Li Suk Fong Susana v Shanghai Commercial Bank Trustee Ltd and another

Choo Han Teck J:

[1] Mr Lorenz Hennryk Gustav (“the deceased”) was a German national domiciled in Hong Kong at the time of his death. In his will dated 9 May 2000 (“the Will”), he appointed the first defendant, Shanghai Commercial Bank Trustee Limited, to be his trustee and executor over assets located in Germany and the rest of the world, including Singapore. The second defendant is an employee of the first defendant and was entrusted to apply for grants of probate and letters of representation in the various jurisdictions, including Singapore. Under the Will, the deceased bequeathed all his real and personal properties located outside of Germany (“the Non-German Residuary estate”) to the plaintiff, except for a pecuniary gift of one million German marks to a friend of the deceased, one Mr Gerhard Schoenegge.

[2] The plaintiff sought, by way of Originating Summons No 1186 of 2013, for the transfer of the Singapore estate to the plaintiff as the sole remaining beneficiary. The parties have since agreed on a draft Order of Court for the distribution of the estate, save for one issue.

[5] A trustee is entitled to be reimbursed expenses which he incurred whilst executing his duties under the trust. Though the defendants may have previously treated each jurisdiction as wholly discrete and independent, there is nothing in the will that prevents the defendants from dealing with the Non-German Residuary estate as a whole. There is only a separation between the German estate and the Non-German Residuary estate, with each having different named beneficiaries. Thus in principle, there does not seem to be anything that prevents the trustee from claiming expenses incurred in one jurisdiction of the Non-German Residuary estate, from the estate of another jurisdiction wherein a caveat may have been lodged.

[6] In this case, the problem with the defendant’s application is that it is unsubstantiated by evidence. The trustee has not proved that these are expenses which it incurred whilst executing its duties under the trust. No invoices have been produced in court, even for the taxes which allegedly amount to S$74,000. In fact, that is the only quantification given by the defendants, and yet they wish to retain a sum of S$700,000. Further, there is a lack of specificity in the defendants’ claims in relation to the administration of the NSW estate. Given that the defendants have not provided this court with any evidence of the alleged expenses that are outstanding in respect of the Singapore estate, and the expenses to be incurred in NSW, I am unable to award the defendants a retention sum of S$700,000 out of the Singapore estate.

Counsel for the plaintiff submits that the defendants have acted solely for their own benefit in refusing to transfer the Singapore estate to the plaintiff or to accept the termination of the trust, including the decision not to transfer the Singapore estate based on the risk that they may be sued by the children of the deceased. As such, Counsel submits that the defendants are not entitled to any costs out of the Singapore estate “which they had unjustifiably withheld from the plaintiff since 2012”, and submits for costs on an indemnity basis. In response, the defendants state that they cannot be faulted for seeking protection in a Court order so that they are not exposed to any legal action from the children.