FAMILY LAW

Thomas Hugh v Tan Chit Neo Alice

[2000] 1 SLR 489

High Court — Divorce Petition No 3391 of 1997 (Registrar's Appeal No 5017 of 1999)

Amarjeet Singh JC

5 August, 6 October 1999

Divorce — Division of matrimonial property — Housing & Development Board flat — Direct and indirect contribution

Koh Tien Hua (Shook Lin & Bok) for the appellant.

Anamah Tan and Audrey Wong (Ann Tan & Associates) for the respondent.

The parties were married in November 1961 and had two children. In 1975, the wife started to work to support the children when the husband became ill. After the husband's recovery at the end of 1987, he left the matrimonial home, and from that time, when the children were 21 and 15 years of age, the wife had been looking after all their needs.

The matrimonial home was a Housing & Development Board ('HDB') executive flat. The flat was purchased in or about 1986 for $166,000 in the joint names of the husband and wife with a loan from the HDB. The husband paid a lump sum of about $89,000 from his CPF funds to purchase the flat. Since the husband deserted the wife and left the matrimonial home in 1988, the wife had been servicing the outstanding HDB loan of about $77,000 for 11 years. In June 1998, the husband and wife were granted a divorce. The husband was 65 and the wife was 63 years old. The district judge awarded the wife, who lived in the flat, the option of purchasing it by paying the husband $135,000. In the event that the option was not exercised within two months, the flat was to be sold and the net proceeds shared 30:70 in favour of the wife with the parties making their own respective refunds to the CPF Board. The market value of the flat in March 1999 was $480,000.

The district judge found that the wife would have expended about $20,000 on renovating the flat and took into consideration both the direct and indirect contributions of the wife, including the payment of property tax and conservancy charges throughout the 11 years. The district judge also took into consideration, inter alia, the substantial indirect contributions of the wife in looking after the flat and having to take care of the needs of the children throughout the years of the marriage and the fact that there was no maintenance by the husband of the wife and the younger child since the day he left. The husband appealed against the district judge's decision in relation to the apportionment of the flat and contended that the flat should be sold and the parties should share the proceeds 50:50, ie equally, after CPF plus interest accrued refunds, less the mortgage loan and expenses.

Held, dismissing the appeal:

From both parties' affidavits, the wife in all probability spent about $20,000 on the renovations of the flat, thereby improving its price and marketability. This was a reasonable and by no means excessive amount of expenditure in the light of the circumstances. In determining the proportion of share each spouse was to have in the matrimonial home, a court would take no account of the rights and wrongs of the separation of the spouses. It was therefore unnecessary to consider the acrimonious debates between the parties as to the cause of the breakdown of the marriage. However, after the parties were separated and in taking accounts between them, the court was entitled to have regard to their conduct. In this regard, s 112(2) of the Women's Charter specifically states that various matters to be taken into consideration.

The district judge was right in making the orders she did. The 30% apportioned to the husband sufficiently compensated him and put him back in the money expended by him in respect of his lump sum payment of approximately $90,000 with the balance being construed as interest that he would have lost on the payment. The 20% additionally apportioned to the wife as her indirect contribution by the district judge for the exacting contribution she made as a single parent to the welfare of the family and providing a shelter for themselves was not unreasonable. It would be unjust to allow the husband an equal share in the flat when he especially failed as a parent to equally bring up and support his then teenage son.

[Editorial Note: The appellant has appealed to the Court of Appeal vide CA 138/99.]

LEGAL PROFESSION

Law Society of Singapore v Ng Cher Yeow

[2000] 1 SLR 480

High Court — Originating Summons No 1198 of 1999

Yong Pung How CJ, LP Thean And Chao Hick Tin JJA

24 September, 12 October 1999

Show cause action — Grossly improper conduct — Sale and purchase of property — Preparation of sham documents — Failure to inform co-vendor of fraudulent scheme of other co-vendor — Duty to client — Absence of dishonesty and intention to deceive — Appropriate penalty — Principles applicable

Jimmy Yap Neng Boo (Donaldson & Burkinshaw) for the applicant.

Lee Hong (Ng Cher Yeow & Partners) for the respondent.

The respondent was a partner in the firm of M/s Ng Cher Yeow & Partners. On 25 May 1995, the complainant, Te An Nyah ('Te') and one Jenny Tan, a real estate agent, approached and instructed the respondent to act for them in the sale and purchase of a walk-up apartment ('the property'). The property was in the joint names of Te and her ex-husband, Koh, who had pre-signed an undated option in blank before being re-located to China. Te and Jenny Tan told the respondent that the property was to be sold by Te and Koh to Jenny Tan at a price of $700,000. The respondent agreed to act for Te and Jenny Tan in the sale and purchase and in the process, also agreed implicitly to act for Koh. On further instructions from the two women, the respondent prepared a document expressed to be an 'Acknowledgement of Debt', which provided that Jenny Tan had received a friendly interest-free loan of $138,000 from Te and that she undertook to repay the loan in five unequal instalments over the next three months.

Subsequently, Jenny Tan had trouble obtaining adequate financing for the purchase of the property. She consulted the respondent about her predicament and told him that the interest-free loan was actually 'under the table' money and that the true purchase price was in fact $838,000. Te had refused to declare this amount in the option as she did not want Koh to know the true selling price of the property as she wanted to cheat him of his fair share of the proceeds of sale. Jenny Tan then suggested that there be put in place an intervening sub-sale so that Te would sell the property to a nominee for $700,000 who would then sub-sell it to Jenny Tan for $838,000. The respondent agreed to this arrangement. Two fresh options, options A and B, were prepared in pursuance of this arrangement. At no time did the respondent inform Koh of Te's scheme to cheat him of his fair share of the proceeds of sale nor did he verify with Koh the actual selling price of the property. On 25 January 1996, Te wrote to the Law Society complaining about the conduct of the respondent in relation to the sale of the property. At a Disciplinary Committee hearing, two of five charges brought against the respondent were found to have been made out: that the respondent was guilty of grossly improper conduct in preparing documents knowing that they were intended for sham transactions and in failing to inform Koh of the true purchase price of the property. The Law Society applied for and obtained an order for the respondent to show cause why he should not be dealt with under s 83 of the Legal Profession Act (Cap 161).

Held, suspending the respondent from practice for three years:

Options A and B were not intended to be acted upon. The respondent in preparing the options knew fully well that the transactions sought to be represented by them were non-existent. They were prepared to give a facade for the transactions which were not intended to be acted upon by the parties and the documents were thus merely a sham. At the time when Jenny Tan consulted the respondent with regard to her inability to obtain adequate financing, she told the respondent about the 'under the table' arrangement and the true reason why Te did not want to state the actual selling price in the option granted to her. The respondent, having known of Te's scheme, in effect condoned Te's fraudulent scheme by preparing options A and B. The origins of the idea of preparing options A and B did not matter so long as the respondent adopted it and carried it to fruition.

It was obvious to the respondent that Te had schemed to cheat Koh of his proper entitlement to the net proceeds of sale. The respondent was plainly under a duty to inform Koh of the true selling price of the property, as Koh was his client as well. The proper thing for him to have done was to have checked with Koh to ensure that the latter was aware of the true selling price of the property. The respondent had committed a serious dereliction of duty vis-à-vis Koh. There was no doubt that the respondent's conduct fell short of the standard of professional conduct reasonably expected of members of the profession of good repute and competency. He was thus guilty of grossly improper conduct in the discharge of his professional duty.

New Acts

Factories (Amendment) Act (A1/2000)

The Factories (Amendment) Act 2000 amends the Factories Act to make further provisions for securing the health, safety and welfare of workers employed in factories. The amendments came into force on 1 March 2000. Some of the amendments are as follows:

1. The interpretation of 'factory' in section 6(2) has been amended to provide that the term 'factory' includes any premises where mechanical power is used in connection with the sorting, packing, handling or storing of articles which is carried on by way of trade or for purposes of gain or incidentally to another business so carried out.
2. The definition of 'machinery' in section 7(1) has been amended to make it clear that machinery used for the propulsion of vehicles is excluded from the term only if the machinery is used solely for the propulsion of vehicles.
3. A new section 7(5) has been inserted to make it clear that protection under the Act for the health of a person includes that of an unborn child which that person is carrying.
4. Section 9 has been amended to require that any application for the registration of a factory must be made not less than one month (instead of the previous period of not less than two months) before the operation of the factory and to exempt certain small factories (in which less than ten persons are employed) from the requirements of registration.
5. A new section 24A has been inserted requiring occupiers of factories to establish and implement lock-out procedures to prevent the inadvertent activation or energisation of any dangerous plant, machinery or equipment that is under inspection, cleaning, repair or maintenance.
6. A new section 27A has been inserted to require occupiers of factories to ensure that certain categories of persons employed in the factory attend safety training courses. The Chief Inspector is empowered to specify the classes or description of persons who must attend these courses and to specify the safety training courses which these persons must attend.
7. Section 36 has been amended to: (1) require occupiers of factories to submit layout plans of proposed boiler rooms to the Chief Inspector for approval before the steam boiler is taken into use, and (2) make it clear that the Chief Inspector may, when a request is made under that section for the examination or testing of a steam boiler, instruct any authorised boiler inspector (not just the inspector requested for by the person desiring the examination or test) to carry out the examination or test.
8. New sections 71A, 71B and 71C have been inserted to empower the Minister for Manpower to require occupiers of such factories as may be specified by the Minister to do the following acts -

• appoint a safety co-ordinator to promote the safe conduct of work generally within the factory and to determine the qualifications and training that he must have (new section 71A);
• implement a safety management system to ensure the safety, and to protect the health and welfare, of persons employed in the factory (new section 71B); and
• appoint a competent person (who must be approved by the Chief Inspector) to conduct periodic safety inspections, to carry out the recommendations resulting from the inspections and to submit the inspection report and the recommendations of the competent person to the Chief Inspector when required (new section 71C).

9. A new section 78A has been inserted to empower the Minister to require occupiers of factories to comply with such Singapore Standards and Codes of Practice published by the Singapore Productivity and Standards Board as the Minister may prescribe.

Business Registration (Amendment) Act (A40/99)

The Business Registration (Amendment) Act 1999 will come into force on 1 April 2000. The following are some of the amendments under the Act:

1. To make it clear that a person who is responsible for the management of the business of another person will be answerable for the doing of any act or thing which that other person is required to do under the Act. Such a person will also be answerable for any omission to do that act or thing.
2. To empower the Registrar of Businesses to require that the statement to be lodged by a person applying for registration to be verified by an approved company auditor, a solicitor, a notary public or a practising member of the Singapore Association of the Institute of Chartered Secretaries and Administrators, or affirmed by a statutory declaration made by the person who signed the statement.
3. To enable registration by electronic means.
4. To provide that a certificate of registration issued upon registration under the Act shall be valid for a period of three years and shall thereafter be renewable for a period of three years in respect of each renewal, subject to the provisions of the Act and upon payment of the prescribed fee. Such certificates may be electronically generated.
5. To enable the Registrar to refuse to register any business under a name that is being reserved under section 27 of the Companies Act.
6. To provide that if any person ceases to be a partner of a firm, he and the remaining partners must give notice of cessation to the Registrar within 14 days after the date of cessation.
7. To require a person who has ceased to carry on business to inform the Registrar of Business of the cessation within 14 days. Such a person may inform the Registrar in advance of the date on which he will cease to carry on business. The maximum fine for non-compliance will be increased from $1,000 to $5,000.
8. To enhance the punishment for an offence under section 19(4) (failure to comply with requests made by, or to resist or obstruct, the Registrar or an inspector in the performance of his duties) by increasing the maximum fine from $1,000 to $5,000 and the maximum imprisonment from 6 to 12 months.
9. To provide that if it is proved that a business name has been displayed in any premises and evidence is given that the business name has reference to any business carried on at the premises, the person or persons carrying on business shall, in the absence of proof to the contrary, be presumed to be carrying on business under that business name.

New Bills

Chemical Weapons (Prohibition) Bill 2000 (B9/2000)

The Chemical Weapons (Prohibition) Bill 2000 seeks to give effect to the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction. The Convention was concluded in Paris on 13 January 1993.

The purpose of the Bill is to implement Singapore's obligations under the Convention and require every person exercising a power or discretion conferred under the Bill to have regard to those obligations.

In particular, clause 8 of the Bill provides that the following acts will constitute an offence under the Bill:

1. engaging in the use, development, production, acquisition, stockpiling, retention, or transfer of a chemical weapon;
2. engaging in military preparation using a chemical weapon;
3. knowingly assisting, encouraging or inducing another person to engage in any activity prohibited under the Convention; or
4. using a riot control agent as a method of warfare.

The Bill also provides for the extraterritorial application of clause 8 in respect of acts done or omitted to be done outside Singapore by any citizen of Singapore or any person on board a ship or aircraft registered in Singapore. However, the sanction of the Public Prosecutor is required before the institution of any proceedings for an offence under clause 8 committed outside Singapore.

National Science And Technology Board (Amendment) Bill (B10/2000)

The National Science And Technology Board (Amendment) Bill 2000 seeks to amend the National Science and Technology Board Act for, inter alia, the following purposes:

1. to expand the functions of the National Science and Technology Board ('NSTB') to encompass stimulating, encouraging and facilitating development of an environment conducive to scientific and technological activities, scientific and technological innovation and commercial application of science and technology; and
2. to expand the powers of the NSTB in order to discharge its expanded functions including, in particular, a new power to provide or develop, in partnership with the private sector, incubator facilities for new technology-based enterprises and business support facilities for growing technology-based enterprises.

Agri-Food and Veterinary Authority Bill (B11/2000)

The Agri-Food and Veterinary Authority Bill 2000 seeks to establish and incorporate a new public corporation to be called the Agri-Food and Veterinary Authority and to transfer to the corporation the functions, property, liabilities and employees of the existing Primary Production Department.

Changes to Subsidiary Legislation

Skills Development Levy (Variation of Remuneration of Employees) Order 2000 (S3/2000)

With effect from 1 July 2000, no skills development levy shall be chargeable for any month in respect of any employee whose remuneration exceeds $1,500 for that month. Presently, the skills development levy is chargeable in respect of employees earning $1,000 or less.

Income Tax (Singapore-Oman) (Agreement for Avoidance of Double Taxation of Income Derived from International Air Transport) Order 2000 (S18/2000)

An Agreement between the Government of the Republic of Singapore and the Government of the Sultanate of Oman for the avoidance of double taxation of income derived from international air transport was signed in Singapore on 29 June 1998. This Agreement entered into force on 14 January 2000 following the completion of ratification formalities. The Agreement has retroactive effect for income derived on or after 1 January 1971.

The Agreement provides for income derived from the operation of aircraft to Oman by Singapore air transport enterprises to be exempt from Omani tax. Similarly, income derived from the operation of aircraft to Singapore by Omani air transport enterprises is exempt from Singapore tax.

Income derived from the operation of aircraft includes:

1. interest derived from deposits with banks where the deposits are from funds directly connected with the operation of aircraft in international traffic; and
2. income and profits derived from training schemes, management and other services rendered to an air transport enterprise of the other country.

Under the Agreement, the reciprocal exemption also applies to:

1. gains from the sale of aircraft, spares and equipment used for the operation of aircraft in international traffic;
2. salaries, wages and other remuneration of air crew employed aboard aircraft operated by Singapore or Omani air transport enterprises.

According to a press release from the Inland Revenue Authority of Singapore, the exemption from Singapore tax under the Agreement does not now apply to profits derived by Gulf Air in which the Sultanate of Oman holds a stake. It will apply only when all of Gulf Air's shareholders have each entered into respective reciprocal exemption agreements with Singapore.

Income Tax (Singapore-Latvia) (Avoidance of Double Taxation Agreement) Order 2000 (S58/2000)

An Agreement between the Government of the Republic of Singapore and the Government of the Republic of Latvia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income was signed on 6 October 1999.

This Agreement entered into force on 18 February 2000, following the completion of ratification formalities. The provisions of the Agreement shall have effect on income derived on or after 1 January 2001.

The Agreement provides a framework which aims to encourage greater cross border flow of trade, investment, technical know-how and expertise between Singapore and Latvia, strengthening bilateral economic ties for the benefit of the two countries.

The Agreement provides for the exemption or reduction of tax in the country of source on various types of income derived by residents of the other country, including:

1. the exemption from tax in the country of source on profits derived from the operation of ships or aircraft in international traffic;
2. the reduction of source country tax on dividends, interest and royalties.

To provide relief from double taxation, Singapore will allow tax paid in Latvia as a credit against Singapore tax on income arising in Latvia. In the case of dividends received from Latvia, the Latvian tax on that portion of the profits out of which the dividends were paid would also qualify for tax credit in Singapore if the shareholder is a company owning at least 10% of the share capital of the company paying the dividends.

With this Agreement coming into force, Singapore has in force comprehensive Avoidance of Double Taxation Agreements with 39 countries.

Property Tax (Exemption of Land Under Development) (Revocation) Order 2000 (S73/2000)

It was announced in the Budget Statement 2000 on 25 February 2000 that the property tax exemption for land under development has been withdrawn. Projects which have been granted tax exemption will continue to enjoy the concession for a maximum period of five years or upon completion, whichever is earlier.

The Property Tax (Exemption of Land under Development) (Revocation) Order 2000 implements this announcement. The Order came into operation on 26 February 2000.

Notwithstanding the withdrawal of the tax exemption, the exemption will continue to apply in the following circumstances:

1. to vacant land on which construction of a permanent building is undertaken in respect of which -

• approval for the exemption from tax on the land was obtained before 26th February 2000; or
• a valid permit to commence or carry out building works under section 7 of the Building Control Act was obtained before 26 February 2000 and foundation works on the land were commenced before that date; and

2. in the case of vacant land being developed in phases, to the land being developed in a phase in respect of which -

• approval for the exemption from tax on the land being developed in that phase was obtained before 26 February 2000; or
• a valid permit to commence or carry out building works under section 7 of the Building Control Act for the land being developed in that phase was obtained before 26 February 2000 and foundation works on that land in respect of that phase were commenced before that date.

Elizabeth Wong
Allen & Gledhill