Wan Lai Cheng v Quek Seow Kee

• Jurisdiction: Singapore
• Judgment Date: 31 July 2012
• Date: 31 July 2012
• Docket Number: Civil Appeals Nos 17 and 21 of 2011 and
• Court: Court of Appeal (Singapore)

Wan Lai Cheng

Plaintiff

and

Quek Seow Kee and another appeal and another matter

Defendant

[2012] SGCA 40

Chan Sek Keong CJ, Andrew Phang Boon Leong JA and V K Rajah JA

Civil Appeals Nos 17 and 21 of 2011 and Summons No 2864 of 2011

Court of Appeal

Family Law—Maintenance—Wife—Wife claiming lump sum maintenance—Whether lump sum maintenance was appropriate—Section 115 (1) Women's Charter (Cap 353, 2009 Rev Ed)

Family Law—Matrimonial assets—Division—Husband claiming that additional encumbrances subsequent to date of commencement of divorce proceedings should be taken into account—Whether liabilities incurred solely by one spouse after divorce proceedings had commenced should be borne by both spouses

Family Law—Matrimonial assets—Division—Wife claiming that she should receive percentage of specific property in substitution of her claim over rest of matrimonial assets—Whether division of matrimonial assets was just and equitable—Sections 112 (1), 112 (2) (h) and 114 (1) (a) Women's Charter (Cap 353, 2009 Rev Ed)

Family Law—Matrimonial assets—Gifts—Whether inter-spousal gifts were matrimonial assets—Section 112 (10) Women's Charter (Cap 353, 2009 Rev Ed)

Statutory Interpretation—Definitions—Whether word ‘gift’ in s 112 (10) Women's Charter (Cap 353, 2009 Rev Ed) referred to inter-spousal gifts or only third-party gifts—Section 112 (10) Women's Charter (Cap 353, 2009 Rev Ed)

Quek Seow Kee (‘the Husband’) and Wan Lai Cheng (‘the Wife’) were married in Singapore on 31 October 1972. The marriage lasted for 36 years. The Husband came from a wealthy family and was self-employed. The Wife was a teacher until her retirement in 2008. The parties were both 66 years old at the time of the judgment. On 26 July 2007, the Wife filed for divorce. The interim judgment was granted by the Family Court on 20 August 2008.

At the time of the judgment, both parties continued to stay at 2 Draycott Park #03-01 Hampton Court (‘the Matrimonial Home’), which was one of 12 units within a condominium development called ‘Hampton Court’.

Hampton Court was constructed on land which belonged to the Husband's late grandfather, Mr Quek Bak Song, who was the chairman of the now defunct Overseas Union Bank. This land was inherited by the Husband and his brothers from their late father, who had, in turn, inherited it from Mr Quek Bak Song. The Husband received three units in Hampton Court, comprising the Matrimonial Home and two smaller units, viz,#02-01 and #03-02 of Hampton Court. The Husband incorporated Hawick Property Investment Pte Ltd (‘Hawick’) to hold #02-01 of Hampton Court and Kelso Property Investment Pte Ltd (‘Kelso’) to hold #03-02 of Hampton Court.

A third company, Skeve Investment Pte Ltd (‘Skeve’), was incorporated to hold a condominium apartment, #24-06 of The Riverwalk (‘the Riverwalk property’), which was purchased by the Husband in 1983. Hawick, Kelso and Skeve would be collectively referred to as ‘the Three Companies’. The difference between the origins of the properties held by Hawick and Kelso on the one hand and the origins of the property held by Skeve on the other was crucial.

The Wife became a shareholder and director of Hawick and Kelso in 1992, and of Skeve in 1983. The Wife was currently the registered owner of 40% of the shares in Hawick, 40% of the shares in Kelso and 10% of the shares in Skeve (the Wife's shares in Hawick and Kelso would hereafter be referred to as ‘the Hawick and Kelso shares’, and her shares in Skeve as ‘the Skeve shares’). The Wife did not pay for the Hawick and Kelso shares and the Skeve shares (collectively, ‘the Shares’), and was never in possession of the share certificates.

The High Court judge (‘the Judge’) found that the Shares had been transferred by the Husband to the Wife absolutely. This finding was not contested by the Husband on appeal. The present appeals by the Husband and the Wife thus proceeded on the basis that the Shares were an inter-spousal gift from the Husband to the Wife.

Throughout the marriage, the Husband had sole control of the Three Companies to the exclusion of the Wife, and he made all the financial decisions in the marriage. The rental income from the properties held by the Three Companies and from a fourth property at 9 Rhu Cross #10-08 Costa Rhu (‘the Costa Rhu property’) was collected by the Husband. The Costa Rhu property was purchased by the Husband in 1995.

The Wife's contributions to the marriage were largely indirect and non-financial. She played a supportive and passive role in the marriage. She had never owned a property in her name.

Held, allowing CA 17/2011 in part and allowing CA 21/2011 in part:

Per Andrew Phang Boon Leong JA:

(1) Under s 112 (10) of the Women's Charter (Cap 353, 2009 Rev Ed) (‘the current Act’) ‘matrimonial asset’ was defined as ‘not includ [ing] 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’ (hereafter referred to as the ‘the Exclusion Clause’): at [19].

(2) Third-party gifts were ‘gifts’ for the purposes of the Exclusion Clause and were thus not included in the pool of matrimonial assets, unless the ‘substantial improvement’ exception was satisfied. The application of the ‘substantial improvement’ exception would prevent an unmerited windfall from accruing to the spouse who was the non-recipient of the gift (‘the non-recipient spouse’). Where, however, the non-recipient spouse satisfied the ‘substantial improvement’ exception, that gift could be brought into the pool of matrimonial assets. Such a result would be just and equitable as it would acknowledge and recognise the efforts of the non-recipient spouse in improving the third-party gift: at [42], [46] and [59].

(3)‘Pure’ inter-spousal gifts (ie, inter-spousal gifts where the subject matter of the gifts were not assets acquired by the donor spouse by way of a third-party gift or an inheritance) were not ‘gifts’ for the purposes of the Exclusion Clause, and were thus included in the pool of matrimonial assets without the need to satisfy any further conditions. A ‘pure’ inter-spousal gift embodied, by its very nature, the initial effort expended by the donor spouse in the original acquisition of the gift. If, therefore, such a gift were excluded from the pool of matrimonial assets, the initial effort expended by the donor spouse in the acquisition of the gift would simultaneously be denied recognition: at [40] to [41], [46] and [59].

(4) Inter-spousal ‘re-gifts’ (ie, inter-spousal gifts which took the form of a ‘re-gift’ of an asset acquired by the donor spouse by way of a third-party gift or an inheritance) remained as ‘gifts’ for the purposes of the Exclusion Clause and were not included in the pool of matrimonial assets. Despite a possible argument to the contrary, inter-spousal ‘re-gifts’ could not be ‘converted’ into ‘pure’ inter-spousal gifts which would then constitute part of the pool of matrimonial assets for distribution as there was no statutory basis for such ‘conversion’. The ‘substantial improvement’ exception was not applicable to inter-spousal ‘re-gifts’ and this constituted a statutory lacuna. Any necessary adjustments to achieve a just and fair result on the facts could be achieved by the court applying s 112 (2) (h)read with s 114 (1) (a) of the current Act: at [55] to [57] and [59].

(5) The matrimonial home was, as the wording of the Exclusion Clause made clear, included in the pool of matrimonial assets for division, even if it was the subject of a third-party gift or an inheritance: at [59].

(6) The main assets held by Hawick and Kelso, viz, units in Hampton Court, originated from the Husband's inheritance. The gift of the Hawick and Kelso shares to the Wife was thus an inter-spousal ‘re-gift’ of an inheritance, and the ‘substantial improvement’ exception was not applicable to the same. The Hawick and Kelso shares were thus non-matrimonial assets which solely belonged to the Wife, and would be taken into account in the division of matrimonial assets under s 112 (2) (h) read with s 114 (1) (a) of the current Act: at [61].

(7) With regard to the Skeve shares, the main asset held by Skeve, viz,the Riverwalk property, was purchased during the marriage, and, unlike the properties held by Hawick and Kelso, was not directly traceable to the Husband's inheritance. The gift of the Skeve shares was a ‘pure’ inter-spousal gift and thus formed part of the pool of matrimonial assets without the need for any further conditions to be satisfied: at [62].

(8) Once divorce proceedings were commenced and the likelihood of the issue of dividing matrimonial assets arose, neither spouse should be allowed to dispose of or incur liabilities on those assets for his or her sole benefit to the detriment of the other spouse. A spouse who didso would be solely liable for the liabilities so incurred: at [67].

(9) There was a significant increase in the total overdraft liabilities on the properties held by Hawick and Kelso and the Matrimonial Home from 2007 to 2008. It was not shown that the aggregate increases in the overdraft liabilities from 2007 to 2008 were incurred for the benefit of the family. The liabilities on all properties included in the pool of matrimonial assets for division (‘the Relevant Properties’) were to be determined as at 31 July 2007: at [70] to [71].

(10) There were two changes to the composition of the pool of Matrimonial Assets (defined as the matrimonial assets for division, excluding the Matrimonial Home which was divided in the proportion 35:65). Firstly, the Skeve shares, which were a ‘pure’ inter-spousal gift, entered the pool of Matrimonial Assets. Secondly, the Husband's 90% shareholding in Skeve would also be included in the pool of Matrimonial Assets, as the main asset held by Skeve was acquired during the...