Central Provident Fund Board v Lau Eng Mui

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeKarthigesu JA
Judgment Date10 August 1995
Neutral Citation[1995] SGCA 60
Citation[1995] SGCA 60
Defendant CounselWilliam Ong and Oo Gin Lee (Ong Goh & Chugani)
Docket NumberCivil Appeal No 167 of 1994
Plaintiff CounselEric Low and Elvin Wan (Khattar Wong & Pnrs)
Published date19 September 2003
Date10 August 1995
Subject MatterMonies in CPF account,Central Provident Fund,Proprietary interest arising from making of s 106 order,Charge on CPF moneys,s 106 Women's Charter (Cap 353),Family Law,Matrimonial property,ss 15 & 25 Central Provident Fund Act (Cap 36,1991 Ed),Whether CPF immunity applied

Cur Adv Vult

Background

This appeal arises from a hearing on ancillary matters in the divorce proceedings between one Lau Eng Mui, the wife, and one Ee Chin Kee, the husband. At the hearing on 3 July 1991, Chan Sek Keong J [as he then was] made, inter alia, the following order:

The respondent [the husband] to pay petitioner [the wife] a lump sum of $20,000 in lieu of maintenance for the children, such sum to be paid and charged against the respondent`s CPF moneys with effect from the date the respondent would be entitled to and withdraws his CPF moneys.



There was no appeal against that order, and it was subsequently served on the Central Provident Fund Board (CPF Board). The CPF Board took the view that the order was in breach of s 25 of the Central Provident Fund Act (Cap 36, 1991 Ed) (the CPF Act), and at the instance of the CPF Board the matter was restored for further hearing. The matter was further heard before Karthigesu J (as he then was) who held that the order ought not to be varied. However, he gave leave to the CPF Board to apply to court for an interpretation of s 25 of the CPF Act. Pursuant to that order, the CPF Board took out an application for an interpretation of s 25 and also for a determination of several other questions. The application was heard before Warren LH Khoo J, who telescoped all the issues into a broad one as follows [see [1995] 1 SLR 110 at p 112E-G]:

In circumstances in which the moneys standing to a CPF member`s account are treated as part of the matrimonial assets in the division of matrimonial assets consequent upon the dissolution of a marriage, and the share of the member`s spouse in the matrimonial assets has to be satisfied from moneys held in the member`s CPF account, is it open to the court to place a charge on such moneys in favour of the spouse of the member in aid of the order made by the court?



Section 25 of the CPF Act (which we shall set out in detail in a moment) preserves the funds of a member in his account with the CPF Board (CPF account) in various ways: it restricts the member from withdrawing his funds in his CPF account; it prohibits any assignment or transfer of such funds; it protects such funds from being seized or attached by his creditors to satisfy any debt or claim; and it also prevents such funds from vesting in the official assignee upon the bankruptcy of the member. In effect, it confers on such funds an immunity from the various processes as specified in that section. Basically, the question before the learned judge was whether such immunity applies in circumstances where the court holds that moneys in the CPF account of a member forms part of the matrimonial assets for division between him and his spouse under s 106 of the Women`s Charter (Cap 353) (to which we shall refer in some detail shortly) and the court makes an order on such division which directly impinges on the member`s CPF account. The learned judge held as follows:

In a case, ... where the whole or a predominant part of the matrimonial assets to be divided consequent upon a dissolution of marriage consists of CPF moneys and where a spouse`s entitlement on a division of the matrimonial assets can only be satisfied from an eventual payment from the CPF moneys, the judgment of the court ordering that the spouse`s share of the matrimonial assets be satisfied from a portion of the CPF moneys in the member`s account gives rise in my view to a proprietary interest in the CPF moneys themselves as opposed to a mere personal claim against the CPF member. That interest is a real and substantial interest, even though the moneys to which it is attached cannot be withdrawn from the fund until the circumstances prescribed for withdrawal have arisen in accordance with s 15 of the Act. A charge on the funds standing to the credit of the member`s CPF account is no more than a device to protect this interest. The position of the spouse in whose favour the judicial process has brought this interest into being is quite different from that of an ordinary claimant or even a judgment creditor. I do not think that the immunity conferred by s 25(1) on a member`s CPF funds applies to the interest of the spouse which comes into being in these circumstances.



Later, the learned judge concluded thus:

It is my view, therefore, that in the circumstances I have postulated above, it is open to the court to impose a charge on funds in a CPF member`s account to such extent as the court may specify upon a division of matrimonial property.



The appeal

This conclusion was challenged by the CPF Board and in their case before us they sought a determination of the following issues:

(1) whether the interest of the spouse which comes into being in the circumstances consequent upon the dissolution of a marriage is capable of being an exception to the immunity conferred by Section 25(1) of the CPF Act on a member`s CPF moneys;

(2) whether it is open to the court to impose a charge on the moneys in the CPF account of a member to such extent as the Court may specify upon a division of matrimonial property;

(3) where such a charge is imposed by the court on a member`s CPF account, whether the CPF Board would have to ensure that no withdrawal from the member`s account is made without leaving in the account a sufficient sum to meet an order imposing that charge, and that once the right to withdraw the moneys from the Fund in accordance with the provisions of the Act has arisen, whether the spouse in whose favour the charge has been made is entitled to apply to the CPF Board for payment direct to him or her, rather than to the member; and

(4) whether in the circumstances postulated in para (3) above, the CPF Board would be sufficiently protected by such an order of court especially where the Act does not provide for the CPF Board to act as directed by such an order.



First issue: proprietary interest

The first issue turns on the precise terms of an order made by the court in the division of matrimonial assets under s 106 of the Women`s Charter (s 106) and the nature of such an order. The relevant provisions are those of sub-ss (1) and (3) of s 106, which are as follows:

(1) The court shall have power, when granting a decree of divorce, judicial separation or nullity of marriage, to order the division between the parties of any assets acquired by them during the marriage by their joint efforts or the sale of any such assets and the division between the parties of the proceeds of sale.

...

(3) The court shall have power, when granting a decree of divorce, judicial separation or nullity of marriage, to order the division between the parties of any assets acquired during the marriage by the sole effort of one party to the marriage or the sale of any such assets and the division between the parties of the proceeds of sale.



Where the court in exercise of its powers makes an order dividing a matrimonial asset (falling under either of the subsections) into two specified portions or shares for the husband and wife and allocate such portions or shares to them respectively, such an order has the effect of conferring on or vesting in them the respective portions or shares of the asset so ordered. For instance, where an order is made dividing a landed property between the husband and wife into two equal or unequal undivided shares (as the case may be) and apportioning the shares to them respectively, each of them is thenceforth entitled to the undivided share in that property so ordered, and such an order is registrable under the Registration of Deeds Act or the Land Titles Act, as the case may be, depending on the nature of the title under which the property is held. Similarly, where the matrimonial asset consists of funds in a bank account of a spouse or the joint account of the spouses, an order made under s 106 dividing the funds into two specific sums and allocating the sums to them respectively gives to each of them an entitlement to the specific sum in the funds. Such an order operates in rem on the asset and gives to each of them a proprietary interest in that asset.

It has now been finally settled since Lam Chih Kian v Ong Chin Ngoh that moneys in the CPF account of a member, if accumulated during his marriage, form part of the matrimonial assets...

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