Insured - Ms Michelle Lim Yan Yi, the granddaughter of Hin Leong founder Lim Oon Kuin, sought a High Court declaration that the three policies, worth over $521,000, should be ring-fenced from creditors’ reach because they were held on trust for her benefit by her father, who was declared bankrupt in December 2024.
The three policies are part of a set of eight insurance policies with AIA that Mr Lim Chee Meng had taken out when Ms Lim was a minor, under which he was the policy owner and she was the named insured.
Trust - But High Court Judicial Commissioner Mohamed Faizal found there was a lack of evidence of an intention on Mr Lim’s part, prior to his bankruptcy, to create a trust over the three policies for the sole benefit of his daughter. He found that the documentary evidence relied on by Ms Lim was “either self-interested representations” or “mere assertions”.
One document she relied on was an October 2021 letter from Mr Lim to ring-fence the eight policies from other assets that were subjected to a freezing order in a US$3.5 billion (S$4.45 billion) civil suit.
Another document adduced was an AIA letter dated October 2021 signed by a purported personal wealth manager, who asserted that “the eight policies belong to (Ms Lim), and are being held by Mr Lim Chee Meng on trust for (Ms Lim)”.
Ms Lim contended that the AIA letter would not have been issued unless her father had clearly conveyed his intention to create a trust.
But the judicial commissioner found “the letter was bare and bereft of details and merely asserted, without more, that the eight policies were held on trust”. Other documents Ms Lim relied on included an e-mail dated March 10, 2025, from Mr Lim to the trustees and part of his affidavit filed in 2024 for in which he asserted that he held the eight policies on trust for Ms Lim.
But the judicial commissioner pointed out that most of the documents she relied on as evidence were written by or on behalf of her father after his bankruptcy proceedings started.
“By that time, it would have been apparent that Hin Leong’s collapse could have extremely far-reaching financial consequences for all concerned, not least Mr Lim who was a director.”
The judicial commissioner noted: “It was at this point that Mr Lim started to insist that the eight policies were in fact not owned by him and should be deemed to be held on trust.”
Bankrupt Ring-Fenced Life Insurance - He pointed out: “The courts should be wary of such belated attempts by bankrupts to shield assets from creditors by retrospectively asserting the existence of trust arrangements without contemporaneous evidence.”
Mr Lim, along with his father and sister Lim Huey Ching, was declared bankrupt in December 2024, following a settlement of two lawsuits brought by Hin Leong’s liquidators and HSBC against the Lim family.
Their bankruptcy estates are being managed by trustees Leow Quek Shiong and Seah Roh Lin of BDO Singapore, who have taken the position that the three insurance policies vest in Mr Lim’s bankruptcy estate.
The trustees had asked Mr Lim and Ms Michelle Lim whether a third party would pay the bankruptcy estate the surrender value of the three policies, which was worth over $521,000 as at Jan 16.
If no third party would pay for them, the trustees would then terminate the policies and use the proceeds to pay his creditors. But Mr Lim and his daughter did not agree to this arrangement.
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