Wong Chong Yue v Wong Chong Thai

Philip Pillai J:

[1] The plaintiff, Wong Chong Yue, brings this suit against his brother, the defendant, Wong Chong Thai, for a declaration that their father Wong Shoa Ching (“Father”) had on 30 April 1993 created an express trust over 5311 shares in a company known as Malaya Construction Co (Pte) Ltd (“MCC”) in favour of the plaintiff, the defendant and their sister Mary Wong in equal shares. The defendant’s defence is that the 5311 shares in MCC (the “shares”) were transferred to him by their Father as a gift. The plaintiff also claims for breach of contract to refund the sum of CAN$60,000.00 and US$189,250.39 which he paid the defendant. The defendant denies that these were loans.

[2] The plaintiff had originally also claimed to be beneficially entitled to a 50% share in 967 shares under a second express trust created in favour of the plaintiff and the defendant. Their Father transferred these in June 2000 to the defendant on trust for the plaintiff and the defendant equally. This was evidenced by a letter produced in the course of discovery dated 13 April 2000 by the Father to the defendant in the following terms:

This is indisputably an express trust over “my [the Father’s] share[s]” which was created in April 2000 and which comprised the 967 shares which he then transferred to the defendant. The defendant has admitted the same. Accordingly this is not an issue before me.

[3] There are two issues to be determined in this action: (i) whether the Father had created an express trust over the 5311 shares he transferred to the defendant on 30 April 1993, in favour of the plaintiff, the defendant and their sister Mary Wong in equal shares; and (ii) whether the plaintiff made the loans to the defendant and if so their recoverability in law.

[4] The family history is a complex one in which the Father, now deceased, had in total four wives in Singapore and Hong Kong. In Singapore his two wives were Ong Siew Yong, with whom he had three children (the “OSY Line”), including one Wong Yue Yu ,and Lee Say Dee, with whom he had three children (the “LSD Line”): the plaintiff, the defendant and Mary Wong (the “LSD Line siblings”). The plaintiff, who is the eldest son in the LSD Line, had worked for several years for the Father in the family business in Sabah, Hong Kong and Singapore before migrating to Canada in 1982. The trial revealed the plaintiff’s chequered relationship with the defendant, with both of them working closely to defend Wong Yue Yu’s lawsuit against the Father and the plaintiff in Originating Summons 1245 of 1996 (“OS 1245”) but thereafter becoming estranged. Both the plaintiff and defendant in turn had poor and adversarial relations with Wong Yue Yu, their half-brother from the OSY Line. Wong Yue Yu had had an affair with the plaintiff’s wife in Canada, which led to their divorce. This unhappy extended family web cast a long shadow over the entire trial and coloured the oral evidence.

[5] The Father, the patriarch of the extended family, owned and controlled MCC until he transferred the shares in the company to his two sons from different wives on 30 April 1993. The Father had at the same time transferred 5311 shares to Wong Yue Yu, who was the eldest son of the OSY Line, and 5311 shares to the defendant, the second son of the LSD Line. The Father retained 1 share, and 1 share was held by his brother (the plaintiff and defendant’s uncle). The remaining outstanding and issued shares of MCC comprised 967 shares which the Father had earlier transferred to another wife, Cecilia Brown, in Hong Kong, and 150 shares held by his wife Ong Siew Yong. Upon her decease, 75 shares devolved to the Father and the balance 75 shares devolved to Wong Yue Yu and his OSY Line siblings equally.

[6] Subsequently the Father had as part of his divorce settlement with Cecilia Brown procured the return by her of 967 shares. The Father retained 100 shares and transferred 867 shares to the plaintiff. Wong Yue Yu filed OS 1245 against their Father and the plaintiff for a declaration that the Father’s transfer of 867 out of these 967 shares to the plaintiff was void, inter alia, because it was in breach of MCC’s articles of association.

[7] The outcome of OS 1245 was that MCC was ordered to be liquidated and its properties distributed amongst the shareholders. The 967 MCC shares came to be registered in the name of the defendant and were, upon the Father’s written instructions, held in trust for the defendant and the plaintiff, as the defendant admits (see [2] above).

[8] I first deal with the preliminary issue of whether the plaintiff’s claims for breach of trust and for account have been time-barred under ss 22(1) and (2), and 6(2), respectively, of the Limitation Act (Cap 163, 1996 Rev Ed) (“Limitation Act”). Section 22(1) and (2) of the Limitation Act reads as follows:

Section 6(2) of the Limitation Act reads as follows:

[9] The meaning and scope of s 22(1)(b) was examined in Soar v Ashwell [1893] 2 QB 390. Lord Esher MR said (at 393):

In the same judgment, Bowen LJ stated that (at 395 - 396):

The above passages have been cited with approval more recently by the English High Court in Cattley and anor v Pollard and anor [2007] 3 WLR 317 at [43] – [47]. A claim for accounting under an express trust would accordingly not be subject to any time bar, whether under s 6(2) or anywhere else in the Limitation Act. Section 22(2) of the Limitation Act is subject to s 22(1) of the Limitation Act, and therefore does not apply.

[10] With respect to the plaintiff’s claim for repayment of CAN$ 60,000 and US$ 189,250.39, such a claim, independent of the trust, would be “founded on a contract” and is thus time barred under s 6(1)(a) of the Limitation Act, which reads as follows:

For completeness I will deal briefly with this claim later (see [21] below).

[11] I now turn to the main issue arising in this suit, ie, whether the Father had created an express trust over the 5311 shares transferred to the defendant in favour of the LSD Line siblings in equal shares.

[12] It is noteworthy that the plaintiff has not produced any document, written communication or letter of wishes of the Father from which an express trust is to be construed. In sharp contrast there was produced in discovery and admitted by the defendant that the Father by his own hand had expressed a trust over the 967 MCC shares he had transferred to the defendant in April 2000 (see [2] above). Further, nothing that was contemporaneous with the relevant instruments of transfer, approval and registration of the 5331 shares by the Father to the defendant in April 1993, and which even remotely suggests that there was a trust intended by the Father then, was produced in evidence. When the Father later transferred the 967 shares to the defendant in April 2000, he took the trouble to expressly write a letter to the defendant expressing a trust over these 967 shares in favour of the defendant and the plaintiff. The Father said nothing in this letter relating back to the 5311 shares he had previously transferred to the defendant in April 1993. The plaintiff admitted under cross examination that there was no evidence of any trust for the benefit of the LSD Line siblings.

[13] It is also noteworthy that although the plaintiff’s solicitors had informed Mary Wong that they reserved their right to subpoena her in these proceedings, she has not been called as a witness. With respect to Mary Wong’s interest in the 5311 shares, the plaintiff’s evidence was contradictory. He took the position that the defendant ought to give her something but deducting the value of the mother’s house that had been transferred to Mary Wong. Mary Wong’s interests in these shares depend on whether or not there is an express trust under which she is to be a beneficiary. It does not in law depend on the decision or exercise of discretion of either the plaintiff or defendant. To the extent that the plaintiff was of the view that the defendant had such a discretion with respect to Mary Wong’s entitlement, this would serve as a contra indication of any trust for the three LSD Line siblings.

[14] The plaintiff sought to rely on affidavit evidence of the deceased Father filed in OS 1245 as being relevant to his claim. Both the plaintiff and the defendant had been engaged in preparing the drafts of the Father’s affidavits in OS 1245 in consultation with the lawyers. The plaintiff‘s evidence of his involvement in this process was summarised as follows:

[15] Portions of the first drafts of the Father’s affidavit had been handwritten by the plaintiff and the defendant typed further drafts, both of which were used by the lawyers to prepare the Father’s draft affidavit which was finally affirmed by the Father in Hong Kong. The affidavit evidence of the Father in OS 1245, in which the Father stated, inter alia, a position at variance with the plaintiff’s claim of an express trust, was introduced:

[16] When cross examined on his role in the drafting of paragraph 10.5 above the plaintiff answered as follows:

The following portion of the plaintiff’s evidence under cross-examination is also relevant:

[17] The plaintiff first called Wong Yue Yu as a witness who, after being sworn in, stated that he was not going to give any evidence beyond what he had filed in OS 1245. The plaintiff then withdrew this witness.

[18] The plaintiff then relied on a letter dated 5 February 1993 from the defendant to him as an admission by the defendant that there exists an express trust as averred. The letter reads as follows:

The plaintiff argued that the defendant, by referring to the 5311 shares as “our 5311”, has thereby admitted that the defendant was merely a trustee of the shares for the plaintiff, the defendant, and their sister, Mary Wong. The starting point is that this is not a letter from the Father. Further, the context and tenor of the letter will determine the meaning and scope of the expression, “our 5311”. The entire letter relates to the shareholdings in MCC and it arose in the context of the OS 1245 litigation by Wong Yue Yu against the Father and the plaintiff, concerning the 967 shares originally held by Cecilia Brown and out of which the Father had transferred 867 shares to the plaintiff and retained 100 shares in his own name (see [6] above). The plaintiff and the defendant had together assisted their Father in his affidavits and legal defence (see [14] above). In this letter the defendant states clearly that he suspects that the shares originally held by Ong Siew Yong (see [5] above) are divided between their Father and the OSY Line children equally. Then he goes on to say that if all things remain equal, “Tom’s [Wong Yue Yu] group”, ie, the OSY Line, has more shares than “us”. The letter is addressed to the plaintiff and makes no reference to Mary Wong. Nothing in this letter construed in context suggests any admission by the defendant that he holds these shares on trust for the three LSD Line siblings equally. On the contrary, it reiterates the defendant’s anxiety not to be outvoted by the OSY Line and, in particular, Wong Yue Yu, which presumably was an anxiety shared by the plaintiff at that time.

[19] It was in this context that the defendant was urging the plaintiff to convince their Father to transfer Cecilia Brown’s shares to the plaintiff so that the plaintiff’s and the defendant’s combined shareholding in MCC would be not be exceeded by the OSY Line’s shareholding.