Hoong Khai Soon v Cheng Kwee Eng and another appeal

• Jurisdiction: Singapore
• Judge: Karthigesu J
• Judgment Date: 12 May 1993
• Neutral Citation: [1993] SGCA 36
• Docket Number: Civil Appeals Nos 18 and 31
• Date: 12 May 1993
• Published date: 19 September 2003
• Year: 1993
• Plaintiff Counsel: Richard YP Sam and Low Kuang Ting (Gupta Sam & Wijaya)
• Citation: [1993] SGCA 36
• Defendant Counsel: Tan Hee Liang (Tan See Swan & Co)
• Court: Court of Appeal (Singapore)
• Subject Matter: No substantial improvement of business,Division,Family Law,Business registered before marriage but income received after marriage not assets acquired during marriage,New property bought during marriage with proceeds of sale of property received as gift from family,Meaning,Source of funds for purchase should not be traced to its origin,Share in property apportioned,Assets available for division,s 106 Women's Charter (Cap 353),Fund vested in a third party out of which maintenance to wife would be paid,Whether available for distribution,Property used as fund must be capable of producing income,Maintenance,No direct contribution made by wife to business,Wife,Matrimonial assets,Secured maintenance

Cur Adv Vult

The facts

These appeals can be conveniently dealt with together as they arise out of the ancillary orders made in divorce proceedings between the parties. The divorce proceedings were commenced by the wife and the order nisi was granted on 23 May 1990 on the ground that the marriage had broken down irretrievably in that the parties had lived separate and apart from each other for a continuous period of at least four years.

In Civil Appeal No 18 of 1991, the husband appeals against the order that he transfer his undivided half share in the property known as No 1B Jalan Haji Salam, Singapore to the wife to be held solely as security for the payment of the maintenance of $1,500 ordered for her and the children.

Civil Appeal No 31 of 1991 is an appeal by the wife against the learned judge`s holding that the husband`s interests in Soon Heng Restaurant, a business owned by his family, and No 1B Jalan Haji Salam are not matrimonial assets available for division under s 106 of the Women`s Charter (Cap 353) (`the Act`).

The brief background to the appeals is as follows. The husband was born on 22 July 1951 and the wife on 25 December 1955. They were married on 13 February 1976 at the Registry of Marriages and they went through a Chinese customary marriage some months later. There are two boys from the marriage: Robin Hoong Ping Ming (`Robin`) born on 14 June 1977; and, Steven Hoong Ping Shyang (`Steven`) born on 11 October 1983. Custody of the children has been given to the wife.

Following the customary marriage, the couple lived with the husband`s family at No 7 Bedok Rise, Singapore for a period of four months before moving out to a rented flat. In January 1978, they moved back to No 7 Bedok Rise until the wife moved out in January 1983 and they have lived apart ever since then. Shortly after the separation, the husband left for England to pursue further studies and returned with a Masters degree in marine engineering from Newcastle University in March 1991. He continued to study for his doctorate while in Singapore but has not completed this course of study. The children lived with the wife during the time he was away.

The husband was a national serviceman at the time of the marriage. In January 1977, he started work with Neptune Orient Lines as a marine engineer. He resigned in January 1983 to pursue his studies abroad. His expenditures in England came to a total of around £46,000. On his return to Singapore, the husband started work at Singapore Shipbuilding & Engineering on 20 August 1990 at a salary of $2,750 per month. This figure does not include the fringe benefits such as medical benefits, a transportation allowance and a corporate credit card.

The wife has not been gainfully employed at any relevant time. While the parties lived at No 7 Bedok Rise, her husband gave her an occasional allowance of $300-$400. The wife`s sources of income after the commencement of the separation consisted largely, if not solely, of the maintenance payable by the husband by virtue of a court order dated 21 September 1983, as varied by a further order dated 25 April 1985. The sum payable was $800 per month in respect of the wife and the two children. During the period when the husband was away in England, the maintenance was paid by the husband`s family. By an interim court order (in the divorce proceedings) dated 26 July 1990, the amount of maintenance was increased to $1,000. Her other source of financial help has been her mother whom she helps out by working at her mother`s coffee shop. However, she is not in employment there and does not receive any remuneration in the form of a wage from her mother. The wife`s education level is up to Secondary Two.

Soon Heng Restaurant

It will be convenient for us to deal first with Civil Appeal No 31 of 1991 as that involves the more substantive of the questions before us. The material facts relating to the Soon Heng Restaurant are as follows. The business is a partnership which was registered on 1 August 1975 with the husband`s father and mother each having a one-third interest in the business. The remaining one-third interest was given by the husband`s parents to him but there is no question that it was always envisaged that he remained only a sleeping partner and this was borne out subsequently. The partnership commenced business in 1976, around the time of the marriage, and the husband received an income from it. In January 1983, he retired from the business but he continued to receive an income from the business as, on his own evidence, it was agreed between his parents and himself that his expenses in England would be paid out of such income. (In fact, the expenses in England were also covered in part by part of the proceeds of sale of No 7 Bedok Rise and this will be dealt with below.)

The learned judge`s principal grounds for holding that the husband`s interest in Soon Heng Restaurant was not available for distribution was that it was not acquired during the existence of the marriage and that the wife had not made any contribution to the restaurant. The learned judge also found that the reason for his retirement from the partnership in January 1983 was the separation and his parents` desire to reorganize, in view of the separation, the structure of what was in essence a business of the husband`s family. The learned judge rejected the suggestion that the true reason for the husband`s retirement was his imminent departure for England and also expressed the view that it was likely that the husband would be formally readmitted to the partnership after the resolution of these proceedings. It must be assumed from this finding that the husband has a present interest in the partnership despite his retirement in 1983 and counsel for the husband did not argue the appeal on the basis that there was no existing interest for the provisions of s 106 of the Act to bite on.

The wife`s counsel submits, if we understand his submissions correctly, that the learned judge was wrong to find that the husband`s interest was acquired before the marriage. He bases himself on the fact that the business only started in 1976 and did not pay any profits until 1977, after the marriage. We are not able to agree with counsel on this. It is important to distinguish between the husband`s interest in the capital of the partnership and his interest in the income. While it is certainly true that his interest in the income accrued during the marriage, that would only be relevant to an order for maintenance. It could also be relevant to a division of assets under s 106 if it were shown that the partnership accumulated some of the profits as capital or in reserve. However, there is no evidence of such a practice in this case. Here, the husband`s capital interest was certainly vested and must be taken to be fixed, before the marriage, at the date of the registration of the partnership. We therefore see no reason to interfere with the learned judge`s holding on this aspect.

The wife then contends that she has nevertheless contributed to the substantial improvement of the business during the marriage. She claims that such contributions came in the form of her doing all the domestic chores at No 7 Bedok Rise and looking after the husband`s family at the family`s request following her husband`s father`s heart attack. She also helped out as a cashier in another coffee shop owned by the husband`s father. The learned judge rejected these contributions as irrelevant for the purposes of s 106(5) of the Act as they were not direct contributions to the business. Section 106(5) provides:

For the purposes of this section, references to assets acquired during a marriage include assets owned before the marriage by one party which have been substantially improved during the marriage by the other party or by their joint efforts.

It is plain that the efforts which bring the asset, ie the partnership interest acquired before the marriage within s 106 must bear a direct causal link to the substantial improvement of the asset. The question is one of fact. There has been no evidence to show that the wife`s efforts at domestic chores and as a cashier at an unrelated business contributed to an increase in the profits of Soon Heng Restaurant. Counsel for the wife asks us to infer such a causal link but, in our view, there is no reasonable basis to draw such a link. This was not a case where a spouse`s efforts in the home frees the other spouse to devote his or her energies to the running of a business. Here, the husband took no...