UMU v UMT and another appeal

• Jurisdiction: Singapore
• Judge: Debbie Ong J
• Judgment Date: 12 November 2018
• Neutral Citation: [2018] SGHCF 16
• Plaintiff Counsel: Lee Ee Yang and Wilbur Lua (Covenant Chambers LLC)
• Docket Number: HCF/DCA No 170 of 2017 and HCF/DCA No 34 of 2018
• Date: 12 November 2018
• Hearing Date: 15 October 2018,24 October 2018
• Subject Matter: Damages for pain and suffering,Family Law,Division,Matrimonial assets,Maintenance,Child
• Published date: 20 November 2018
• Defendant Counsel: Seenivasan Lalita and Isabel Chew Maggie (Virginia Quek Lalita & Partners)
• Court: High Court (Singapore)
• Citation: [2018] SGHCF 16
• Year: 2018

Debbie Ong J:

These were appeals against orders on ancillary matters made by a District Judge (“the DJ”). The appellant in HCF/DCA 170/2017, who was the respondent in HCF/DCA 34/2018, shall be referred to as the “Wife”. The appellant in HCF/DCA 34/2018, who was the respondent in HCF/DCA 170/2017, shall be referred to as the “Husband”. The only issues in dispute were the division of assets and maintenance for the parties’ three children: “P”, “Q” and “R”, who were 22, 19 and 13 years old respectively.

Division of assets Compensation moneys

The Husband was unfortunately involved in a road traffic accident in April 2012 and suffered serious injuries. A consent order was recorded in his favour for the sum of $520,000, comprising $425,000 for general damages, $75,000 for special damages and $20,000 for interest (“the Consent Order”). Of this sum, he had received $433,828.94, after payment of costs to solicitors (“the Compensation”).

A key dispute in this appeal was whether the Compensation is a matrimonial asset (“MA”). The DJ held that the Compensation received by the Husband is a MA but did not include the entire sum of the Compensation in the pool of MAs. She included sums received for special damages (medical expenses, past loss of earnings, damage to motorcycle and surveyors’ fees) in the pool; it was noted that the expenses in respect of these had been paid from parties’ assets. She also included damages for the Husband’s pain and suffering, noting that the Wife had taken care of him and attended to his needs. However, she did not include the sum awarded for future medical expenses (as the Wife accepted that this should not be included) and the sum for future loss of earnings (as “it would be more appropriate to take this into account as part of [the Husband]’s means for the issue of maintenance instead of division of assets”). On a pro rata basis, the DJ thus included $149,237.20 in the pool of MAs.

The Wife argued as a preliminary point that the DJ should have assessed the Compensation as $450,722.17 instead of $433,828.94, because the sum of $16,893.23 was paid to the Husband’s solicitors in relation to the maintenance proceedings taken out by the Wife against the Husband as well as the parties’ divorce proceedings, and was not related to the personal injury suit. The Husband submitted that this expense was legitimately incurred as “actions would have been commenced against him” if he had not paid. As the sum of $16,893.23 was legal costs incurred by the Husband in proceedings unrelated to his personal injury claim, there was no reason for this sum to be deducted from the compensation he received. Thus, the Compensation should be valued at $450,722.17.

The Wife argued that the entire Compensation, except the sum for the Husband’s future medical expenses, should be included in the pool of MAs for division. She submitted that the DJ was wrong to break it down into various components, because parties had settled on a global basis and there was no agreed breakdown. The Wife submitted that the Compensation is a quintessential matrimonial asset as it was acquired by the personal effort of the Husband, ie, effort in litigating, negotiating and settling. She also argued that the DJ was wrong to exclude the sum awarded for the Husband’s future earnings from the pool, because the entire sum had been dispensed and was already available to the Husband without being contingent on any future event happening.

The Husband submitted that the entire Compensation should be excluded from the pool of MAs because it was paid to him to compensate for his loss as a result of the traffic accident. It was therefore personal to him as it was not acquired through the efforts of either party.

A good starting point in understanding the context within which this issue arises is in the Court of Appeal’s decision of NK v NL [2007] 3 SLR(R) 743 at [20]:

… The division of matrimonial assets under the [Women’s Charter] is founded on the prevailing ideology of marriage as an equal co-operative partnership of efforts. The contributions of both spouses are equally recognised whether he or she concentrates on the economics or homemaking role, as both roles must be performed equally well if the marriage is to flourish. When the marriage breaks up, these contributions are translated into economic assets in the distribution according to s 112(2) of the [Women’s Charter]. … [emphasis added]

The definition of a matrimonial asset in s 112(10) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“the Charter”) focuses on two key features: first, it is an asset acquired by effort and not by gift or inheritance, and second, it is an asset acquired during marriage or has a connection to the efforts of the spouses during marriage. Assets with these two characteristics have been described as “quintessential matrimonial assets”: see Leong Wai Kum, Elements of Family Law in Singapore (LexisNexis, 3rd Ed, 2018) (“Family Law”) at para 16.041; TNC v TND [2016] 3 SLR 1172 at [40]; TND v TNC [2017] SGCA 34 at [9]. Assets which do not have these characteristics may be “transformed” into matrimonial assets if they were ordinarily used or enjoyed by parties, constituted the matrimonial home or were substantially improved by the efforts of the parties during the marriage: see s 112(10) of the Charter.

I note that compensation for tortious wrongdoing aims to restore a person to a position that he or she would have been in had the wrong not been committed against him or her. Compensation for pain and suffering are not assets acquired by the efforts of a spouse during marriage. I did not accept the Wife’s submission that litigating and negotiating for a settlement amount to “effort” in this context. Such an interpretation would be highly artificial, because the Husband’s entitlement to the Compensation arose not from litigation per se, but from him being the victim of a tort.

An analogy was made to lottery winnings in the submissions. In Ng Sylvia v Oon Choon Huat Peter and another [2002] 1 SLR(R) 246, the High Court held that a property purchased with lottery winnings could be included in the pool of MAs for division. Professor Leong in Family Law at paras 16.062– 16.063 commented on this decision: [16.062] … A property acquired as a windfall presents challenges to inclusion as matrimonial asset. The Women’s Charter section 112(10) does exclude “any asset … that has been acquired by one party … by gift or inheritance” from “any … asset of any nature acquired … during the marriage” as matrimonial asset. It is possible to argue that a purposive reading of “gift or inheritance” would also include, by analogy, property acquired by other sorts of windfall including lottery winnings. [16.063] … The point that lottery winnings may be equated with “gift or inheritance” was not argued before the Judge. The author suggests that the decision is supportable. If one bears in mind that matrimonial assets are the material gains of the marital partnership it is not necessary to exclude the entire of property acquired by windfall. … If marriage is truly an equal co-operative partnership of different efforts for the spouses’ mutual benefit, why should they not share their good fortune?

Thus lottery winnings already present challenges to their inclusion as MAs despite the possible connection between lottery winnings and the key characteristics of MAs (see [8] above). It could be argued that some utilisation of effort and matrimonial funds for the purchase of lottery tickets arise in the acquisition of lottery winnings. On the other hand, there is no element of effort in respect of damages received as compensation for the victim of a tort for his personal suffering. Lottery winnings could also be said to be part of the good fortune to be shared by both spouses in a marital partnership, while tortious damages are personal to the injured spouse.

Some components of compensation, such as lost earnings due to the accident prior to the divorce, may be considered assets acquired as they are intended as compensation for the income the spouse would have expended effort to acquire had he or she not been injured. Such income would have been earned if the accident had not occurred, and would be subject to division. Special damages such as hospital and transport expenses do not raise any issue in this context as any sums paid would be to reimburse the injured party for expenses actually incurred.

The DJ’s decision is largely in line with these positions except for her decision to include the sum awarded for the Husband’s pain and suffering in the pool of MAs. The DJ noted that the Wife had taken care of the Husband after his accident. However, the Wife’s contributions in tending to the Husband are relevant in the determination of the just and equitable proportion of assets each party should receive, rather than in the identification of an asset as a MA. The DJ’s approach also gives the Wife twice...