Cheong v Cheong [2021] WTLR 79

WTLR Issue: Spring 2021 #182

CHAN CHI CHEONG (Trustee of the Will of the Testator)

V

CHAN YUN CHEONG (Trustee of the Will of the Testator)

Analysis

Shortly before his death in 1947, the deceased made a will appointing his sons as his executors and trustees (the will). Clause 3 of the will provided that, ‘If any of my Trustees disagree with the others or have to attend to other business, he is at liberty to resign and the vacancy thereby created shall be filled accordingly.’

By 2017, following a series of deeds of appointments and retirements of trustees over several decades, the trustees were three individuals. In January 2019, the plaintiff wrote to the two other trustees notifying them of his intention to retire as a trustee, enclosing a draft deed of retirement for execution, the effect of which would have satisfied s40 of the Singapore Trustees Act 2005. One of the trustees indicated that they had no objection and returned a signed version of the draft deed of retirement.

In a first response letter, the defendant raised issue with a transfer authorised by the plaintiff. In a second letter, the defendant purported to resign as a trustee with immediate effect, explaining his inability to discharge his duties given the disputed transaction. In further correspondence the defendant averred that acting in accordance with s40 of the Trustees Act 2005 was not the only way in which a trustee could resign: he relied on clause 3 of the will. The defendant also raised the issue that a former trustee had resigned by letter.

In response, to regularise the position with the former trustee, the plaintiff sent a deed of retirement and confirmation signed by the plaintiff and the former trustee, and requested the defendant sign it and the plaintiff’s deed of retirement. The defendant refused.

Held:

(1) The operative mode of resignation/retirement is s40 of the Trustees Act 2005

The Trustees Act 2005 was applicable to the trust created by the will. Section 40 of the Trustees Act 2005 conferred a power on the trustees to obtain a discharge without having to appoint a successor, provided there are at least two remaining trustees, and thus s40 fell within the definition of a power conferred on trustees under s2(2) of the Trustees Act 2005.

Although s2(2) of the Trustees Act 2005 provides that provisions of that Act which are expressly or impliedly in contravention or inconsistent with the trust instrument will not override the powers of the trustee under the instrument, a fair and objective reading of clause 3 of the will did not forbid the operation of s40 of the Trustees Act 2005, and there were no words that suggested or implied that the deceased’s intention was to void its application. Clause 3 did not prescribe the method of resignation, nor did it state that a letter of resignation was sufficient. As there was no contrary intention in clause 3, s40 of the Trustees Act 2005 applied. The defendant’s letter of resignation did not comply with s40 of the Trustees Act 2005 and was invalid (paras [22]-[46])

Arguendo, even if a letter of resignation was permissible, the defendant’s letter of resignation was not sufficient because the plaintiff had given written notice of his intention to resign before the defendant. The plaintiff’s resignation would have left the defendant one of two remaining trustees, meaning that the defendant would have had to have appointed a replacement trustee before he could resign, as required by s40(1) of the Trustees Act 2005 (paras [47]-[51]).

(2) Defendant can be compelled to provide his consent to the plaintiff’s retirement deed and the deed of retirement and confirmation

As the plaintiff had proved, on the balance of probabilities, that the defendant had withheld his consent unreasonably to frustrate the plaintiff’s desire to retire, the court could use its statutory powers and inherent powers to order the defendant to grant his consent, failing which the court could direct the Registrar of the Singapore Supreme Court to execute the deeds on the defendant’s behalf.

In particular, it was not a prerequisite of s14 of the Singapore Supreme Court of Judicature Act (SCJA) for there to be a pre-existing judgment or order, and this provision was sufficient to grant the relief sought. Further, s18 SCJA also gave the court the power to compel the defendant to grant consent or the Registrar of the Supreme Court to do it on his behalf. Further still, O 92 r4 of the
Singapore Rules of Court gave the court the inherent power to make any order as may be necessary to prevent injustice or prevent an abuse of process (paras [52]-[78]).

(3) Inequitable to accept the defendant’s argument that the former trustee remained a trustee such that the deed of appointment of the plaintiff and defendant was ineffective

Although the former trustee had not resigned in accordance with s40 of the Trustees Act 2005, it could be considered valid for all intents and purposes because the trustees and relevant parties over the preceding ten years had acknowledged his discharge. Further, there was no basis to object to the regularisation of the position through a deed of retirement and confirmation now.

Moreover, there was nothing unjust or inequitable to the defendant in circumstances where the plaintiff and the defendant had themselves acted in reliance on the purported resignation. Moreover, two prior wrongs did not validate an invalid way for a trustee to retire (paras [80]-[81]).

JUDGMENT TAN SIONG THYE J: Introduction [1] This is a case in which two out of three trustees of a trust estate want to be discharged. The Plaintiff, Chan Chi Cheong, seeks to retire pursuant to s40 of the Trustees Act (Cap 337, 2005 Rev Ed) (‘Trustees Act’). This provision sets out several conditions to …
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Counsel Details

Menon T P B (Wee Swee Teow LLP, 491B River Valley Road, #10-03/04 Valley Point, Singapore 248373, tel +65 6532 2966, email contact@wst.com.sg) for the plaintiff.

Paul Wong Por Luk and Lau Wen Jin (Dentons Rodyk & Davidson LLP, 80 Raffles Place, #33-00 UOB Plaza 1, 048624 Singapore, tel +65 6225 2626, email sg.mail@dentons.com) for the defendant.

Cases Referenced

  • AQR v AQS [2011] SGHC 139
  • Cheong Wei Chang v Lee Hsien Loong and another matter [2019] 2 SLR 326
  • Cowan & ors v Scargill & ors [1985] Ch 270
  • Hwa Soo Chin v Personal Representatives of the Estate of Lim Soo Ban, deceased [1994] 2 SLR(R) 1
  • In the Matter of E A Scott 1991 Children’s Settlement No 1 [2012] EWHC 2397 (Ch)
  • Leo Teng Choy v Leo Teng Kit & ors [2000] 3 SLR(R) 636
  • Letterstedt (now Vicomtesse Montmort) v Broers & anr [1884] UKPC 1; [1884] 9 App Cas 371
  • London Regional Transport Pension Fund Trustee Co Ltd v Hatt [1993] PLR 227
  • Moore v M’Glynn [1894] 1 Ir.R. 74
  • Rajabali Jumabhoy & ors v Ameerali R Jumabhoy & ors [1998] 2 SLR(R) 434
  • Re Wrightson [1908] 1 Ch 789
  • Roberto Building Material Pte Ltd & ors v Oversea-Chinese Banking Corp Ltd & anr [2003] 2 SLR(R) 353
  • Walker v Walker [2010] WTLR 1617 ChD
  • Wellmix Organics (International) Pte Ltd v Lau Yu Man [2006] 2 SLR(R) 117
  • Yeo Guan Chye Terence & anr v Lau Siew Kim [2007] 2 SLR(R) 1

Legislation Referenced

  • Singapore Rules of Court (Cap 322, R5, 2014 Rev Ed), O92 r4
  • Supreme Court of Judicature Act 2007 (Singapore), ss14, 18
  • Trustees Act 1925 (UK), ss37(1), 39, 69(2)
  • Trustees Act 2005 (Singapore), ss2, 38(1), 40