Case Details
- Citation: [2021] SGCA 33
- Case Number: Civil Appeal No 63 of 2020
- Court: Court of Appeal of the Republic of Singapore
- Date of Decision: 09 April 2021
- Judges (Coram): Judith Prakash JCA; Chao Hick Tin SJ; Belinda Ang Saw Ean JAD
- Parties: Chan Yun Cheong (Trustee of the Will of the Testator) v Chan Chi Cheong (Trustee of the Will of the Testator)
- Applicant/Appellant: Chan Yun Cheong (Trustee of the Will of the Testator)
- Respondent/Defendant: Chan Chi Cheong (Trustee of the Will of the Testator)
- Legal Area: Trusts – Trustees
- Procedural History: Appeal from the High Court decision in [2020] SGHC 43
- Judgment Length: 18 pages, 10,053 words
- Counsel: Lau Wen Jin and Shivam Ahuja (Dentons Rodyk & Davidson LLP) for the appellant; Giam Chin Toon SC, Hui Choon Wai and Ho Si Hui (Wee Swee Teow LLP) for the respondent
- Key Statutes Referenced: Supreme Court of Judicature Act; Trustees Act; Trustees Ordinance
- Key Trust Instrument: Will dated 5 February 1947 executed by the late grandfather, Chan Wing (“Testator”)
Summary
In Chan Yun Cheong (Trustee of the Will of the Testator) v Chan Chi Cheong (Trustee of the Will of the Testator) [2021] SGCA 33, the Court of Appeal addressed a practical but legally significant question in trust administration: when a trustee seeks to retire under an express clause in the trust instrument, must the statutory conditions for retirement under the Trustees Act nevertheless be satisfied? The dispute arose because one trustee refused to consent to the other’s retirement by deed, insisting that he himself could resign by letter under the will’s terms.
The Court of Appeal upheld the High Court’s decision. It held that the retirement of a trustee was governed by s 40 of the Trustees Act, and that the will did not evince a contrary intention sufficient to displace the statutory requirements. The Court further affirmed that the court had power to compel the recalcitrant trustee to execute the required deeds (or otherwise facilitate execution), so that the remaining trustees could properly continue the trust administration.
What Were the Facts of This Case?
The trust in question originated from a will dated 5 February 1947 executed by the late grandfather, Chan Wing (“Testator”). The Testator died a few weeks later, and his sons became trustees of his estate. Over time, trustees died or purported to retire, and replacements were appointed. The trust assets were substantial and included assets located in Malaya and Singapore. The case therefore concerned not merely personal status as trustee, but the mechanics of maintaining a functioning trust structure with adequate trusteeship.
By around 1973, one trustee, Chan Kat Cheung, purported to retire by letter of resignation. There was no evidence that he executed a deed of retirement. Nonetheless, the remaining trustees accepted the letter as a valid method of retirement. Later, by June 2003, the trust had three trustees: Chan Chee Chiu (“CCC”), Chan See Chuen, and Chan Fatt Cheung (“CFC”). In March 2009, CFC resigned by letter, again without evidence of a deed of retirement. In April 2017, Chan See Chuen died, leaving CCC as the only remaining trustee.
In June 2017, CCC appointed the respondent and the appellant as co-trustees by a deed of appointment, restoring the number of trustees to three. After this reconstitution, disagreements emerged regarding stewardship of the trust assets. On 10 January 2019, the respondent’s solicitors wrote to CCC’s solicitors stating that the respondent intended to retire and attached an unsigned draft deed of retirement (“Draft Deed”). CCC’s solicitors indicated no objection and returned the Draft Deed with CCC’s signature appended on 15 January 2019.
On 16 January 2019, the respondent’s solicitors notified the appellant of the respondent’s intention to retire and asked for the appellant’s consent. The appellant did not sign the Draft Deed. Instead, on 1 February 2019, he wrote a “Resignation Letter” to the respondent and CCC stating that he resigned as trustee with immediate effect. He explained that his resignation was prompted by concerns about his ability to discharge his duties effectively, including a disagreement about a fund transfer allegedly made without his authorisation.
What Were the Key Legal Issues?
The Court of Appeal identified two core issues. First, it had to determine whether the trustee’s retirement or resignation was governed by the statutory regime in s 40 of the Trustees Act, or whether the express clause in the will (cl 3) provided an operative and independent mode of resignation that displaced the statutory requirements. This required the court to examine the interaction between the trust instrument and the statutory “default” powers conferred by the Trustees Act.
Second, the court had to decide whether the appellant—who refused to consent to the respondent’s retirement deeds—could be compelled to execute the deeds necessary to effect retirement and discharge. This issue engaged the court’s procedural and substantive powers to ensure that trust administration could proceed despite a trustee’s refusal, including whether the court could order execution and, if necessary, facilitate execution through the Registrar.
How Did the Court Analyse the Issues?
(1) Operative mode of retirement: statutory conditions vs trust instrument
The Court of Appeal agreed with the High Court that a trustee seeking to retire must comply with s 40 of the Trustees Act. The analysis began with the statutory framework. Section 2(2) of the Trustees Act provides that the powers conferred by the Act apply in so far as the trust instrument does not express a contrary intention. The court treated s 40 as a “power” within that framework. Accordingly, unless the will expressed a contrary intention, s 40 would apply to govern retirement.
The appellant relied on cl 3 of the will, which stated that upon the death or retirement of any trustee, the successor would be the testator’s male descendant through a male line, and that if any trustee disagreed with the others or had to attend to other business, he was “at liberty to resign and the vacancy thereby created shall be filled accordingly.” The appellant argued that this clause authorised resignation without formalities and without the consent of other trustees, and that the will’s mechanism was independent of any requirement to execute a deed.
The Court of Appeal rejected that submission. It emphasised that a “contrary intention” need not be express; it could arise from an inconsistency between the will’s operation and the statutory power. However, on an objective reading of cl 3, nothing indicated that the Testator intended to void or displace the statutory requirements. The clause addressed the consequences of a trustee’s retirement (including succession and filling of vacancies) but did not clearly and sufficiently regulate the mode of retirement, the need for consent, or the formalities required to discharge a trustee.
In practical terms, the court found that the appellant had not met the conditions prescribed by s 40 TA. The statutory scheme required retirement to be effected by deed, and required the remaining trustees to consent to the retiring trustee’s discharge by deed. Because the appellant did not execute a deed of retirement and because the respondent’s retirement required the appellant’s consent by deed, the appellant remained a trustee for legal purposes.
(2) Effect of prior “letter resignation” practice and estoppel
The appellant also sought to rely on historical practice within the trust. He pointed to CFC’s earlier resignation in 2009, which had been accepted by the other trustees without a deed. The High Court had accepted that the parties had acted on the basis that CFC was no longer a trustee from the time of his resignation, and therefore treated that resignation as valid for all intents and purposes in the circumstances. However, the Court of Appeal maintained that this did not create a general rule that resignation by letter was legally effective.
On estoppel, the appellant argued that the respondent and CCC had accepted CFC’s resignation by letter, thereby representing that resignation by letter was effective, and that the appellant relied on this representation to his detriment. The Court of Appeal agreed with the High Court that the acceptance of CFC’s resignation did not amount to a representation capable of estopping the respondent from asserting the statutory requirements. The parties’ reliance in appointing and administering the trust did not transform an erroneous method of retirement into a legally authorised mode that displaced s 40.
The Court of Appeal also addressed the appellant’s alternative argument that even if resignation by letter were effective, the respondent had already resigned before the appellant. The appellant contended that this meant the appellant was one of two remaining trustees and could therefore resign. The Court of Appeal accepted the High Court’s reasoning that the respondent’s retirement attempt occurred before the appellant’s purported resignation, but that the statutory structure still meant the appellant remained a trustee where there were insufficient conditions for resignation to be effective. In other words, the statutory requirement to ensure an appropriate number of trustees and to effect retirement properly could not be circumvented by sequencing alone.
(3) Compelling execution of deeds: court’s power
Having concluded that the appellant remained a trustee and that s 40 TA governed retirement, the Court of Appeal turned to the second issue: whether the court could compel the appellant to execute the deeds necessary for the respondent’s retirement and discharge. The respondent had argued that the court could order execution under s 18 of the Supreme Court of Judicature Act read with item 14 of the First Schedule, and/or by virtue of inherent powers, including those reflected in O 92 r 4 of the Rules of Court.
The Court of Appeal upheld the High Court’s view that s 14(1) of the SCJA provided a basis for the court to direct the Registrar of the Supreme Court to execute documents on behalf of a party who refused. This was important because trust administration often requires formal instruments to be executed to effect legal changes in trusteeship. If a trustee could block retirement by refusing to sign, the trust could become administratively dysfunctional, and the statutory purpose of retirement formalities would be undermined.
Accordingly, the court’s approach balanced two principles: (i) trusteeship is a serious appointment that cannot be relinquished at will, and (ii) the court has adequate procedural tools to prevent a trustee from using refusal to frustrate the statutory mechanism for retirement. The Court of Appeal therefore affirmed that the appellant could be ordered to execute the deeds, and that the court could facilitate execution if the appellant continued to refuse.
What Was the Outcome?
The Court of Appeal dismissed the appellant’s appeal and upheld the High Court’s orders. The appellant was required to consent to the respondent’s retirement by executing the relevant deeds, and the court also ordered steps to confirm earlier retirement arrangements through deed execution.
Practically, the decision ensured that the respondent’s retirement could be properly effected in accordance with the statutory formalities, and that the trust could continue with the intended trustee structure rather than being held hostage by a trustee’s refusal to sign.
Why Does This Case Matter?
This case is significant for trust practitioners because it clarifies the relationship between express trust provisions and statutory default rules governing trustee retirement. Even where a will contains a clause allowing a trustee to “resign” upon disagreement or other business, the Court of Appeal will examine whether the trust instrument expresses a contrary intention sufficient to displace statutory requirements. Absent clear inconsistency, s 40 of the Trustees Act will govern the mode of retirement.
The decision also reinforces that trusteeship is not a purely personal office that can be abandoned unilaterally by informal correspondence. Trustees must comply with the formalities necessary to discharge their responsibilities and to ensure continuity of trust administration. This is particularly relevant where trust assets are substantial and where the number of trustees must be maintained to enable proper management and decision-making.
Finally, the case demonstrates the court’s willingness to use its powers to prevent procedural deadlock. By confirming that the court can compel execution (including through the Registrar), the decision provides reassurance that a trustee cannot indefinitely obstruct retirement or discharge by refusing to sign documents required by statute.
Legislation Referenced
- Supreme Court of Judicature Act (Cap 322)
- Trustees Act (Cap 337, 2005 Rev Ed), in particular s 40 and s 2(2)
- Trustees Ordinance (as referenced in the judgment context)
- Rules of Court (Cap 322, R 5, 2014 Rev Ed), in particular O 92 r 4
Cases Cited
Source Documents
This article analyses [2021] SGCA 33 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.