Case Update: High Court declares procedurally irregular CPF nomination to be legally valid

By Goh Hui Hua and James Tan

Did you know that a divorce does not automatically revoke your pre-existing CPF nomination? What happens if a person only realizes this when his or her health was deteriorating, and he or she thereafter failed to properly change his or her CPF nomination in accordance with the strict rules required by the CPF Board?

In Toh Tun Li Adeline v Central Provident Fund Board [2023] SGHC 55, the Honourable Justice Lee Seiu Kin (“Justice Lee”) confirmed that the High Court has the power to declare a procedurally irregular CPF nomination to be legally valid. Justice Lee further declared that the CPF nomination made by the Applicant’s late father (the “Deceased”) is legally valid, even though the formalities stipulated in the Central Provident Fund Act 1953 (2020 Rev Ed) (the “CPF Act”) and the Central Provident Fund (Nomination) Rules (Cap 36, 1998 Rev Ed) (the “CPF Nomination Rules”) were not duly complied with.

Our team comprising Goh Hui Hua and James Tan successfully acted for the Applicant in the above matter.

Background Facts

This case involves attempts made by the Deceased to change his CPF nominee from his ex-wife to the Applicant, who is his only daughter. The Deceased and his ex-wife were divorced in 1985, following which both the Applicant and the Deceased ceased to have any contact with her, save for a single meeting which the Applicant had with her in 2009 to seek closure.

As the Deceased was labouring under the mistaken impression that his existing CPF nomination made in favour of his ex-wife during their marriage had already been revoked after the divorce, the Deceased did not make any fresh CPF nomination to change his CPF nominee. After the Deceased was made aware that his ex-wife still remained as his CPF nominee, the Deceased then made two (2) online submissions on 22 November 2021 and 30 November 2021 via the CPF online portal to change his CPF nominee to the Applicant (the “CPF Online Submissions”). Unfortunately, the CPF Online Submissions were not duly processed and accepted by the CPF Board owing to inadvertent errors on part of the Deceased during the online submission process.

The Deceased’s health took a turn for the worse, and he passed away shortly thereafter on 4 January 2022.

As the CPF Board took the position that they could not recognise the CPF Online Submissions as valid Nominations made by the Deceased, the Applicant had to take out a court application against the CPF Board and the Deceased’s ex-wife to first obtain an injunction to prevent the CPF Board from disbursing the Deceased’s CPF monies to his ex-wife, and also to seek a court declaration that the Deceased had validly nominated the Applicant as his CPF nominee.

The High Court’s Decision

After finding that the Deceased had intended to change his CPF nominee from his ex-wife to the Applicant, Justice Lee proceeded to examine the statutory regime under the CPF Act and the CPF Nomination Rules and the obiter dicta in a previous Court of Appeal decision. His Honour then concluded that the provisions in the CPF Act and the CPF Nomination Rules serve an administrative function of providing an effective methodology through which the CPF member’s intentions can be communicated to the CPF Board, thereby safeguarding both the CPF Board and the members from disputes over the monies after the death of members. Following from the aforesaid, the administrative function is thus geared towards the just distribution of a member’s CPF monies and should not be used to cause injustice.

Notwithstanding submissions made by the CPF Board that the manner in which the CPF Online Submissions were made was inappropriate and suspicious, Justice Lee agreed with our submission that there was no fraud perpetuated in the present case. It was clear on the facts that the Deceased could not have intended for his ex-wife to be the beneficiary of his CPF monies. Further, the Deceased had clearly intended for all of his property to be given to the Applicant. This was expressed through the Deceased’s Last Will and Testament, which had made the Applicant the sole beneficiary of his estate. Given that the Deceased had clearly intended for his CPF monies to be passed to the Applicant upon his death, and this is the intention that the statutory regime of CPF nominations would have sought to give effect to, Justice Lee therefore declared that the Deceased had validly nominated the Applicant as his CPF nominee.

Justice Lee however emphasized that in circumstances where the CPF nomination in question does not fully comply with the CPF Act and/or the CPF Nomination Rules, the CPF Board is entitled and justified to refuse to release the Deceased’s monies to the Applicant in the absence of a court order directing the CPF Board to do so.

Conclusion

Justice Lee’s decision makes it clear that all hope is not lost in the event that a CPF nomination does not fully comply with the CPF Act and/or CPF Nomination Rules, provided that there is sufficient evidence of the CPF member’s intentions at the time when the CPF nomination was made. That said, given that the CPF Board is entitled to withhold disbursement of CPF monies to the intended CPF nominee in the event that a CPF nomination is procedurally irregular, CPF members should take due care in ensuring that their CPF nominations have complied with the rules and requirements imposed by the CPF Board so as to avoid necessitating any court applications to regularise their CPF nominations thereafter.

If you have any enquiries and/or require assistance with any matters relating to your CPF monies, please contact our team below.