The rule on vesting and capacity

Unlike an executor of a will obtains his title and authority from the will, an administrator obtains his title and authority from legislation. Therefore, an administrator can only act on behalf of the estate when the grant of Letters of Administration is obtained. Before obtaining this grant, the person seeking the grant had no capacity to take any action, much less maintaining one (Teo Gim Tiong v Krishnasamy Pushpavathi (legal representative of the estate of Maran s/o Kannakasabai, deceased) [2014] 4 SLR 15 at [19]).

 

 

Do any exceptions apply?

There are 3 exceptions to the rule on vesting and capacity.

  1. Order 4 rule 4 of the Rules of Court 2021
  2. Section 20(4) of the Civil Law Act 1909
  3. The “Wong Moy” line of cases

 

Exception 1: Order 4 rule 4 of the Rules of Court 2021

This exception provides an avenue of plaintiffs to sue the deceased’s estate. There need not be an administrator of the estate (i.e., the grant of letters of administration has yet to be obtained by the potential administrator) for the action to commence against the deceased’s estate.

 

 

Exception 2: Section 20(4) of the Civil Law Act 1909

This exception provides that if death was caused by any wrongful act, neglect or default and that the deceased were entitled to sue had he not died, his dependants can bring an action against that party despite not having an executor or administrator. All such actions should be brought within 3 years from the deceased’s death.

 

 

Exception 3: The “Wong Moy” line of cases

This exception applies in cases where mere beneficiaries of an estate would like to commence an action on behalf of the estate.

In the Court of Appeal case of Wong Moy (administratrix of the estate of Theng Chee Khim, deceased) v Soo Ah Choy[1996] 3 SLR(R) 27 (“Wong Moy”) at [11], the SGCA affirmed the principle that mere beneficiaries of an estate do not have equitable or beneficial interest in an unadministered estate and hence they are not entitled to commence any action. In essence, they do not have the requisite standing to sue on behalf of an estate.

 

For the exception to apply, there must be “special circumstances”.

However, as stated in Wong Moy at [12], in certain “special circumstances”, the beneficiary of an estate which is unadministered or under administration may institute an action to recover assets of the estate. The basis for this would be that the action is taken on behalf of the estate to protect the estate. While such an action allows the beneficiary to assert his right of remedy, it asserts the estate’s right of property.

It is important to note that the “special circumstances” were not narrowly confined to instances where the personal representative had defaulted in acting to recover property. It was held that such a narrow interpretation would be too inflexible and would lead to injustice (Wong Moy at [24]). This interpretation was followed in the more recent SGHC case of Fong Wai Lyn Carolyn v Kao Chai-Chau Linda and others [2017] 4 SLR 1018 at [9]. In essence, the court would consider all circumstances of the case to determine whether “special circumstances” were present (Wong Moy at [28]).

(An example of a “special circumstance” would be when the personal representative, be it the executor or administrator, is in default. Perhaps he is dissipating the estate. Therefore, some other person would have to step in to protect the estate.)

Therefore, a beneficiary to the estate can rely on this exception to the rule on vesting and capacity to initiate an action on behalf of the estate.

The type of reliefs that can be sought.

The beneficiary commencing the action under the exception is not confined to declaratory reliefs. He can claim any relied on behalf of the estate (Ching Chew Weng Paul v Ching Pui Sum [2010] 2 SLR 76 at [58]).

Therefore, the beneficiary can obtain injunctions and or claim damages. He can choose the type of relief he is seeking.

 

Limitations to the Wong Moy exception.

The exception to the rule on vesting and capacity in the Wong Moy line of cases has its limitations. This exception only applies to matters where the plaintiffs had commenced actions to recover or protect assets that were either held by the deceased or which were held on trust for the deceased. In the High Court case of Lakshmi Anil Salgaocar v Vivek Sudarshan Khabya [2017] 4 SLR 1124, the widow of the deceased tried to sue the CEO of her husband’s company for allegedly breaching his duties to the company. As the company has a separate legal personality, the proper plaintiff rule would dictate the locus standi is the company. While Wong Moy provided an exception to the rule on vesting and capacity, it did not go as far as to provide a further exception to the proper plaintiff rule.