Trust issues arise in mother and daughter’s fight over 26 Singapore properties

The dispute began in 2021, as Prawesti claimed her mother had “surreptitiously” invoked a Power of Attorney (POA) to sign collective sale agreements on her behalf in 2020. 

Justice Nair said: “On the other hand, Koe explained that she had been financially supporting (Prawesti) with her credit card debts between 2018 and 2021. However, the Covid-19 pandemic created cashflow issues for Koe and she ceased that support. 

“This caused (Prawesti) to retaliate by terminating the POA and advancing a claim over the properties.” 

The problem with trusts 

In her claim, Prawesti said she had a 50 per cent beneficial interest in the 26 properties under a common intention constructive trust. 

There are broadly three scenarios in which “common intention” may arise, said Justice Nair. 

Common intention may arise from an express discussion, or be inferred based on a person’s direct financial contributions to the purchase of the property. In exceptional situations, it may also arise from the parties’ conduct, which gives rise to an implied common intention. 

In this case, there was no express trust over the properties, as the only piece of writing Koe pointed to was a letter of indemnity that she signed in 2007, which indemnified Prawesti from any losses or damages resulting from Koe purchasing or selling properties in Prawesti’s name. 

Justice Nair said the letter of indemnity did not manifest any intention by Prawesti to create a trust over the 26 properties. 

The “use of (Prawesti’s) name… does not establish the requisite certainty of intention to establish an express trust. Having said that, the letter of indemnity is evidence of the parties’ common intention with respect to the beneficial ownership of the properties purchased.” 

The juge also found that there was no express common intention constructive trust in Prawesti’s favour. 

According to Prawesti, Koe had asked her to invest in a unit at The Centrepoint in 2002. Prawesti claimed her mother had promised her that they would continue to purchase properties as equal owners in the future. 

However, Justice Nair did not accept Prawesti’s evidence that Koe had made the promise. 

After the mother and daughter’s relationship broke down, Prawesti sent Koe a letter of demand requesting for her “rightful share” of sale and rental proceeds from the 26 properties. 

“If there was truly an agreement or understanding that she beneficially owned 50 per cent of the 26 properties, (Prawesti) would have said so in this letter. Yet, she did not even allude to the alleged promise.” 

Instead, she set out her registered interest in the 26 properties, which was 1 per cent for most of the properties. The judge also noted how Prawesti did not stake her claim to the properties despite the financial struggles she faced from 2018 to 2020, choosing to ask her mother for help with her credit card bills. 

“If (Prawesti) truly had a 50 per cent beneficial interest in the 26 properties, one would have expected her to ask for her share of the sale proceeds from these six properties instead of repeatedly asking Koe for handouts,” said Justice Nair.

Mother mostly paid for properties 

However, the judge ruled that there was an inferred common intention over 25 of the properties in favour of the mother on account of her financial contributions. 

Except for minor contributions drawn from Prawesti’s bank accounts for a unit at Golden Mile Complex and a unit at Hoa Nam Building, Koe paid for all the other properties without her daughter’s assistance. 

The letter of indemnity Koe signed made her liable for any loss incurred for those purchases, which supported her claim that she beneficially owned the properties, Justice Nair said.

“Further, (Prawesti) accepts that the letter of indemnity makes Koe solely liable for all mortgage payments. Indeed, because of this, (Prawesti) did not contribute any payment and would refer all notices or demands she received from the banks to Koe for her to deal with.” 

Koe was also the one who researched and selected the properties to purchase; dealt with agents to manage and rent out the properties; liaised with banks on their financing; paid all fees and expenses related to the purchase; and dealt with the rental and sale proceeds. 

Justice Nair ruled, however, that one of the 26 properties, the unit at The Centrepoint, falls outside the constructive trust.

Both Prawesti and Koe had contributed towards the purchase of the property, with the parties’ financial contributions almost evenly split, thus defeating Koe’s claim that her daughter was holding her share of The Centrepoint unit on trust. 

Justice Nair also dismissed a claim by Prawesti that she had an understanding with her mother that her salary for working at two of the family businesses, KST Family and ST Travel, would be forsaken and that the sums would count as Prawesti’s contribution for the 26 properties. 

The judge said the alleged understanding Prawesti had with her mother “cannot get off the ground” because it was never put to Koe during the trial. 

Verdict 

Justice Nair ruled that Prawesti will not be entitled to any account of the rental and sale proceeds of the 26 properties as she holds 25 of them on trust for her mother, and it would be “inequitable” for her to ask for an account for The Centrepoint property. 

Prawesti will also have to pay her mother the net rental proceeds she received from a unit at Hawaii Tower, as Koe is the beneficial owner even though the property is held in the names of Prawesti and her brother. 

However, Koe was ordered to repay her daughter more than S$26,000 for mortgage payments made for the Golden Mile Complex and Hoa Nam Building units. 

In another recent case involving a family dispute over properties held on trust, motoring tycoon Peter Kwee lost his lawsuit against his daughter Karen Kwee’s bankruptcy trustee over five properties registered in her name. He was ordered to pay more than S$195,000 in costs.