Muhammad Naseer

Facts

Muhammad Naseer applied in Originating Application No 1192 of 2024 under s 54 of the Trustees Act 1967 for leave to sell a condominium flat held on trust by his nephew for his 15-year-old son, with the net proceeds to be held on trust for the son until he turns 21.

The applicant obtained an HDB flat in his name on 19 November 2018. In July 2019 he bought the condominium for his son and, because the son was under 21, executed a trust deed on 5 August 2019 holding it on trust for him. The deed gave the son the rent but did not provide for a sale. The property was let out. Around January 2021 the family moved to France. HDB then told him, by a letter dated 8 November 2021, that owners must fulfil the 5-year minimum occupation period (MOP) before acquiring any interest in private property, including on trust, and that it would let him keep the flat without penalty only if he disposed of the private property within 4 months. On 21 December 2021 he appointed his nephew as trustee, and on 25 January 2022 the nephew appointed him as attorney to manage the property. The applicant says his son has settled in France, that the son's expenses there are high, and that the nephew agreed to the sale.

Issues

1. Whether the court should approve a sale of the trust property under s 54 of the Trustees Act
2. Whether the trust arrangement appeared to circumvent the HDB rules on the minimum occupation period

Holding

The court made no order on the application and declined to approve the sale, granting the applicant liberty to apply if he obtains approval from HDB.

Reasoning

The court said such an application would be straightforward if the sale benefited the beneficiary and the trustee consented. The difficulty lay in its history. Under HDB rules, a buyer cannot invest in private residential property during the five-year MOP, so the applicant could only have bought the condominium in November 2023. The court found that the trust deed for the son appeared to be intended to circumvent those rules. The applicant was trustee for more than two years before HDB found out, and although he then made his nephew trustee, he became the nephew's attorney one month later and in effect still managed the property.

The rent was also paid into an account held jointly by the applicant and his son, and some withdrawals were labelled business expenses, which the applicant said he had selected inadvertently. He had not shown that this was a properly designated trust account; a joint account on its own is merely a joint account. Nor had he produced any evidence that HDB consented to the application. The court would not assist an application that appeared to circumvent the HDB rules.

From the judgment