Wan Lai Cheng v Quek Seow Kee

• Jurisdiction: Singapore
• Judgment Date: 14 January 2011
• Date: 14 January 2011
• Docket Number: Divorce Transferred No 3449 of
• Court: High Court (Singapore)

Wan Lai Cheng

Plaintiff

and

Quek Seow Kee

Defendant

[2011] SGHC 9

Kan Ting Chiu J

Divorce Transferred No 3449 of 2007

High Court

Family Law—Maintenance—Wife claiming lump sum maintenance—Section 114 Women's Charter (Cap 353, 2009 Rev Ed)

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

—Statutory Interpretation—Definitions—Section 9A (3) Interpretation Act (Cap 1, 2002 Rev Ed)

This action was in relation to the division of matrimonial assets and maintenance of the plaintiff/wife. The parties were 62 years old and had been married for 36 years. The defendant/husband came from a wealthy family and was self-employed. The plaintiff was a teacher until she retired.

With regard to the division of matrimonial assets, there was a sub-issue whether shares registered in the plaintiff's name were as the plaintiff asserted, absolute gifts to her, or were as the defendant argued, held on trust for him. The parties also agreed that the division of the matrimonial home was to be dealt with separately from the division of the rest of the matrimonial assets.

In relation to maintenance, the plaintiff wanted a lump sum payment of $432,000 on the ground of the defendant's intention to make his future in China. The defendant contended that monthly maintenance of $2,688 was appropriate.

Held, granting the application in part:

(1) The defendant transferred the disputed shares to the plaintiff as absolute gifts upon professional advice as part of a financial and estate duty planning exercise, and not as a sham transaction: at [18].

(2) Section 112 (10) of the Women's Charter (Cap 353, 2009 Rev Ed) provided that an asset that had been acquired by one party at any time by gift or inheritance and had not been substantially improved during the marriage by the other party or by both parties to the marriage was not a matrimonial asset. On a plain reading of the provision, inter-spousal gifts were not matrimonial assets: at [19].

(3) The definition in s 112 (10) changed the Court of Appeal's ruling in Yeo Gim Tong Michael v Tianzon Lolita [1996] 1 SLR (R) 633 that inter-spousal gifts were matrimonial assets: at [28].

(4) As there was no claim that the defendant or the parties had substantially improved the value of the shares, the shares were not subject to division as matrimonial assets. However, this did not mean that the plaintiff would have the advantage of keeping the shares for herself, without this being taken into account in the division of matrimonial assets: at [30].

(5) Taking into account the fact that the plaintiff contributed as homemaker but made no financial contributions to the acquisition of the property, she was awarded 35% of the matrimonial home: at [32] and [39].

(6) As the plaintiff had acquired property of considerable value as a result of the divorce proceedings, she should receive 25% of the other matrimonial assets. There was insufficient material to work out the actual amounts of the other matrimonial assets. Hence, these amounts were to be determined by the registrar: at [44] and [45].

(7) There was no real risk that the defendant would settle in China and evade paying maintenance to the plaintiff. He was born and bred in Singapore and had substantial links and properties here. Taking all matters into consideration, the defendant was to pay the plaintiff monthly maintenance of $2,000: at [50] to [52].

Chen Siew Hwee v Low Kee Guan [2006] 4 SLR (R) 605; [2006] 4 SLR 605 (refd)

Kwok Wai Leng v Chan Sooi Hong [2004] 2 SLR (R) 386; [2004] 2 SLR 386 (refd)

Lee Puey Hwa v Tay Cheow Seng [1991] 2 SLR (R) 196; [1991] SLR 198 (refd)

Ong Chen Leng v Tan Sau Poo [1993] 2 SLR (R) 545; [1993] 3 SLR 137 (refd)

Soon Geok Hong v Ong Yeow Tiong [1995] SGHC 78 (refd)

Wang Shi Huah Karen v Wong King Cheung Kevin [1992] 2 SLR (R) 172; [1992] 2 SLR 1025 (refd)

Yeo Gim Tong Michael v Tianzon Lolita [1996] 1 SLR (R) 633; [1996] 2 SLR 1 (refd)

Women's Charter (Cap 353, 2009 Rev Ed) s 112 (10) (consd) ;ss 112 (2) (h) , 114 (1) , 114 (1) (a) , 114 (1) (b)

Interpretation Act (Cap 1, 2002 Rev Ed) s 9A (3)

Luna Yap (Luna Yap & Co) for the plaintiff

Randolph Khoo and Chew Ching Li (Drew & Napier LLC) for the defendant.

Judgment reserved.

Kan Ting Chiu J

1 This is the concluding chapter of a long marriage which ended in an acrimonious divorce with the division of matrimonial assets and the maintenance for the plaintiff/wife to be dealt with.

2 The parties are 62 years old and have been married for 36 years. The defendant/husband came from a wealthy family and was self-employed. The plaintiff was a teacher until she retired. They have two sons, Darren and Daniel, both in their 30s, for whom no provisions have to be made in the divorce.

3 On the division of matrimonial assets, there was a sub-issue whether shares registered in the plaintiff's name in three companies, Hawick Property Investment Pte Ltd (“Hawick”), Kelso Property Investment Ptd Ltd (“Kelso”) and Skeve Investment Pte Ltd (“Skeve”) belonged to her beneficially, or were held by her on trust for the defendant. This was a significant issue because the plaintiff is the registered owner of the 40% of the shares in Hawick and Kelso, and 10% of the shares of Skeve, and each of these companies owned a unit of valuable residential property.

4 On the division of the matrimonial assets, the parties agreed that the division of the matrimonial home at 2 Draycott Park #03-01 Hampton Court, Singapore was to be dealt with separately from the division of the rest of the matrimonial assets.

The shares in Hawick, Kelso and Skeve

5 These three companies are family companies of the parties and were under the control of the defendant. The plaintiff became a shareholder and director of Kelso and Hawick in 1992 and of Skeve in 1983. The defendant deposed that that was done on the advice of consultants, but he was reticent about the advice he received. He did not disclose the content of the advice or the person who rendered it. Indirectly, there was some information on this because an affidavit was deposed by Wong Cecil Vivian Richard (“Cecil Wong”) who was a partner of the accountancy firm Ernst & Young (“E&Y”) till his retirement in 1985 stating that:

1. 7. ... The Defendant approached E&Y for corporate structuring and financial planning advice. I was personally involved in providing such advice along with a Mr Graham Clark, who was the tax principal at the material time.

2. 8. It was decided amongst the Defendant and his family members that a number of apartments to be built at Hampton Court were to be shared out between the Defendant and his 2 younger brothers. The remaining units were to be held by the holding company, Hampton Property Investment Pte Ltd.

3. 9. One specific aspect of the corporate structuring and financial planning advice sought by the Defendant concerned estate duty planning for him and his brothers. The Defendant and his brothers were advised to set up individual companies to hold each of their allotted units in Hampton Court.

[emphasis added]

6 As the Kelso and Hawick shares were issued to the plaintiff in 1992, and Cecil Wong retired from E&Y in 1985, the extent of his input and knowledge of the advice was not clear, but this was the best evidence of the advice there was. He only deposed that the defendant and his brothers were advised to set up individual companies to hold each of their allotted units in Hampton Court. While there was no reference to any advice about issuing shares in the company to the wives as part of the corporate structuring, financial planning advice and estate duty planning advice, there was no issue that such advice would come within that ambit. The plaintiff also recalled that shares were issued to her under professional advice, although she remembered it as solicitors' advice. She may have made the mistake as the advice was rendered to the defendant and not to her directly and she may also have confused this with the subsequent wealth plan proposed by solicitors, which will be dealt with in a later part of this judgment.

7 Accepting that the defendant issued the shares to the plaintiff on the basis that the shares were issued on E&Y's advice for estate duty planning purposes, the question still remained whether those shares were to be held by the plaintiff beneficially, or as a trustee for the defendant as he contended. I raised this with counsel during the hearing. I pointed out that the court should be slow to find that Cecil Wong or E&Y had advised the defendant to evade estate duty by arranging for shares to appear as the plaintiff's shares when he was the beneficial owner, under a secret trust. I made the point because if the advice was the disputed shares in the family companies were to fully held by the plaintiff, that would result in a legitimate reduction in the estate duty payable on the defendant's estate. However, if the advice was to issue the shares to the plaintiff without transferring the beneficial ownership of the shares a question arises over the probity of the advice.

8 The plaintiff's solicitors had captured the issue and stated the plaintiff's position when it submitted that:

The question is whether the Defendant acted on such advice by creating a sham shareholding in favour of the...