Former Group CEO Files Bankruptcy, Wife Tries to Claim Share of $3.82M Land Ownership, Singapore News

A freehold landed house in Ang Mo Kio, which belonged to a former CEO of the group, is the subject of a lawsuit brought by his wife.

The asset (or the net proceeds from its sale) is now under the trusteeship of a group of trustees after the CEO was ousted from his listed company and declared bankrupt in 2017.

The lawsuit was brought against the directors (not her husband), with the wife claiming a 50% beneficial interest (i.e. the net proceeds) of the house.

After declaring bankruptcy, her husband sold the house for $3.82 million ($952 per square foot) in 2017.

The property was completed in 2007 and is part of a 122 unit estate. The 4,011 square foot home was purchased for $3.1 million ($773 per square foot) in mid-2011.

It underwent extensive renovations between 2011 and 2012, which the husband financed with a $604,000 loan.

Initially, husband and wife, who was non-Singaporean at the time, intended to jointly own the house as a couple.

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However, after transferring the initial five percent ($155,000) together, the couple’s lawyer advised that the wife was not eligible because foreigners cannot buy land in Singapore except under specific approval guidelines.

The property was therefore purchased in the sole name of the husband.

After his wife became a Singaporean citizen in December 2011, the couple and their children moved into the house in 2012. Even then, title to the house remained in the husband’s name.

In 2017, after her husband was declared bankrupt and sold the property, the wife tried to claim a beneficial interest in 50% of the property sold and the net proceeds.

However, the administrators rejected her, saying her husband was the sole legal owner.

In 2019, the wife filed a lawsuit against the trustees.

Woman’s argument

Arguments of the wife against the trustees include common intention, where the wife and her husband had jointly decided to own the property.

Even though her husband purchased the property in his sole name, it stands to reason that he will also hold it in trust for his wife – generally referred to as a “constructive trust of common intention”.

His arguments also included an inferred common intent, through evidence such as:

  • They were jointly given the option to purchase the property
  • They made the initial five percent payment together
  • His subsequent loan repayments through their joint accounts
  • Its contribution to the renovation costs

Judge dismisses wife’s claims as she was a stranger to point of purchase

Unfortunately for her, the judge dismissed her claims, citing provisions of the Residential Property Act, which limits the purchase or transfer of residential properties (including vacant land) to Singapore citizens and approved buyers.

Since she was a non-citizen at the time of the purchase, the acquisition of any interest under a constructive trust of common intention would already be void.

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In addition, the law prohibited the husband, a Singaporean, from holding an interest in the property in trust for his wife – in August 2011 (when the purchase was finalized) or at any time before December 2011 (before she becomes Singaporean).

Basically, a Singapore citizen cannot purchase residential property as an agent of a foreign person to hold in trust for that foreign person.

We reported a relatable case of a naturalized Singaporean from China buying landed property on behalf of foreigners last year.

The penalties for purchasing restricted residential property in the name of a foreigner are up to three years imprisonment, a fine of up to $100,000 or both.

In his statement, the judge referred to the Act (Section 25(2)) and shared that any foreign person wishing to purchase or acquire an estate or interest in (restricted) residential property must first obtain the Minister’s approval.

Finally, the judge also shared that the wife was acting with the intention of circumventing the law with her arguments.

Here is what he said:

“The real reason why the bankrupt purchased the property in his sole name was not to be the sole owner in law and equity, but because the plaintiff was not a citizen of Singapore and could not therefore not be a co-owner.

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“The bankrupt and the plaintiff (his wife) were advised that although the bankrupt had purchased the property in her sole name, she could benefit from a trust on one-half of the property until she became a citizen .

“The constructive trust of common intention was therefore to take effect upon the conveyance of the property in the sole name of the bankrupt and to last until the plaintiff acquired Singaporean citizenship.

“At that point, they would include the plaintiff’s name on the title deed. She would then not only be a beneficial co-owner but also a legal co-owner.”

His file was therefore dismissed.

This article was first published on 99.co.

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