TIC v TID

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JA
• Judgment Date: 08 November 2018
• Neutral Citation: [2018] SGCA 75
• Date: 08 November 2018
• Docket Number: Civil Appeal No 183 of 2017
• Published date: 13 November 2018
• Plaintiff Counsel: Appellant in person
• Defendant Counsel: Walter Ferix Silvester and Sara Binte Abdul Aziz (Silvester Legal LLC)
• Court: Court of Appeal (Singapore)
• Hearing Date: 02 October 2018
• Subject Matter: Family law,Payment of ongoing liabilities pending transfer to one party,Matrimonial home

Andrew Phang Boon Leong JA (delivering the judgment of the court): Introduction

This appeal examines the situation of parties to divorce proceedings in which one party is given the option of taking over the other party’s share of the matrimonial property upon the payment of a sum of money to him or her. The primary question before us is whether the party who is to take over the matrimonial property should bear its ongoing liabilities during the interim period between the date of the order and the date of completion of the transfer.

The parties before the court are parties to divorce proceedings. The District Judge in the family court had determined the ancillary matters, including the division of matrimonial assets, on 10 September 2015. The District Judge apportioned the net equity in the property in a 59:41 ratio in favour of the Wife and gave the Wife the option of taking over the Husband’s share of the property upon payment of a fixed sum of $381,000. This sum was the value of the Husband’s share of the property based on the value of $1.8m after deducting the outstanding mortgage of the property. The transfer was to be completed within three months from the date of the certificate making interim judgment final, failing which the property was to be sold within nine months of the date of final judgment and the proceeds divided between the parties in accordance with their net equity in the property.

The Wife appealed to the High Court. The High Court judge (“the Judge”), in an order dated 19 December 2016, made the following variations to the District Judge’s order of 10 September 2015. The net equity of the property was to be calculated using a valuation of $1.78m, which was the valuation of an independent valuer that the parties had later agreed to use, rather than $1.8m. The ratio of 59:41 of the net equity of the property in favour of the Wife was varied to a ratio of 58:42 in favour of the Wife, meaning that if she wanted to take over the Husband’s share of the property, she now had to pay the Husband a fixed sum of $377,684.

In so far as the option to take over the property was concerned, the timelines set by the District Judge were affirmed.

Subsequently, both parties applied to the High Court to determine the issue as to which party should bear the ongoing liabilities of the property in the interim period between the date of the order and the eventual date of the transfer. The Judge heard the parties on 21 June 2017 and ordered that they bear the ongoing liabilities in their respective proportions of the net equity of the property. However, after hearing further arguments from the Husband on 27 June and 31 August 2017, during which the Wife confirmed that she wanted to take over the Husband’s share of the property, the Judge revised her initial order. The new order was that the Wife was to be solely liable for these ongoing liabilities, which the parties agreed was a sum of $30,246.48 (see TIC v TID [2017] SGHCF 30 (“the GD”) at [16]). The Judge reasoned that since the Wife would be the eventual owner of the property, she would bear the risk of any rise or fall in the value of the property during the interim period between the date of the order and the date of completion; further, any mortgage payments made during this period would also benefit her alone. Thus, it was only “fair and logical” that the Wife should bear the ongoing liabilities (see the GD at [18]).

The Judge emphasised that this reasoning only applied where there was no specific court order and that it was open to a court to tailor an order based on the particular circumstances of the case. In this case, however, there were no special circumstances that warranted a departure from the norm (see the GD at [20]).

In this appeal, the Wife appeals against the Judge’s order that she should bear the ongoing liabilities solely and seeks an order that the parties bear the liabilities in their respective proportions of their net equity of the property. She also argues that the date from which the parties should bear the said liabilities should not be 10 September 2015, which was the date of the District Judge’s order that was subsequently varied by the Judge. In her submission, the use of this date unduly penalises her, given that the Judge had taken a long time to resolve the appeals, which included asking the parties for further information that was not initially provided to the court.

After considering the parties’ written and oral submissions, we now give our decision. We shall first deal with the issue of whether the Wife should bear the ongoing liabilities during the interim period before turning to the issue of the date from which these liabilities should be borne.

Whether the Wife should bear the ongoing liabilities solely

We agree with the Judge that the Wife, who had confirmed that she wanted to take over the Husband’s share of the property, should bear its ongoing liabilities solely during the interim period between the date of the court order and the date of completion. In our judgment, however, there is a need to distinguish between mortgage payments and other payments, such as the payment of property taxes, because they attract different considerations. In the present case, since the sum of $30,246.48 comprises mortgage payments and property tax payments (see the GD at [16]), we consider each in turn.

Mortgage payments

In our judgment, the key factor in relation to mortgage payments is that the eventual owner of the property (here, the Wife) is the sole beneficiary of any payments made towards the outstanding mortgage during the period between the date of the court order and the date of completion. It is thus fair that the eventual owner bears the payments during the interim period.

To illustrate the point, we refer to the net equity of the property in the present case. At the date of the court order, which was 10 September 2015, the net equity of the property was $909,336, which was derived by taking the market value of the property ($1.78m) less the outstanding mortgage of the property ($870,664) (see the GD at [8]). By the date of completion, the outstanding mortgage would have been less than $870,664 because the parties would have been servicing the mortgage payments during this period. This means, all other things being equal, that the net equity of the property would be more than $909,336. This increase in the net equity of the property, however, benefits only the Wife and not the Husband. This is because the fixed sum to be paid to the Husband, which was calculated based on the net equity of $909,336, was not adjusted to correspond to the new, higher net equity of the property. Thus, it is only fair that the mortgage payments, which resulted in the increase in the net equity of the property, be borne by the Wife.

Against this, the Wife submits that she has not actually obtained any benefit in the present case because the value of the property has fallen from $1.78m to $1.73m (based on a valuation report obtained by the Wife dated 11 May 2017). We do not accept this argument. Even if the value of the property had fallen by the date of completion, this was a risk that the Wife had agreed to assume by taking up the option to purchase the Husband’s share of the property. She would have known, or should be taken to have known, that there was no guarantee that the property would remain the same or rise; indeed, there was a real chance that the value of the property would fall. Furthermore, even if the absolute amount of profit eventually received by Wife is less than that anticipated at the date of the order due to the fluctuating value of the property in the market, this does not change the fact that the Wife is the only party who would benefit from the mortgage payments during...