SINGAPORE Law and Practice Contributed by: Sim Bock Eng, Josephine Choo, Aw Wen Ni and Vincent Ho, WongPartnership LLP
6.2 Fiduciary Liabilities As is the case generally with corporations, it is not possible to pierce the veil of a trust to hold the fiduci - ary personally liable for the liability of the trust, unless the trust is merely a device, façade or sham intend - ed to give third parties or the court an appearance of creating legal rights and obligations between the parties that are different from the actual rights and obligations that the parties intended to create; see, for example, Gaye Williams Nee Marks v Cary Donald Williams [1993] SGHC 190. In Siraj Ansari bin Mohamed Shariff v Juliana bte Bahadin and another [2022] SGHC 186, one of the trustees of a trust holding a condominium property on behalf of the beneficiary (who was also the trus - tee’s son) sought to have the trust set aside on the basis that it was a sham executed for the purposes of evading ABSD. Applying the principles from Chng Bee Kheng (ie, whether there was a subjective “common intention to mislead” on the part of both the settlor and the trustee), the Singapore High Court found that the conduct of the parties and the contemporaneous evidence pointed to the trust not being a sham. The case of Lau Sheng Jan Alistair v Lau Cheok Joo Richard [2023] SGHC 196 considered the related issue of when a trust should be unenforceable for illegality. The beneficiary in that case sought a declaration for the trust to be terminated and for the trust property to be transferred to him pursuant to the rule in Saun- ders v Vautier (1841) 4 Beav 115. The High Court held that, in deciding whether a trust is unenforceable for illegality, it will consider whether the trust in question is illegal in itself, whether the trust was created for an illegal purpose and, even if the trust is not enforceable, whether the party seeking to enforce the trust can nonetheless establish an alternative basis for enforc - ing a proprietary interest by the operation of trusts law. The Trustees Act 1967 The Trustees Act 1967 also contains several protec - tions and indemnities for trustees, including protection against liability and an implied indemnity that a trustee is only chargeable for money and securities actually received by them and accountable only for their own acts, receipts, neglects or defaults.
In Rajabali Jumabhoy and others v Ameerali R Juma- bhoy and others [1998] 2 SLR(R) 434, the Court of Appeal held that an exculpatory clause in the set - tlement operated to relieve a trustee of liability for loss where no dishonesty was involved, although it noted that the extent of an exemption clause would “depend very much on the precise wording and ambit of the exemption clause itself”. The Court of Appeal also noted that, even if the exculpatory clause did not apply, the court retained a residuary discretion under Section 63 of the Trustees Act 1967 to relieve a trustee from liability where they have acted “honestly and reasonably, and ought fairly to be excused for the breach of trust”. Under Section 27 of the Trustees Act 1967, a trustee may delegate some or all of their powers and discre - tions by way of a power of attorney. However, Section 27 (6) of the Trustees Act 1967 provides that, despite such delegation, the trustee shall be liable for the acts or defaults of the donee in the same manner as if they were the acts or defaults of the trustee. Anti-Bartlett Clauses “Anti-Bartlett” clauses are common in commercial trust deeds and essentially negate any duty on the part of the trustee to enquire into or interfere in the conduct or management of the company owned or held by the trust, unless the trustees are aware of circumstances that call for enquiry. These clauses are typically inserted into trust instruments to pro - vide trustees with a degree of comfort when the trust assets include shares in operating businesses or trad - ing companies, or when the assets are not managed and/or controlled by the trustee. In Zhang Hong Li v DBS Bank (Hong Kong) Limited [2019] HKCFA 43, the Hong Kong Court of Final Appeal overturned the findings of the courts below, and held that the anti-Bartlett clauses in a trust deed would exclude any residual high-level supervisory role or obligation on the trustee in respect of investment decisions made by an investment adviser appointed by the underlying company. Such a duty would be “plainly inconsistent with the anti-Bartlett provisions”. The Singapore International Commercial Court had an opportunity to consider anti-Bartlett clauses in the
505 CHAMBERS.COM
Powered by FlippingBook