KHOO TEK KEONG Vs. CHNG JOO TUAN NEOH

JUDGEMENT

(1.) The action in which this appeal arises is an action for the administration of the estate of one Khoo Eu Yong, a merchant of Penang, who will be referred to as the testator. The testator by his will, dated 16 October 1918, appointed Khoo Heng Poon and Khoo Tek Keong executors thereof. After bequeathing sundry pecuniary legacies and directing the investment of a sum of $10,000 to be applied as therein mentioned, he devised and bequeathed the residue of his estate upon certain trusts (including a trust for the accumulation of surplus income) during a period of 12 years from his death. The trusts of the residue at the expiration of the period were declared in the following terms : " (e) Upon trust as to both the capital and the accumulations for my said wife and my sons Khoo Tek Chye, Khoo Tek Keong and Khoo Lip Sim in equal shares. (f) Provided always that in case my said wife shall die before the expiration of the said period of 12 years her share shall go to increase the shares or share of my sons or son who shall survive the said period or leave a child or children living at the expiration of the said period and if more than one in equal shares. (g) Provided further that if any of my said sons shall die before the expiration of the said period of 12 years without leaving a child living at the expiration of the said period his share shall go to increase the shares or share of my other sons or son who shall survive the said period or leave a child or children at the expiration of the said period and if more than one in equal shares. (h) Provided also that if any of my said sons shall die before the expiration of the said period of 12 years leaving a child or children living at the expiration of the said period such child or children shall stand in the place of such deceased son and take per stirpes and equally between them if more than one the share of my residuary trust fund which such deceased son would have taken if he had been living at the end of the said period including any accrued share or shares under the last two preceding clauses."

(2.) The investment clause contained in the will ran thus: "11. I empower my trustees to invest all moneys liable to be invested in such investments as they in their absolute discretion think fit with liberty to vary the same from time to time." The testator died on 2 January, 1919, and his will (with a codicil irrelevant for the present purpose) were proved by the two executors on 16 April 1919. Khoo Heng Poon died on 11 January, 1927, leaving the testator's son, Khoo Tek Keong, as sole surviving trustee of the will. Khoo Tek Keong had in fact been also managing trustee. On 19 May 1929, Khoo Sian Tan and Cheah Inn Keong were appointed additional trustees ; and on 2 March, 1931, they were appointed managing trustees, as from which date Khoo Tek Keong ceased to be a managing trustee, although he continued to be a trustee. The period of 12 years expired on 2 January, 1931, and thereupon in the events which happened the residuary estate belonged to the testator's widow and his three named sons in equal shares.

(3.) On 14 April 1931, the writ in the present action was issued (the plaintiffs being the testator's widow and his son, Khoo Tek Chye) against the three trustees, in the Supreme Court of the Straits Settlements (Settlement of Penang). It asked for administration of the estate of the testator with all necessary and proper accounts and enquiries. The statement of claim in para. 9 thereof alleged various breaches of trust, of which it is only necessary to mention those alleged against Khoo Tek Keong, defendant 1, viz. : " Para. 9 (4).-Defendant 1 has committed breaches of trust or wilful default in lending out trust funds on personal loans on security of jewelleries without valuation." Para. 9 (6). -Defendant 1 has committed breaches of trust or wilful default in lending out trust funds to Chetties without securities."