AYM v AYL and another appeal

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 26 August 2014
• Neutral Citation: [2014] SGCA 46
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal Nos 116 of 2013 and 20 of 2014
• Year: 2014
• Published date: 29 August 2014
• Hearing Date: 10 July 2014
• Plaintiff Counsel: Anamah Tan and Wong Hui Min (Ann Tan & Associates)
• Defendant Counsel: Kee Lay Lian, Nigel Pereira, and Vithiya Rajendra (Rajah & Tann LLP)
• Citation: [2014] SGCA 46

Sundaresh Menon CJ (delivering the judgment of the court): Introduction

AYM (“the Husband”) and AYL (“the Wife”) were married for more than 20 years when the Wife filed for divorce on 8 April 2010. They have three children, J, N, and L (henceforth collectively referred as “the Children”). As part of the divorce proceedings, the parties reached an agreement on the ancillary matters regarding custody, care and control, maintenance, and the division of matrimonial assets. They recorded the terms of their agreement in a consent order as part of the interim judgment entered on 13 July 2010 (“the Consent Order”).

The Consent Order provided, among other things, that: the Husband was to pay: $2,670 per month as maintenance for each of the Children; the Children’s school fees (which at that time amounted in aggregate to about $7,000 per month); and $3,990 per month as maintenance for the Wife; 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 $2.5m, or 70% to the Wife and 30% to the Husband should the sale price be more than $2.5m; and a list of other cash assets amounting to about $900,000 would be divided between the parties.

The appeals before us arise from the decision in AYL v AYM [2013] SGHC 237 (“the GD”) concerning the variation of the terms of the Consent Order providing for maintenance payments by the Husband to both the Wife and the Children.

On 10 July 2014, we heard oral submissions from the parties and adjourned the matter for the parties to furnish us with information regarding the amount of maintenance that had been already paid by the Husband since the Consent Order was entered into. Having received the information requested, we now deliver our decision.

Facts and background to the dispute

The dispute between the parties has resulted in substantial litigation in both the State Courts and the Supreme Court, and has already come up before the Court of Appeal on one previous occasion. The facts of the case have been set out in detail in a number of decisions (see AYL v AYM [2012] SGHC 64, AYM v AYL [2013] 1 SLR 924, and the GD), and it is unnecessary to canvass them again at length. For present purposes, we set out only the facts that are material to our decision.

We begin with the Husband’s financial situation at the time the Consent Order was entered into. The Husband was made redundant at work in or about 2007. He then decided to enter into a business venture with another partner. Together, they incorporated a company which was in the business of providing solutions for the felling, renewal and processing of rubber wood in Indonesia. The Husband’s evidence is that he and his partner each invested $1m in the company while also seeking funding from external investors. The company, however, was never profitable. Despite that, the Husband was paid a substantial monthly salary of $22,438 by the company from September 2009 onwards. As mentioned above, the terms of the Consent Order were recorded on 13 July 2010.

Less than a year later, on 14 June 2011, the Husband brought an application 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 the company. The District Judge ordered that the Consent Order be varied but not quite in the way the Husband had wanted. The District Judge ordered that the Matrimonial Property be sold within six months and also made provisions for some minor variation to the maintenance of one of the Children, JLR. The Husband appealed to the High Court, and later to the Court of Appeal. The Court of Appeal 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.

In the meantime, three significant events took place. First, the Matrimonial Property was sold for $5.1m, which was a much higher price than what the parties had contemplated (even on their most optimistic calculations). Secondly, the Wife brought an application for the order for periodic maintenance payments to be converted to a lump sum payment. Thirdly, the Wife and the Children relocated to Sydney, Australia in January 2012, while the Husband remarried a Singaporean lady and currently lives in Singapore with her and her two children from her previous marriage.

As directed by the Court of Appeal, all issues relating to maintenance were heard by the Judge (by which time the events described in the preceding paragraph had already transpired). Before the Judge, 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: (1) that there had been a change in his financial circumstances due to the failure of his business venture; and (2) that the parties had obtained an unexpected windfall from the sale of the Matrimonial Property. 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 initially sought $750,000 for herself and $1.845m for the children but was eventually willing to accept a reduced amount of $250,000 for herself and $750,000 for the Children. Although there was no specific evidence on this, we deduced that these sums were arrived at having regard to payments already made by the Husband by this time. The Wife did not take any position on the Husband’s contention that the windfall gain from the sale of the Matrimonial Property should be taken into account.

The Judge held that a lump sum payment was appropriate, and the quantum of maintenance sought by the Wife was reasonable in light of the original amount of maintenance payments that were to be made under the Consent Order. He also specifically found that neither of the two changes of circumstances relied on by the Husband were made out or warranted any adjustment. The Judge therefore ordered on 12 August 2013 that: the Husband pay a lump sum maintenance to the Wife fixed at $250,000; and the Husband pay lump sum maintenance for the children, fixed at $750,000 (inclusive of school fees).

The parties’ cases on appeal

The Husband was dissatisfied with the orders made. On appeal, he again asserted that the two material changes in circumstances set out at [9] above warranted a reduction in the maintenance payable under the Consent Order; he also argued that he would be financially crippled if compelled to make lump sum maintenance payments.

The Wife maintained that the Judge’s decision to refuse a downward variation of maintenance was correct because there had in fact been no material changes in the relevant circumstances. She also contended that the Judge was correct to order an aggregate lump sum maintenance payment of $1m.

Variation of consent orders

As a preliminary point, we note that an aspect of this case concerned the principles relating to when the terms of a consent order may be varied in the matrimonial context. Sections 118 and 119 of the Women’s Charter (Cap 353, 2009 Rev Ed) provide for the variation of maintenance orders and agreements for maintenance for the wife respectively:

Power of court to vary orders for maintenance 118. The court may at any time vary or rescind any subsisting order for maintenance… on the application of the person in whose favour or of the person against whom the order was made… where it is satisfied that the order was based on any misrepresentation or mistake of fact or where there has been any material change in the circumstances.

Power of court to vary agreements for maintenance 119. Subject to section 116, the court may at any time and from time to time vary the terms of any agreement as to maintenance made between husband and wife… where it is satisfied that there has been any material change in the circumstances and notwithstanding any provision to the contrary in any such agreement.

Thus, the court may vary agreements for maintenance where it is satisfied that there has been a material change in the circumstances. The circumstances in question must 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 must show, therefore relate to those circumstances.

In relation to variation of maintenance for children, the relevant provisions are in ss 72 and 73:

Rescission and variation of order 72.—(1) On the application of any person receiving or ordered to pay a monthly allowance under this Part and on proof of a change in the circumstances of that person, his wife or child, or for other good cause being shown to the satisfaction of the court, the court by which the order was made may rescind the order or may vary it as it thinks fit.

(2) Without prejudice to the extent of the discretion conferred upon the court by subsection (1), the court may, in considering any application made under this section, take into consideration any change in the general cost of living which may have occurred between the date of the making of the order sought to be varied and the date of the hearing of the application.

Power of court to vary agreement for maintenance of child 73. The court may, at any time and from time to time, vary the terms of any agreement relating to the maintenance of a child… notwithstanding any provision to the contrary in that agreement, where it is satisfied that it is reasonable and for the welfare of the child to do so.

Although the parties did not cite these provisions in their respective cases or...