FEATURES

Will the Right of Survivorship Survive?

A Legal Comment on: Yeo Guan Chye Terence and Another v Lau Siew Kim [2007] 2 SLR 1, [2007] SGHC 7; and Lau Siew Kim v Yeo Guan Chye Terence , [2008]2 SLR 108 (Court of Appeal).

Introduction

The issue raised here is whether, in the context of an estate claim, the right of survivorship under a joint tenancy in property could be over-ridden by a resulting trust; with the exception of a claim that follows a severance of a joint tenancy in real property. Specifically, the holding in the High Court case of Yeo Guan Chye Terence and Another v Lau Siew Kim is examined here. The peripheral issue of a conveyancer's duty in the creation and preservation of the right of survivorship under a joint tenancy is also examined. The practices and law development highlighted in that case also beg the question as to whether the creation of the right of survivorship is to be perceived as a presumptive law issue or a conveyancing issue.

The discussion in this paper will revolve around these principal issues:
a The incursion, if at all, of rules of equity into the area of joint tenancy with right of survivorship and the uncertainties cast on the otherwise seemingly immutable right of survivorship when placed in juxtaposition with such claims in equity;

b Whether a right of survivorship could be over-reached by a claim made by the estate of a deceased joint owner against the survivor, premised on the presumption of a resulting trust; and

c Whether registration under the electronic regime and practices of the Singapore Land Authority can represent prima facie evidentiary proof of the creation of a joint tenancy with right of survivorship - sufficient to negate or at least rebut any claim in equity.

It is proposed therefore to look at the propriety of a claim by an estate of a deceased joint owner, outside a severance situation, and premised on a presumption of a resulting trust against the surviving joint owner. This was the scenario established in Yeo Guan Chye. We will also examine the propriety of reducing the right of survivorship to a lesser right than it originally is known to have enjoyed under common law and/or under the registered title system in Singapore.

Preamble - Brief Statement on the Law

A resulting trust now arises as a matter of law. Where a disposition of property is made that transfers the legal interest without anything stated as to how the beneficial/equitable interest is to be dealt with, a resulting trust arises. A resulting trust will therefore arise in favour of a purchaser - the person who pays the purchase money where he takes the conveyance in the name of someone else.¹

A resulting trust can arise in the situation where the conveyance creates a joint tenancy holding in the property and is conveyed without further explanation as to how the beneficial interest is to be dealt with by the parties, unless rebutted or displaced by a presumption of advancement.

A right of survivorship inherent in a joint tenancy also arises by operation of law. This contingent right devolves with a jus accrescendi (a gradual concentration of the property on the demise of the joint owner(s) to the survivor(s), leaving the last person to inherit the whole of the property). At the same time, it has also been judicially observed that there is no situation known to fasten a trust obligation to the right of survivorship. The joint tenants are said to be owners per my et per tout - that is by every part and by the whole.²

Admittedly, the presumption of a resulting trust is commonly applied to cases of severance of a joint tenancy and the presumption of advancement is more readily applied to spousal or family-held properties in the absence of intention or contrary intention.

Summary of the Facts of Yeo Guan Chye

In Yeo Guan Chye, the deceased died intestate leaving some properties including a property at Minton Rise and at No. 18 Jalan Tari Payong. Both properties were the subject of a claim by the Plaintiff against his stepmother (the Defendant) who had held the properties at issue (together 'Property'), jointly with his late father. The Plaintiff contended that as his father had provided the purchase money, the Defendant was therefore holding the Property in trust for the estate. The Plaintiff also argued that there was no presumption of advancement in favour of the Defendant. The Defendant submitted that there was a presumption of advancement in her favour and that this presumption would override any resulting trust. She also claimed that she was in law entitled to the whole Property as a survivor of property held under a joint tenancy.

At the High Court

At the High Court, Lai Siew Chiu J held in favour of the Plaintiff on the grounds that that there was a resulting trust which operated to override the right of survivorship. As a result, the judge held that the Plaintiff and Defendant were entitled to the proportionate shares respectively of 65 per cent to 35 per cent of the property at 18 Jalan Tari Payong, and 50 per cent to 50 per cent in respect of the property at Minton Rise. The following passages, reproduced at length from the record, are relevant in the judgment:

The right of survivorship

73 It is well established that in a joint tenancy, there is a right of survivorship when one of the co-tenants die. In the present case, it was axiomatic that the right of survivorship dictated that the entire property in a joint tenancy belongs to the defendant. However, this will result in the deceased's estate being left with nothing. This seems to be unfair and unjust.³ Case law states that equity intervenes to ensure that although the deceased and the defendant remain joint tenants at law, they are actually tenants in common in equity, according to the proportion of their respective financial contributions. Accordingly, I hold that the existence of a resulting trust overrides the right of survivorship in the joint tenancies of both Minton Rise and 18 Jalan Tari Payong.⁴ (Emphasis added.)

74 Judith Prakash J rightly opined in Neo Boh Tan v Ng Kim Whatt ⁵ [2000] SGHC 31 at [11]:

As joint tenants of the flat, the plaintiff and defendant have at law an identical interest in the whole of the flat. The position is, however, different in equity because of the way in which they paid for the flat. The governing principle is that where two or more persons buy a property together but pay for it in unequal shares, then even if they register themselves as joint owners of the property, the law will presume that the express joint tenancy has been severed in equity into an implied tenancy in common in unequal shares proportioned to the amount of the purchase price contributed by each co-owner. As Professor Tan Sook Yee puts it in Principles of Singapore Land Law (at pp 91 to 92):

Equity leans in favour of tenancies in common in given situations because of the inherent unfairness of the right of survivorship that obtains where there is a joint tenancy. For example, where A and B have contributed to the purchase price of property in unequal shares or have lent money on mortgage, or are business partners but the conveyance contains no words of severance, at law there would be a joint tenancy. If they are also joint tenants in equity, on the death of one of the joint tenants, the surviving joint tenant will succeed to the 'share' of the deceased joint tenant by the right of survivorship, so that the estate of the deceased joint tenant will get nothing. In the circumstances, this result is manifestly unfair and equity will recognise that while A and B are joint tenants at law, they are also tenants in common in equity and each should be entitled to a share proportionate to his contribution. The net result is that A and B are joint tenants in law, holding in trust for themselves as tenants in common in shares proportionate to their contributions. (Emphasis added)

Professor Tan goes on to state in a footnote that this is a resulting trust and can be rebutted by evidence to the contrary.

In Yeo Guan Chye there was no attempt to consider or to distinguish the circumstances or context in which the above presumption of resulting trust was applied. It was said that the right of survivorship could be overridden by a presumption of resulting trust in the context of an estate claim as distinguished from a contingent or prospective right in a severance scenario. The judge in Yeo Guan Chye found that there was on the facts a resulting trust. As a matter of law the joint tenants would therefore be holding the properties in question on a resulting trust for the persons who provided the purchase money. The defendant is said to remain joint tenants in law but were actually tenants in common in equity in the proportion of their contribution towards the purchase price.

The relevant works of Professor Tan Sook Yee and parts of Judith Prakash J's judgment had been quoted in Yeo Guan Chye as references to support the contention that the ratio of contribution was in equity pertinent to the determination of the proportionate distribution of a property jointly held by the contending parties. The resulting trust has the effect of retaining the equitable interest in the property in the survivor as trustee. Whether the right of survivorship arising in law on the death of one of two joint owners has the effect of rebutting the presumption of resulting trust was not considered in Yeo Guan Chye.

Today, the inequities seemingly inherent in the doctrine of the right of survivorship and the comments made thereon, are being addressed and dealt with in various ways. Malaysia is one country which does not recognise the right of survivorship. In Singapore, the laws and procedures for severance of joint tenancy holdings have been made more flexible to facilitate equitable distribution.⁶

Ramifications of the High Court Decision

The above-quoted judicial pronouncement made in Yeo Guan Chye can be said to highlight the mutable character of the contingent right of the survivor on a severance, and also the mutable position of the survivor. As a general statement, these observations may hold true. That a judicial pronouncement might be relied upon to unsettle the right of survivorship under a joint tenancy such that a right at law would be nudged out or 'over-ridden' by a presumption of resulting trust under the fact situation in Yeo Guan Chye deserves further qualification.

However, the pronouncement made in Yeo Guan Chye might lead contenders to question the right of survivorship in the case where claims are instituted by the estates of joint owners and challenges are made on the platforms of the presumption of resulting trusts and the presumption of advancement.

The 'joint tenancy in law and tenancy in common in equity' proposition was pronounced to characterise the situation in Yeo Guan Chye. In effect this application of the presumption of a resulting trust equates and treats the equity in the joint tenancy holding to that of a tenancy in common holding. In this case, the survivor is deemed a potential trustee even as the right of survivorship under the joint tenancy has already been conferred on him by operation of law. That the presumption of resulting trust is said to have arisen in such a situation is challengeable. The attachment of a trust obligation to the survivor in a joint tenancy is alien to the right of survivorship in real property express declarations of trusts excepted. Other exceptions are discussed below.

On Appeal

On appeal, the decision of the High Court was reversed, in favour of the appellant who was given absolute ownership of the properties. The Court of Appeal disagreed with the approach that one presumption (resulting trust or the presumption of advancement) would prevail over the claim of the Defendant - the approach taken by the High Court.

A two-step test was instead applied. First, if on the facts a resulting trust had emerged and second, if a resulting trust was presumed, then a presumption of advancement would apply to displace the resulting trust on sufficient evidentiary proof. The application of the presumption of resulting trust which divorces equitable interests from legal interests, must initially be established before the need for the presumption of advancement even arises.⁷

The Court of Appeal found that the resulting trust was displaced by the presumption of advancement deduced from the presumptive inference of the deceased's and the Appellant's marriage. The intention expressed in the deceased's will in which the deceased had named the Appellant as the sole beneficiary of all his properties was also considered. This evidence was given weight notwithstanding that the will was said to be revoked by the re-marriage of the deceased. A strong presumption of advancement was said to have arisen.⁸ Further, the evidence adduced by the Respondent was insufficient to rebut the presumption of advancement.

Context - A Crucial Consideration?

The claim raised in Yeo Guan Chye - one in which a claim was instituted by the estate of a deceased joint owner against a survivor had been presented in a similar UK case of Goodman v Carlton.⁹

In Yeo Guan Chye the cases cited therein on the presumption of resulting trust actually referred to claims made by a joint owner in the context of a severance of a joint tenancy (Neo Boh Tan v Ng Kim Whatt¹⁰; Sitiawah Bee bte Kader v Rosiyah bte Abdullah¹¹ included) and not a claim instituted by the estate of a deceased joint owner against a surviving joint tenant with right of survivorship. The presumption raised in Yeo Guan Chye was found by the Court of Appeal to have been rebutted by the presumption of advancement applying Lau Siew Kim.

It is significant that no premise on the over-riding effect of the presumption of resulting trust was announced in Goodman. In Goodman it was for the court, a matter of evaluating 'the evidence of circumstance'. The Court of Appeal declared that the mere fact that the legal title to the property was vested in the joint names, did not entitle the surviving legal owner to an equitable interest in the property if this does not accord with the intention of the parties. On that premise it dismissed the appeal of the sole survivor under a joint tenancy and awarded the joint property to the estate of the deceased joint owner.

The Court of Appeal in Goodman proceeded on the basis of the admission that the joint owners considered themselves trustees.¹² As for the deceased joint owner, the resulting trust was not rebutted by any 'evidence of circumstance' of common intention, of any declaration of trust or of any parol evidence to create a joint tenancy. The presumption of resulting trust favouring the sole survivor of a joint tenancy was not rebutted. On that premise and approach, the appeal by the sole survivor was dismissed.

In a situation where the trusteeship status of the parties is not in dispute but admitted, and where the presumption of a resulting trust has arisen as a matter of law, it does seem that the context in which the claim arises, be it before or after the demise of one of two joint owners would have been no bar to the claim of the presumption of the resulting trust. Once established, the resulting trust over the property of a deceased joint owner can be rebutted or unseated by (a) an intention or inferred or presumed intention to create a joint tenancy with right of survivorship (b) presumption of advancement. In Goodman, the Court of Appeal found that the presumption of resulting trust was not rebutted.

In the absence of any admission by a survivor of a joint tenancy, of any trusteeship having been assumed or created, (unlike the situation in Goodman) could a presumption of a resulting trust arise in Yeo Guan Chye, especially where a right of survivorship has come into operation at law?

Court of Appeal Observations

Pertinent dicta made by the three judges give added clarity to the Court of Appeal decision in Lau Siew Kim. Among others, they touched on the matters highlighted below:

a The public's concern was noted, that the law on presumptions of resulting trust which had its roots in the feudal system and the presumption of advancement should be discarded.¹³ However, the Court of Appeal was also mindful that any such move could not be made by judicial fiat but by the legislature;

b The presumption of the resulting trust is not in today's context an immutable rule to be applied blindly and rigidly;¹⁴ and

c The observation that legislation could indeed require parties to specify the manner of holdings of land in the instrument of transfer.¹⁵ It was further suggested that perhaps a system of incorporating a sworn testimony of the solicitor completing the transaction could be considered to provide evidence that due diligence and advice had been given to ensure that joint owners had made their choice as informed persons.¹⁶

The reversal of the High Court decision does restore the properties solely to the survivor as the resulting trust was rebutted by the presumption of advancement on the strength of convincing evidence adduced. However, the judicial pronouncement in Yeo Guan Chye on the right of survivorship does place in doubt the assumed indefeasibility of the right of survivorship under a joint tenancy holding registered at the Singapore Land Registry. It is worrying that this pronouncement may be read by a deceased joint tenant's estate to be the basis for a rightful cause of action against the survivor.

This decision also reflects that the contingent right of survivorship, albeit defeasible in a severance situation when there is direct or weighty evidence in support of a resulting trust, is nonetheless not as yet to be written off when parties are considering it as a tool in estate planning. The right and proper approach to creating and protecting the right of survivorship must be placed on the checklist of the conveyancer.¹⁷

Conveyancers in Singapore have understandably referred to the common law as to the substantive law aspects of what a joint tenancy in land confers on the survivor. Traditionally, in Singapore, no mention of a right of survivorship is mentioned in a document creating a joint tenancy. The right of survivorship is assumed without express mention of it as may be done in other jurisdiction and practices. An update to the conveyancing procedure was suggested in Lau Siew Kim, where it was observed by the bench that a sworn attestation by a solicitor on the advice rendered to the joint owners could be considered. The Court of Appeal in Lau Siew Kim remarked:¹⁸

94 If legislation were, in fact, amended to mandatorily require parties to specify the manner of holding of land in the instrument of transfer, this would ensure that all co?owners would be aware of their manner of holding in registered land. Further, if the additional recommendation of the LRCWA - that a simple explanation of the significance of the distinction should be contained in the instrument of transfer - were implemented, co?owners could be regarded as having knowingly intended to acquire and hold the estate or interest in the manner of holding specified. This is especially so, given that instruments of transfer are normally completed by a solicitor who should explain to the relevant parties the legal distinction between the two types of co?ownership so that they can make an informed choice of whichever type of co?ownership they desire. Hence, we are of the view that if legislation were as that suggested by the LRCWA, there would be no need, generally, for any intervention on the part of the courts or equity to presume a completely different beneficial manner of holding. Interestingly, as we have pointed out earlier (see [88] above), the progenitor of the present s 53(1) of the LTA approximated such a position. (Emphasis added.)¹⁹

Impact on Conveyancing Practice in Singapore

With reference to the last-mentioned observation made by the Court of Appeal in Lau Siew Kim, it is noted that the prescribed instrument of Transfer under the Land Titles Act (Cap 157) and the Land Titles Strata Act (Cap 158) does require that the manner of holding be specifically stated in its electronic form in order for submission to be accepted. The call by the judiciary for a sworn attestation to be made by solicitors that co-owners had exercised informed choices based on advice rendered by solicitors might have to be considered from the practice that solicitors are already signing the Certificate of Correctness.²⁰ This implies that they have already carried out all due diligence in the execution of their duty as the solicitors for the sellers or the purchasers as the case may be. This due diligence will inevitably include advising the purchasers of the manner of holding that they would wish to have in the property before the manner of holding in the property could be stated in the statutory instrument of Transfer. Advice on the manner of holdings and in other areas of the law as are applicable for any case, form the general duty of care owed by the solicitor to the client, Whether such advice should be approached qualitatively or quantitatively can be quite controversial and debatable.

Advice on how beneficial interests are to be held

As to other advice coming from the bench, conveyancers have also been reminded to explain the nature and distinctions between the different types of holdings they wish to have in the property to be purchased and to state as to how the beneficial interests are to be dealt with.²¹ In Goodman, Ward LJ at the Court of Appeal, made this statement:

I ask in despair how often this court has to remind conveyancers that they would save the clients a great deal of later difficulty if only they would sit the purchasers down, explain the difference between a joint tenancy and a tenancy in common, ascertain what they want and then expressly declare in the conveyance of transfer how the beneficial interest is to be held because that will be conclusive and save all argument. When are conveyancers going to do this as a matter of invariable standard practice? This court has urged that time after time. Perhaps conveyancers do not always read the law reports. I will try one more time: always try to agree on and then record how the beneficial interest is to be held. It is not very difficult to do (Emphasis added).²²

The reminder and remarks by Ward LJ in Goodman should be well noted and well heeded by conveyancers.²³ The right of survivorship is a legal incident of the joint tenancy manner of holding in real property. Usually, when a joint tenancy manner of holding is expressly declared in a Conveyance (or the instrument of Transfer or property held under the registered title system) the intention of the parties to give a right of survivorship is as a matter of practice implied and is normally given effect to so long as common law essentials for the creation of a joint tenancy holding are present - these being unity of title, interest, possession and time. The intention of the parties to give a right of survivorship is inferred from the creation of the joint tenancy itself.

The dichotomy of treatment of interests into legal and beneficial interests, held under a joint tenancy is clarified in the British Columbian case of Clelland v Clelland.²⁴ Here the beneficial interest in a joint tenancy was dealt with separately from the right of survivorship. In the said case there was a presumption of a resulting trust which was affirmed by evidence of the plaintiff's intention to give only the right of survivorship and no present beneficial interest at all.²⁵ It is also interesting to note that in the said case, it was also observed that by this approach, it could also be that proof of the intention to give the right of survivorship would partially rebut the presumption of a resulting trust to the extent of that right of survivorship.²⁶ This case would also suggest that in the creation of a joint tenancy, the beneficial interest can and should be specifically or expressly dealt with by the conveyancer. Otherwise a judge may be left with no option but to second-guess the intention of the parties from the circumstances.

Conveyancing Practice in Singapore

In the interest of clarity is there then a need for the use of the beneficial interest and the right of survivorship to be mentioned in the creation of a joint tenancy? In Singapore, as earlier mentioned, conveyancing practice requires the conveyancer to ascertain the manner of holding intended by the purchaser or any party acquiring property since, the submission of the e-form requires on a mandatory basis, an entry that such information on the choice of manner of holding should be clearly and expressly stated. However it is a feature of the registered title system that trusts are kept off the register and are generally dealt with outside the registration regime. Any trust to be created or arising would be traceable to the time of the acquisition of the property.

Although the Torrens System²⁷ of registration of land does not recognize trust holdings, it is significant to note that the Singapore Land Registry does accept for registration instruments of transfer which describe holdings that are held on trust by the registered proprietors.²⁸ In limited cases, therefore, the registered title system does support the express declaration of trust²⁹ and could be relied upon as a legitimate evidentiary source. In recognition of the mechanism of a joint tenancy holding premised on the essential common law elements of the four unity of time, possession, title and interest, and in the context of the practice at the Singapore Land Registry and its acceptance for registration, instruments which may declare trust holdings of property held under a joint tenancy, and where there may be express declarations of trusts outside the registration regime, the intervention of the presumption of a resulting trust must be that less significant.

Boundaries of Conveyancer's Duty

In the wake of observations and remarks made by the appeal judges in Goodman and Lau Siew Kim, on the duty expected of conveyancers, the boundaries of such duty may now be further tested. The impact of these presumptive and equitable rules must now be explained by conveyancers and a fortiori, pre-emptive measures considered and discussed, to ensure that both legal and beneficial rights survive anticipatory contingencies - such as a claim by the estate of the deceased joint owner or severance. In other words, the inherent right of survivorship under a joint tenancy holding in property is not quite immutable or indefeasible (as some conveyancers might have assumed). Even as the courts continue to regard equity as following the law conveyancers are now expected to provide evidentiary proof of preservation of that right of survivorship in a joint tenancy and that such right is not defeated by contrary intention.³⁰ A caution as to its mutability or defeasibility as a contingent right must also form part of the advice to be rendered in anticipation of a severance which any one of the parties to a joint tenancy holding might institute in the future.

At the stage of the creation of the joint tenancy, the right of survivorship is indeed a mere 'prospect'. There is merit, therefore, to have the right of survivorship as well as the use of the beneficial interest expressly mentioned when a joint tenancy is created. However, would the Registry be obliged to accept for registration an electronically completed instrument of Transfer with these descriptions as to the manner of holding acquired by the transferee:

To A & B as joint tenants with right of survivorship, reserving nonetheless [in the event of a severance, or such other incidents as the case may be] the beneficial use and interest thereof to A and B in the proportion of their monetary contribution to the purchase price in the ratio of ______ to ______ ³¹

If the various pieces of advice offered are to be observed and implemented, a more exacting description of the manner of holding of property to be held under a joint tenancy may be necessary since presumptions operating at common law could be problematical for purposes of determining actual intention. The question is whether a detailed explanation is to be accommodated in the instrument of Transfer under the electronic registration regime of the Singapore Land Authority or under a sale and purchase contract or a trust declaration. These are options which can be considered.³²

Conveyancers' practice, aside, other considerations which follow the trail of overt and subtle observations made by the Court of Appeal in Lau Siew Kim are equally relevant. The issues which present themselves in that case reflect the levels of difficulty in relating to the law and practice in the areas of resulting trusts and joint tenancies and the complications and growing confusion brought to surface when they do cross paths. Judicial observations made in Lau Siew Kim and other cases touching on conveyancers' duty to advise clients on the nature and consequences to choosing a joint tenancy manner of holding would also test the effectiveness of the joint tenancy manner of holding as an estate planning tool. The joint tenancy route has always been risk-ridden and at times has been rendered not quite efficacious. One clear implication is that the legal claim to the right of survivorship which promises a vesting of the legal as well as a beneficial right may not be quite indefeasible after all. This may be so in the circumstances which are outside the 'contra-indications'
involving partnership and business-owned properties

Right of Survivorship Defeasible?

When the right of survivorship is challenged by the estate of a deceased joint owner the burden of proof inevitably would lie with the estate. In practice however, the isolation and mention at the outset of the proportionate equitable interests to be held by the parties in a joint tenancy may possibly have the effect of rendering the holding in a real property, a tenancy in common.³³ Outside a severance scenario, in the absence of any express declaration of trust, or clear, precise, directions, or convincing evidence supporting a presumption of resulting trust, a joint tenancy could simply be the overt or express election made in the prescribed instrument of transfer at the time the joint tenancy was created. In a Pennsylvania case the following direct approach was taken:

Because the theory of a resulting trust depends on the parties' intent and because the deed provides for joint tenancy with right of survivorship, we find that Bryan Fenderson holds an interest in the property as a joint tenant with right of survivorship (emphasis added).³⁴

The deed was taken as prima facie evidence that a joint tenancy was created.³⁵

That the subsequent challenge of a resulting trust in a severance situation may supercede the 'prospect' of the right of survivorship is often a situation though foreseeable may nonetheless remain outside the anticipation of the parties planning for a joint tenancy holding in property. The instrument of transfer in the Singapore context has been and still is prima facie evidence that a joint tenancy with right of survivorship has been the choice of the purchaser where a joint tenancy is expressed in the instrument of transfer. The Certificate of Correctness signed by the solicitors for the parties to the transaction signifies that the matters stated in the instrument of transfer are substantially correct.³⁶ Whether registration under the registered title system would render the right of survivorship indefeasible in the same way that other title in property are thus rendered, is also questionable. The criteria for rendering such title defeasible if at all, will need to be dealt with by legislature. Is the protection accorded within the matrix of the registered title system still intact?

Right of Survivorship - an Irrebuttable Presumption at Law?

Generally, a claim premised on a resulting trust is recognised in certain cases such as those involving partnership property and business arrangements. In Australia and New Zealand, as in Singapore, the presumption of advancement however has frequently been successfully contested in cases involving distribution of matrimonial property and property of co-habitators and in cases involving a severance of the joint property - hence the premature extinguishment of the contingent right of survivorship. Such claims precede the crystallisation of the right of survivorship. Outside the spousal and other close family relationship, in the absence of direct evidence, express declaration or absence of intention, the survivor of a property held under a joint tenancy will find it onerous to rebut the presumption of the resulting trust. On the other hand, the creation of the right of survivorship under a joint tenancy manner of holding with right of survivorship could sometimes by itself be prima facie evidence of intention and would have brought the cases instituted by the estate of a deceased joint owner well outside the reach of the application of the presumption of resulting trust. This is especially so, given the establishment of the electronic conveyancing regime prevailing in Singapore. These circumstances would ipso facto support the common intention of the parties in a joint tenancy situation. The compliance requirements and electronic filing practices required of conveyancers by the Singapore Land Authority was not considered as an evidentiary source for the creation of the joint tenancy holding in Yeo Guan Chye.

The lament of the Court of Appeal in Lau Siew Kim on the lack of legislation directing compulsory or mandatory mention of the manner of holding of property acquired by purchasers could perhaps be reviewed on the consideration of the mandatory requirement for the electronic instrument of transfer to be completed and the manner of holding expressly specified as part of the registration process. The Court of Appeal's observation is noted:

Admittedly, a quick perusal of the current land transfer form shows that transferees are required to complete the field stipulating the manner of holding of the property to be transferred. One may suggest that the Land Registry only accepts land transfer forms in which that field is duly completed. However, such administrative forms and procedures must be viewed against the backdrop of the governance of primary legislation such as the LTA and s 53(1) of the LTA certainly seems to envisage that parties may omit to stipulate their manner of holding of land and provides a catch-all default position to cater to such situations.37

The 'catch-all default position' under the Land Titles Act referred to by the Court of Appeal restates and re-confirms the position at common law of the joint tenancy incident. The electronic registered title system is non-discriminatory in its acceptance for registration, only completed instruments of transfer. No omission is therefore possible or anticipated.

Meanwhile, there appears to be no impediment to the right of survivorship being deemed as an irrebuttable presumption at law³⁸ in the context of the electronic registration regime of transfers at the Singapore Land Authority. However it is observed that the Court of Appeal approach in Lau Siew Kim was to subject the claim against the survivor to the test of the conventional lack of proof of contrary intention of the parties to the joint tenancy, in order to rebut the presumption of resulting trust. Further, the passage below from the judgment in Lau Siew Kim supports the intervention of equity in cases relying or premised on a 'statutory presumption of joint tenancy in Singapore'. This passage may also need to be read within the restrictive and specific context and parameters mentioned therein It merely justifies the dichotomy of the 'tenancy in common in equity and joint tenancy in law' on the intervention of equity, without bringing within its ambit situations premised on de facto rights of survivorship outside a severance situation.

As such, just as equity inclines towards a tenancy in common when faced with the common law presumption of joint tenancy, equity may similarly intervene in the statutory presumption of joint tenancy in Singapore to deem, as beneficial tenants in common, co-owners holding local registered land as joint tenants at law.³⁹ Finally, on the fact situation established in Yeo Guan Chye, the Court of Appeal in Lau Siew Kim opined that in a spousal relationship, 'there is a presumptive inference that the parties intended to hold the property as joint tenants in equity as well'.⁴⁰ This presumed and inferred intention of the joint owners in the context of and arising from the joint owners' spousal relationship would have rendered it unnecessary for the presumption of resulting trust to apply.⁴¹

Concerns and Directions

Equity was pitted against the statutory presumption of joint tenancy in the Court of Appeal decision and thus added another dimension to the resulting trust conundrum. The apparent premise upon which the case proceeded in the High Court and the perceived mutability of the right of survivorship may require an extended reflection, lest the judicial pronouncement made at the High Court be relied upon to apply to an unintended situation where the estate of a contributing joint tenant may have a prospect of a superior claim against a surviving joint owner until rebutted.

The reversal at the Court of Appeal must come as a relief to the appellant. Having opted for the joint tenancy holding with a right of survivorship, it must have been disconcerting to a legitimate survivor to be confronted subsequently with a claim premised on a presumption of resulting trust. Ordinarily, the act of parties opting for the joint tenancy manner of holding⁴² as expressed in the instrument of transfer⁴³ would have sufficed as evidence of the joint owners' common intention to give a right of survivorship where such holding is maintained to the demise of one of two joint owners. The Court of Appeal's conclusion in aligning itself to the basic and direct approach expressed in the paragraph quoted below in the judgment in Lau Siew Kim reflects its inclination to preserving the right of survivorship in status quo:

There is no occasion for equity to fasten upon the registered interest held by the joint tenants a trust obligation representing differently proportionate interests as tenants in common. The subsistence of the matrimonial relationship, as Mason and Brennan JJ emphasized in Calverley v Green, supports the choice of joint tenancy with the prospect of survivorship (emphasis added.)⁴⁴

That passage in essence, sums up the case for the surviving joint tenant and in not so many words, inversely deals with the burden of proof of the person claiming for the estate. For now it provides a persuasive approach and pragmatic answers to the current position on the survivor's rights (within a spousal and perhaps, de facto relationship) in the face of a claim by an estate, premised on a resulting trust.

Meanwhile, conveyancers and estate planners will take the cue from the judicial observations and directions in Lau Siew Kim that documenting the intention⁴⁵ of the joint tenants is necessary.⁴⁶ Documenting intention on the use of the beneficial interest as well as the intention to give a right of survivorhip has consistently been the advice offered and urged by the judiciary.⁴⁷ What is the degree of precision required of documentation in the creation of a joint tenancy when the right of survivorship is already a right at law - a right inherent in the joint tenancy manner of holding? Will documentation incorporating the dichotomy of the legal title with right of survivorship and equitable use in the creation of a joint tenancy in favour of a survivor negate or check a claim premised on a resulting trust?⁴⁸

In Summary

The judicial pronouncement in Yeo Guan Chye, though relevant as a general observation in appropriate context, may likely cause some confusion when raised by the estate of a deceased joint owner in the scenario of Yeo Guan Chye. In the result, the notion of a retrospective severance of a joint tenancy, after the right of survivorship has arisen in law and not just a 'prospect' on a contingency, must in the meantime remain a highly controversial and challengeable issue. Further in the absence of any direct case law or clear and convincing authority, any equitable incursions into the right of survivorship outside the parameters of a severance or an express declaration of trust, must be supported in law or some vitiating factors for such a pronouncement to stand beyond a statement of general observation.

Exceptions to a claim by the estate of a deceased joint owner where the right of survivorship would not be inappropriate have been noted to include joint properties of business partners and in related business relationships.⁴⁹ Nonetheless, the right of survivorship could also be vitiated or defeated by fraud, mis-representation, duress, mistake, illegal acts, concealment and undue influence among other instances.

There was no direct comment by the Court of Appeal on the judicial pronouncement made in Yeo Guan Chye but it did observe that where the manner of holding in property is specified it would render unnecessary any intervention by the courts or equity to presume a beneficial manner of holding.⁵⁰ Yet, the Court of Appeal opined that 'equity may similarly intervene in the statutory presumption of joint tenancy in Singapore, to deem, as beneficial tenants in common, co-owners holding registered land as joint tenants at law.' This broad brush statement if read as an extended incursion of equity into rights incident to a joint tenancy holding may need to be applied by legal practitioners with some caution and within the context and ambit of observations made on the statutory presumption of joint tenancy discussed in that appeal.

Whilst we still hear the echoes of Lord Denning's remark that 'Equity is not past the age of child-bearing' the principle that equity follows the law still holds good. Hence in situations where a trust relationship is not expressed in the instrument of transfer the mechanism and incident of the right of survivorship (apart from a mere prospect of a contingent right under a joint tenancy still capable of being subjected to a severance), is not to be summarily displaced nor should its position be unseated by case-law dealing with presumption of resulting trust, in a distinguishable context.

Further, notwithstanding that the presumption of a resulting trust may operate as a matter of law, its presumption in this scenario of a claim by an estate of the deceased against the survivor will have to be closely reviewed, given the circumstances prevailing in the Singapore Land Authority's electronic filing and registration regime. Under this regime, it is mandatory that the manner of holding in property (joint tenancy included), must be stated, recorded and registered with the Singapore Land Authority - and with the incident of the common law right of survivorship remaining intact.

It would need much convincing to accept the notion that equity has made incursions into the right of survivorship in a joint tenancy such that as a consequence of the filing of a claim, the right now has ab initio 'fastened to it a trust obligation'. In this case under study the right of survivorship has by law arisen on the death of a joint owner, and no trust relationship should be imputed to a joint tenancy properly created under its registration regime, or in the absence of vitiating factors.⁵¹ Such a situation would ordinarily remain beyond the reach of the presumption of resulting trust though not necessarily so for a contingent or prospective right of survivorship within a severance claim.

The Court of Appeal concluded:

Indeed, we are unaware of any leading case which imposes a resulting trust on the surviving spouse who prima facie inherits absolutely by way of survivorship, the property previously held as joint tenant with his or late spouse.⁵²

On that note, the pronouncement in Yeo Guan Chye could perhaps be read and laid to rest in the context of a severance and other excepted situations, lest the presumed incursion into the right of survivorship could operate to negate it or at best potentially reduce that right to an inferior right, to something lesser than a 'prospect'.

Hairani Saban Hardjoe
CK Tan & Co
E-mail: hairani@cktan.com.sg

Notes

1 Jowitt's Dictionary of English Law at page 1570.

2 Ibid at p1018.

3 It is understood that this reasoning be relevant in constructive trust.

4 This is not a general statement, but one specifically applying to the fact situation of the case - a claim made by the estate of a deceased joint owner against the sole survivor of the properties in question.

5 This is a case involving a severance of a joint tenancy where the 'joint tenants in law and tenants in common in equity' proposition is applied to a joint property held by the joint tenants in trust for themselves. Its application to a case where the survivor claims right of survivorship (with no admission of any trust holding on the survivor's part), is questionable.

6 Section 53 (5) of the Land Titles Act; Section 66A of the Conveyancing and Law of Property Act: Severance of tenancy in common and joint tenancy, 66A-(3): Without prejudice to any rule or principle of law relating to severance of a joint tenancy, a joint tenant may sever a joint tenancy of an estate or interest in land by a deed of declaration and by serving a copy of the deed of declaration personally or by registered post on the other joint tenants.

7 Lau Siew Kim supra, para 57.

8 Ibid, paras 121,127, 12 1 134, 141 and 142.

9 [2002] All ER (D) 284 CA This case was not cited in Yeo Guan Chye.

10 [2001]SCHC 31.

11 [2000] 1 SLR 612; [1999] SGHC 267).

12 Carlton v Goodman, supra, para 22: i) The consequence of the transfer of the House by Mrs Croft into the joint names of Mr Goodman and Anita was that the legal estate was vested in them as trustees; ii) …. [t]he only claim (in her defence) now made by Anita (the survivor) is under a resulting trust.

13 Ibid at paras 48 and 49.

14 Ibid at para 55: Today . . . [t]he application of the presumption of resulting trust must be sufficiently nuanced to sufficiently address the myriads of modern matrices in which the presumption might arise.

15 Ibid at para 94.

16 Ibid at para 95.

17 The establishment of the four unities characterizing a joint tenancy holdings must be present - unity of title, interest, possession and time. In the wake of Yeo Guan Chye, the Stamp Office should also scrutinise and re-examine its practice on the occasion where it had refused to assess duty based on the actual and proportionate contributions made by parties to the purchase price. In this case it was expressed in the instrument of transfer that the owners had purchased the property as joint tenants. In this severance, despite evidence of the proportionate payments being produced, the Stamp Office had insisted on the presumption of 50-50 ownership where the transaction had been labelled to be held under a joint tenancy holding. The presumption of a resulting trust had been ignored.

18 Lau Siew Kim, supra para 94.

19 Specific and express direction as to the use of the beneficial interest is one suggestion made by Ward LJ in Carlton v Goodman [2002] All ER (D) 284.

20 S 59 of the Land Titles Act (Cap 157 ).

21 Carlton v Goodman, [2002] EWCA Civ 545, [2002] 2 FLR 259.

22 Ibid at p 281.

23 It is interesting to note that the Housing and Development Board, (HDB), a statutory body, has also taken upon itself to print the advisory on Joint Tenancy in their application forms for the acquisition of HDB property. The HDB's definition of a joint tenancy is as follows: 'A joint tenancy is a form of ownership where all co-owners have an equal interest in the flat regardless of how much each co-owner contributes to the purchase of the property'. The HDB generally deals with the legal owners, whether they are the joint owners or survivor(s). In a severance, the court has however always taken into account the contribution made by each of the joint owners in the acquisition of the property in its distribution of the equity in the flat. Presumptions of resulting trusts have also frequently been considered and applied.

24 Supra.

25 Ibid at p 666 per Robertson JA.

26 [1944] DLR 703, p 706- 7 per Macfarlane J. At the Court of Appeal, the decision turned on the issue of mistake which operated to vitiate whatever was initially intended. The plaintiff was under the mistaken belief that the defendant was his wife when he created the joint tenancy holding in the property.

27 A land registration system attributed to have been started by Robert Torrens in Australia. The Singapore registered title system is based on the New South Wales Practice.

28 For example, such as when trustees hold the property for an association or society.

29 Properties may be declared to be held by joint tenants as trustees of associations.

30 The ascertainment of the creation of a joint tenancy holding had traditionally been premised on the basis of the intention established: see Tan Thiam Loke v Woon Swee Kheng Christina [1992] 1 SLR 232; [1991] SGCA 32. On the question of proof of intention in a severance case refer to Sanida Johnson v Roan Clark, in the Supreme Court Of Judicature Of Jamaica, in Equity Suit No. E 583 of 2001, May 19 and 20 and June 27 (2003). In this case, intention was vitiated since the joint tenancy was created under a mistake of fact.

31 It would seem that there is no legal impediment to the Registrar accepting this description of the manner of holding, except that all these while, the presumption of the joint tenancy holding with right of survivorship has always been the practice norm and purchasers had accordingly advised by solicitors, the right of survivorship as an inherent common law right without further elaboration. Although cumbersome, the use of the beneficial interest can alternatively be attended to under a separate document.

32 Such a description can for instance be incorporated in the Sale and Purchase Agreement without involving a systems adjustment to the electronic filing of the transfer.

33 See the argument in reverse where the mention of a joint tenancy with a right of survivorship may be implied to affect the beneficial interest, Clelland, supra.

34 See the argument in reverse where the mention of a joint tenancy with a right survivorship may be implied to affect the beneficial interest, Clelland, supra.

35 It is submitted that a contract for the sale and purchase of property, setting out the details of the joint tenancy manner of holding could also be produced in evidence supporting the intention stated therein.
36 Section 59 of the Land Titles Act, -

Certificate of correctness :
(1) The Registrar may reject any application to bring land under the provisions of this Act, or any other instrument purporting to deal with or to affect land (whether registered or unregistered), unless there is endorsed thereon a certificate by the parties to the instrument that it is correct for the purposes of this Act. [25/2001;10/2003];
(2) The certificate by any party to the instrument (shall imply representations that to the best of the signatory's knowledge and belief and in so far as he has any reasonable means of ascertaining -
(a) the instrument is made in good faith;
(b) the matters set forth therein are substantially correct.

37 Lau Siew Kim, supra, para 90.

38 As to the discussion on the right of survivorship possibly being deemed as an irrebuttable presumption at law, refer to Lau Siew Kim infra at para 43.

39 Ibid at para 87.

40 Ibid at para 101.

41 Ibid at paras 88, 107 and 108.

42 Unless it could be proven otherwise by lack of any of the four unities of time, possession, title and interest such manner of holding would have an inherent right of survivorship.

43 Assuming all four elements of the unity of possession, title, interest and time are present in a proper creation of a joint tenancy manner of holding.

44 Quoted in paragraph 100 in Lau Siew Kim supra. This quote is in consonance with the Court of Appeal's sentiments expressed in paragraph 94 of its judgment. (See quote supra.) Although there is no legislation requiring the manner of holding to be stated in the instrument of transfer to be registered with the Singapore Land Authority, conveyancing practice nonetheless dictates (by the e-form), that the manner of holding must be provided in the prescribed transfer.

45 An extraneous document containing a declaration of intention will suffice. A recent development in this direction will be the use of the Nuzriah (Nazar Statement) which has been recognized by the Majlis Ugama Islam Singapura ('MUIS') as a valid way of expressing and documenting intention of a joint owner involving two joint owners in a spousal/family relationship subject to the other compliance requirements under Islamic practices being observed. Whether the Nazar Statement can be viewed as an Islamic severance is a topic of worthy controversy.

46 This begs the question as to whether the stated manner of holding in the default entry in the e-transfer form is sufficient evidence or whether any additional document would be necessary - such as a Trust Deed or Declaration or some other instrument documenting intention.

47 See Ward LJ in Carlton v Goodman supra.

48 See supra on the suggested format.

49 Malayan Credit v Jack Chia MPH (1986).

50 Lau Siew Kim supra para 94.

51 Section 66A(5) of the Conveyancing & Law of Property Act refers to a joint tenancy of land held in trust - in recognition of properties which may be held under a joint tenancy in trust for business partners, associations and other trust relationships. Such holdings may probably be outside the ambit of the consideration for which an express declaration of trust would be required at the time of the acquisition of the property in order to displace a joint tenancy intention.

52 Ibid at para 106. In Carlton v Goodman, supra, the resulting trust was not imposed on the parties, rather, both parties chose to premise their claims on a resulting trust (on the admission that the joint tenants were trustees for themselves) and the survivor failed to rebut the estate claim.