District Judge Goh Zhuo Neng:
INTRODUCTION
The Plaintiff father (“Father”) and Defendant mother (“Mother”) were married on 12 September 1991 and interim judgment was granted on 11 May 2021. This made it a marriage of about 30 years. The parties had two children who were now adults and parties agreed they were not pursuing orders for the maintenance of these children or themselves.
On 10 February 2022, I heard and determined the ancillary matters relating to the division of matrimonial assets, making the following orders: By consent, the parties’ interest in the matrimonial home at xxx (the “Condo”) will be determined as set out in paragraphs 22 to 29 of the Deed of Separation dated 8 August 2017 (the “Deed”). See Annex A. By consent, The Mother’s interest in the jointly owned Plot 82 and Plot 81, xxx, Romford, England (“Romford Property”) would be transferred to the Father, who would bear the costs of the transfer. Within 4 weeks of the date of my order, the Father will transfer the Mother the sum of $106,128.25 from his Central Provident Fund (“CPF”) Ordinary Account to her CPF Ordinary Account. Within 4 weeks of the date of my order, the monies in the bank accounts in the joint names of the parties would be transferred to the Mother and be closed. Overseas Chinese Banking Corporation Account No. xxx (“OCBC Joint Account”). Standard Chartered Bank Account No. xxx (“SCB Joint Account”). Save as set out above, parties would retain all assets in their own names.
On 23 February 2022, the Father filed a Notice of Appeal against my decision. I set out below the full grounds of my decision.
DIVISION OF MATRIMONIAL ASSETS (THE LAW)
Identification and Valuation of Matrimonial Assets
In the case of TNC v TND [2016] SGHCF 9, the High Court was able to identify three separate categories of matrimonial assets, which are consistent with the definition of matrimonial assets under Section 112(10)(a) and (b) of the Women’s Charter, at [40] to [41]: Assets that formed part of the quintessential matrimonial assets which were acquired during the marriage; Assets which were acquired before the marriage, but were used and enjoyed by the parties or their children; and Assets which were acquired before the marriage, but were substantially improved by one or both of the parties. Here, only the increase in value of the property brought about by the parties’ improvement should be liable to division. However this distinction would not apply if the particular asset was the matrimonial home.
The Division of Matrimonial Assets
In dividing the matrimonial property, I applied the structured approach in ANJ v ANK [2015] 4 SLR 1043 (“ANJ”): Step 1 - Express as a ratio the parties’ direct contributions relative to each other, having regard to the amount of financial contribution each party made towards the acquisition or improvement of the matrimonial assets. Step 2 - Express as a second ratio the parties’ indirect contributions relative to each other, having regard to both financial and non-financial contributions. Step 3 - Derive the parties’ overall contributions relative to each other by taking an average of the two ratios above (the derived ratio shall be referred to as “the average ratio”). Weightage could be given to the different ratios depending on the facts.
The Division of Matrimonial Assets (Weightage)
In applying Step 3, the Court may as an exception, apply a different weightage to direct and indirect contributions instead of averaging them. In short marriages with children, decisions of the High Court and Court of Appeal have given a greater weightage to direct contributions. ATE v ATD [2016] SGCA 2. Here, the Court of Appeal applied a 75:25 weightage to the direct/indirect contributions. The marriage lasted for 5 years. Both parties were high earners who worked and had the assistance of a full time maid. Parties had a child, but only for 2 years of the marriage. The pool of matrimonial assets was also large. AZZ v BAA [2016] SGHC 44. Here, the High Court applied a 70:30 weightage to the direct/indirect contributions. The marriage lasted for 6 years. Both parties were high earners who worked and had the assistance of a full time maid. However the Father frequently travelled out of the country for work. Parties had 2 children for 5 years of the marriage. The pool of matrimonial assets was also large.
What appears to have guided the decisions above was that the assets were considerable, the marriage was short, both parties worked and parties did have the assistance of a maid which would reduce the weight attached to their indirect contributions.
The Effect of a Deed of Separation on Division
In the case of ANX v ANY [2015] 1 SLR 728, the High Court analysed the effect of a Deed of Separation on the division of matrimonial assets. Having held that the Deed of Separation bound the parties, the Court found that it only addressed one specific property belonging to the parties and was silent on all the other matrimonial assets. The High Court took the view that section 112 of the Women’s Charter would then apply to the division of the remaining matrimonial assets not covered by the Deed of Separation, at [44].
DIVISION OF MATRIMONIAL ASSETS (VALUATION OF ASSETS AND DIRECT CONTRIBUTIONS)
The Deed
Parties had entered into the Deed on 8 August 2017. In addition to setting out the agreement of the parties to live separately, the Deed also addressed the division of matrimonial property. More specifically: Clauses 22 to 29 - The jointly owned Condominium (Condo). That the Mother would have first option to purchase the Condo at a designated price within 6 months after the certificate of final judgment was granted. If the Condo was not purchased by the Mother within that period, it would be sold in the open market and the net proceeds would be divided 60:40 in favour of the Mother. Clause 16 - The jointly owned Housing Development Board flat at xxx, (“HDB Flat”). This would continue to be rented out. If parties agreed to sell the HDB Flat, the net sales proceeds (being the sales price minus repayment of mortgage loan and all related costs to the sales, including agent’s commission) would be distributed equally between the parties. Clause 30 - The motor car xxx (“Mazda”) would be transferred to their elder Child’s name (“Child A”) and the Father would pay $30,000.00 in instalments towards the repayment of the loan. Clauses 32 to 36 - Parties would retain all assets in their names, whether acquired before or after the signing of the Deed.
Notably the Deed did not fully address all the jointly owned assets of the parties. For instance, what should happen to the proceeds of the OCBC and SCB Joint Accounts and the Romford Property.
Issues for Consideration
The Parties agreed that the Deed would apply to the division of assets, save for the following which should be determined by the Court : The proceeds of sale from the HDB Flat. The proceeds of sale from the Mazda. Monies in and taken from the OCBC and SCB Joint Accounts.
They were also agreed that the Mother’s share of the Romford Property would be transferred to the Father, who would bear the costs of the transfer.
This meant that before considering the above issues in paragraphs 11(a) to (c), I ordered that: By consent, the parties interest in the Condo will be determined as set out in paragraphs 22 to 29 of the Deed. See Annex A. By consent, The Mother’s interest in the jointly owned Plot 82 and Plot 81, xxx, Romford (“Romford Property”) would be transferred to the Father, who would bear the costs of the transfer.
My treatment of the issues in paragraphs 11(a) to (c) is set out below.
The proceeds of sale from the HDB Flat.
The HDB Flat had already been sold shortly before the writ of divorce was filed on 31 March 2021. The HDB completion account dated 3 March 2021 indicated that it was sold for $663,000.00. While there was no outstanding loan, the HDB Flat was sold at negative sale value as there were insufficient proceeds to refund the CPF monies utilised by parties to acquire the HDB Flat (including accrued interest).
Therefore, parties were not able to receive any proceeds in cash as the remaining proceeds of sale were applied to the CPF ordinary accounts of the Father ($478,153.53 out of $514,791.29 due) and Mother ($184,846.47 out of $199,010.04 due).
This did not represent the equal split of sales proceeds after repayment of the loan that was intended under the Deed. The Mother claimed that the Father should be required to top up her CPF ordinary account so that she received an equal share of the sale proceeds. The Father claimed that the Deed did not apply in the circumstances as the Mother had consented to a negative sale of the HDB Flat.
I agreed with the Father. I took the view that while the Deed had provided for a mechanism to divide the proceeds of sale of the HDB Flat, this mechanism was inadequate for several reasons. The drafters of the Deed did not take into account the large sums of CPF that would need to be refunded by the parties, namely the Father ($514,791.29). To achieve an equal refund of proceeds to each party that would allow them to fully repay their CPF refunds, each party would need to receive $514,791.29 so that the Father’s CPF refunds could be settled. This would require a sale price of at least $1,029,582.58, which the Mother’s counsel acknowledged was impossible to achieve. The Deed did not have a mechanism to address how the division of sale proceeds would be effected in the event of a negative sale.
This meant that the proceeds of sale from the HDB Flat would have to be addressed by the structured approach in ANJ as they were not addressed by the Deed. ANX v ANY [2015] 1 SLR 728, [44].
As agreed by parties, the direct financial contributions to the HDB Flat were 72.17 : 27.83 in favour of the Father....
