Man left HDB flat he co-owned with brother to widow in his will, sparking court tussle over sale of flat

[The_King]

SINGAPORE: After her husband died and left her his 30 per cent share of a Housing Board flat that he co-owned with his brother, a widow ran into problems when she tried to sell it.  

She failed to persuade her brother-in-law to sell the flat and was even locked out of the unit on one occasion. 

The woman then turned to the High Court seeking orders for the flat to be sold and for her to have control of the sale. 

Her brother-in-law, on the other hand, said that selling the flat immediately would cause him and his family hardship.

He also said that it was not fair as he was the majority owner holding 70 per cent of the share, and should therefore have the right to purchase the flat in the first instance.

According to a judgment published on Wednesday (Nov 16), the widow, Madam Sun Yunyuan, was the sole beneficiary of her late husband Ng Yit Yew, who died in September 2020. 

He left her his 30 per cent share in a flat in Bedok North. His brother, Mr Ng Yit Beng, held the remaining 70 per cent share of the flat.

After her husband's death, Mdm Sun faced difficulties communicating with her brother-in-law. The latter had exhibited family violence against her, and she initially sought a personal protection order against him before discontinuing the application after Family Court mediation.

Mdm Sun's brother-in-law also locked her out of the flat on Nov 20, 2021. He let her in only when she called the police.

Mr Ng allegedly made several promises to Mdm Sun to sell the flat, but never followed up. 

So Mdm Sun turned to the High Court, asking for the flat to be sold in the open market within six months and for the sale proceeds to be divided. Mdm Sun, who is neither Singaporean nor a permanent resident, also asked to have sole conduct of the sale of the flat.

Mr Ng said that Mdm Sun's proposed order would prejudge his interest as the owner of a 70 per cent share of the flat. It would also deny him the right of first refusal to buy over her share of the flat.

He did not object to selling the flat, but told the court that he wanted the right of first refusal to buy over Mdm Sun's share of the flat. 

THE ISSUE OF LAW RAISED

Judicial Commissioner Goh said the arguments from both sides raise an issue of law worth clarifying - whether a court can order one co-owner to compulsorily purchase a property from the other owner.

The judge found that it was necessary or expedient according to the law that the flat be sold to resolve the conflict. However, the issue was how the flat was to be sold.

Mdm Sun's lawyers had cited a High Court decision of Tan Chor Heng v Ng Cheng Hock, which said the court was not empowered to order one co-owner to compulsorily purchase a property from the other owner.

The judge in the current case disagreed with this approach. He found instead that there was local case law supporting an order for the right of first refusal when ordering a sale in lieu of partition as between co-owners.

He concluded that he had the power to order the sale of the flat to Mr Ng, at least on the basis of a right of first refusal.

THE JUDGE'S ORDERS

The judge agreed with Mr Ng that the relatively immediate sale of the flat would cause him and his family hardship, and that it would not be fair as he is the majority owner. He said it was a relevant factor that Mdm Sun is not a majority owner of the flat and cannot be seen as "dictating" terms to Mr Ng.

"In this regard, the respondent’s interest in how the sale is conducted will be greater as he is the 70 per cent owner," said the judge.

"Given that the parties are aligned that the flat should be sold, I see no reason not to order that the sale be conducted jointly. Ultimately, the manner of the sale should be such to minimise conflict between the parties and provide a definite resolution to the situation."

He ruled that neither party was to market the flat for sale on the open market within six months.

During this moratorium period of six months, Mr Ng will have the right to buy Mdm Sun's 30 per cent share of the flat from her, at a price of 30 per cent of the market valuation of the flat or higher.

The market valuation is to be obtained from the Housing and Development Board or an approved property valuer within three months, and they are to share the cost of the valuation report in proportion to their share of the flat - that is, 30 per cent and 70 per cent.

If, within six months, Mdm Sun's 30 per cent share of the flat has not been sold to Mr Ng, both parties will be at liberty to put up the flat for sale in the open market.

However, they will have to sell it jointly. Once either party receives an offer to purchase the flat at market valuation or higher, they are to accept the offer and sell the flat.

If Mdm Sun receives an offer from a third party to buy the flat at market valuation or higher, she is to inform her brother-in-law of the offer within 48 hours.

Mr Ng will have the right of first refusal to purchase Mdm Sun's 30 per cent share of the flat at 30 per cent of the price of the third-party offer, or higher.

If he chooses this option, Mr Ng has to exercise his right of first refusal within four days of being informed of the third-party offer. He will then have to give Mdm Sun an offer to buy her 30 per cent share of the flat, at 30 per cent of the price of the third-party offer. 

If Mr Ng does not exercise his right of first refusal within four days, Mdm Sun will be at liberty to accept the third-party offer.

If the flat is sold to a third party, the sales proceeds will be used to pay for the conveyancing, stamp, registration and administrative fees of the sale of the flat.

The remainder will be divided between Mdm Sun and Mr Ng - at 30 per cent and 70 per cent respectively.

The court ordered each party to bear their own costs.