Aym v Ayl

• Jurisdiction: Singapore
• Judgment Date: 26 August 2014
• Date: 26 August 2014
• Docket Number: Civil Appeals Nos 116 of 2013 and 20 of 2014
• Court: Court of Appeal (Singapore)

AYM

Plaintiff

and

AYL and another appeal

Defendant

[2014] SGCA 46

Sundaresh Menon CJ

,

Andrew Phang Boon Leong JA

and

Judith Prakash J

Civil Appeals Nos 116 of 2013 and 20 of 2014

Court of Appeal

Family Law—Maintenance—Child—Husband sought to vary consent order for maintenance of wife and children—Whether variation reasonable and for welfare of child—Whether business failure and loss of income constituting material change in circumstances—Whether unexpected windfall from sale of matrimonial property constituting material change in circumstances—Whether lump sum maintenance order should be made—Section 73 Women's Charter (Cap 353, 2009 Rev Ed)

Family Law—Maintenance—Variation of consent order—Husband sought to vary consent order for maintenance of wife and children—Variation where there is material change in circumstances—Circumstances must be those prevailing when consent order entered—Whether business failure and loss of income constituted material change in circumstances—Whether unexpected windfall from sale of matrimonial property constituted material change in circumstances—Whether lump sum maintenance order should be made

Family Law—Maintenance—Wife—Husband sought to vary consent order for maintenance of wife and child—Whether business failure and loss of income constituted material change in circumstances—Whether unexpected windfall from sale of matrimonial property constituting material change in circumstances—Whether lump sum maintenance order should be made—Section 119 Women's Charter (Cap 353, 2009 Rev Ed)

These appeals concerned the variation of terms relating to maintenance payments agreed to between the appellant husband and the respondent wife. The agreement was recorded in a consent order as part of the interim judgment entered on 13 July 2010 (‘the Consent Order’), which provided, inter alia, that the husband was to pay the wife maintenance in the sum of $3,990 per month for herself, $2,670 per month per child for each of their three children and their school fees, and that a piece of landed property (‘the Matrimonial Property’) was to be sold within six years and the proceeds would be divided in the proportions of 80% to the wife and 20% to the husband if the sale price was equal to or less than $2.5 m, or 70% to the wife and 30% to the husband should the sale price be more than $2.5 m.

According to the husband, his business failed in November 2010, the result of which was that he no longer received any income. This caused his financial circumstances to take a drastic turn for the worse. On 14 June 2011, he applied to vary the terms of the Consent Order in relation to the division of the matrimonial assets and maintenance for the wife and the children on the ground that there had been a material change in the circumstances due to the failure of his business. The Husband did not get the orders he wanted, and subsequently appealed to the High Court, and later to the Court of Appeal. The Court of Appeal in AYM v AYL[2013] 1 SLR 924 decided the appeal in relation to varying that part of the Consent Order concerning the division of matrimonial assets but remitted the issue of varying the Consent Order in relation to maintenance back to the High Court.

At the High Court hearing, the Husband sought to reduce the amount of periodic maintenance payable under the Consent Order by arguing that there were two material changes in the circumstances: (a) that there had been a change in his financial circumstances due to the failure of his business; and (b) that the parties had obtained an unexpected windfall from the sale of the Matrimonial Property. The Matrimonial Property was sold for $5.1 m although their most optimistic expectation was for the sale price to be $3.75 m. The wife, on the other hand, sought to vary the Consent Order by converting the periodic maintenance payments into a lump sum. In her application, the wife was willing to accept maintenance of $250,000 for herself and $750,000 for the children.

The judge (‘the Judge’) found that that neither of the two changes in circumstances relied on by the Husband were made out, or warranted any adjustment. He also found that a lump sum maintenance payment was appropriate, and ordered that the husband pay lump sum maintenance of $250,000 to the wife and $750,000 to the children inclusive of school fees. This was on the basis that those figures were reasonable in light of the original amount of maintenance payments that were to be made under the Consent Order if the periodic payments were converted into a lump sum. The Husband appealed against these orders.

Held, allowing the appeal in part:

(1) Section 119 of the Women's Charter (Cap 353, 2009 Rev Ed) (‘Women's Charter’) provided that the court might vary agreements for maintenance where it was satisfied that there had been a material change in the circumstances. The circumstances in question had to be those prevailing at the time the agreement for maintenance was entered into. The material changes, which any party seeking to vary an agreement for maintenance had to show, therefore related to those circumstances: at [14] .

(2) Section 73 provided that any agreement relating to maintenance might be varied where the court was satisfied that it was reasonable and for the welfare of the child to do so. This was broad enough to encompass a material change in the circumstances of the parents as a basis for varying the maintenance for the child. Whether or not this should result in the maintenance actually being varied was a factual inquiry that depended on the circumstances of each case: at [16] .

(3) A lump sum payment allowed for a clean break in the marriage and should be availed of whenever feasible. Such a clean break might help avoid further litigation and acrimony between the parties. However, a lump sum payment should not be ordered if it would cripple the husband financially: at [18] .

(4) A lump sum payment would allow parties to move on with their lives and avoid further rancorous interactions, especially in light of the multiplicity of legal proceedings this dispute had generated: at [20] and [21] .

(5) A material adverse change in the financial circumstances of the husband, especially where the wife was reasonably provided for, was a good basis for a downward variation of a maintenance order: at [23] .

(6) The evidence was that the husband's business was not doing well since its inception and also when the Consent Order was entered into. Therefore, the husband could not reasonably have been relying on the success of the business to provide him with sustainable future income so that he could meet his maintenance obligations. Those were the circumstances upon which he agreed to the Consent Order, and the failure of the business could not constitute a material change in the circumstances: at [24] to [26] .

(7) Taking the outer limit of the $3.75 m as the highest sale price expected by the parties, the eventual sale of the Matrimonial Property at $5.1 m gave the parties an unforeseen and unexpected windfall of $1.35 m. The wife received 70% of the windfall while the husband received 30% based on the terms of the Consent Order. The Wife therefore received a larger amount of $270,000 more than what was initially expected from the division of the matrimonial assets. This justified a reduction in the agreed quantum of maintenance since the wife would be in a better position to provide for herself and the children as a result of this windfall: at [28] and [29] .

(8) Any payments made by the husband since the date of the Consent Order until the date of the orders made by the Judge was already taken into account when the wife proposed the aggregate lump sum order of $1 m: at [33] and [41] .

(9) Any reduction in the lump sum maintenance payments by taking into account the windfall was to be deducted from the aggregate lump sum maintenance amount of $1 m suggested by the wife. The wife did not mention that her receiving a higher proportion of the sale proceeds was something material to be taken into consideration in asking for the aggregate lump sum maintenance of $1 m before the Judge: at [43] .

(10) Reducing the amount of maintenance by taking into account the windfall was not in any way contrary to the welfare of the children. The reduction was made having regard to the resources available to the wife to provide for herself and the children. Moreover, it was in the interests of the children's welfare that there be a lump sum order for maintenance since this would help reduce the occasion for acrimony between the parties: at [45] .

(11) Based on the evidence, a lump sum payment would not cripple the husband financially. The contention by the husband that he had undertaken fresh obligations to his new family should not affect or compromise the pre-existing obligations he continued to owe to the wife and his children from his previous marriage: at [47] .

AYL v AYM [2012] SGHC 64 (refd)

AYM v AYL [2013] 1 SLR 924 (refd)

BCS v BCT [2012] SGDC 338 (refd)

Chua Chwee Thiam v Lim Annie [1989] 1 SLR (R) 426; [1989] SLR 468 (folld)

Lee Puey Hwa v Tay Cheow Seng [1991] 2 SLR (R) 196; [1991] SLR 198 (folld)

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