Introduction
The breakdown of a relationship often leaves a complex web of financial and proprietary issues to resolve. This is particularly acute in the context of a joint application for a home, such as a Singaporean Build-To-Order (BTO) flat, which requires significant upfront financial commitment before the couple is married or has established a long-term home together. This essay addresses the legal avenues available to a party who has contributed more financially when such an application collapses. It will argue that while a claim in contract is theoretically possible, it is unlikely to succeed due to the strong presumption against an intention to create legal relations in domestic agreements. This effectively channels the dispute towards the equitable doctrines of unjust enrichment and, more significantly, trusts law. This essay will contend that this channelling is not a doctrinal failure but is, in fact, appropriate, as the flexibility of equity is better suited to achieving a just outcome in the informal context of a domestic relationship than the rigid requirements of contract law.
The Limited Prospect of a Contractual Claim
For a party to sue their former partner in contract, they must first establish that a legally binding contract existed between them. This requires proving the essential elements of a contract: offer, acceptance, consideration, and a mutual intention to create legal relations (ITCLR). In the context of a domestic relationship, the final element, ITCLR, presents a significant hurdle.
The law presumes that parties in a domestic or social relationship do not intend for their agreements to be legally enforceable. This principle, famously established in the English case of Balfour v Balfour [1919] 2 KB 571 and long accepted in Singapore, is based on the public policy consideration that courts should not be flooded with disputes arising from everyday domestic arrangements. The Singaporean courts have affirmed this, for instance in Choo Tiong Hin v Choo Hock Swee [1959] MLJ 67, where agreements made between family members were held to be unenforceable for lack of ITCLR. A joint application for a BTO flat between an engaged or cohabiting couple falls squarely within this domestic context. The financial arrangements are typically based on trust and the expectation of a shared future, not on a desire to form a commercial contract.
This presumption can be rebutted, but it requires clear evidence to the contrary. As established in Merritt v Merritt [1970] 1 WLR 1211, the presumption is weaker when the parties are separated or when the agreement has a commercial character. For a BTO application, a party might argue that the significant financial outlay and the formal nature of the property transaction rebut the presumption. They would need to demonstrate that there was a clear agreement, preferably in writing, that their contributions were not a gift and were conditional on the relationship continuing, with specific terms for repayment upon its breakdown. In the absence of such an explicit agreement, the court is highly likely to find that there was no ITCLR, and any contractual claim will fail at this initial stage. Therefore, contract law offers a very narrow and often inaccessible route for resolving these disputes.
The Necessary Shift to Equity and Unjust Enrichment
The likely failure of a contract claim forces the claimant to seek remedies in other areas of private law, primarily the equitable doctrines of trusts and unjust enrichment. These doctrines are not constrained by the requirement of ITCLR and are designed to address situations where one party's retention of a benefit would be unconscionable.
Unjust Enrichment
A claim in unjust enrichment may be available where one party has been enriched at the other's expense, and it would be unjust for them to retain that benefit. The Singapore Court of Appeal in Eng Chiet Shoong v Cheong Soh Chin [2016] 4 SLR 728 affirmed the three-stage inquiry: (1) has the defendant been enriched?; (2) was the enrichment at the claimant’s expense?; and (3) was the enrichment unjust? In the BTO scenario, the "unjust factor" would most likely be a total failure of basis. The basis for the financial contribution was the shared goal of acquiring a home in which to cohabit as a couple. The breakdown of the relationship causes this basis to fail completely. If, for example, one party paid the entire deposit for the BTO application but the application was in joint names, and the other party refuses to return their 'share', a claim in unjust enrichment for the return of the funds is a viable possibility. However, where the issue is not just about the return of specific payments but about quantifying a share in a property or a right to a property, the law of trusts is often a more appropriate and powerful tool.
The Law of Trusts
Trusts law, specifically resulting and constructive trusts, provides the primary framework for determining property rights between unmarried couples in Singapore. Unlike contract, trusts law focuses on the parties' intentions and contributions regarding the property itself.
A resulting trust arises by operation of law where a party contributes to the purchase price of a property but is not reflected on the legal title as a joint owner, or is reflected as a joint owner but has contributed more than their share. The presumption is that the property is held on trust for the contributors in shares proportionate to their contributions (Lau Siew Kim v Yeo Guan Chye Terence [2008] 2 SLR(R) 108). This can be rebutted by evidence that the contribution was intended as a gift or a loan.
More commonly used and more flexible in this context is the common intention constructive trust. The Singaporean approach was clarified by the Court of Appeal in Chan Yuen Lan v See Fong Mun [2014] 3 SLR 1048. The court established a two-stage process. First, the court looks for a common intention between the parties that the beneficial ownership of the property was to be different from the legal ownership. This intention can be express (through discussions) or inferred from the parties' entire course of conduct, including their financial contributions. If such a common intention is found, the court then quantifies the respective beneficial shares. This is done by looking at the parties' conduct and the evidence of their shared intentions. The approach in Chan Yuen Lan allows the court to undertake a broad examination of the facts to ascertain what the parties intended, providing a flexible and fact-sensitive mechanism for resolving the dispute. For a BTO applicant who has paid a larger share of the deposit and other initial costs, they can argue that this conduct infers a common intention that their beneficial share in the future property should be greater than the 50% legal title might suggest.
Should Contract's Presumption Push the Dispute Elsewhere?
The final question is whether it is right that contract law's presumption against ITCLR pushes these disputes into the realms of equity. It is submitted that this is both a necessary and a desirable outcome.
To insist on a contractual framework would be to impose an unrealistic burden on couples. The nature of a domestic relationship is one of trust, not one of arm's-length negotiation. Expecting couples at the hopeful stage of applying for a marital home to draft legally binding agreements about what happens if the relationship fails is contrary to social reality. It would formalise and commercialise a relationship in a way that many would find unpalatable and damaging.
In contrast, the equitable doctrines of unjust enrichment and trusts are specifically designed to provide justice in situations where formal agreements are absent. Equity operates to prevent unconscionable conduct. It would be unconscionable for one party to walk away from a failed joint venture for a home while retaining the benefit of the other's more significant financial contributions. The common intention constructive trust, in particular, allows the court to look at the substance of the relationship and the "whole course of dealing" (Chan Yuen Lan, citing Stack v Dowden [2007] UKHL 17) to find a solution that reflects the parties' actual, albeit informal, intentions. This flexibility is its greatest strength. It allows the law to respond to the myriad ways in which couples organise their financial lives, rather than penalising them for failing to adopt the rigid and formalistic approach of contract law. Therefore, the presumption against ITCLR acts as a sensible filter, directing domestic financial disputes away from an unsuitable legal framework and towards one that is equipped to handle their unique complexities.
Conclusion
In conclusion, a person who has contributed more to a failed joint BTO application has a very slim chance of successfully suing their former partner in contract law. The presumption against an intention to create legal relations in domestic agreements serves as a formidable barrier, one that is difficult to overcome without clear, formal evidence of a contrary intention. This effectively forces the aggrieved party to seek a remedy in equity. The doctrines of unjust enrichment and, more importantly, the common intention constructive trust offer more promising avenues for relief. This is the correct and appropriate state of the law. By channelling these disputes towards equity, the legal system acknowledges the social reality of domestic relationships and utilises a more flexible and fairness-oriented toolkit to prevent one party from being left in a position of unfair financial loss following the breakdown of a relationship.
References
- Balfour v Balfour [1919] 2 KB 571
- Chan Yuen Lan v See Fong Mun [2014] 3 SLR 1048
- Choo Tiong Hin v Choo Hock Swee [1959] MLJ 67
- Eng Chiet Shoong v Cheong Soh Chin [2016] 4 SLR 728
- Lau Siew Kim v Yeo Guan Chye Terence [2008] 2 SLR(R) 108
- Merritt v Merritt [1970] 1 WLR 1211
- Stack v Dowden [2007] UKHL 17
