Why an average of 10 families in Singapore fight over properties every year

If you have the impression that more families seem to be fighting over real estate in court, you are, sadly, not wrong.

There have been at least 130 such cases here in the past decade alone, meaning that an average of 10 families a year choose to slug it out in court because they could not agree on who the rightful owners of the bricks and mortar are.

And these cases do not include divorces, which invariably involve division – sometimes acrimonious – of assets such as matrimonial homes.

Many people are usually driven to fight in these situations because they get the wrong idea that the legal owners must be the absolute owners, but this is not necessarily true if they have not paid for the properties.

This prompted Professor Tang Hang Wu to write a recent research paper on this controversial topic to throw some light on why such cases happen and how families can better know their rights.

He noted that the common features in these cases involve “long-simmering familial tensions” either between spouses or siblings that usually go public after “a catastrophic event, usually the demise of the family’s patriarch or matriarch”.

These conflicts are not peculiar to Singapore alone; similar court battles have been erupting in Hong Kong, Malaysia and among Chinese immigrants in New Zealand.

Prof Tang, who is with the Yong Pung How School of Law, said such disputes happened because traditional Asian families were organised along a core societal unit.

“Family members do not think of themselves individually but have a collective identity as a family. In other words, the fortunes of the family members are tied to their families,” he noted.  

As a result, property and businesses were acquired as “family property” without precise consideration of each family member’s individual entitlement. So while some individuals are put in charge of the properties, they do not own the assets but hold them on behalf of other family members.

While no one would dare to make a move when the head of family was still around, all bets are off the moment the governing structure of these families crumbles.

“Certainly, this explains why these disputes happen when the patriarch and matriarch pass away because the essential thread that holds these families together, filial piety and the offsprings’ obedience to their parents, disappears,” Prof Tang added.

When this happens, those tasked with holding the assists usually proclaim total ownership but such unilateral moves invariably prompt others in the family to launch lawsuits.

Here are two cases that highlight the pitfalls in holding family properties.

Man bought house in wife’s sole name

This unusual case involved a man who bought a house for his wife when he was already seeing another woman. He paid about 84 per cent of the purchase price and his wife accounted for 16 per cent.

The wife wanted the property put in her name because she was feeling insecure due to his infidelity. She also claimed that her husband bought the property in her name “to appease her and to assuage his guilt”.

But she could not explain why, if the house was truly a gift to her, she willingly allowed her husband to exercise control over the property by giving him a power of attorney to deal with it.

The husband had a different view. He contended that he had no intention of giving the house to his wife and that she wanted her name on the property deed so that she could brag to her friends that she was the owner.

In the end, the Court of Appeal found that the wife’s story was unrealistic and incredible, noting: “There was no convincing reason why (the husband), a man nearing retirement who had just begun an affair, would make the biggest purchase of his life, only to gift it to someone who was his wife in name only.”

It further ruled that the presumption of gifting was rebutted by the husband, who proved that he had no intention of giving the wife the whole house.

In the end, the wife was declared to own only 16 per cent of the property and she was to hold the remaining 84 per cent for her husband.

Multimillion-dollar gift of gold bars

In this case, a couple jointly owned 122 gold bars that were represented in gold certificates issued in their names. One day, at his wife’s request, the husband signed on the “delivery instructions” of the certificates with the “transferee” section left blank.

The wife later used the signed documents to get the issuing bank to register new gold certificates in her name only.

She died about a year later and her will left the gold bars to four of their children.

The husband then sued for the return of the bars, claiming he was the true owner as he had paid for the precious metal.

But the Appellate Division of the High Court found that this was not a case involving the amount of each party’s financial contribution but whether the man willingly gave the gold bars to his wife.

He argued that he had no intention of giving away the gold in his lifetime and that his wife was supposed to hold the assets on his behalf. If so, why then did he sign away his gold?

He claimed that he had signed in the “delivery Instructions” section so that his wife could have “control” over the certificates. But the court found that this explanation made no sense because the certificates were always in her possession.

He then argued that he “signed to prove the gold was his” but this explanation also did not hold water because he had signed under the section of the original gold certificates that was meant to transfer the titles to the bars.

He also failed to explain why there was a sudden need to sign the certificates to prove that the gold bars were his.

The court found that if the man’s intention was truly to retain the right of survivorship to the gold bars, there would have been even less reason for him to give up his joint legal title to the metal.

It ruled that signing the certificates meant he was actually giving the gold bars to his wife.

As disputes over the ownership of family assets often involve the question whether the parties intended to make gifts, Prof Tang said relatives who want to stake their claims should go through these two checklists:

1. What are the actual intentions of the main owners? For instance, do the parents have any intention to give the assets as gifts to the joint owners? If the claimants can prove that the main owners intend to give the assets to them, there is no need to calculate who has paid for what, just like in the gold bar case.

2. If the intention of the main owners is unclear, then it may be necessary to go into an accounting process to find out who has paid for what. This process could then determine the shares that each party will get, based on their financial contribution.

This would be similar to the dispute between the couple concerning the house because the husband was found to own 84 per cent of it as he proved he had no intention of giving it away.

So one way of looking at resolving such family disputes is this – if there is evidence of a valid gift, then the gift stands and there is simply no room for other claimants to argue for a share in the asset.

Tan Ooi Boon is the Invest Editor of The Straits Times.

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

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