CHEE YIN MEH v ONG KIAN GUAN & 2 Ors

Facts

Mr Fan Kow Hin was made bankrupt, and his trustees in bankruptcy brought Suit No 1078 of 2017 against his wife, Mdm Chee Yin Meh, and two British Virgin Islands companies, One Organisation Limited (OOL) and Gateway Plus Limited, challenging ten transactions Mr Fan had entered into with them. The trial judge found for the trustees on eight of the ten and made orders against Mdm Chee on three. She appealed on those three; the companies did not appeal.

At trial Mdm Chee first relied on a securities lending agreement and a shareholders agreement dated 28 February 2010, under which she said OOL had lent Mr Fan 401m shares of Healthway Medical Corporation Limited. She later admitted that she and Mr Fan created and signed those documents, and related notices, in September 2016 and falsely backdated them. She then relied on another document, the Points of Agreement for Securities Lending (POASL), and on an alleged oral agreement that Mr Fan held certain IHC shares on trust for OOL. The judge found the POASL a falsely backdated sham and that the alleged trust agreement never existed.

The three transactions on appeal were Mr Fan's transfer to Mdm Chee of his 58 OOL shares for $1; his transfer to her of $782,314.83 from a Hong Leong Finance account; and his sale of IHC bonds to OOL for $850,000 followed by his transfer of that sum to her without consideration. Each had been found a fraudulent conveyance and a transaction at an undervalue.

Issues

1. Whether the judge erred in finding the POASL a falsely backdated sham, and so in setting aside the transfer of the OOL shares
2. Whether the $782,314.83 belonged to OOL as proceeds of IHC shares held on trust for it
3. Whether the IHC bonds sold for $850,000 belonged to another company rather than to Mr Fan
4. Whether indemnity costs were appropriate

Holding

The Appellate Division dismissed the appeal and upheld the orders against Mdm Chee on all three transactions. She was ordered to pay the trustees costs on an indemnity basis fixed at $55,000, with disbursements of $8,000.

Reasoning

On the share transfer, Mdm Chee challenged only one of the judge's nine findings, the authenticity of the POASL. The unchallenged findings, including that Mr Fan was insolvent and had no obligation to transfer the shares, were enough to sustain the decision. The court also rejected her challenge on its own terms: she did not engage with the judge's reasons, which included the late production of the documents, the improbability of the share figure being known in 2010, and the identical company stamp on documents said to span five years. The POASL was never pleaded, and she had not served her notice of appeal on OOL, a party to it.

On the $782,314.83, her claim that it was sale proceeds of shares held for OOL was unpleaded and contradicted by her own evidence in cross-examination that she could not identify those shares. The judge's findings that the alleged trust agreement never existed were not addressed.

On the bonds, the claim that they belonged to another company was unpleaded, absent from her affidavit, unsupported by any other evidence and inconsistent with how the sale money moved. That company was not served either.

Indemnity costs were justified because she still relied on the POASL on appeal, which the court considered dishonest, and largely made bare assertions without engaging with the judgment.

From the judgment