The top court dismissed a woman’s appeal against a High Court decision which found she had tricked her husband into signing a deed of trust that would have left him a pauper and their infant son a millionaire.
The assets included a $25 million inheritance from his late mother who was murdered in an unrelated incident barely a week before he signed the deed.
The man, identified in court papers as BOK, had signed the deed on March 26, 2014, while he was grieving over his mother who was killed on March 19.
“The deed of trust was by no means fair, just and reasonable,” wrote Judge of Appeal Andrew Phang in decision grounds on Thursday. “We note further the husband had no independent advice and the deed was clearly a transaction at an undervalue, both of which weigh heavily in favour of a finding of unconscionability,” he said on behalf of the five-judge court, which also included Judge of Appeal Steven Chong and Justices Belinda Ang, Chan Seng Onn and Quentin Loh.
In contract law, unconscionability describes terms that are unjust.
In the deed he signed, the man had provided for all of his assets, including the potential inheritance from his mother’s estate, to be held by him and his wife in trust for their son who was then two years old. The document was signed in the presence of her father, a senior lawyer. But the couple’s relationship was rocky and the woman, a 38-year-old former lawyer, filed for divorce on Nov 25, 2015.
Five days later, BOK, now 34, applied to the High Court to set aside the declaration of trust. The High Court granted the application last December, holding that BOK was “in a state of weakness at the time he signed the deed of trust”.
The couple’s son and the woman, represented by Senior Counsel Kenneth Tan and lawyer Suresh Damodara respectively, then appealed to the top court.
Senior Counsel Michael Hwang, who was briefed by lawyer Anthony Lee, appeared for BOK, an energy firm’s managing director.
The Court of Appeal heard the parties in September and dismissed the appeal. In the 89-page judgment grounds, the top court concurred with the High Court to quash the trust deed on the grounds of misrepresentation, mistake and undue influence.
It ruled that a “narrow doctrine of unconscionability applies in Singapore”, saying it would not only consider whether or not the aggrieved plaintiff is poor and ignorant, but “would also include situations where the plaintiff is suffering from other forms of infirmities – whether physical, mental and/or emotional in nature”.
The court said the impairment of the man’s mental state “was of such gravity that it constitutes an infirmity that the wife knew about and took advantage of”.
The court said the deed was “by no means a reasonable way of providing for the son especially when one takes into account the circumstances in which it was executed”.
“We stress that the absence of independent advice and the characterisation of a transaction as being at an undervalue are not mandatory elements to be satisfied. However… the presence of these factors will often underscore and highlight the exploitation of an infirmity that renders a transaction improvident,” added Judge of Appeal Phang.