AFS v AFU

JudgeAndrew Ang J
Judgment Date07 March 2011
Neutral Citation[2011] SGHC 52
Citation[2011] SGHC 52
Docket NumberDivorce Transfer No DT 626 of 2006 and Summons No 5789 of 2010
Published date14 March 2011
Hearing Date25 November 2010,01 July 2010,03 September 2010,02 September 2010,07 July 2010
Plaintiff CounselFoo Siew Fong (Harry Elias Partnership)
Date07 March 2011
Defendant CounselSuchitra Ragupathy (Rodyk & Davidson LLP)
CourtHigh Court (Singapore)
Subject MatterFamily Law
Andrew Ang J: Introduction

The parties, whom I shall refer to as husband and wife, were married on 15 January 1993 in Budapest, Hungary. The wife is Hungarian and the husband is Canadian. Both are Singapore permanent residents. There are two children of the marriage, both sons, born in 1995 and 2000. In or about 2001 to 2002, the husband left the family to live with another woman, [D]. The parties entered into a Deed of Separation (“the Deed”) on 19 February 2003. The husband filed the divorce petition on 16 February 2006, and the decree nisi dissolving the marriage was obtained on 28 April 2006 and the ancillaries were dealt with separately.

The ancillary hearings have been long and tumultuous, involving numerous summonses taken out by both parties, and spanning more than four years. The ancillary orders made by me on 25 November 2010 were as follows: The husband and wife shall have joint custody of the children, namely, [E] and [F], with the husband having care and control of [E] and the wife having care and control of [F]. The husband shall have access to [F] as follows: Tuesday and Thursday after school to 9.00pm. The husband is to pick up [F] from school and return him to [Property 1]. Alternate weekends from Friday after school till Sunday 8.00pm. Half of school holidays. Alternate public holidays from 10.00am to 8.00pm. [F]’s birthday on alternate years. On [E]’s birthday, access to [F] from after school to 9.00pm. (The wife did not apply for access to [E] as she preferred that [E] see her voluntarily.) The husband shall pay $3,500 per month for the maintenance of [F] with effect from February 2010. The husband shall pay the children’s school fees, tuition fees and the transport expenses. The husband shall pay the sum of $3,600 per month for the rent of the residential premises of the wife and [F] with effect from March 2010. The husband shall provide [F] a return air ticket to Hungary, once annually. Other household expenses (including supplemental rental and employment of maid) shall be borne by the wife. The husband shall pay $1 per month, nominal maintenance for the wife until further order. The wife to get 25% of the matrimonial assets which is the S$985,000 and the 11.5 million [G] Commodities shares. Account not to be taken of any other assets of either party. The husband to take all steps necessary to cause or transfer 25% of the said shares to the wife’s CDP Securities Account No [xxx]. The wife to remove the Caveat No [xxx] against [Property 2], after payment and receipt of her share in the 25% of the matrimonial assets. There will be no order as to costs. DCA Nos [xxx], [xxx], and [xxx] of 2010 to be withdrawn by consent, with no order as to costs. Liberty to apply.

The husband has appealed against (i) and (k) of my order above. I now give my reasons for my order that the wife is to receive 25% of the matrimonial assets, consisting of S$985,000 and 11.5 million [G] Commodities shares.

Background

The husband is presently the managing director of [G] Commodities Pte Ltd (“[G] Commodities”). [G] Commodities is a company listed on the Singapore Stock Exchange. The wife is an associate medical director with [H] Development Pte Ltd. As mentioned earlier, the husband had left the family around 2001 to 2002 for [D] and parties subsequently decided to enter into the Deed. The Deed was comprehensive and included all ancillary matters such as custody, care and control of the children, maintenance for the children and the wife, as well as division of matrimonial assets. More crucially, cl 11 of the Deed read: Assets excluded from division

Both parties agree that asset(s) acquired by either party from the date of this Deed will remain as asset(s) of the acquiring party.

At the time of execution of the Deed, the husband was the managing director of [J] Asia Pte Ltd (“[J] Asia”). However, subsequent to the execution of the Deed there was a buy-out of [J] Asia by [K] Holdings Pte Ltd (“[K] Holdings”) which was completed on 12 February 2004. The husband remained as the managing director of [J] Asia. As a result of the buy-out, the husband received a stock option dated 28 June 2004, which provided that the husband could acquire 25% of the current issued and paid up share capital of [J] Asia for S$1 within the next three years from the date of the option, provided that if after the exercise of the option, [J] Asia’s annual audited consolidated profit and loss accounts reflected a loss for three consecutive financial years, the husband would have to pay $500,000 for his 25% stake. The husband exercised the option on the very same day. [J] Asia was later renamed [K] Asia Pte Ltd (“[K] Asia”).

[K] Holdings was a major shareholder of [G] Commodities. Subsequently, on 10 July 2006, both [K] Holdings and the husband sold their shares in [K] Asia to [G] Commodities. The husband received 11.5 million [G] Commodities shares, estimated to be worth around S$12m, and S$985,000 in consideration for his 25% stake in [K] Asia.

As the buy-out of [J] Asia and the transfer of the shares to the husband occurred after the execution of the Deed, the husband’s assets consisting of 11.5 million [G] Commodities shares and S$985,000 (“the husband’s assets”) would therefore prima facie fall under the exclusion cl 11 of the Deed. However, the wife’s position was that the option was given for his efforts in brokering the sale of [J] Asia to [K] Holdings prior to the execution of the Deed.

The question of when the issue of a buy-out of [J] Asia arose became pertinent in order to ascertain when the husband’s assets were acquired, and whether they were acquired by the husband’s efforts expended during the marriage or after separation. The Family Court gave orders on 4February 2010 for the husband to answer interrogatories posed to him by the wife’s counsel, as well as to disclose documents relating to the sale and purchase of [J] Asia, with a view to determining if the shares were part of the matrimonial assets.

Division of matrimonial assets

The governing provision with regard to the division of matrimonial assets is s 112 of the Women’s Charter (Cap 353, 2009 Rev Ed) (“the Act”):

112.―(1) The court shall have power, when granting or subsequent to the grant of a judgment of divorce, judicial separation or nullity of marriage, to order the division between the parties of any matrimonial asset or the sale of any such asset and the division between the parties of the proceeds of the sale of any such asset in such proportions as the court thinks just and equitable.

It shall be the duty of the court in deciding whether to exercise its powers under subsection (1) and, if so, in what manner, to have regard to all the circumstances of the case, including the following matters: the extent of the contributions made by each party in money, property or work towards acquiring, improving or maintaining the matrimonial assets;

...

the needs of the children (if any) of the marriage; the extent of the contributions made by each party to the welfare of the family, including looking after the home or caring for the family or any aged or infirm relative or dependant of either party; any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce;

...

the giving of assistance or support by one party to the other party (whether or not of a material kind) including the giving of assistance or support which aids the other party in the carrying on of his or her occupation or business; and

...

The court may make all such other orders and give such directions as may be necessary or expedient to give effect to any order made under this section. The court may, at any time it thinks fit, extend vary, revoke or discharge any order made under this section, and may vary any term or condition upon or subject to which any such order has been made.

...

Any order under this section may be made upon such terms and subject to such conditions (if any) as the court thinks fit.

...

[emphasis added in bold italics]

For a start, it should be noted that s 112(10)(b) of the Act defines “matrimonial asset” as including: In this section, ‘matrimonial asset’ means ... any other asset of any nature acquired during the marriage by one party or both parties to the marriage,

but does not include any asset (not being a matrimonial home) that has been acquired by one party at any time by gift or inheritance and that has not been substantially improved during the marriage by the other party or by both parties to the marriage.

It is clear that the [G] Commodities shares and $985,000 fell within s 112(10)(b) of the Act as assets that were acquired during the marriage by the husband The question is whether cl 11 of the Deed should prevail nevertheless.

It is evident from s 112 of the Act that in deciding on the division of matrimonial assets the court must take into account all relevant matters but has the discretion in weighing the relevant factors to come to a just and equitable division for both parties. Ultimately, the court has the power and the discretion to decide what is just and equitable and arrive at a fair conclusion for both parties.

Was the Deed binding?

Before me, the husband submitted that the Deed was prepared and drafted by the wife’s solicitors, M/s Rodyk & Davidson, based on the wife’s instructions. Further, both parties had the benefit of competent and independent legal advice as to the terms and effects of the Deed as affirmed in Recital 1.3 of the Deed. As such, the husband submitted that as the wife was the one who had requested for the Deed to be entered into, it was unfair for her to argue to...

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9 cases
  • Wong Kien Keong v Khoo Hoon Eng
    • Singapore
    • High Court (Singapore)
    • 20 Diciembre 2013
    ...a division at the later date looking more unjust as it would be tilted in favour of the party guilty of bad faith: at [110] .] AFS v AFU [2011] 3 SLR 275 (refd) Anthony Patrick Nathan v Chan Siew Chin [2011] 4 SLR 1121 (refd) AOH v AOI [2011] SGHC 14 (refd) AOO v AON [2011] 4 SLR 1169 (refd......
  • Wong Kien Keong v Khoo Hoon Eng
    • Singapore
    • High Court (Singapore)
    • 21 Junio 2012
    ...facts and circumstances of the case itself: see TQ v TR at [73]-[75], [77], [80], [103]; AOO v AON [2011] 4 SLR 1169 at [19]; AFS v AFU [2011] 3 SLR 275 at [17]-[18]. As the court noted in TQ v TR (at [80], [86]), such an agreement may be given conclusive weight and effectively enforced in ......
  • Wong Kien Keong v Khoo Hoon Eng
    • Singapore
    • High Court (Singapore)
    • 20 Diciembre 2013
    ...that the court can take. A mixture of fact and the exercise of discretion may justify a different approach, as was the case in AFS v AFU [2011] 3 SLR 275. I will be discussing this case later in the judgment. As a related observation, where parties have failed to point towards any form of i......
  • BHL v BHM
    • Singapore
    • High Court (Singapore)
    • 29 Abril 2013
    ...consideration of what is just and equitable in the circumstances (TQ v TR and another appeal [2009] 2 SLR(R) 961 at [73]–[75]; AFS v AFU [2011] 3 SLR 275 at [18]). As for the wife’s second alternative argument, this was insufficiently substantiated and in any case immaterial for the same re......
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1 books & journal articles
  • Family Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2011, December 2011
    • 1 Diciembre 2011
    ...remaining S$9m in the proportion of 60:40, if it is just and equitable to do so. Marital agreements and consent orders 15.33 In AFS v AFU[2011] 3 SLR 275 (AFS), the parties entered into a deed of separation (Deed) in February 2003, three years before they divorced. Clause 11 of the Deed pro......

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