Lee Yong Chuan Edwin v Tan Soan Lian

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 05 December 2000
• Neutral Citation: [2000] SGCA 68
• Docket Number: Civil Appeal No 39 of 2000
• Date: 05 December 2000
• Year: 2000
• Published date: 19 September 2003
• Plaintiff Counsel: Harry Elias SC and Yeo Yen Ping (Harry Elias Partnership)
• Citation: [2000] SGCA 68
• Defendant Counsel: Raj Singam and Edmund Kronenburg (Drew & Napier)
• Court: Court of Appeal (Singapore)
• Subject Matter: Value of wife's share in matrimonial home,Divorce,Gift of shares received prior to marriage,Original shares exchanged for new shares following amalgamations -Whether new shares part of matrimonial assets,Whether husband can object to use of valuation report by district court in appeal to Court of Appeal,Family Law,Division of matrimonial assets,Whether lump sum maintenance order appropriate,Division of matrimonial home,Maintenance

: This is an appeal concerning the division of matrimonial assets following the divorce of the appellant and the respondent. The appellant contended that Kan Ting Chiu J, who heard the parties` respective appeals against the decision of District Judge Khoo Oon Soo, erred on three counts. The first concerned the amount which the appellant was required to pay the respondent for her share of their matrimonial home. The second concerned the quantum of the lump sum maintenance payable by the appellant to the respondent. The third concerned Kan J`s ruling that the appellant`s shares in two companies, which were received in exchange for shares given to him by his grandparents and father before and after his marriage to the respondent, formed part of the matrimonial assets available for division between the parties.

Background

The appellant married the respondent on 4 July 1980. The appellant and the respondent have two children. Their first child, their only son, was born in September 1981 and their second child, their only daughter, was born in January 1984.

Throughout the marriage, the appellant worked in his family`s group of companies. He was a director of many of the companies within the group, and was an executive director of the public-listed Lee Kim Tah Holdings Ltd. The respondent was a full-time housewife, who took charge of the household and the welfare of their children.

The parties` marriage broke down after almost 12 years. On 1 July 1992, the parties entered into a deed of separation, following which the husband [appellant] moved out of their then matrimonial home. On 14 March 1997, the respondent filed a petition for divorce against the appellant on the ground that the marriage had broken down irretrievably, in that the couple had been separated for at least three years. The petition was not opposed. A decree nisi was granted on 3 June 1997. At an ancillary hearing which followed, the respondent was awarded sole custody, care and control of the two children, with reasonable access to the husband.

The district judge`s decision

The hearing on the remaining ancillary matters took place subsequently before District Judge Khoo Oon Soo, who gave his decision on 7 May 1999.

The district judge`s first order, which concerned the matrimonial home of the parties, was as follows:

45% of the value of Astrid Meadows (45% of $4,380,000 [equals] $1,971,000) (round up - $2m).

If sale, respondent to make his own refunds to CPF, to pay outstanding mortgage fees and expenses relating to sale.

As for the question of maintenance, the district judge awarded the respondent a lump sum of $960,000. The lump sum was calculated on the basis of a monthly maintenance of $8,000 over a period of ten years.

As for the parties` other matrimonial assets, the district judge held that the respondent was entitled to 25% of the value of these assets. He also ruled that the appellant`s shares in two companies, Lee Kim Tah Holdings Limited (hereinafter referred to as `LKTH`) and Lee Kim Tah Investments Pte Ltd (hereinafter referred to as `LKTI`) were to be excluded from the pool of matrimonial assets available for division between the parties.

Whether or not the LKTH and LKTI shares formed part of the matrimonial assets was a hotly contested issue in the courts below and in this court. As such, the history of these shares ought to be considered at this juncture. Between 1977 to 1982, the appellant`s grandparents and father gave him a substantial number of shares in three companies within the Lee Kim Tah group of companies. The shares were as follows:

(a) 10,407 shares in Lee Realty (Pte) Ltd

(b) 278,285 shares in Lee Development (Pte) Ltd

(c) 28,000 shares in Lee Kim Tah (Pte) Ltd.

In August 1982, two years after the parties were married, the Lee Kim Tah group of companies underwent an amalgamation exercise. As a result of this exercise, all the shareholders of Lee Realty (Pte) Ltd, Lee Development Pte Ltd and Lee Kim Tah (Pte) Ltd transferred their shares to LKTH in exchange for shares of the same value. The purpose of the exchange of shares was to make LKTH the holding company of Lee Realty (Pte) Ltd, Lee Development Pte Ltd and Lee Kim Tah (Pte) Ltd, so that LKTH could be listed on the board of the Singapore Stock Exchange. As the transfers and exchange of shares were made pursuant to a scheme of amalgamation, no ad volarem stamp duty was payable. At the time of the hearing, the appellant owned 1,800,000 shares in LKTH.

In June 1984, some four years after the marriage of the parties, the shareholders of LKTH transferred a portion of their shares in exchange for shares of equivalent value in LKTI. This was also done pursuant to an amalgamation scheme, which was intended to ensure that the Lee family continued to have collective control over LKTH after its public listing, which took place in July 1984. Again, no ad volarem stamp duty was payable as the transfer and exchange of shares were made pursuant to a scheme of amalgamation. At the time of the hearing, the appellant had 3,606,279 shares in LKTI.

The appellant contended that the restructuring of his family companies did not alter the nature of the original gifts given to him by his grandparents and father. This argument was accepted by the district judge, who ruled that the appellant`s LKTH shares and LKTI shares, which were valued at $4,956,279 in April 1999, were not to be included in the pool of assets to be divided between the parties.

The appeal to the high court

Both parties appealed to the High Court on varying grounds. Although neither party appealed against the order relating to the division of the matrimonial home, Kan J, who heard the appeal, decided to alter the wording of the district judge`s order so as to `reflect its effect more succinctly`. The redrafted order provided as follows:

The [respondent] is to receive $2m as her share of the property at Block 48 Henley Court [num ]06-04 Astrid Meadows, Coronation Road West, Singapore 269263.

The judge further ordered the appellant to pay the $2m to the respondent within three months from the date of the redrafted order.

As for the question of maintenance for the respondent, the judge upheld the district judge`s order that a lump sum payment of $960,000 be made by the appellant.

With respect to the appellant`s shares in LKTH and LKTI, the judge allowed the wife`s appeal and reversed the district judge`s finding that the said shares were not matrimonial assets. His Honour noted that the shares which had been given to the appellant by his grandparents and father had been exchanged for shares in LKTH and LKTI and said:

The husband argued that the LKTH and LKTI shares are not matrimonial assets under s 112(10) [of the Women`s Charter], but I disagreed with him. The gift in the original companies were no longer in existence at the time of division. He had accepted the offer to exchange them for new shares. The new shares did not come from the donors and were not gifts received in the course of amalgamation.

The present appeal

The appellant, who was dissatisfied with the judgment of Kan J, appealed against his decision. His counsel asserted the following:

(a) The judge erred when he ordered the appellant to pay the respondent $2m for her share of the matrimonial home at Astrid Meadows.

(b) The judge erred when he upheld the district judge`s award of a lump sum payment of $960,000 to the respondent as maintenance.

(c) The judge erred when he overruled the district judge`s ruling that the appellants` shares in LKTH and LKTI be excluded from the pool of matrimonial assets available for division between the parties.

The matrimonial home at Astrid Meadows

The reason for the appeal concerning the matrimonial home at Astrid Meadows is simple. The district judge awarded the respondent $2m for her share of the matrimonial home on the basis that the property was worth $4.38m, a value ascribed to it by M/s Edmund Tie & Company in their valuation report dated 24 October 1997. The sum awarded is approximately 45% of $4.38m. As it turned out, the property was finally sold for $3.5m. The appellant pointed out that if he was...