Zhou Lijie v Wang Chengxiang

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 14 December 2015
• Neutral Citation: [2015] SGHC 316
• Court: High Court (Singapore)
• Hearing Date: 12 March 2015,31 August 2015,09 October 2014,27 July 2015,02 September 2015
• Docket Number: Divorce (Transferred) No 2266 of 2011
• Plaintiff Counsel: Yeo Soon Keong and Audrey Lim (Quahe Woo & Palmer LLC)
• Defendant Counsel: Maurice Cheong and Amelia Ang (Lee & Lee)
• Subject Matter: Family law,Matrimonial assets,Division,Maintenance,Wife
• Published date: 16 December 2015

Belinda Ang Saw Ean J: Introduction

The plaintiff wife (“the plaintiff”) and the defendant husband (“the defendant”) were married at the Ministry of Civil Affairs of the People’s Republic of China on 2 December 2002. The couple relocated to Singapore in 2003. The marriage lasted for nine years. The divorce filed on 12 May 2011 was uncontested and Interim Judgment for Divorce was granted on 9 December 2011.

The plaintiff is 51 years old. The defendant is 38 years old. There are no children to the marriage, although the plaintiff has an adult son from a previous marriage. During the marriage, the defendant was the sole breadwinner of the family whereas the plaintiff was a homemaker. The defendant came to Singapore in early 2003 to work as a salaried electrical engineer. Fortunately for the couple, their fortune changed in 2007 with the success of a company known as Oceantek Marine (Singapore) Pte Ltd (“Oceantek 1”) that the defendant and his partner set up to provide engineering consultancy and system integration services. A second company, Oceantek Marine & Offshore Pte Ltd (“Oceantek 2”), was set up in 2008. The two companies will be referred to collectively in this decision as “the Oceantek companies”. With the business doing well over the years, the defendant started to build up the family wealth. At the time the marriage broke down, the defendant had purchased two properties in private developments in Singapore as well as a BMW 7 Series vehicle.

The ancillary matters in dispute were: Division of the matrimonial assets; and Maintenance for the plaintiff.

On 2 September 2015, I gave judgment, valuing the matrimonial assets at $6.8m and dividing the assets between the plaintiff and the defendant in the proportions of 15% and 85% respectively. The division would be achieved by allowing the plaintiff to retain property which is in her sole name, with the balance sum being paid out of the net proceeds of sale of the matrimonial property located at 10 Stirling Road #28-02 (“the Queens”). The defendant was also ordered to pay maintenance at a lump sum of $96,000 less the total amount which the plaintiff had received pursuant to the consent interim Maintenance Order 843 of 2011 made in September 2011 (“MO 843/2011”).

I now give the grounds for my decision.

The matrimonial assets

Save for a property located in Nanjing, China, the parties did not dispute the identity of the various other assets that formed the pool of matrimonial assets. The arguments also covered the valuation of the Oceantek companies, the source of funding to Oceantek 1 as well as allegations of undisclosed assets. I will first deal with the Nanjing Property before discussing the other various contentions.

The Nanjing Property

The plaintiff’s position is that a property in China, which is in her sole name and referred to by parties as “the Nanjing Property” is to be excluded from division as it is not a matrimonial asset. It was contended that the Nanjing Property was purchased from assets owned by the plaintiff before marriage.

The Nanjing Property would prima facie qualify as a matrimonial asset since it was purchased during the marriage. The burden is on the plaintiff to prove that the Nanjing Property is not a matrimonial asset.

Section s 112(10)(b) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“Women’s Charter”) provides that a “matrimonial asset” refers to an asset acquired during the marriage by one party or both parties to the marriage. The proviso to s 112(10)(b) states that a “matrimonial asset” does not include an asset (except for the 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 both parties, to the marriage. The plaintiff argued that the proviso applied to the Nanjing Property to exclude the same from being an “asset” to be divided.

The plaintiff explained that she previously owned a small apartment before she was married (“the first property”). This property was later bought over by the Chinese government and she was subsequently compensated for the acquisition. In 2003, the plaintiff purchased a second property with a bank loan and a gift of RMB 131,000 from her mother (“the second property”). This latter property was sold in or around 2007 for RMB 784,000 and the plaintiff used about RMB 500,000 (approximately S$100,000) to assist the Oceantek companies, which were in financial difficulties at the time. The remainder of the sale proceeds was used as a down payment for the Nanjing Property and the rest of the purchase price was paid for with a bank loan. She later used the compensation from the Chinese government for the first property to pay off the bank loan in 2008.¹ In support of the plaintiff’s case, the plaintiff exhibited a Contract of Gift between her and her parents which evidenced the gift of RM 131,000. The plaintiff also relied on the Contract of Gift to show that the Nanjing Property was, at least in part, acquired by way of gift.

The defendant disputed the plaintiff’s account. His position was that it was beyond the plaintiff’s means to purchase the second property, and that the burden of paying off the bank loan in respect of the second property fell squarely on him. This was also the case in respect of the Nanjing Property. The defendant explained that he would remit a portion of his monthly salary to the plaintiff’s Bank of China account to pay the monthly instalments. He was not able to produce the remittance slips to evidence his payments as the remittances (totalling RMB 1.4 million which is equivalent to S$300,000) were made on his behalf by his former employers who would deduct each month’s remittance from his monthly salary. I note that in later reply submissions, the figure of S$300,000 was changed to S$280,000. No explanation was given for the change and, fortunately for the defendant, this revision would not make a material difference to his case. Despite the defendant’s requests and the defendant’s discovery application that was granted in part by the District Judge on 3 June 2014, the plaintiff did not disclose her bank statements.² The defendant also rejected the plaintiff’s claim that the government’s compensation that she received was used to discharge the bank loan for the Nanjing Property. The defendant asserted that the government’s compensation was used to purchase another apartment in Nanjing for the plaintiff’s mother in 2009.

According to the defendant, the second property and the Nanjing Property were in the plaintiff’s sole name because at the time of purchase of both properties, he was in Singapore and was also too busy setting up the Oceantek companies to attend to these matters in China.³

It is not disputed that the Nanjing Property was acquired during the course of the marriage. Although the defendant did not comment on the plaintiff’s gift from her parents, the gift was admittedly used to partially acquire the second property. In short, the second property was not acquired entirely by way of gift or inheritance. Notably, this gift of RM 131,000 was used to purchase the second property and not the Nanjing Property. The plaintiff’s assertion that the Nanjing Property was acquired from assets which she held before marriage based on the circumstances described would not satisfy the proviso to s 112(10)(b).

More to the point, the plaintiff’s assertion side stepped the need to trace the gift which constituted part of the second property into the Nanjing Property. It is convenient to now refer to the observations of Andrew Phang Boon Leong J (as he then was) in Chen Siew Hwee v Low Kee Guan (Wong Yong Yee, co-respondent) [2006] 4 SLR(R) 605 at [58]:

… where funds derived from a gift are used to acquire a new asset, this new asset will qualify as an “asset … acquired … by gift” within the qualifying words unless it can be shown that the donee … has demonstrated an intention that the new asset should be considered part of the pool of matrimonial assets. Put in another way, the new asset will be “acquired … by gift” if the donee intends the new asset to assume the same nature as that of the original asset, ie, that of being a gift. At this juncture, I should however pause to highlight that before one can even undertake this enquiry of whether the nature of the original asset should be that of the new asset, it would, in all cases, be necessary to first consider whether the new asset is traceable to the assets which constituted the original gift (here, the shares) to begin with. If such tracing is not available, for example, where it is unclear what the source of funds used to acquire the new asset was, it would be logically impossible to additionally consider whether the “new” asset continues to be in the nature of a gift. [emphasis added]

It was not clear to me how the parents’ gift of RM 131,000 to the plaintiff for the purchase of the second property could be traceable to the Nanjing Property because no evidence was led to establish this. There ought to have been an explanation for the plaintiff’s purchase of an apartment for her mother in 2009 which could well be connected with the earlier gift of RM 131,000. Thus, a vague assertion on the plaintiff’s part would not be sufficient, given the prima facie position in s 112(10)(b) of the Women’s Charter. I agreed with the defendant that the Nanjing Property was a matrimonial asset that was subject to division.

I also preferred the defendant’s evidence that he was responsible for paying the instalments on the bank loans for both the second property and the Nanjing Property. Although the plaintiff was employed in China, she had quit her job in 2003 to accompany the defendant to Singapore. The second property was purchased in 2003 and sold in 2007. During the material time, the plaintiff did not have a job and there was no evidence of available...