AYM v AYL

• Court: Court of Three Judges (Singapore)
• Judge: Chao Hick Tin JA
• Judgment Date: 23 November 2012
• Neutral Citation: [2012] SGCA 68
• Citation: [2012] SGCA 68
• Hearing Date: 17 August 2012,15 August 2012
• Published date: 10 January 2013
• Docket Number: Civil Appeal No 21 of 2012
• Plaintiff Counsel: Engelin Teh SC, Joyce Fernando, Linda Ong and Lee Leann (Engelin Teh Practice LLC)
• Defendant Counsel: Kee Lay Lian and Nigel Pereira (Rajah and Tann LLP)
• Subject Matter: Family Law,Matrimonial assets,Division

Andrew Phang Boon Leong JA (delivering the grounds of decision of the court):

This was an appeal by the Husband against the decision of the High Court Judge (“the Judge”) in AYL v AYM [2012] SGHC 64 (“the GD”) dismissing his appeal against the decision of the District Court. The District Court had dismissed his application to vary a consent order entered into between the parties vis-à-vis ancillary matters on the divorce of the two parties. The Husband had sought to rely on business failure to vary the consent order to a more favourable division of the matrimonial asset (a piece of landed property) (“the Property”) and for a lump sum maintenance for the Wife to be paid out of her share and for the monthly payments to accordingly cease. The Judge refused the variation of the consent order as far as the division of the Property was concerned, but ordered a lump sum maintenance of $750,000 to be paid to the Wife out of the Husband’s share of the sale proceeds. We dismissed the appeal with regard to the former issue and allowed it with regard to the latter issue. We now set out the detailed grounds of our decision.

The factual background

This case concerned a consent order entered into between the parties in respect of ancillary matters arising out of divorce proceedings. The parties were married for 23 years. A writ for divorce was filed on the ground of irretrievable breakdown, relying on the fact of at least four years’ separation, and interim judgment was granted on 13 July 2010. At the time leading to the interim judgment, discussions took place between the parties with a view to reaching an agreement on the ancillary matters which arose out of the divorce. By 13 July 2010, the parties reached an agreement in relation to ancillary matters relating to custody and care and control of the children, division of assets, and the maintenance of the Wife and children. The terms of the agreement were recorded in the interim judgment as a consent order and the interim judgment was made final on 13 October 2010. The consent order provided, inter alia, that the Husband was to pay $2,670 per month per child as maintenance for each of the three children, the children’s school fees, $3,990 per month as maintenance for the Wife, and that the Property be sold within six years and for the proceeds to 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 $2.5m or 70% to the Wife and 30% to the Husband should the sale price be more than $2.5m. The result of the consent order was that the Husband was paying $19,000 a month for the maintenance of the Wife and the children.

According to the Husband, in November 2010, his financial situation changed – his business, which was during the period leading up to the making of the consent order only just starting, saw its investors withdraw and that led to its failure, the eventual result of which was that he no longer received any income. He claimed to have tried to find a new job but was unable to and this was so even up until the appeal was heard before us. On 14 June 2011, the Husband, relying on these changes in his circumstances, applied to the District Court to vary the terms of the consent order pursuant to ss 112(4) and 118 of the Women’s Charter (Cap 353, 2009 Rev Ed) (“the Act”). By this point in time, the value of the Property had risen from $2.5m to an estimated $5.5m. The Husband sought, inter alia, to have the Property sold within three months and for the order as to the division of the matrimonial assets to be varied to an equal division, with a $750,000 lump sum payment for the Wife’s maintenance to be paid out of her 50% share. The District Judge ordered a variation to the extent that the Property was to be sold within six months, but refused to vary the terms of either the division of the matrimonial assets or the maintenance payments for the Wife.

Decision of the High Court

On appeal to the High Court on 23 March 2012, the Judge upheld the District Court’s decision not to vary the terms of the division of the matrimonial assets pursuant to s 112(4) of the Act (“s 112(4)”). The Judge reasoned that it did not follow as of course from business failure that the court would allow a variation. The Judge emphasised that “[a] consent order is a contract endorsed with the approval of the court” and that “[i]t is not an order to be lightly varied or set aside” (see the GD at [6]). It was also observed that “[w]hen a contract has been made or a consent order has been recorded the parties must part with a mind at peace that the matter is at an end” and that “[t]hey should not go on living with the anxiety of a return to court when the asset value changes” (see the GD at [6]). The Judge then proceeded to order that a lump sum maintenance of $750,000 be paid to the Wife from the Husband’s share of the proceeds of sale of the Property, on the basis that the parties had agreed to this $750,000 lump sum maintenance (see the GD at [4]).

The Property was sold on 8 June 2012 for $5.1m.

The issues on appeal

The two issues which arose before this court were as follows: Whether the Judge was correct in refusing to, pursuant to s 112(4), vary the terms of division of the matrimonial assets in the consent order despite the alleged change in circumstances of the Husband (“Issue 1”). Whether the Judge was correct in ordering a lump sum maintenance of $750,000 be paid to the Wife out of the Husband’s share of the sale proceeds of the Property (“Issue 2”).

The parties’ respective arguments on appeal

Counsel for the Husband, Ms Engelin Teh SC (“Ms Teh”), argued that, under s 112(4), a “material change in the circumstances” after an order with regard to the division of matrimonial assets was made constitutes sufficient grounds for varying the order. Ms Teh relied on the Singapore High Court decision of Nalini d/o Ramachandran v Saseedaran Nair s/o Krishnan [2010] SGHC 98 (“Nalini”), where the learned judge expressed (at [14]) the view that a “material change in the circumstances” was sufficient for the court to invoke s 112(4). The learned judge there came to that view because he thought s 112(4) was more broadly framed than ss 118 and 119 (which apply to the variation of orders and agreements for the maintenance of an ex-wife, respectively), and therefore s 112(4) must encompass a “material change in the circumstances” as a sufficient ground, such ground being expressly specified in ss 118 and 119. Ms Teh thus argued that the Husband’s business failure and loss of income constituted such “material change in the circumstances” to warrant the variation of the consent order with regard to the terms of the division of the Property. She further relied on the decision of this court in Tan Sue-Ann Melissa v Lim Siang Bok Dennis [2004] 3 SLR(R) 376 where it was held that, where a consent order as to maintenance was entered into on a certain mutual assumption shared by the parties, the failure of that assumption constitutes a material change in the circumstances sufficient to warrant its variation. She thus argued that, in the present case, there was a mutual assumption between the parties at the time of the making of the consent order that the Husband’s business would take off and it having failed, the consent order could be varied.

In response, counsel for the Wife, Ms Kee Lay Lian (“Ms Kee”), submitted that the test applicable for the variation of an order in respect of the division of matrimonial assets is not a “material change in the circumstances” but instead one of “unworkability”. She further relied on the proposition that a consent order is a contract to be upheld and should not be varied save in exceptional circumstances. She also argued that even if a “material change in the circumstances” was a sufficient ground, the Husband had not satisfied it as it was self-induced and he had not sufficiently proved it. Lastly, Ms Kee denied the existence of any mutual assumption as asserted by Ms Teh.

Our decision Issue 1

The division of the pool of matrimonial assets between the parties is governed by s 112 of the Act (“s 112”), which reads as follows:

Power of court to order division of matrimonial assets 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.

(2) 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: (a) the extent of the contributions made by each party in money, property or work towards acquiring, improving or maintaining the matrimonial assets; (b) any debt owing or obligation incurred or undertaken by either party for their joint benefit or for the benefit of any child of the marriage; (c) the needs of the children (if any) of the marriage; (d) 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; (e) any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce; (f) any period of rent-free occupation or other benefit enjoyed by one party in the matrimonial home to the exclusion of the other party; (g) 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...