigate the matter. On 19 August 2015, Gabriel applied to replace Kay as Ng’s next friend in the Hong Kong suit. Kay contested the application. The court ruled in favour of Gabriel, a decision upheld on appeal by Recorder Pow. The relevant part of his judgment is at [47]:

Kay did not appeal against this decision. Mr Ong submits that Recorder Pow’s judgment is irrelevant as it related only to party-and-party costs for the application before him.

In the circumstances, I grant Kay’s claim for reimbursement of S$36,792.98 and HK$677,475 and I dismiss her claim for reimbursement of the rest of the Hong Kong legal fees.