Recent matrimonial case proves seminal with landmark valuation judgment

In UUV v UUU [2020] SGHCF 7, High Court Judge Tan Puay Boon ruled that a Yishun BTO property be sold at market value despite it not completing its five-year Minimum Occupation Period (MOP).

A family court district judge back in 2018 ruled that the wife be given the first option to buy out the husband’s share of their flat as part of the matrimonial distribution of assets.

The case was brought to the High Court as the wife attempted to get the husband to sell his shares based on the surrender value – a much lower amount than the market value.

The flat                                               

The BTO flat at Fern Grove @ Yishun was bought jointly in the couple’s name in August 2014 for $371,500, with a surrender value of $352,925 if the flat was to be handed over to HDB before its MOP of five years. 

The husband’s legal counsel noted that the flat had a certified market value of $545,500 in early 2020.

The ruling

Despite the initial court verdict not compelling the couple to sell the flat, the wife attempted to buy the husband’s shares at the HDB mandated surrender value.

Judge Tan disagreed as the wife would have an unfair gain in buying out at a lower amount than the market value.

“I accept the husband’s argument that a valuation based on the surrender value would result in a windfall to the wife,” he said.

He ruled that the valuation of the property should be pegged to the market value of similar HDB properties in the vicinity to get a more accurate indication of the real worth of the flat.

“The surrender value would only be an accurate estimate of the flat’s value if it was actually surrendered to the HDB, which is unlikely the case,” Judge Tan explained.

Also, he ordered that the flat’s value should be backdated to its market value in September 2018, when the couple’s ancillary matters were brought before the family court district judge.

A seminal case in family law

The husband’s legal counsel noted that the High Court’s decision is significant because it is “the first such ruling”.

The case clarified the appropriate method of valuing BTO flats with MOP obligations, she noted.

“Both parties had been stuck as to the use of the market price or the purchase price, the surrender value being pegged at a percentage below the purchase price. The court’s answer is the market price,” she said.

This proves to be a landmark ruling in matrimonial cases in 2021 given the rise in divorce cases and an increase in demand for BTO flats.

About Gifted Group

Gifted Group is a corporate financial advisory firm that provides strategy advice, transaction structuring and valuation services. It has acted as Expert Valuation Witness to a number of matrimonial cases including  UTJ v UTK [2019] SGHCF 6, where it produced credible, fair and comprehensive assessments of the matters dealt with in its valuation reports. These valuation reports allowed the Court to arrive at a more just and equitable means of dividing matrimonial assets between the Parties. Other cases include:

• Valuation of a family textiles business in which patriarchs were seeking to claw-back over $10 million in fraudulent withdrawals by next-generation family members.
• Valuation of damages in a High Court case where over 125 club members, in one of the largest representative action suits in Singapore, acted against the club owner for breach of contract and the torts of deceit and negligence.

Gifted Group’s data-driven approach to its operations and experienced team of valuation professionals sets it apart from its competitors.