High Court dismisses tycoon Peter Kwee’s claim over properties in bankrupt daughter’s name

The High Court on March 20 dismissed a claim by motoring tycoon Peter Kwee that he is the true owner of five properties that are registered in the sole name of his daughter Karen.

In a written judgment, Justice Philip Jeyaretnam accepted that Mr Kwee funded the purchase of the properties and that the businessman bought properties in the names of his family members for business strategy and wealth planning purposes, including avoiding estate duty.

However, the judge found that Mr Kwee had intended to gift the five properties to his daughter, which made her both the legal and beneficial owner.

A legal owner holds the formal title to an asset; a beneficial owner ultimately benefits from the asset.

Of the five, two are landed properties in Bukit Timah and three are located overseas – two in Canada and one in Australia.

The beneficial ownership of the properties was disputed after Ms Kwee was declared bankrupt in October 2022.

The question that arose was whether the properties funded by Mr Kwee but held in Ms Kwee’s name formed part of her estate in bankruptcy.

Mr Kwee, who is also owner of Laguna National Golf Resort Club, filed a lawsuit against Mr Lai Seng Kwoon, the private trustee appointed to manage Ms Kwee’s bankruptcy estate.

The businessman sought a declaration that his daughter held the five properties or their sale proceeds, as well as money in three bank accounts, on trust for him.

The bank accounts were used to receive rental proceeds from the properties.

If Mr Kwee succeeded in his claim, it would prevent the proceeds from the properties from being distributed to Ms Kwee’s creditors.

According to the pair’s testimony, Mr Kwee had always provided for his family members, paying for their daily expenses and buying houses and cars for them.

Even after Ms Kwee married and had her own child, she continued living in houses bought by her father.

She was employed in his companies since she was in her 20s, and did not have any independent income apart from the salaries and allowances arranged for her via his companies.

Mr Kwee also funded the purchase of various properties in the names of his family members. The properties were largely bought for investment purposes, in particular to collect rental income.

He said he exercises a significant degree of control over these properties, and his family members do not generally question his decisions regarding the property deals.

He asserted that he spoke to Ms Kwee before he purchased each property, in what he described as a “name-placing” agreement.

The businessman, who was represented by Mr Chong Kuan Keong, said he told his daughter that the properties would be purchased under her name but would be his.

Mr Lai did not dispute that Mr Kwee had always provided financially for his family members and that Ms Kwee remains financially dependent on her father.

In fact, the trustee relied on these facts to contend that the relationship between the pair is underpinned by a moral or equitable obligation on the part of Mr Kwee to care for his daughter.

Mr Lai, who was represented by Mr Daryl Fong, argued that this gave rise to the presumption that Mr Kwee had intended his daughter to have the benefit of the properties bought in her name.

In his judgment, Justice Jeyaretnam found that Mr Kwee had said words to the effect that after he died, the property would belong to the person under whose name it was registered.

When confronted with this point in court, Ms Kwee tried to explain that her father was referring to making a later gift in his will.

But the judge said this did not align with her own confirmation that her father had told her in Mandarin: “After I die, these properties are yours.”

Justice Jeyaretnam said: “The discussion that the properties were hers when he died without any need for Mr Kwee to make a gift of them by will to her indicated that she became the beneficial owner of the properties from the start.”

The judge said Mr Kwee’s expectation that his daughter would do as he might say concerning those properties did not change the fact that she was the beneficial owner.

As for the bank accounts, the judge said the bulk of the monies consisted of rental proceeds from the properties, and it follows that the bulk of the contributions were Ms Kwee’s as well.

Justice Jeyaretnam also ordered Mr Kwee to pay more than $195,000 in legal costs to Mr Lai.

Selina Lum is senior law correspondent at The Straits Times.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

Is it a bank? Is it a fund manager? Chocolate Finance meltdown highlights need for clear distinction Super Rich In Korea’s David Yong allegedly sought Grenada passport; remains a ‘serious flight risk’