Lee Hsien Yang pays S$619,335 to Ministers Shanmugam and Balakrishnan in defamation suit to protect family home

Lee Hsien Yang (LHY), son of Singapore's founding father Lee Kuan Yew (LKY), has paid S$619,335.53 to Minister for Home Affairs and Law K Shanmugam and Minister for Foreign Affairs Vivian Balakrishnan following a defamation ruling that required him to pay damages and costs to the two ministers, who had sued him over remarks made in a Facebook post regarding their rental of state-owned properties.

In a Facebook post on 29 September 2024, LHY stated that the payment was necessary to protect his family home at 38 Oxley Road, which he described as his "significant asset" in Singapore, following the court's decision in November 2023. He added that he wanted to honor his late father’s wishes and ensure his sister, Dr Lee Wei Ling, who is ill, could continue to live in the house.

The property has been at the centre of a longstanding family dispute over its future between LHY, his sister, and his elder brother, former Prime Minister Lee Hsien Loong (LHL). In his last will, LKY expressed his wish for the house to be demolished after his passing or when Dr Lee no longer resides there. However, some members of the political party LKY founded have expressed disagreement with this wish, citing public sentiment as being against the idea.

He shared that the amount he paid was equivalent to 13.6 months of rent for the two Ridout Road properties leased by the ministers.

It was revealed in July last year that Mr Shanmugam rents the state-owned 26 Ridout Road property, which spans 23,164 square meters, for S$26,500 per month, while Mr Balakrishnan rents 31 Ridout Road, which spans 9,157 square meters, for S$20,000 per month.

In his post, LHY also expressed regret that the defamation case was pursued in Singapore rather than in the UK, where he currently resides. He had earlier challenged the ministers to sue him in the UK, where he believed their case would be subject to more impartial judgment.

The defamation suit, for which LHY made the payment, stems from a Facebook post he made on 23 July 2023, where he commented on the ministers' rental of the Ridout Road properties following a parliamentary session on 3 July 2023, during which both ministers delivered statements explaining the circumstances of their leases.

The Ridout Road controversy first emerged in May 2023 when questions were raised about the ministers’ leases of two state-owned properties at 26 and 31 Ridout Road.

Both Mr Shanmugam and Dr Balakrishnan have maintained that their leases were conducted in accordance with the law and that they paid market rates. Mr Shanmugam also stated that he had recused himself from decisions involving the Singapore Land Authority (SLA), which oversees the leasing of these black-and-white bungalows, given his role as Minister for Law.

LHY's Facebook post from 23 July 2023 was first issued a correction direction under the Protection from Online Falsehoods and Manipulation Act (POFMA) on 25 July 2023.

Two days later, the ministers announced plans to sue LHY for defamation unless he issued an apology and retracted the statements made in the July Facebook post.

They accused LHY of suggesting that they had acted corruptly by receiving favourable treatment from SLA through unauthorized tree felling and state-funded renovations at 26 and 31 Ridout Road. Both ministers categorically refuted these allegations.

In a Facebook post, Mr Shanmugam outlined their demands: LHY was to retract his accusations, issue an apology, and pay damages, which would be donated to charity. Non-compliance would result in legal action.

LHY refused the demands and argued that his comments were based on publicly available information and did not allege corruption or personal gain but rather raised questions about transparency.

He wrote, “My post did not assert that Shanmugam and Vivian Balakrishnan acted corruptly or for personal gain by having the Singapore Land Authority (SLA) give them preferential treatment, such as illegally felling trees without approval and having SLA pay for renovations. My post simply stated facts that were already widely published in the Singapore and international media.”

He also alleged that Ministers Shanmugam and Balakrishnan were pressuring him to issue a false apology for statements he never made, adding, “No Singaporean should have to lie to avoid lawsuits.”

Despite his public clarification, the ministers still proceeded to sue him in August, and in November 2023, the Singapore High Court ruled in their favour after LHY failed to file a Notice of Intention (NOI) to contest the lawsuit within the required timeframe.

This led to a default judgment. Justice Goh Yihan, who presided over the case, issued an injunction preventing LHY from republishing or disseminating the alleged defamatory statements.

Justice Goh also noted that even if LHY had filed the NOI, the ministers' claims would likely have succeeded on their merits, as they had established a valid defamation case. He added that LHY’s continued reference to his original post on social media heightened the risk of further defamatory statements.

Each minister was then awarded S$150,000 in general damages and S$50,000 in aggravated damages. Additionally, each minister was awarded costs of S$51,000 plus disbursements. The rest of the amount that LHY paid consisted of legal fees to Davinder Singh, counsel who represented the two ministers in the defamation suit.

Following the court ruling, public debate arose about whether LHY, now living in the United Kingdom, could have avoided paying the defamation costs. However, as LHY suggested in his post, failing to pay the outstanding sum could have resulted in the seizure of his Singapore-based assets, particularly 38 Oxley Road, which he had purchased from his brother, Prime Minister Lee Hsien Loong.

While the ministers have announced that they will donate the sum paid by LHY to charity, some have considered the potential tax benefits they may receive from the donation.

Under Singapore’s tax laws, charitable donations qualify for a tax deduction of 2.5 times the donated amount. Given the ministers’ annual income of approximately S$1,760,000 at the MR1 ministerial grade, this could lead to a tax saving of around S$120,000 each.

But despite the possible tax benefit, it is unlikely to impact the ministers’ financial standing significantly. For example, Mr Shanmugam had reportedly gained S$88 million from the sale of his Astrid Hill property in August 2023.