Important money rule: No proof means it’s not yours

If you have a stake in a bank account that holds tens of million dollars, you would probably insist on being a joint account holder or have documents to prove your right to the money.

Yet in a recent dispute, a man who claimed a quarter share of the family’s multimillion-dollar fund did nothing to put his ownership in writing.

Other relatives refuted his claim and the High Court ruled that he had no share of the fund because his bare words were just that.

Here are three important lessons that could protect your rights to any claim.

Documents are important

There is a reason why people sign agreements – documents make it easier to prove your case. Of course, it may not be possible to produce such an agreement immediately during a family meeting and ask everyone to sign it.

In such cases, it is good practice to note all the points that have been agreed upon and send the document to the relevant family members. If no one objects to the content, that letter or e-mail could be sound documentary evidence of any oral agreements made at the meeting.

The courts always consider relevant documentary evidence in family disputes, such as letters or e-mails, because these reduce the need to rely solely on the credibility of witnesses in order to ascertain if any oral agreement exists

Claimants who cannot produce any documents usually lose unless they have credible third-party witnesses to speak for them.

Conduct of the parties

It is logical that documents are better proof than bare words – many disputes often concern events that happened years ago, and it is often hard for the witnesses to recollect the exact words that were said.

And there are often two sides of the story, so it often boils down to who comes across as more believable.

If a person making the verbal statement is not legally trained, the court would not place undue emphasis on the choice of words.

For instance, if an elderly man told his three children that all of them had equal responsibility in the family company, but the eldest child later inherited the lion’s share, it would be hard for the other two children to argue that their father had intended them to hold a one-third share each.

If no documents are available, the parties’ conduct will be crucial to determine whether they are telling the truth.

A man once claimed that he was the rightful owner of the family home as his mother wanted him to own it for a small price before she died. But his own conduct showed otherwise, as he later asked his daughter to buy the house from his late mother’s estate, something he would not have needed to do if he was the true owner.

No proof means no money

Even if a business deal is made informally, it pays to put it in writing.

A businessman lent $4 million to a firm, expecting to make a hefty return of 15 per cent, or $600,000, within a short time.

But he did not count on a major spanner being thrown into the works: The company that took the money said it had no obligation to return any cash to him because the money was used to pay a debt.

While he could prove that the money was transferred from his bank account, he could not produce any documents proving that the company had borrowed the funds from him. He claimed there were three verbal loan agreements with one of the company’s employees who had the authority to handle such deals.

The High Court dismissed the claim because the man “deviated significantly” from conduct that would be expected of an experienced businessman, which was to put the loans in writing, given the huge amounts involved.

So even if it is a deal with relatives or friends, it is wise to have it in writing, and a simple “IOU” or a WhatsApp message is still better than bare words.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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