Lian Hwee Choo Phebe v Tan Seng Ong

• Jurisdiction: Singapore
• Judgment Date: 03 July 2013
• Date: 03 July 2013
• Docket Number: Civil Appeal No 136 of 2012
• Court: Court of Appeal (Singapore)

Lian Hwee Choo Phebe

Plaintiff

and

Tan Seng Ong

Defendant

[2013] SGCA 37

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

Judith Prakash J

Civil Appeal No 136 of 2012

Court of Appeal

Family Law—Husband and wife—Agreements between—Reorganisation of legal ownership of matrimonial assets with husband and wife conducting financial affairs separately thereafter—Whether foregoing constituting agreement between parties with respect to ownership and division of matrimonial assets made in contemplation of divorce—Section 112 (2) (e) Women's Charter (Cap 353, 2009 Rev Ed)

The parties married in August 1974, and had four adult children. In December 2010, the wife commenced divorce proceedings. The husband consented to interim judgment in April 2011. In the course of the ancillary matters consequent upon their divorce, a preliminary issue arose. This was whether the parties had come to an agreement on the matrimonial assets that could be categorised as one ‘made in contemplation of divorce’ within the meaning of s 112 (2) (e) of the Women's Charter (Cap 353, 2009 Rev Ed) (‘the Charter’).

In the early years of the marriage, the parties were involved in the purchase and on-sale of real estate for profit. In November 1982, a tract of land was sold for a profit of about four million dollars (‘the sale’). As the parties were then joint owners of a Housing and Development flat, regulations forbade them from further purchases of private property in their own names. The parties (using the profit from the sale) subsequently went on to purchase several other private properties in the names of the wife's mother and sister, to be held on trust for them (‘the Properties’). The parties also acquired a property in London which was placed in the wife's name only. In January 1984, the Inland Revenue Authority of Singapore enquired into the sale. As the land was held in the wife's name, she would have been fully liable for income tax at a rate of approximately 33.3% if the profits earned on the sale were liable to be taxed as income. The wife alleged that she received no assurances from the husband that he would contribute his share of the tax and there had been substantial withdrawals from a bank account jointly held with the husband. The wife was therefore concerned about her ability to pay the outstanding taxes.

It was at around this time that the wife discovered that the husband had had an affair. The wife, in anger, unilaterally cancelled a line of credit, which detrimentally affected the husband's property development business. The wife, with their three children (the fourth had not been born at the time), left the matrimonial home with the intention of relocating to London. The husband successfully obtained an injunction preventing the wife from leaving Singapore with the children, and also lodged caveats against the Properties. On 19 November 1985, the parties with their respective solicitors met in an attempt to resolve the impasse. The meeting was documented in a letter dated 22 November 1985, which stated that ‘the following matters were discussed and agreed upon at the meeting’. Several matters were referred to, amongst them the transfer of the legal ownership of the Properties, the payment of tax liabilities, and custody of and access to the children. The wife and the children returned to the matrimonial home on 23 November 1985. She left the matrimonial home again in July 1986, but she returned shortly thereafter. The parties then continued living together for more than 20 years, and had their fourth child in 1991. Despite their apparent reconciliation, the parties had after 1985 conducted their financial affairs separately (by not pooling their assets and by conducting their own independent property development businesses). The husband contended that this separation of financial affairs, coupled with the transfers of legal ownership of three properties in 1987, constituted an agreement within the meaning of s 112 (2) (e) of the Charter.

Held, allowing the appeal:

(1) To determine whether an agreement of the type specified in s 112 (2) (e) of the Charter existed, two elements had to be met: first, there had to have been an agreement with respect to the ownership and division of matrimonial assets; and second, the aforesaid agreement had to have been ‘made in contemplation of divorce’: at [17] .

(2) There were two types of agreement within the meaning of s 112 (2) (e) of the Charter: first, if an agreement was entered into for the purpose of dividing the assets in the context of a specifically contemplated divorce, that would be an agreement within the meaning of s 112 (2) (e) for the purpose of that divorce; but, if for some reason the divorce did not ensue at that time and the parties reconciled and carried on, then that agreement could have no relevance in the event of a later divorce. Second, if an agreement was a definitive one for the division of assets in the event of a divorce (whenever that might happen and even though it might not be specifically envisaged at the time of the agreement (as was the case in a prenuptial agreement) ), the evidence had to show that the agreement was intended to have such an effect. If such intention was proven, then that agreement would be admissible under s 112 (2) (e) : at [21] .

(3) The necessary intention might be explicitly stated in a written agreement by the parties or be clearly inferable from the language of such agreement. An express clause stating that the agreement pertaining to the division of matrimonial assets was to be binding upon divorce would generally be sufficient to prove the requisite intention. The requisite intention was to be objectively ascertained: at [22] .

(4) Where there was no written document and no clear evidence of parties having verbally concluded an agreement, an agreement falling within s 112 (2) (e) of the Charter might nevertheless be implied if two hurdles were crossed. First, the burden of proof lay on the party alleging the existence of the agreement. Clear and cogent proof inexorably pointing towards consensus ad idem and an intention to create legal relations was required because of the fundamental proposition that contracts should not be lightly implied. Second, the agreement had to have been intended to exhaustively govern the post-divorce allocation of matrimonial assets. Due to these hurdles, it would be extremely unlikely for a court to find that an agreement intended to exhaustively govern the post-divorce allocation of matrimonial assets ought to be implied from the behaviour of spouses: at [29] and [30] .

(5) In this case, amongst other things, the contemporaneous documentary evidence did not support the argument that the agreement between the parties was made in contemplation of divorce. Taken as a whole, the evidence showed that the parties did not have any intention for their agreement to exhaustively govern any post-divorce allocation of matrimonial assets: at [31] and [33] .

[Observation: It bore mention that if in any particular divorce proceedings it was established that an agreement falling within s 12 (2) (e) of the Charter exists, that agreement was only one of the factors the court would have to consider when deciding how the matrimonial assets were divided. Depending on the circumstances, this might not be the main factor in the division: at [16] .

An agreement on the disposition of property in the event of divorce did not, stricto sensu, oust the jurisdiction of the court because the court granted its imprimatur to such agreements, which were not enforced directly ex debito justitiae but indirectly via s 112. Nevertheless, a stringent standard was required because the parties were in effect inviting the courts to place some weight on such agreements, and courts could afford significant or even conclusive weight to such agreements. The courts had to thus ensure that the parties had truly intended for the agreement to be binding in the event of a divorce: at [26] .]

Aircharter World Pte Ltd v Kontena Nasional Bhd [1999] 2 SLR (R) 440; [1999] 3 SLR 1 (folld)

Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 (folld)

Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Singapore Branch v Motorola Electronics Pte Ltd [2011] 2 SLR 63 (distd)

Foo Jong Peng v Phua Kiah Mai [2012] 4 SLR 1267 (refd)

TQ v TR [2009] 2 SLR (R) 961; [2009] 2 SLR 961 (folld)

Wan Lai Cheng v Quek Seow Kee [2012] 4 SLR 405 (folld)

Wong Kam Fong Anne v Ang Ann Liang [1992] 3 SLR (R) 902; [1993] 2 SLR 192 (refd)

Wong Kien Keong v Khoo Hoon Eng [2012] SGHC 127 (folld)

Wong Ser Wan v Ng Cheong Ling [2006] 1 SLR (R) 416; [2006] 1 SLR 416 (refd)

Women's Charter (Cap 353, 1997 Rev Ed) s 112

Women's Charter (Cap 353, 2009 Rev Ed) s 112 (2) (e) (consd) ;s 112

Narayanan Sreenivasan SC, Stuart Andrew Palmer and Judy Ang Pei Xia (Straits Law Practice LLC) for the appellant

Lim Kheng Yan Molly SC, Koh Sunanda Swee Hiong and Lim Rui Cong Roy (Wong Tan & Molly Lim LLC) for the respondent.

Judgment reserved.

Judith Prakash J

(delivering the judgment of the court) :

Introduction

1 The appellant and respondent in this appeal were formerly wife and husband respectively. In the course of the ancillary matters consequent upon their divorce, a preliminary question arose. This was determined by the judge dealing with the ancillary matters (‘the Judge’) after the parties were cross-examined on their affidavits. The determination led to the sole issue in this appeal, namely, whether the parties had come to an agreement on the matrimonial assets that could be categorised as one ‘made in contemplation of divorce’ within the meaning of s 112 (2) (e) of the Women's Charter (Cap 353, 2009 Rev Ed) (‘the Charter’).

2 At first instance, the Judge essentially held that such an agreement could be implied from all the relevant circumstances. The wife appealed against this...