www.channelnewsasia.com
Singapore
A judge's gavel. (File photo: iStock)
SINGAPORE: A Singapore court ruled on Wednesday (Jun 12) that the mistress of an American man who lived in Hong Kong will keep about S$8 million (US$6 million) that he had given to her.
James Eng Jr, who died in September 2018 at age 76, had a romantic relationship with Lolita Tsang since 2005 despite both parties being married to others.
Eng's wife died in December 2011.
Eng had intended to grant Tsang, who is now 64 years old, S$8.5 million in October 2016 but a delay in the process resulted in the bank transfer taking place only in January 2017.
At the time, the money in the foreign currency call account amounted to only about S$8.2 million. This was likely due to the drop in currency exchange rates, said the judge.
Tsang, the claimant, sought to claim the shortfall between S$8.5 million and the remaining balance in the bank account.
At the same time, Eng's daughter, Allison Nicole Eng, contested the validity of the deed as one of the alternative executors of her father's estate. The defendant sought to recover money her father had given to Tsang.
That account was opened in Tsang's sole name.
However, the process was delayed because Hong Leong Bank’s compliance team needed information about Tsang’s wealth, personal assets, inheritance and financial knowledge or experience.
The team also required Eng to execute a deed of gift before he could transfer the money to Tsang.
The deed of gift was executed by Eng on Nov 7, 2016 and conferred an “unconditional and irrevocable” gift of S$8.5 million to Tsang, according to court documents.
It also contained a clause which stated that the deed and all matters relating to it shall "be governed and construed in accordance with the laws of Singapore" and that the parties "hereby submit to the exclusive jurisdiction of the Singapore courts".
Tsang's bank account was opened on Jan 20, 2017 and as of Jan 25, 2017, it had about S$8.2 million.
Eng "had no intention" for it to be binding and enforceable, said the lawyer.
According to the defendant, the only reason why Eng signed the deed was because the bank had required it before his funds could be transferred to the newly opened account that was in Tsang's name.
The lawyer added that the true intention behind Eng’s transfer of his funds "was not that he intended to benefit Tsang fully and absolutely".
Instead, it was because he had intended to "avoid the prohibitive estate duties and probate processes for an easy distribution of his liquid assets".
The lawyer further submitted that Eng had intended Tsang to distribute the money to Eng's daughter after his death.
The claimant's lawyer, however, argued the deed was valid since it was signed, sealed and delivered.
He said that Eng's total assets, which included his liquid assets and an apartment in Hong Kong, would amount to about S$12.75 million.
Eng had intended for his daughter to receive about $4.25 million, while Tsang would receive S$8.5 million.
Eng had, in his will, given instructions for Tsang to either purchase the apartment from his daughter with the money in the Hong Leong Bank account or retain the full amount in the account while his daughter retained ownership of the property.
Eng did not sign the draft will as he was “probably awaiting Allison’s response to his emails”, which he sent on Nov 25, 2016 and Feb 13, 2018, said Justice Choo.
Eng had, on Nov 25, 2016, sent an email to ask his daughter how she wanted the payment to be made. She did not reply despite a reminder that was sent on Feb 13, 2018.
“Given that Eng intentionally had the deed and the will drafted at the same time, the contents of the draft will are relevant in assessing Eng’s intentions at the material time,” the judge added.
Eng wanted to minimise his estate’s exposure to the prohibitive estate duties when he decided to transfer S$8.5 million to Tsang, he added.
"All the objective evidence reproduced above similarly points to the conclusion that the S$8.5 million was to ensure that Tsang would be provided if he were to predecease her.
"Hence, both the deed and the draft will were meant to give effect to the same purpose - for easy distribution of his assets after his demise."
On the claim by the defendant's lawyer that the deed was not sealed or delivered, making it unenforceable, Justice Choo Han Teck said it appeared that the original deed had not been sealed on the day of execution.
However, he noted it was likely to have been sealed after Eng's lawyer in Singapore confirmed his client's instructions to hand the deed over to his account manager at Hong Leong Bank.
Justice Choo added that it is "well-established" that the physical manifestation of a seal is not required for the document to be considered sealed.
Rather, the key point was whether Eng had recognised and accepted the document as his deed and had the requisite intention to execute it.
Having gone through the email correspondence between Eng and his lawyer, Justice Choo said the former's intention to execute the deed was sufficiently indicated.
He also rejected the argument by the defendant's lawyer that the deed was not delivered, stating that the act of delivery does not refer to the actual transfer of possession but rather the intention to deliver.
The email correspondence between Eng and his lawyer likewise showed the former's intention to be bound by the deed, with Justice Choo also noting that it was delivered to his account manager at Hong Leong Bank.
"Accordingly, I find that the deed is a valid and enforceable gift," the judge said.
Justice Choo also found no merit in the argument that the true purpose of the deed was to satisfy Hong Leong Bank's requirement.
He determined that "for all intents and purposes", the money in the Hong Leong accounts formed part of the gift of S$8.5 million from Eng to Tsang.
"It is likely to be the case that Eng, at the material time in October 2016, had a total of S$8.5 million from all his Hong Leong Bank accounts that were operated in different foreign currencies.
"However, given that the Hong Leong Account was only opened in January 2017, it was likely that the exchange rates for those currencies had dropped in the following months, such that the total monies in the Hong Leong account only amounted to about S$8.2 million as of Jan 25, 2017."
On whether Tsang is entitled to claim for the shortfall between S$8.5 million and the balance in the Hong Leong account, Justice Choo said that "no shortfall amount is to be awarded given the lack of evidence".
This was because Tsang had closed the bank account in question and it "remains unclear when Tsang closed the account, and what the account balance was when she did".
“Such evidence could have been readily provided by Tsang. The fact that Tsang had closed the account was also not revealed until the first day of trial," he said.
"The lack of evidence from Tsang makes it difficult for me to find in her favour," Justice Choo added.
He also noted that given the fluctuating nature of the exchange rates, the funds in the Hong Leong account could very well have increased after Eng’s death.
However, the judge ruled that Tsang was entitled to retain the money that was remaining in the Hong Leong Account - S$7.91 million - before she closed it.
The question of costs will be heard at a later date should both parties not come to an agreement.
Singapore
Mistress to keep about S$8 million in lawsuit after man's death
The woman sought to claim the shortfall between the S$8.5 million deed of gift and the remaining bank account balance, while the man's daughter contested the deed's validity.
SINGAPORE: A Singapore court ruled on Wednesday (Jun 12) that the mistress of an American man who lived in Hong Kong will keep about S$8 million (US$6 million) that he had given to her.
James Eng Jr, who died in September 2018 at age 76, had a romantic relationship with Lolita Tsang since 2005 despite both parties being married to others.
Eng's wife died in December 2011.
Eng had intended to grant Tsang, who is now 64 years old, S$8.5 million in October 2016 but a delay in the process resulted in the bank transfer taking place only in January 2017.
At the time, the money in the foreign currency call account amounted to only about S$8.2 million. This was likely due to the drop in currency exchange rates, said the judge.
Tsang, the claimant, sought to claim the shortfall between S$8.5 million and the remaining balance in the bank account.
At the same time, Eng's daughter, Allison Nicole Eng, contested the validity of the deed as one of the alternative executors of her father's estate. The defendant sought to recover money her father had given to Tsang.
DEED OF GIFT
Eng opened a Hong Leong Bank account for Tsang on Oct 25, 2016 after he sent an email to his account manager with directions to close his existing accounts at the bank and transfer the balance into the new account.That account was opened in Tsang's sole name.
However, the process was delayed because Hong Leong Bank’s compliance team needed information about Tsang’s wealth, personal assets, inheritance and financial knowledge or experience.
The team also required Eng to execute a deed of gift before he could transfer the money to Tsang.
The deed of gift was executed by Eng on Nov 7, 2016 and conferred an “unconditional and irrevocable” gift of S$8.5 million to Tsang, according to court documents.
It also contained a clause which stated that the deed and all matters relating to it shall "be governed and construed in accordance with the laws of Singapore" and that the parties "hereby submit to the exclusive jurisdiction of the Singapore courts".
Tsang's bank account was opened on Jan 20, 2017 and as of Jan 25, 2017, it had about S$8.2 million.
ARGUMENTS
The lawyer acting for the defendant argued that the deed was not enforceable because it was not sealed on the day it was executed and that it was not delivered to Tsang.Eng "had no intention" for it to be binding and enforceable, said the lawyer.
According to the defendant, the only reason why Eng signed the deed was because the bank had required it before his funds could be transferred to the newly opened account that was in Tsang's name.
The lawyer added that the true intention behind Eng’s transfer of his funds "was not that he intended to benefit Tsang fully and absolutely".
Instead, it was because he had intended to "avoid the prohibitive estate duties and probate processes for an easy distribution of his liquid assets".
The lawyer further submitted that Eng had intended Tsang to distribute the money to Eng's daughter after his death.
The claimant's lawyer, however, argued the deed was valid since it was signed, sealed and delivered.
Father sues daughter over co-owned properties worth more than S$11 million, wins suit that 'split the family'
Woman sues brother over S$700,000 Toa Payoh flat on behalf of mother who has dementia
Three sisters sue younger brother over property left by father, win equal shares
THE DRAFT WILL
Justice Choo took into consideration the contents of Eng’s draft will from Nov 7, 2016, which was the same day he signed the deed, to assess his intentions in transferring his funds to Tsang’s Hong Leong Bank account.He said that Eng's total assets, which included his liquid assets and an apartment in Hong Kong, would amount to about S$12.75 million.
Eng had intended for his daughter to receive about $4.25 million, while Tsang would receive S$8.5 million.
Eng had, in his will, given instructions for Tsang to either purchase the apartment from his daughter with the money in the Hong Leong Bank account or retain the full amount in the account while his daughter retained ownership of the property.
Eng did not sign the draft will as he was “probably awaiting Allison’s response to his emails”, which he sent on Nov 25, 2016 and Feb 13, 2018, said Justice Choo.
Eng had, on Nov 25, 2016, sent an email to ask his daughter how she wanted the payment to be made. She did not reply despite a reminder that was sent on Feb 13, 2018.
“Given that Eng intentionally had the deed and the will drafted at the same time, the contents of the draft will are relevant in assessing Eng’s intentions at the material time,” the judge added.
JUDGE'S RULING
In his judgement, Justice Choo said that Eng’s intentions in making the deed were connected to his intentions in making the draft will.Eng wanted to minimise his estate’s exposure to the prohibitive estate duties when he decided to transfer S$8.5 million to Tsang, he added.
"All the objective evidence reproduced above similarly points to the conclusion that the S$8.5 million was to ensure that Tsang would be provided if he were to predecease her.
"Hence, both the deed and the draft will were meant to give effect to the same purpose - for easy distribution of his assets after his demise."
On the claim by the defendant's lawyer that the deed was not sealed or delivered, making it unenforceable, Justice Choo Han Teck said it appeared that the original deed had not been sealed on the day of execution.
However, he noted it was likely to have been sealed after Eng's lawyer in Singapore confirmed his client's instructions to hand the deed over to his account manager at Hong Leong Bank.
Justice Choo added that it is "well-established" that the physical manifestation of a seal is not required for the document to be considered sealed.
Rather, the key point was whether Eng had recognised and accepted the document as his deed and had the requisite intention to execute it.
Having gone through the email correspondence between Eng and his lawyer, Justice Choo said the former's intention to execute the deed was sufficiently indicated.
He also rejected the argument by the defendant's lawyer that the deed was not delivered, stating that the act of delivery does not refer to the actual transfer of possession but rather the intention to deliver.
The email correspondence between Eng and his lawyer likewise showed the former's intention to be bound by the deed, with Justice Choo also noting that it was delivered to his account manager at Hong Leong Bank.
"Accordingly, I find that the deed is a valid and enforceable gift," the judge said.
Justice Choo also found no merit in the argument that the true purpose of the deed was to satisfy Hong Leong Bank's requirement.
He determined that "for all intents and purposes", the money in the Hong Leong accounts formed part of the gift of S$8.5 million from Eng to Tsang.
"It is likely to be the case that Eng, at the material time in October 2016, had a total of S$8.5 million from all his Hong Leong Bank accounts that were operated in different foreign currencies.
"However, given that the Hong Leong Account was only opened in January 2017, it was likely that the exchange rates for those currencies had dropped in the following months, such that the total monies in the Hong Leong account only amounted to about S$8.2 million as of Jan 25, 2017."
On whether Tsang is entitled to claim for the shortfall between S$8.5 million and the balance in the Hong Leong account, Justice Choo said that "no shortfall amount is to be awarded given the lack of evidence".
This was because Tsang had closed the bank account in question and it "remains unclear when Tsang closed the account, and what the account balance was when she did".
“Such evidence could have been readily provided by Tsang. The fact that Tsang had closed the account was also not revealed until the first day of trial," he said.
"The lack of evidence from Tsang makes it difficult for me to find in her favour," Justice Choo added.
He also noted that given the fluctuating nature of the exchange rates, the funds in the Hong Leong account could very well have increased after Eng’s death.
However, the judge ruled that Tsang was entitled to retain the money that was remaining in the Hong Leong Account - S$7.91 million - before she closed it.
The question of costs will be heard at a later date should both parties not come to an agreement.
