Informal arrangements between family members often go unrecorded when relations are good. There often appears little to no reason during times of harmony to keep scrupulous record of specific particulars (including who said what to whom). However, the problem arises later down the line in the event of a dispute occurring between family members.
From our experience assisting clients with their inheritance disputes, the passage of time and the death of family members can make it difficult to prove what was agreed between family members in the absence of contemporaneous records. The recent decision of the General Division of the High Court, Tia Oon Lai v Tia Sock Kiu Sally (personal representative of Su Ye Chu, deceased) and others [2025] SGHC 108, is illustrative of these difficulties. This was a dispute over two decades worth of rent monies for a HDB coffeeshop.
Background
The Claimant, Tia Oon Lai (“TOL”) and his mother (“Mother”) were the registered proprietors of a coffeeshop in Yishun, under a 30-year lease from the HDB. The coffeeshop had been rented out to food court operator Koufu from October 1998 to June 2018, during which time all of the rental monies were paid directly to Mother.
After Mother’s passing in 2021, TOL commenced legal proceedings against her estate. He asserted that he owned 50% of the coffeeshop, which was a gift from his late father. His alleged that Mother had committed a breach of trust through the “unauthorised dissipation” of his 50% share of the rental monies, and sought an order that Mother’s estate account for the same.
The gift from TOL’s late father
According to TOL, his father (“Father”) had a conversation with him and Mother in early 1997 where Father said that he would pay for a long-term lease to be granted by HDB over the coffeeshop and gift that to TOL and Mother in equal shares.
The Judge did not believe TOL’s evidence and found that it was unreliable, and TOL was “prone to exaggeration”. For instance, TOL recounted that in 1984, Father stated he wanted to give the coffeeshop to both TOL and TOL’s son. However, TOL’s son was only born in 1992.
Crucially, the Judge observed that TOL’s evidence was inconsistent with contemporaneous evidence. Father would not have discussed in early 1997 about purchasing a long-term lease over the coffeeshop as it was only more than a year later, on 17 April 1998, that the HDB wrote to Father to offer the opportunity to apply for the 30-year lease.
Was TOL entitled to the rental monies?
Despite TOL failing to prove the gift from Father, the Court ultimately decided that he was entitled to a 37.65% share of the rental monies.
This was because the 30-year lease was partially financed by a mortgage taken out by TOL and Mother, as co-borrowers. By law, it would be assumed that the co-borrowers would repay the mortgage in the same proportion as the liability assumed to the bank, unless there is evidence that the parties agreed on the different arrangement on who will pay the mortgage. Mother’s estate did not present any evidence of any such agreement.
As such, because Mother and TOL assumed equal liability for the mortgage, their contribution to the mortgage payments was taken to be 50-50. As TOL was taken to have paid 50% of the mortgage, he contributed 27.65% of the overall price for the 30-year lease.
The estate is called to account for TOL’s 37.65%
TOL’s position was that Mother was aware and had agreed to hold his share of the coffeeshop rental monies. TOL said that, from around 2003, he requested money from Mother but she only gave him a few hundred dollars up to $2,000 a month. TOL said that Mother allegedly told him that he could not take too much money because there was a need to pay the coffeeshop’s expenses and save up for lease renewal.
The Judge found that one critical piece of evidence corroborated TOL’s story. This was a voice message from TOL’s eldest sister, Sally, sent shortly after Mother’s passing. In this voice message, Sally alluded to the fact that Mother was holding money for TOL and intended to apply this money to renew the 30-year lease.
This voice message ended up being the silver bullet for TOL’s case, as the Court held that Mother was aware that TOL was beneficially entitled to a share of the rental monies and was keeping them on trust for TOL. Mother’s estate was therefore ordered to give an account of TOL’s share of the rental monies.
Key takeaways
This case is a realistic reminder on the importance of record-keeping. Objective and contemporaneous evidence – such as bank letters, bank statements, loan repayments – would be of greater probative value than the subjective account given by one party under circumstances of a dispute. There is value in preserving any and all form of contemporaneous record regardless of how insignificant the recorded fact may seem at the point of recording. As in the aforementioned case, no one could have contemplated that an innocuous voice message would be so significant in a major dispute down the road.
The lack of formal agreements or records about the wishes of family members creates uncertainty and, in this case, led to costly litigation for the parties. Notwithstanding that formalising agreements with family members may be misconstrued by some as a lack of trust or family unity, but this could not be further from the truth as documenting the common intention of family members should in fact provide basis for prevention of dispute arising over agreements made between family members. A simple formal record of the agreement between parties in a family can ensure fairness, protect familial relationships, and enhance the control and continuity for the family over key matters including estate and legacy.
Jacque Law LLC can provide the tailored expertise and support that you need to navigate complex family dynamics and structure important family’s affairs with clarity, protection and foresight. Please do not hesitate to reach us should you require any information or clarification with respect to your estate planning needs. We will be happy to assist, as always.