WANG XIAOPU v KOH MUI LEE & 2 Ors

Facts

The plaintiff, Wang Xiaopu (Mdm Wang), had earlier won Suit 686 against Dr Goh Seng Heng (Dr Goh), a doctor and co-founder of Aesthetic Medical Partners. In December 2019 the court ordered him to repay S$30,700,000 in share sale proceeds after finding he had made misrepresentations. Dr Goh did not pay, applied for his own bankruptcy and was declared bankrupt on 19 March 2020. In Suit No 636 of 2020, Mdm Wang sued his wife, Koh Mui Lee (Mdm Koh), his daughter Melissa Goh and his son Dr Jeremy Goh, claiming that Dr Goh had placed his assets beyond his creditors through them. Dr Goh himself was not a party.

She challenged about S$18m placed in an OCBC account in Dr Jeremy's name in 2016, two flats bought in the children's names (a Berth unit for Ms Melissa and a Seascape unit for Dr Jeremy), the sale of Dr Goh's half share in the family home at 36 Cove Way to Mdm Koh on 12 April 2019 for S$5,250,000, and the novation to Mdm Koh of his loans to two yacht companies. Mdm Wang relied on s 73B of the Conveyancing and Law of Property Act (CLPA), which makes conveyances made with intent to defraud creditors voidable, and on resulting trusts. The defendants said the transactions were in good faith and the properties were genuine gifts.

Issues

1. Whether the transfer of money into the OCBC account in Dr Jeremy's name was voidable under s 73B of the CLPA.
2. Whether the purchases of the Seascape and Berth units in the children's names were voidable or held on resulting trust.
3. Whether the sale of Dr Goh's half share in 36 Cove Way to Mdm Koh was voidable under s 73B.
4. Whether the novation of the yacht company loans and the transfer of shares to Mdm Koh were voidable under s 73B.

Holding

Lee Seiu Kin J allowed the claim in part. He declared void under s 73B the transfer of S$1,873,320.63 into the OCBC account in Dr Jeremy's name (ordering him to pay the account money to the Official Assignee within seven days), the Seascape purchase, the transfer of the 36 Cove Way interest (Dr Goh to refund Mdm Koh the S$5.25m) and the yacht loan novation and share transfer. The Berth purchase was not voidable, but Ms Melissa was declared to hold Berth on trust for Dr Goh and Mdm Koh. Berth and Seascape were each to be sold within three months, with 50% of the proceeds paid to the Official Assignee. Costs were reserved.

Reasoning

On the OCBC money, the judge found that the joint account of Dr Goh and Mdm Koh used to fund much of the family's dealings was not Mdm Koh's alone. The couple treated it as a common pool, and Dr Goh had earlier declared it joint on affidavit. Only the S$1,873,320.63 transferred from that joint account was shown to be his money. A family chat message from Dr Michelle on 12 February 2016 said Dr Goh was prepared to go bankrupt and move his assets to the children so that claimants would get nothing. Dr Jeremy later passed S$15m back to Dr Goh through Ms Melissa and gave no credible explanation. The court found actual intent to defraud and notice on Dr Jeremy's part. Mdm Wang was prejudiced because her suit was already under way.

On Seascape, bought in 2015 after Suit 686 had started, Dr Goh's message calling his litigants vultures, his control of the mortgage proceeds and his calls with the buyer during the 2021 auction showed intent and notice. Berth, bought in late 2014 when Dr Goh and Mdm Wang were still on good terms, was not shown to have been bought to defraud creditors. But it was paid for from the joint account and Ms Melissa never acted as owner, so a resulting trust arose.

On 36 Cove Way, the judge preferred the defendants' valuer and found no undervalue. But Dr Goh, already beaten in Suit 1311 and with a pattern of moving assets, sold his share to put it beyond creditors, and Mdm Koh, whose account of what she knew was contradicted by her earlier sworn evidence, had notice. The yacht loans were found to have come mainly from the joint account, Mdm Koh paid S$1 for the novation, and the explanations did not fit together. Since the couple had pooled the joint account, the judge split their interest in Berth and Seascape equally rather than 80% to Dr Goh as Mdm Wang had asked.

From the judgment