Saseedaran Nair s/o Krishnan (now known as K Saseedaran Nair) v Nalini d/o K N Ramachandran (Mrs Saseedaran Nair)

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 16 January 2012
• Neutral Citation: [2012] SGCA 5
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 84 of 2010
• Year: 2012
• Published date: 25 January 2012
• Hearing Date: 18 October 2011
• Plaintiff Counsel: Mr K Mathialahan (Guna & Associates)
• Defendant Counsel: Mr Krishna Morthy SV (SK Kumar & Associates)
• Subject Matter: Family Law
• Citation: [2012] SGCA 5

Chao Hick Tin JA (delivering the grounds of decision of the court): Introduction

This was an appeal against the decision of the judge (“the Judge”) in Nalini d/o Ramachandran v Saseedaran Nair s/o Krishnan [2010] SGHC 98 that: (a) the appellant, Saseedaran Nair s/o Krishnan (now known as K Saseedaran Nair) (“the Husband”), was not solely entitled to the payout of $172,740.30 (“the HPIS Payout”) under the Home Protection Insurance Scheme (“HPIS”); and (b) that the HPIS Payout, which pertained to the matrimonial home (“the Property”), was to be divided between the parties in accordance with the ancillary order made, and not deducted in calculating the net worth of the matrimonial home.

The object of the HPIS and the manner of its operation are described in [4] and [9] below. At the conclusion of the hearing, we dismissed the Husband’s appeal. We now give our reasons.

Facts

The Husband was married to the respondent, Nalini d/o K N Ramachandran (“the Wife”) for 17 years, and the parties have two children aged 15 and 13 respectively. On 22 November 2006, the Wife filed a writ for divorce on the ground of four years’ separation. On 27 February 2007, an interim judgment dissolving the marriage was made. On 22 January 2008, the parties settled all ancillary matters at mediation before a district judge and a consent order (“Consent Order”) was made accordingly. Paragraph 5(5) of the Consent Order relating to the division of the Property, a Housing and Development Board (“HDB”) flat, provided, inter alia, that the Property should be sold in the open market, and that the net sale proceeds should be divided in the proportion of 60% to the Wife and 40% to the Husband. As at the date of the Consent Order, there was an outstanding mortgage loan on the Property of approximately $170,000.

Between September 2007 and February 2008, the Husband sought medical attention for his visual problems. On 13 February 2008 (after the Consent Order was made), his doctor at the National University Hospital confirmed in writing that he was suffering from Leber Hereditary Optic Neuropathy, a condition which left him with very poor vision in both eyes. At the time the Property was purchased, the Husband had taken up the HPIS established pursuant to s 29 of the Central Provident Fund Act (Cap 36, 2001 Rev Ed) (“CPF Act”). The HPIS provided that in the event of the Husband’s death or disability, his outstanding liability to repay the housing loan shall be discharged by the Central Provident Fund (“CPF”). As such, on 15 July 2008, the Husband applied to the CPF Board for a payout due to his disability. On 16 December 2008, he was certified to be legally blind. On 26 December 2008, pursuant to the HPIS, the CPF Board paid a sum of $172,740.30 directly to the HDB to fully discharge the outstanding mortgage loan on the Property.

The decisions below

On 18 June 2009, the Wife filed an application to enforce para 5(5) of the Consent Order (see above at para 3), viz, that she have sole conduct of the sale of the Property and that the Husband should, inter alia, vacate the Property within one month of the date of Consent Order. On 10 September 2009, the Husband applied for a variation of the Consent Order, so that he would be solely entitled to the HPIS Payout. He further applied for a variation to the Consent Order requiring the Wife to transfer her interest in the flat to him, after which he would pay the Wife a sum being 60% of the net value of the flat after deducting, inter alia, the HPIS Payout. In other words, the Husband sought to claim that he was solely entitled to the benefit of the HPIS Payout. After hearing both applications together, the district judge (“DJ”) dismissed the Wife’s application and varied the Consent Order. The DJ ordered that the Wifetransfer her title to the flat to the Husband, and that the Husband pay the Wife 60% of the net value of the flat without taking into account the fact that, pursuant to the HPIS Payout, the outstanding mortgage on the Property had been redeemed (ie, the 60% share of the matrimonial home due to the Wife would be on the basis as if the outstanding loan on the Property had not been repaid by the HPIS Payout).

The Wife appealed against the DJ’s decision. On appeal, the Judge varied the DJ”s order and held that: (i) the Husband was not solely entitled to the HPIS Payout; and (ii) that the HPIS Payout was not to be deducted for the purposes of calculating the net value of the Property for division between the parties. The Husband appealed against this variation made by the Judge.

Whether the HPIS Payout should be attributed solely to the insured party, such that it should be deducted from the sale proceeds before computing the parties’ respective shares in the matrimonial home

We found that the Judge was correct in holding that the HPIS Payout was not for the sole benefit of the insured party (here the Husband), such that it should not be deducted from the sale proceeds before determining the net worth of the Property and in turn, the parties’ respective shares in it.

First, the character of the HPIS, as revealed by both the legislative intent and the mechanics of its operation, clearly indicates that a payout under the HPIS pertains to the insured CPF member’s property rather than to the insured CPF member. The HPIS is a mortgage-reducing policy that is specifically targeted at protecting the family home. This was expressly articulated in the course of parliamentary debates by the then Minister for Communications and Minister for Labour, Mr Ong Teng Cheong, when the HPIS was introduced (Singapore Parliamentary Debates, Official Report (6 March 1981) vol 40 at cols 324-325):

The Ministry has found that a large majority of CPF members who are using their CPF moneys to repay the mortgages on their flats are not covered by any mortgage reducing insurance policy... Therefore, the establishment of the [HPIS] by the CPF Board would meet a need which insurance companies have failed to meet.

It is clear that the purpose of the HPIS is to reduce the mortgage outstanding on the property, not to compensate the insured for his incapacity (here, the blindness of the Husband). A payout under the HPIS is not personal in nature, thereby...