When a family fight over a house nearly ended their business

Case highlights importance of legacy planning by parents

- Tan Ooi Boon

A decade-long dispute between two siblings over a house was so bitter that it almost resulted in the closure of the family business.

The unfortunate dispute involved a woman suing her brother for ownership of the family home in return for her stake in their hardware business. This provoked the brother to go for broke by applying to wind up the business since the house was bought with company funds.

Both sides took their fight to the High Court after being unable to reconcile their differences over a long period, but hit a stalemate when the court dismissed both their cases.

The judge noted that it might be better for the siblings to settle their difference out of court by working out a compromise but he feared that the initial court setback would instead push them to spend more time and money on legal battles.

True enough, the siblings chose to have their day in the Court of Appeal, with the sister pressing on with her claim for the house and her brother still insisting on getting an order to wind up the family business.

This time, the court ruled in favour of the sister, upholding her claim that the siblings had made an earlier agreement for her to own the house in exchange for giving up her stake in the family business.

Although the validity of this agreement was contested in the initial hearing, the court found that the siblings' subsequent conduct showed that the deal was binding.

Since the sister would give up her stake in the company, the court found that there was no basis in issuing an order to wind up the firm with her departure. It dismissed the brother's application, noting that if he still insisted on closing the company, he could do so on his own as the majority shareholder without any intervention from the court.

HOW THE FAMILY STRUCTURED THEIR ASSETS