Wan Lai Cheng v Quek Seow Kee and another appeal and another matter

• Court: Court of Three Judges (Singapore)
• Judge: Chan Sek Keong CJ
• Judgment Date: 31 July 2012
• Neutral Citation: [2012] SGCA 40
• Citation: [2012] SGCA 40
• Docket Number: Civil Appeals Nos 17 and 21 of 2011, and Summons No 2864 of 2011
• Hearing Date: 04 July 2011
• Published date: 06 August 2012
• Plaintiff Counsel: Luna Yap (Luna Yap & Company)
• Defendant Counsel: Randolph Khoo, Jonathan Chan and Tan Yanying (Drew & Napier LLC)
• Subject Matter: Family Law

Andrew Phang Boon Leong JA: Introduction

These are two related appeals filed by the husband, Quek Seow Kee (“the Husband”), and the wife, Wan Lai Cheng (“the Wife”), respectively, against the decision of the High Court judge (“the Judge”) in Wan Lai Cheng v Quek Seow Kee [2011] 2 SLR 814 (“the Judgment”) with regard to: (a) the division of matrimonial assets, and (b) the maintenance for the Wife. Civil Appeal No 17 of 2011 (“CA 17/2011”) is filed by the Wife, and Civil Appeal No 21 of 2011 (“CA 21/2011”) is filed by the Husband. Summons No 2864 of 2011 (“SUM 2864/2011”) is an application taken out by the Husband in relation to CA 21/2011.

Facts Parties to the dispute

The parties were married in Singapore on 31 October 1972 when they were both 26 years old. The marriage lasted for 36 years. The Husband comes from a wealthy family and is self-employed. The Wife was a teacher until her retirement in 2008. The parties are both currently 66 years old.

There are two children of the marriage (Darren and Daniel), who are both in their 30s, and for whom no provision has to be made in the divorce proceedings.

Background to the dispute

On 26 July 2007, the Wife filed for divorce (in the Judgment, the date of commencement of the divorce proceedings is stated as 27 July 2007 (see, inter alia, [33] of the Judgment), but the correct date is actually 26 July 2007). The fact relied on to prove the irretrievable breakdown of the marriage was that the Husband had behaved in such a way that the Wife could not reasonably be expected to live with him. The interim judgment was granted by the Family Court on 20 August 2008.

Currently, both parties continue to stay at No 2 Draycott Park #03-01 Hampton Court (“the Matrimonial Home”), which is one of 12 units within a condominium development called “Hampton Court”.

Hampton Court is 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. On the advice of Ernst & Young, 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 1983.¹ Hawick, Kelso and Skeve will be collectively referred to as “the Three Companies”. As I will make clear later in my judgment (see below at [61], [62] and [74]), 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 is crucial.

The Wife became a shareholder and director of Hawick and Kelso in 1992, and of Skeve in 1983. The Wife is 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 will 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.

There was a dispute in the court below as to whether the Shares belonged to the Wife beneficially or whether she held them on trust for the Husband. This is a significant issue as each of the Three Companies holds (as noted above) a unit of valuable residential property. The Judge found that the Shares had been transferred by the Husband to the Wife absolutely (see the Judgment at [18]). This finding is not contested by the Husband on appeal. The present appeals thus proceed 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 No 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 1995.²

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

The decision below

The Judge made the following findings in the court below: On a finding of fact, the Shares were gifts made by the Husband to the Wife (see the Judgment at [18]). Inter-spousal gifts were “gifts” for the purposes of s 112(10) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“the current Act”), and were thus not matrimonial assets unless there was evidence that the gifts had been substantially improved during the marriage by the donor spouse or by both parties to the marriage (see the Judgment at [28]–[29]). There was no claim or evidence that the Husband (the donor spouse in the present case) had substantially improved the value of the Shares, whether by himself or together with the Wife. Therefore, the Shares were not matrimonial assets but were instead the Wife’s assets (see the Judgment at [19] and [30]). Section 112(2)(h) and s 114(1)(a) of the current Act, read together, required a court, when dividing matrimonial assets, to have regard to, inter alia, the property of each of the parties to the marriage. As the Shares were the Wife’s property, they would be taken into consideration in determining her share of the matrimonial assets (see the Judgment at [30]–[31]). The Wife was awarded 35% of the net asset value (“NAV”) of the Matrimonial Home, which was to be taken as at the date of commencement of the divorce proceedings (ie, 26 July 2007), or, alternatively, rounded off to 31 July 2007 if that did not prejudice the Husband (see the Judgment at [36] and [39]). The Wife was further awarded 25% of all the other matrimonial assets, excluding the Matrimonial Home and the remainder of the shares in the Three Companies that were not registered in her name, subject to the following (see the Judgment at [43]–[45]): the NAV of the Costa Rhu property was to be calculated in the same way as the NAV of the Matrimonial Home; the bank balances of each party were to be taken as at the date of commencement of the divorce proceedings; the boat “Delightful Dream” registered in the name of the Husband and held on trust for Skeve was not to be included in the division; and the Renault car registered in the name of the Husband and given as a wedding present to Daniel was not to be included in the division. The Matrimonial Home and the Costa Rhu property were to be valued and sold, or, alternatively, transferred by sale to the sole name of either of the parties. If the parties could not reach an agreement, either party could apply to the court for directions (see the Judgment at [47]). The Husband was ordered to pay the Wife monthly maintenance of $2,000 (see the Judgment at [52]).

Issues on appeal

The following issues were raised on appeal: whether inter-spousal gifts are “gifts” for the purposes of s 112(10) of the current Act (referred to hereafter as either “s 112(10)” per se or “the current s 112(10)”, as may be appropriate to the context), and are thus not matrimonial assets unless there is evidence that the gifts have been substantially improved during the marriage by the donor spouse or by both parties to the marriage (“Issue 1”); if Issue 1 above is answered in the affirmative, whether the inter-spousal gift in this case, ie, the Shares, had been substantially improved by the Husband (the donor spouse) or by both parties during the marriage, and thus brought into the pool of matrimonial assets for division (“Issue 2”); what the appropriate operative date for determining the NAV of the Matrimonial Home and the Costa Rhu property (and by implication, the NAV of any other property included in the pool of matrimonial assets for division) is (“Issue 3”); whether the division of matrimonial assets made by the Judge was just and equitable within the meaning of s 112 of the current Act (“Issue 4”); and whether a lump sum maintenance should have been awarded in the court below instead of monthly maintenance, and, if so, what the lump sum should be (“Issue 5”).

I turn now to consider each of the above-mentioned issues seriatim.

My decision Issue 1 Overview

As noted above, what has to be ascertained with regard to Issue 1 is whether inter-spousal gifts are “gifts” for the purposes of s 112(10), and are thus not matrimonial assets unless there is (as stipulated in s 112(10)) evidence that the gifts have been substantially improved during the marriage by the donor spouse or by both spouses.

The Husband’s case

The Judge’s decision that inter-spousal gifts were “gifts” under s 112(10) and were excluded from the pool of matrimonial assets (unless the inter-spousal gifts had been substantially improved during the marriage by the donor spouse or by both spouses) had the effect that the Shares were the Wife’s assets and not matrimonial assets. Apropos this ruling, counsel for the Husband, Mr Randolph Khoo (“Mr Khoo”), argues – apparently contrarily to the express language of s 112(10) – that inter-spousal gifts are matrimonial assets. Mr Khoo notes that this was the legal position prior to the amendments made on 1 May 1997 to the then equivalent of the current Act (viz, the Women’s Charter (Cap 353, 1985 Rev Ed) (“the 1985 Act”)), and contends that the said amendments (“the 1997 Amendments”) did not change the...