SUPREME COURT OF SINGAPORE
31 January 2024
Case summary
Yong Kin Sen v Loke Jian Xun Gabriel Prieztiano
Appellate Division – Originating Application No 57 of 2023 [2024] SGHC(A) 4
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Decision of the Appellate Division of the High Court (delivered by Justice Woo Bih Li):
Outcome: The Appellate Division of the High Court dismissed the application of the defendant seeking permission to appeal against the decision of the judge in the General Division of the High Court (“the Judge”). The Appellate Division held that there was no valid basis for the defendant to resist the plaintiff’s claim.
Pertinent and significant points of the judgment
• If there are opposing claims by a beneficiary of an estate and by a third party, it is not for an executor to dispute the claim by the beneficiary and the executor should interplead or seek directions.
Background to the appeal and the material facts
1 Eight brothers held shares in a company (“the Company”), including one Loke Soon Han (“LSH”), Loke Soon Seet (“LSS”) and Loh Soon Yam (“LSY”). The Plaintiff is LSH’s son.
2 LSH passed away in 2010. Under LSH’s wills, all of his shares in the Company were given to the Plaintiff. Loke Siew Kee (“LSK”), LSH’s sister, was the executor of LSH’s estate. LSK sold all the shares in the Company but declined to pay a portion of the sale proceeds to the Plaintiff. The Plaintiff commenced action against LSK in the District Court for the unpaid sale proceeds. After trial commenced but before its completion, LSK passed away, and her husband, Yong Kin Sen was appointed to represent LSK as the Defendant in the action.
3 The unpaid sale proceeds corresponded to 67,567 shares in the Company which were transferred to LSH on 18 May 2011 pursuant to two share transfer agreements. The shares comprised 59,523 shares transferred by LSS to LSH and 8,044 shares transferred by LSY to LSH. According to the Plaintiff, these shares were sold pursuant to a genuine sale of the shares in 2002. On the other hand, the Defendant alleged that the 67,567 shares belonged to LSS. The Defendant pleaded that the share transfer agreements were entered into in or around 2002 in anticipation of LSS’ bankruptcy which occurred in 2003. However, the Defendant argued in the Defendant’s closing submissions that the share transfer agreements was entered sometime in or around 1995 instead.
4 The District Judge (the “DJ”) took the view that the Defendant’s central position was that there was a collateral oral agreement in 2002, just before the adjudication of bankruptcy of LSS, to put LSS’s shares out of the reach of his creditors, and the Defendant’s pleadings precluded the Defendant from arguing that the agreement was entered in or around 1995. The DJ concluded that the purported collateral oral agreement would be a fraud on LSS’ creditors and illegal, and the Defendant should not be allowed to rely on it. The Judge agreed with the DJ and dismissed the appeal.
5 The Defendant sought permission to appeal in this application, arguing that the Judge made errors of law.
Decision of the court
6 If the Defendant had valid reason to believe that some of the shares belonged to LSS, it was not for the Defendant to act on her own and resist the Plaintiff’s claim for the Balance in respect of the Disputed Shares. To do so would be to act contrary to the Will. The Defendant should have asked LSS formally if he was claiming ownership of the Disputed Shares. If so, then the Defendant should have taken out an interpleader application or an administration action or an application to seek directions from the court (at [28] – [29]).
7 It was not for the Defendant to argue LSS’ claim for him, and there is no basis for the Defendant to continue to resist the Plaintiff’s claim. The application is thus futile and should not have been pursued at all (at [30] – [32]).
This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.