ARY v ARX and another appeal

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 10 March 2016
• Neutral Citation: [2016] SGCA 13
• Plaintiff Counsel: Ong Ying Ping and K Manickam (East Asia Law Corporation)
• Docket Number: Civil Appeals Nos 3 and 5 of 2015
• Date: 10 March 2016
• Hearing Date: 22 October 2015,26 November 2015
• Subject Matter: Matrimonial assets,Family Law,Maintenance,Division
• Published date: 16 March 2016
• Citation: [2016] SGCA 13
• Defendant Counsel: Wong Hin Pkin Wendell, Eoon Zizhen Benedict and Goh Mei Shi Valerie (Drew & Napier LLC)
• Court: Court of Appeal (Singapore)
• Year: 2016

Chao Hick Tin JA (delivering the judgment of the court): Introduction

These are two related appeals against the decision of a judge (“the Judge”) on the division of matrimonial assets and maintenance in the ancillary matters of a divorce. Her decision is reported at ARX v ARY [2015] 2 SLR 1103 (“the Judgment”).

These appeals present us an opportunity to further clarify the legal position on the operative date for determining the pool of matrimonial assets for division in a divorce.

Background

The husband and wife were married on 29 October 1994, and remained married for approximately 15 years, until the relationship broke down in June 2009, when the parties separated by mutual agreement. The husband, now aged 43 and who originally hailed from Turkey, is currently resident and employed in the Hong Kong Special Administrative Region. He works for a large international media agency (“IMA”) and earns a monthly salary of about $36,000.

The wife is a 52-year-old Scotswoman. She was a homemaker for a large part of the marriage, but is currently employed as a part-time bookkeeper and earns about $2,500 every month. The wife resides in Singapore with their two sons, who are 16 and 11 years of age. Both children are enrolled in an international school in Johor Bahru. They were boarders at that school when the matter was before the Judge, but had ceased boarding arrangements by the time the matter came before us. Parties have agreed on the custody, care and control, and access arrangements for the children.

The marriage and the early years

The parties met in 1993 when the wife was on holiday in Turkey. The wife was then a banker in England and earning a substantial salary. The husband lived and worked in Turkey. Just prior to the marriage, the husband moved to London to live with the wife. He became a full-time student reading for a university degree, and he also enrolled in an English language course.

The wife claims that during the early years of their marriage, she was the “sole financial provider”. She funded the husband’s passage to England and his education there.¹ The husband, on the other hand, claims that he paid for his education in England with his savings from Turkey and the money he earned from part-time work while studying.² It is, however, clear and beyond doubt that the wife provided the marriage with financial stability in the early years, because her salary far outstripped the husband’s.

In 1999, their first son was born. The husband, having graduated from his degree programme, took up employment at IMA in London in that year.

His career has been a successful one. He has risen through the ranks to his current position as a regional sales manager.

The moves to Hong Kong, Japan and then Singapore

The parties relocated to Hong Kong in 2003. The decision to relocate was caused by a confluence of three events that year. First, the husband was promoted, and offered a position at IMA’s Hong Kong office. Second, the wife was made redundant by her then employer, a European bank. Third, the wife became pregnant with their second son, and gave birth to him in December that year. The wife stopped working to become a homemaker soon after.

Parties disagree over the reason the wife became a homemaker. The wife says that she sacrificed her career so that she could focus on the family.³ The husband says that it was not a matter of choice. Instead, she could not find employment after having been made redundant.⁴

The family relocated two more times after moving to Hong Kong. In 2004, the husband was posted to Japan, and in 2006, he was posted to Singapore. The family went with him wherever his career brought him.

The separation and divorce proceedings

The husband had an affair while the family was in Singapore. This caused the marriage to deteriorate. The wife found out about the affair in January 2008,⁵ and they eventually separated in June 2009 when the husband left their rented matrimonial home in Singapore. The wife stayed on at the matrimonial home with the children. The husband continued to pay for the rent of the matrimonial home and for the children’s expenses. He also gave the wife $1,200 every month for her own expenses.

The husband filed for divorce on 2 February 2010. Interim judgment was granted on 26 October 2010. The ancillary proceedings commenced on 30 June 2012.

The decision below and the arguments on appeal

We will now provide a broad overview of the Judge’s decision in the court below, as well as the parties’ arguments on appeal, followed by an analysis of the issues of this appeal.

There were two main issues before the Judge. The first concerned the division of the matrimonial assets, and the second, maintenance for the wife and children.

In respect of the division of the matrimonial assets: The Judge held that the operative date for determining the pool of matrimonial assets was the date the ancillary proceedings commenced, 30 June 2012. At that date, the total assets in the matrimonial pool amounted to $1,475,809.24. The Judge rejected the husband’s argument that the operative date should be (i) the date parties separated in June 2009, when the total assets in the matrimonial pool amounted to $966,708.51;⁶ or alternatively (ii) the date interim judgment was granted on 26 October 2010, when the total assets in the matrimonial pool amounted to $1,289,399.35.⁷ The Judge divided the pool of assets equally, resulting in each party receiving approximately $738,000.

In respect of the maintenance for the wife and children: The Judge awarded monthly maintenance of $7,700 to the wife, which comprised $3,000 for her personal and household expenses and $4,700 for rent for herself and the children. The Judge rejected the wife’s claim for a supplementary card, a car, and a monthly sum of $1,000 for holiday expenses. The husband agreed to pay for the children’s school and boarding fees (which amounted to $7,250 monthly), school-related expenses, medical insurance and pocket money.

The husband appeals against the Judge’s decision on division. His challenge to the decision on division is mounted at three levels. First, he argues that the operative date should not be the date of commencement of ancillary proceedings, but rather, the date the parties separated. Second, he argues that the Judge erred by including a Turkish property in the matrimonial assets. Third, he argues against an equal division of the matrimonial assets. He says that the division should be in the proportions of 70:30 in his favour, which is more closely aligned to the parties’ financial contributions.

Both the husband and wife appeal against the Judge’s decision on maintenance. The wife says that maintenance should be increased to $10,200 monthly comprising $4,500 for her personal and household expenses, $4,700 for rent, and $1,000 for holiday expenses. The husband, on the other hand, argues that the maintenance should be reduced to $5,000 monthly.

We will address the division of matrimonial assets and maintenance separately because they raise discrete legal principles and facts.

Issues relating to the division of matrimonial assets

The husband’s appeal against the Judge’s decision on division raises the same three issues (see [18] above). First, what the operative date for determining the pool of matrimonial assets should be. Second, whether a property in Turkey (“the Turunc property”) should be included in the pool of matrimonial assets. Third, whether the Judge’s division of the matrimonial assets in equal proportions is just and equitable.

What the operative date for determining the pool of matrimonial assets should be The decision below

The appropriate operative date for determining the pool of matrimonial assets received extensive argument in the court below. It was a pivotal point because there was a surge of about 50% in the total matrimonial assets between the parties’ separation in June 2009 and the commencement of ancillary proceedings on 30 June 2012. The surge was due to the husband’s receipt of some $520,000 in salary and bonuses during that period.

The Judge accepted the wife’s position that the operative date should be when the ancillary proceedings commenced. The Judge held that the court had a “broad discretion” in selecting an operative date for determining the pool of matrimonial assets (the Judgment at [22]). The wife was responsible for the welfare of the children even after the breakdown of the marriage and the grant of interim judgment (the Judgment at [31]). This allowed the husband to focus on his work, and obtain the salary and bonuses. Those monies should therefore be included in the pool of matrimonial assets for division.

The parties’ cases on appeal

On appeal, the husband maintains his position that the operative date should be the date the parties separated. He gave four reasons. First, the parties’ intentions are an important factor in determining the operative date. By June 2009, the parties manifested a clear intention not to contribute to the matrimonial assets. They were living apart and had closed their joint accounts (except for one to deduct rent and utilities and a second overseas account to collect rental proceeds). Thereafter, they managed their assets separately.⁸ Second, the Judge double-counted the wife’s non-financial contributions. The Judge relied on the wife’s non-financial contributions to justify a later operative date, and also relied on those same contributions when dividing the matrimonial assets.⁹ Third, the Judge failed to consider that the husband continued to pay for the rent of the matrimonial flat and for the children’s expenses even after he had moved out.¹⁰ Fourth, as a matter of policy, setting the operative date to be at the date when ancillary proceedings are commenced will encourage parties to drag out divorce proceedings.¹¹

The wife argues that the Judge’s...