Love this case, it just reeks of Singapore
Who paid for the wines
The younger brother also wanted to get back $33,000 used to pay for his brother’s wines. But the elder brother claimed that the money was actually payment for wines he had bought for his younger brother.
The court found that e-mails and invoices that were produced by the elder brother supported his case that the money was used to pay for a particular wine shipment that had been requested by the younger brother.
There was also an e-mail exchange between the brothers about their combined order of over 100 bottles. The elder brother said he would place the order and his younger sibling replied: “Ok pls add some for me but let me pay for it thank u.”
Judge Wong dismissed the $33,000 claim because the elder brother did not owe any money for the wine purchase.
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Nothing tests family bonds quite like large sums of money, as two warring brothers in Singapore found out when they sued each other over more than $3 million in expenses for a family home, special car number plates and fine wines.
The amount in dispute was substantial because it involved two real estate tycoons who were fighting over payments that were made before they fell out. The showdown was ignited when the younger brother filed a lawsuit against his elder brother to get back $2.8 million he claimed was a loan.
But the elder brother said he did not borrow any money, contending that the payment was a “gift” from his younger brother to help with the construction of his $10 million house where their parents and sisters also lived.
The younger brother also claimed that his elder brother did not return $33,000 that was his share of the cost of fine wines they had ordered.
The elder brother responded in kind, filing a claim for $300,000 that he said was owed after he transferred two of his car registration plates featuring only the single digit “1” to his younger brother.
As the brothers’ money came from their family company in the form of dividends, one of their sisters, who is the firm’s chief financial officer, was also caught in the crossfire and had to testify in court.
But the brothers’ effort to recover their money came to nothing as all their lawsuits were dismissed by the High Court because their claims were supported mostly by mere words without any convincing evidence.
This case provides a compelling lesson on why it is better for families to resolve their disputes without going to court because it is often futile to prove transactions without records.
It is common for family members to run their businesses informally and it is only human that most do not keep records as few would anticipate court battles when everything is going well.
That said, if you feel the need to record certain transactions because the sums involved are substantial, it is wise to note any payments in writing so that you don’t have to rely on mere words if things go wrong.
For instance, sending an e-mail to the recipient to state the purpose of a payment is better than having no records at all, and even better if the other party replies and confirms the transaction.
Here are three observations from the case on why it is tough to prove informal transactions between family members.
Loan or gift
As the family was involved in the real estate business, it was natural that they would build their own homes too.
The elder brother’s house was built at a cost of over $10 million, as it was intended to be the family residence for their parents and two sisters too.
The younger brother’s house was more modest, costing just $1.4 million to build.
The family company could run into a deficit if the two homes were built for “free”, so the brothers were given invoices for their homes that would be paid with funds from their accounts.
The brothers could pay such expenses because they receive regular million-dollar dividends from the firm.
Sometime in 2015, the younger brother made a $2.8 million payment on an invoice for the main family home because he said his elder brother had asked for a loan so he could settle other expenses.
But the elder brother denied it was a loan, claiming instead that the payment was a contribution to the family home.
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