Peter Kwee loses bid to claim properties held by bankrupt daughter Karen Kwee

[SINGAPORE] Motoring tycoon Peter Kwee has lost his lawsuit against his daughter Karen Kwee’s bankruptcy trustee and has been ordered to pay around S$195,283 in costs at the conclusion of a lawsuit that began in 2022. 

Karen Kwee was found to have both legal and beneficial ownership of the five properties that Peter Kwee contested, said a judgment issued by Justice Philip Jeyaretnam on Thursday (Mar 20). Two of the five properties are landed houses in Singapore and the remaining three are located in Australia and Canada. 

“In law, (Karen) Kwee was the beneficial owner of all the properties… They were beyond the reach of (Peter) Kwee’s creditors, a purpose of the arrangement that (Peter) Kwee expressly acknowledged in relation to the King’s Drive property,” the judge said. 

He added that he accepted Peter Kwee and his daughter spoke prior to the purchase of the properties, but the effect of the conversations was in fact that they were gifts to her.

Justice Jeyaretnam said: “The discussion that the properties were hers when he died without any need for (Peter) Kwee to make a gift of them by will to her indicated that she became the beneficial owner of the properties from the start.” 

“(Peter) Kwee’s expectation that she would do as he might say concerning those properties does not change the fact that she was the beneficial owner. This is so notwithstanding that she seems to have generally acquiesced and left him to manage the properties at least some of the time.” 

In his judgment, Justice Jeyaretnam noted that it was undisputed that Peter Kwee “effectively managed the family portfolio of properties”. 

However, he was able to do so to the extent that Karen Kwee deferred to him as her father who had given the properties to her, rather than because he was the beneficial owner of the properties, he said. 

The judge noted: “(Karen) Kwee, along with the rest of her family, trusts (Peter) Kwee to make decisions for her welfare and leaves matters in his hands.

“In that context, it is unsurprising that (Peter) Kwee also handles the purchase and sale of the properties, as well as the tenancies and other matters associated with those properties. That fact does not negate the donative intention on the part of (Peter) Kwee in favour of (Karen) Kwee.”

Over the course of the nine-day trial in February, several witnesses were called, including Evonne Yeo, a property agent who was involved in the sale of the King’s Drive property in Singapore.

Text messages between Yeo and Karen Kwee showed that Karen Kwee conducted herself as the owner of the King’s Drive property, and that Yeo treated her as the owner.

When she agreed to a sale price of S$4.08 million, Yeo then acted on her instructions to obtain a cheque for the option fee from the purchaser. 

“She did not seek (Peter) Kwee’s permission first, but only informed (him) after she had done so.” 

Justice Jeyaretnam said: “Based on the messages, all three of them seem to have proceeded on the basis that (Karen) Kwee was both the legal and beneficial owner of the King’s Drive Property.” 

As for the three bank accounts held in Karen Kwee’s name or jointly with her father, the judge said that Peter Kwee had not shown that all the monies in there were his.

“In fact, the bulk of the monies consisted of rental proceeds from the properties. (Karen) Kwee was the beneficial owner of the properties. It follows that the bulk of the contributions were hers as well.” 

The costs were awarded to Lai Seng Kwoon, Karen Kwee’s bankruptcy trustee. Both of the Singapore properties have been sold, and the remaining ones are expected to be liquidated. Their proceeds will go towards her bankruptcy estate and will be distributed amongst her creditors. 

Lai was represented by a team of lawyers led by Shook Lin & Bok’s Daryl Fong while Chong Chia & Lim acted for Peter Kwee.