CHENG AO v YONG NJO SIONG

Facts

Mr Cheng Ao (Cheng) sued his mother, Mdm Yong Njo Siong (Mdm Yong), in Suit No 78 of 2022 over a unit at Tropical Spring. Mdm Yong's late husband, Satrio, who died on 9 November 2021, controlled the family's finances and had founded tile businesses in China, in which Cheng and his brother Chen worked. When Inhwa Qingdao was sold in 2011, Satrio received RMB158m and, after scaling back the allocations in his handwritten note of 25 June 2011, intended RMB45.35m each for himself and Cheng and RMB12.75m each for Mdm Yong and Chen.

In 2011 Cheng and Mdm Yong bought the unit for $1.515m, exercised the option on 13 September 2011 and were registered as tenants in common in equal shares on 3 January 2012. Cheng made all the payments, including a $790,000 mortgage he serviced, but did not live there; his parents moved in after relocating to Singapore in December 2019. An email Cheng sent Chen on 6 December 2011 set out the shares Satrio had distributed and allotted RMB4m of Mdm Yong's share to the unit as "her house".

Cheng claimed Mdm Yong held her half on resulting trust for him, saying he bought the unit with his own money as an investment and added her name only for her comfort. Mdm Yong counterclaimed that Cheng held his half on resulting trust for her, and that he was liable for the rest of her RMB12.75m share under an express or constructive trust.

Issues

1. Whether the half share registered in Mdm Yong's name was held on resulting trust for Cheng.
2. Whether the half share registered in Cheng's name was held on resulting trust for Mdm Yong.
3. Whether Cheng was liable to Mdm Yong for the balance of her share of the sale moneys under an express or constructive trust.

Holding

The High Court dismissed Cheng's claim and allowed Mdm Yong's counterclaim in part. It granted a declaration that Mdm Yong is the sole beneficial owner of the unit, and dismissed her counterclaim for the balance moneys of RMB8.75m. Parties were directed to file submissions on costs.

Reasoning

On the first issue, the question was whose money paid for the unit. The court read the 6 December 2011 email as showing that, between contract and completion, the whole purchase, mortgage repayments included, was to come from Mdm Yong's share. It did not believe Cheng's account that he was speaking hypothetically. The email also showed Cheng's belief that the unit was to be his mother's. The court found Mdm Yong, who had limited education, trusted her son and believed the unit was bought for her as Satrio's provision. It rejected Cheng's comfort explanation: a businessman of his sophistication would have chosen a joint tenancy if that were the aim, and the evidence did not support his account of an assurance that she would return her share to him.

On the second issue, the email shifted the evidential burden to Cheng to rebut the inference that he used funds Satrio meant for Mdm Yong, and he failed to do so. It was not necessary for her to show a prior beneficial interest in the moneys or that the purchase drew only on earmarked funds; money is fungible, and the intended gift was perfected through Cheng when the funds were used. Cheng's half was therefore held on resulting trust for her.

On the third issue, neither an express trust nor grounds for a constructive trust were shown. Satrio, who controlled the family's finances, could still ask Cheng to pay him the balance instead. Without evidence from Satrio, the court could find neither that Cheng returned the balance to Satrio, as he testified, nor that he did not, so the pleading points did not need deciding.

From the judgment