Tan Cheng Guan v Tan Hwee Lee

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 26 September 2011
• Neutral Citation: [2011] SGHC 216
• Court: High Court (Singapore)
• Hearing Date: 21 July 2011,23 August 2011,21 September 2011
• Docket Number: Divorce (T) No 1658 of 2008/C
• Plaintiff Counsel: Bernice Loo Ming Nee and Magdalene Sim (Allen & Gledhill LLP)
• Defendant Counsel: Irving Choh and Stephanie Looi Min Yi (RHT Law LLP)
• Subject Matter: Family Law,matrimonial assets,division,Whether inter-spousal gift is a matrimonial asset,maintenance,wife,child,custody
• Published date: 09 April 2013

Choo Han Teck J:

The plaintiff (husband) is a 55 year old Executive Vice-President at Sembcorp Industries Ltd and the defendant (wife) is 52 years old. She is a housewife. The parties married on 9 October 1982 and have two daughters, aged 23 and 21 years respectively. The children are pursuing their tertiary education in the United States. A decree nisi was granted on 6 May 2010. During the 28 year marriage, the husband was the sole breadwinner while the wife looked after the household and their children.

The parties own three properties: 32 Seletar Hills Drive Singapore 807047 (“32 SHD”), 34 Seletar Hills Drive Singapore 807049 (“34 SHD”) and 36E La Salle Street Singapore 454936. 32 SHD was the matrimonial home from 1981 to 1999, but from 1999 onwards, the parties resided at 34 SHD. When their relationship deteriorated, the wife claimed the husband gave her 32 SHD to persuade her not to end the marriage. It is this property which raises the issue of whether an inter-spousal gift forms part of the pool of assets liable for division. The parties’ claims are widely divergent. The husband wants 80% of 32 SHD, 90% of all the other assets and reimbursement for various items of expenditure. The wife has asked, inter alia, for the whole of 32 SHD, 80% of 34 SHD, 35% of the husband’s other assets and for her to retain the assets in her name. I shall deal first with 32 SHD. The wife has claimed that 32 SHD was a gift from the husband. Relying on the High Court decision in Wan Lai Cheng v Quek Seok Kee [2011] SGHC 9 (“Wan Lai Cheng”), her counsel submitted that 32 SHD should not form part of the matrimonial pool. By contrast, the husband asserted that 32 SHD is the matrimonial home and remained a matrimonial asset. He further submitted that his transfer of 90% share of 32 SHD to the wife was not an effective gift. In the alternative, even if it was a gift, it was still part of the matrimonial pool.

Section 112(1) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“WC”) defines a matrimonial asset as:

Power of court to order division of matrimonial assets

112. —(1)…

…

(10) In this section, “matrimonial asset” means — (a) any asset acquired before the marriage by one party or both parties to the marriage — (i) ordinarily used or enjoyed by both parties or one or more of their children while the parties are residing together for shelter or transportation or for household, education, recreational, social or aesthetic purposes; or (ii) which has been substantially improved during the marriage by the other party or by both parties to the marriage; and (b) any other asset of any nature acquired during the marriage by one party or both parties to the marriage,

but does not include any asset (not being a matrimonial home) that has been acquired by one party at any time by gift or inheritance and that has not been substantially improved during the marriage by the other party or by both parties to the marriage.

Generally, the process of dividing matrimonial assets has three stages: first, the pooling of the assets and the ascertainment of the value of the pool; second, deciding the “fair and equitable” division between the parties; and finally, making the actual division. In Wan Lai Cheng, the court took the view that inter-spousal gifts are not part of the matrimonial pool to be valued at the first stage. The wife also relied on Wong Ser Wan v Ng Cheong Ling [2006] 1 SLR(R) 416 (“Wong Ser Wan”) where the court explained why it did not consider the inter-spousal gift as part of the matrimonial pool at [75]:

… Here, the gifts made to the wife under the financial arrangement were made for the specific purpose of inducing the wife to act in a certain way. She did so. I think that it would be inequitable to allow the husband to retract these gifts now even though his financial circumstances may have changed for the worse…

I am, however, of the view that an inter-spousal gift, acquired by the donor other than as a gift or inheritance from a third party, remains a matrimonial asset. Although this may appear contrary to the intuitive notion that a gift is irrevocable, the concept of gift remains valid, but applies only at the third stage, when the Court decides how to give effect to the percentage division it has ordered, and not earlier. Giving effect to the gift at the third stage reconciles the law on matrimonial assets and the law of property on gifts. The Court should not exclude the inter-spousal gift from the matrimonial pool at the first stage because the qualifying words of s 112(10) only attaches to assets that were never part of the matrimonial pool to begin with. It does not apply to gifts which were purchased with a pre-existing matrimonial asset, such as a spouse’s salary. In the latter situation, only the identity of the asset changes. It does not lose its nature as a matrimonial asset. At the same time, considering the gift at the third stage enables the Court to give effect to the irrevocability of the inter-spousal gift. The most common way would be for the Court to order that the gift forms part of the percentage share awarded to the party. Two examples would be helpful to make my point clear: (a) At the first stage, the...