Low Heng Leon Andy v Low Kian Beng Lawrence (Administrator of The Estate of Tan Ah Kng, Deceased)[2018] SGCA 48

January 24, 2019

INTRODUCTION

In this month’s case study, we will look at a case whereby a grandmother promised her grandson that in the event of her demise, he would be free to continue staying in her five-room Housing Development Board (“HDB”) flat located at Hougang (hereinafter referred to as “the Flat”) for so long as he wished and that everything in the HDB flat will be left to him.

The grandson, in reliance on the promises made by the grandmother, took care of one of his aunts (“the Aunt”) (who was suffering from ovarian cancer) and the grandmother (who was suffering from tuberculosis) during the entire period from 2005 until their respective deaths in 2007 and 2008.

The grandmother subsequently passed away without leaving behind a Will.

FACTS

(a) The grandson (or “the Appellant”) had, since his birth in 1984, lived in the Flat until he was evicted by the administrator of the grandmother’s estate (or “the Respondent”) in July 2009. The Flat was held in joint tenancy by the grandmother (or “the Deceased”) and the Aunt. The grandmother and the Aunt had previously moved out of the HDB flat in 1992, but returned to live with the grandson in 2005. The Aunt passed away on 7 September 2007, while the grandmother passed away on 28 November 2008. This left the grandmother’s estate (hereinafter referred to as the “Estate”) as the sole legal and beneficial owner of the HDB flat. The grandson was not a beneficiary of the grandmother’s estate.

(b) According to the Appellant, the Deceased had, before her passing, frequently emphasized to the Appellant, in the presence of his relatives and their family doctor, that the Flat was not to be sold in the event of her demise, and that the Appellant would be free to continue staying in the Flat for as long as he wished. The Deceased also expressed her intention to leave everything in the Flat to the Appellant.

(c) In reliance on the promises made by the Deceased, the Appellant took care of the Aunt (who was suffering from ovarian cancer) and the Deceased (who was suffering from tuberculosis) during the entire period from 2005 until their respective deaths in 2007 and 2008. The Appellant claimed to have suffered from the following detriments:

i. First, the Appellant spent time and effort to care for the Aunt and the Deceased, and took on the responsibility of paying for all of the household expenses, including food and utilities, as well as the medical expenses for the Deceased. He did not claim these expenses from a sum of $40,000/- that the Aunt had left in her bank account, to which she had given the Appellant access for the purposes of maintaining and providing for the Deceased. He also refrained from asking his other family members to contribute to the expenses.

ii. Second, the Appellant refrained from seeking regular full-time employment, and subsequently also gave up his employment as a financial planner with Manulife Singapore (even though it allowed for relative flexibility in working hours) in order to take care of the Deceased on a full-time basis.

iii. Third, the Appellant claimed that while taking care of the Deceased, given that the Deceased has contracted tuberculosis, he had to endure the “mental anguish” that came with the fear of contracting tuberculosis himself. The Appellant was also compelled to sacrifice his social life by avoiding social contact in the entire period when taking care of the tuberculosis-stricken Deceased.

FIRST INSTANCE BEFORE THE ASSISTANT REGISTRAR

Following the Appellant’s eviction in July 2009, he brought a claim for, amongst other things:

i. The moneys expended in taking care of the Deceased’s during her lifetime;

ii. Equitable (i.e. fair) compensation for the loss of his life-long licence to reside in the Flat.

On 24 August 2016, the Appellant obtained an order for judgment against the Deceased’s estate, with damages (or the amount) to be assessed.

At first instance before the Assistant Registrar (“AR”), the Appellant dropped his claim for the moneys expended in taking care of the Deceased, and focused only on his claim for the equitable compensation for the loss of his life-long licence, which he claimed is best quantified by reference to the rent that he has been paying in respect of his alternative accommodation following his eviction from the Flat. To that end, the Appellant sought a sum of $420,000.

The AR awarded the Appellant damages of $84,000, taking the view that a sum equivalent to rental of $1,000 per month for a period of seven (7) years from the time when he was evicted from the Flat was sufficient to satisfy the equity that arose as a result of the detriment suffered by the Appellant.

THE DECISION BY THE JUDGE IN THE HIGH COURT

On appeal, the Appellant again limited his claim to the recovery of a sum representing equitable compensation for the loss of his life-long licence. The Judge allowed the appeal, increasing the quantum of equitable compensation awarded to $100,000.

In arriving at his decision, the Judge looked to what the claimant’s position would have been had the Deceased actually acted in accordance with his representations – on the ground that the Appellant here had formed the expectation that he would be allowed to live in the Flat for as long as he wished. The Judge then affirmed the method adopted by the AR, which involved multiplying a base rental sum by a multiplier reflecting a time period in order to derive the cost of residing in an alternative flat for the applicable time period.

In so far as the applicable multiplicand was concerned, the Judge held that the figure determined by the AR of $1,000 was too low, and preferred a base sum of $1,500. The Judge found that given that the Appellant’s expectation was to live in a furnished flat, the AR should have awarded the additional $500 per month associated with the hiring of furniture, fittings and fixtures for the Appellant’s flat, on top of the $1,000 per month for the basic rental sum. The Judge, however, declined to adopt the Appellant’s proposed sum of $2,400 per month, which was based on a newspaper clipping showing that the median rent of a five-room HDB flat in Hougang in the fourth quarter of 2014 was $2,400.

As for the multiplier, the Judge affirmed the AR’s decision to select a multiplier of seven (7) years. The Judge considered the multiplicand of between 10 to 14 years proposed by the Appellant to be too high, as the Appellant had only taken care of the Deceased for about three (3) years, and hence such a multiplicand would lead to a remedy that was disproportionate to the detriment that the Appellant had actually suffered. This resulted in a final sum of $126,000. However, the Judge held that this sum should be moderated to $100,000 for the following reasons:

(a) The equity had been partly satisfied given that the Appellant had been staying in the Flat at the material time on a rent-free basis;

(b) The detriment in fact suffered by the Appellant was less than what he had claimed during the hearing. Although the Appellant submitted that he had spent some $80,000 on expenses for the Deceased, the claim that he submitted when he commenced proceedings only stated that he had spent a far lower sum, i.e., $18,350.50. In addition, even in respect of this lower sum, the evidence adduced was not cogent. Finally, a domestic helper had been hired to take care of the Deceased, such that the Appellant’s burden had in fact been partially alleviated.

The Appellant appealed against the judgment.

THE DECISION BY THE COURT OF APPEAL

The apex court allowed the appeal.

In the Court of Appeal’s judgment, the sum of $140,000 ought to be awarded to the Appellant.

In assessing the appropriate remedy, the Court of Appeal agreed with the methodology employed by the Judge, which is to first identify a suitable multiplicand to be multiplied by a suitable multiplier in order to arrive at an amount that fulfills the Appellant’s expectation, and then consider whether this amount should be reduced to ensure the proportionality of the remedy with the detriment suffered.

The Court of Appeal, however, differed from the Judge in a number of respects in relation to the assessment exercise.

Quantifying the multiplicand the and the multiplier

In so far as the multiplicand is concerned, the Court of Appeal agreed with the Judge that a multiplicand of $1,500 per month is appropriate.

The Appellant submitted, as he did before the Judge below, that the multiplicand should be $2,400 per month, based on the newspaper clipping that he had adduced below reflecting the median rental rate of S$2,400 for a five-room HDB flat in Hougang in the fourth quarter of 2014 – because his expectation is to enjoy life-long free accommodation in the HDB flat, which is a five-room HDB flat. The Appellant thus claimed that in so far as his tenancy agreements entered into following his eviction from the HDB flat merely correspond to the rental of a three-room or four-room flat, they do not fully reflect his expectation.

The court disagreed with the $2,400 figure proposed by the Appellant for two reasons. First, the Court of Appeal found that the newspaper clipping adduced by the Appellant (and correspondingly the rental rates cited therein) to be an unreliable basis for determining the applicable multiplicand. The Appellant relied in particular on the median rental rate for a five-room HDB flat in Hougang in the fourth quarter of 2014 to support the mooted figure of $2,400. However, in the same newspaper clipping tendered, the median rental rates for a three-room flat and a four-room flat in Hougang were $1,900 and $2,300, respectively. These depart significantly from the rent that the Appellant had in fact paid in the same period: based on the 2 tenancy agreements that the Appellant had actually entered into following his eviction from the Flat, the Appellant was paying $1,000 per month for the premises. In the court’s view, the difference between the figures that the Appellant had actually paid and the figures presented in the newspaper clipping – especially the difference between the $1,000 rental paid for a three-room flat under the first tenancy agreement entered into in 2014 and the $1,900 rental rare for a three-room flat in 2014 reflected in the newspaper clipping – is difficult to ignore, and is one that seriously called into question the reliability of the $2,400 figure cited in the newspaper clipping.

Second, the Court of Appeal rejected the Appellant’s submission that only the rental rate for a five-room flat would be a fair reflection of what he was in fact promised. His expectation is to enjoy a life-long licence to occupy the Flat (and not to, for example, to own the entire unit). This meant that it should correspondingly also be within his expectation that the Estate, as the sole legal and beneficial owner of the Flat following the Deceased’s demise, may take possession of the Flat and proceed to rent out any of the rooms in the Flat other than the one that the Appellant is occupying. Given this possibility, the court considered it fair to, as the Judge had done, rely on the aforementioned tenancy arrangements for three-room or four-room HDB flats that the Appellant has entered into post-eviction in order to quantify his expectation loss.

The Court of Appeal also confirmed the $1,500 figure adopted by the Judge as the multiplicand. In the court’s view, the Judge was correct to include both the basic monthly rent of the flats that the Appellant had rented as the alternative accommodation after being evicted from the Flat (i.e. S$1,000) and the monthly fee for the hire of the furniture, fittings and fixtures in the flats (i.e. $500), because the Appellant’s expectation was to live in a furnished flat.

In respect of the multiplier, the Appellant submitted that the Judge erred in considering 7 years to be the appropriate multiplier. Instead, the Appellant submitted that the multiplier should be 14 years.

The Court of Appeal found 10 years to be the most appropriate yardstick for the period of time that the court should take into account in fashioning an award to meet the Appellant’s expectation. Although the Appellant was promised a life-long licence to occupy the Flat, the Appellant had expressed an intention to reside in the Flat only up until when he is first eligible to apply for public housing as a single. This took into account the period of time from when the Appellant was evicted (in 2009) to when the Appellant would first be eligible to apply for public housing as s single at the age of 35 (in 2019), which the court considered to be a suitable objective reference point for its calibration of the multiplier to be premised on.

The Court of Appeal rejected the Appellant’s submission that the multiplier should be 14 years. The Appellant advanced this submission on the basis that due consideration should be given to the additional period of time required for an HDB BTO development to be completed. In the court’s view, it would be unprincipled to take this additional period of time in account, given that the award would otherwise be recognizing the Appellant’s rather specific intention of applying for a BTO flat.

For these reasons, therefore, the Court of Appeal concluded that the amount that would fulfill the Appellant’s expectation should have been obtained by multiplying the multiplicand of $1,500 per month by a multiplier of 10 years, which came up to a total sum of $180,000.

Proportionality of the remedy with the detriment suffered

However, was this amount extravagant, or out of proportion to the detriment which the Appellant had suffered, such that the Appellant’s equity ought to be satisfied in a more limited way?

In the Court of Appeal’s judgment, the provisional figure of $180,000 would be out of all proportion to the detriment that the Appellant had suffered, and should thus be reduced to the sum of $140,000 in order to ensure proportionality between the expectation of the Appellant and the detriment suffered.

This is because firstly, the Appellant’s detriment suffered in the form of medical and household expenses borne on behalf of the Deceased was not as substantial as he claimed. In addition, the Court of Appeal did not take into account the Appellant’s decision to refrain from seeking regular full-time employment, and also to forego his subsequent employment as a financial planner with Manulife Singapore, in order to take care of the Deceased on a full-time basis. Although the Appellant pleaded this particular detriment, he failed to adduce the necessary evidence to support his claim. The Appellant could have, for example, adduced evidence of his income statements when he was employed as a financial planner with Manulife Singapore, but failed to do so.

Secondly, the detriment that the Appellant suffered from having spent time and effort to take care of the Deceased was in fact less pronounced than the impression that the Appellant had given, because a domestic helper had been hired to look after the Deceased, alongside the Appellant.

CONCLUSION

A learning point from our case study is that everyone should consider making a Will, if nothing else but to at least set out your intentions with regards to the distribution of your estate. If there is no Will, then it becomes very difficult for another, who may be relying on your verbal statements, to establish any interest in your estate. The law in this regard is very established, in that the legal position with regards to distribution applies, unless overwhelming evidence proves otherwise and even then, the remedy may not lie in what was specifically promised.

Sadly, in this case, the grandson was evicted from the home which he lived in his whole life, with the court awarding him a compensation sum of $140,000 for the detriment that he had suffered.

Jolene Chia
Advocate & Solicitor