Case Details
- Citation: [2020] SGHC 43
- Title: Chan Chi Cheong (Trustee of the Will of the Testator) v Chan Yun Cheong (Trustee of the Will of the Testator)
- Court: High Court of the Republic of Singapore
- Date of Decision: 4 March 2020
- Originating Summons: Originating Summons No 703 of 2019
- Judges: Tan Siong Thye J
- Plaintiff/Applicant: Chan Chi Cheong (Trustee of the Will of the Testator)
- Defendant/Respondent: Chan Yun Cheong (Trustee of the Will of the Testator)
- Legal Area(s): Trusts; Trustees; Statutory interpretation; Civil procedure (inherent powers)
- Statutes Referenced: Supreme Court of Judicature Act; Trustee Act 1925; Trustees Act; Trustees Act 1925; Trustees Act 1925 (UK Trustee Act 1925); Under the Trustees Act (as referenced in the judgment)
- Cases Cited: [2011] SGHC 139; [2020] SGHC 43
- Judgment Length: 45 pages; 14,228 words
Summary
In Chan Chi Cheong (Trustee of the Will of the Testator) v Chan Yun Cheong (Trustee of the Will of the Testator), the High Court addressed a practical and legally significant problem in trust administration: whether a trustee who wishes to be discharged must follow the statutory mechanism for discharge under s 40 of the Trustees Act (Cap 337, 2005 Rev Ed), or whether the trustee may instead rely on a less onerous resignation/retirement clause contained in the trust instrument (here, a will dated 5 February 1947).
The case arose because two of three trustees sought to retire, but the remaining trustee refused to sign the retirement deeds. The court held that the operative mode for a trustee’s discharge/retirement is governed by s 40 of the Trustees Act rather than by the will’s Clause 3, where the statutory requirements are more specific and prescriptive. The court further considered whether the remaining trustee could be compelled to provide consent to the retirement deeds and whether the refusal was reasonable. Applying the court’s supervisory and inherent powers, the court granted relief to enable the retirement process to proceed.
What Were the Facts of This Case?
The trust estate originated from the will of the testator, Chan Wing alias Chan Min Sang alias Chan Chung Sui alias Chan Chun Wing (the “Testator”), who died on 27 February 1947. The will appointed the Testator’s sons as executors and trustees (the “Original Trustees”). Probate was granted in 1947 and later resealed in Singapore in 1949. Over time, trustees retired, passed away, and were replaced through deeds of appointment and retirement, resulting in a continuing trust administration with multiple trustees across decades.
By 2017, the trust had effectively narrowed to a small group of trustees. When Chan Sze Chuen died on 28 April 2017, only Chan Chee Chiu remained as trustee. Chan Chee Chiu then approached the plaintiff and defendant to act as co-trustees. A deed of appointment was executed on 27 June 2017, bringing the number of trustees to three: Chan Chee Chiu, the plaintiff (Chan Chi Cheong), and the defendant (Chan Yun Cheong).
On 10 January 2019, the plaintiff, through his solicitors, informed the defendant’s side of his intention to be discharged as trustee and attached a draft deed of retirement (the “10 January 2019 letter”). The plaintiff’s initial approach was based on an impression that the defendant’s solicitors acted for both the defendant and Chan Chee Chiu. When it became clear that the solicitors acted only for Chan Chee Chiu, the plaintiff’s intention to retire was reiterated to the defendant by letter dated 16 January 2019 (the “16 January 2019 letter”).
The defendant responded in a series of letters dated 1 February 2019. In his first letter, he explained that he had been corresponding about the legality of a transfer authorised by the plaintiff: a transfer of SGD 10,721,745.18 from the estate’s UOB account to the estate’s Citi Private Bank account (the “Disputed Transaction”). In a second letter titled “RESIGNATION AS TRUSTEE OF THE ESTATE OF CHAN WING, DECEASED”, the defendant purported to resign with immediate effect, stating that he was unable to effectively discharge his duties due to his disagreement with the Disputed Transaction.
After the plaintiff’s solicitors maintained that the defendant remained a trustee until a proper deed of retirement was executed, the defendant insisted that he had already resigned and argued that the Trustees Act did not make a deed the only way a trustee can resign. He relied on Clause 3 of the will, which (as described in the judgment) provided that if a trustee disagreed with the others or had other business, he was at liberty to resign and the vacancy would be filled accordingly. The defendant also pointed out that earlier retirements had allegedly been done by simple resignation letters, suggesting that the plaintiff’s position would create uncertainty about the validity of prior appointments and retirements.
In May 2019, the plaintiff’s solicitors sought to regularise the position by providing deeds of retirement and confirmation. They informed the defendant that a prior trustee’s retirement (Chan Fatt Cheung, who had resigned in 2009 without a deed) had been regularised by a deed executed on 25 April 2019. They then attached two deeds: (i) a deed of retirement and confirmation relating to Chan Fatt Cheung’s retirement, and (ii) the plaintiff’s retirement deed, both leaving a final signature section blank for the defendant. When the defendant refused to sign, the plaintiff commenced OS 703/2019 seeking the court’s intervention.
What Were the Key Legal Issues?
The High Court identified two pivotal issues. The first was statutory and interpretive: whether Clause 3 of the will or s 40 of the Trustees Act is the operative mode for a trustee to resign or retire. This required the court to consider the relationship between the trust instrument’s internal provisions and the statutory scheme governing trustee discharge.
Within Issue 1, the court had to determine (1) whether s 40 of the Trustees Act confers a power on trustees to be discharged, and (2) whether s 40 is contrary to the will. This involved examining the origin and purpose of s 2 of the Trustees Act (as discussed in the judgment), and how that provision affects the interaction between statutory rules and the terms of the trust instrument.
The second issue was remedial and procedural: whether the defendant could be compelled to provide his consent to the plaintiff’s retirement deed and the deed of retirement and confirmation. The court had to consider the statutory basis for the court’s power to make orders affecting trustees, including s 14 of the Supreme Court of Judicature Act, and whether the defendant’s refusal was “reasonable”. The court also considered the court’s inherent powers to ensure the proper administration of trusts.
How Did the Court Analyse the Issues?
Issue 1: Clause 3 versus s 40 of the Trustees Act
The court approached the question by focusing on the statutory architecture of trustee discharge. Section 40 of the Trustees Act sets out conditions for a trustee who desires to be discharged from the trust. The judgment emphasised that the provision is not merely procedural; it is a substantive mechanism that specifies how discharge is to be effected, including the requirement that the discharge be by deed and that the other trustees consent by deed to the discharge. The court treated these requirements as central to ensuring certainty and continuity in trust administration.
In analysing the relationship between s 40 and the will’s Clause 3, the court examined the origin of s 2 of the Trustees Act and its implications for how statutory provisions apply to trusts. The court’s reasoning (as reflected in the judgment outline) indicates that s 2 plays a role in determining whether statutory provisions override, supplement, or are displaced by the terms of the trust instrument. In other words, the court did not treat the will’s clause as automatically controlling; it treated the statute as potentially determinative where it prescribes a specific method for discharge.
The court then considered whether s 40 confers a power on trustees. If s 40 is a conferring provision, it provides the legal route by which trustees can be discharged. The court’s analysis also addressed whether s 40 is contrary to the will. Clause 3, on its face, appears to allow resignation by a trustee who disagrees or has other business, with the vacancy filled accordingly. However, the court’s interpretive task was to decide whether Clause 3 can operate alongside s 40 or whether it conflicts with the statutory method.
The court concluded that s 40 is the operative mode. The will’s Clause 3 could not be used to bypass the statutory conditions. The practical effect of this conclusion was that the defendant’s attempt to resign by letter—without executing the required deed of retirement and without providing the statutory form of consent—could not be treated as effecting a valid discharge. This also meant that the defendant remained a trustee for the purposes of the trust until the statutory discharge process was completed.
Issue 2: Compelling consent to the retirement deeds
Having determined that s 40 governs, the court turned to whether the defendant could be compelled to sign the retirement deeds. The plaintiff’s position was that the defendant’s refusal prevented the statutory discharge from being completed. The defendant’s position was that he had already resigned and, alternatively, that his disagreement with the Disputed Transaction justified his refusal.
The court considered s 14 of the Supreme Court of Judicature Act as a source of power to make orders necessary for the administration of justice, including orders that can affect parties’ legal rights where appropriate. The judgment also addressed whether the defendant’s refusal was “reasonable”. This is a critical trust-law concept: trustees owe duties to the trust and to the beneficiaries, and their decisions about administrative steps (such as consenting to retirements) must not be arbitrary or motivated by collateral disputes that are not properly connected to the trustee’s discharge.
In addition to statutory power, the court considered its inherent powers. Trusts are equitable institutions requiring ongoing judicial supervision where necessary. The court’s inherent jurisdiction supports orders to ensure that trust administration is not frustrated by procedural deadlock. Here, the deadlock was created by the defendant’s refusal to sign the deeds despite the plaintiff’s compliance with the retirement process and the court’s view that the defendant remained a trustee until the statutory discharge was properly effected.
The court also took into account the broader context of regularisation. The deeds of retirement and confirmation relating to earlier trustee retirements (including the regularisation of Chan Fatt Cheung’s 2009 resignation) demonstrated that the trust administration had previously required formalisation to ensure validity and continuity. That context supported the court’s insistence on formal compliance with s 40 for the plaintiff’s retirement.
What Was the Outcome?
The court granted the relief sought by the plaintiff. In substance, it determined that the defendant could not rely on Clause 3 to avoid the statutory discharge requirements under s 40 of the Trustees Act. The defendant’s letter of resignation did not validly discharge him as trustee, and he was therefore required to participate in the statutory retirement process.
Practically, the court’s orders enabled the plaintiff’s retirement to proceed despite the defendant’s refusal to sign the retirement deeds. The decision ensures that trustees cannot frustrate trust administration by withholding consent where the statutory conditions for discharge have been met and where the refusal is not justified as reasonable in the circumstances.
Why Does This Case Matter?
1. Clarifies the hierarchy between trust instruments and statutory trustee discharge rules
This case is important because it resolves a “novel and pivotal” question about whether a trustee can choose the method of resignation/retirement based on the trust instrument rather than the statute. The court’s approach reinforces that where the Trustees Act prescribes a specific method for discharge (including deed formalities and consent requirements), trustees and practitioners should treat s 40 as the operative mechanism even if the trust instrument contains a more flexible clause.
2. Prevents procedural deadlock and protects trust administration
Trust administration often depends on trustees taking administrative steps in a timely manner. If a trustee could effectively block retirement by refusing to sign deeds, the trust could become stuck in an unworkable configuration. The court’s willingness to use statutory and inherent powers to address refusal supports the broader principle that courts will not allow trustees to frustrate the proper administration of trusts through formal or tactical resistance.
3. Practical drafting and compliance guidance
For practitioners, the case provides clear guidance on how to structure retirement and discharge documentation. Where s 40 applies, practitioners should ensure that retirement is effected by deed and that the required consents are obtained in the correct form. Where a trustee refuses, counsel should consider seeking court directions or orders rather than relying on informal resignation letters or arguments based solely on the trust instrument’s internal clause.
Legislation Referenced
- Supreme Court of Judicature Act
- Trustee Act 1925
- Trustees Act
- Trustees Act 1925
- UK Trustee Act 1925
- Under the Trustees Act (as referenced in the judgment)
Cases Cited
Source Documents
This article analyses [2020] SGHC 43 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.