Can What You Do Not Own be Divided?

This article looks at the remains of the day when matrimonial assets come up for division.

Since the introduction of the principle of ‘just and equitable’ division of matrimonial assets via s 112 of the Women’s Charter (Cap 353, 1997 Ed), many have struggled to find the meaning and purport of the terminology. Although many cases have since pointed to the direction of ‘just and equitable’ division, it still leaves the question very much open as to what it truly is. Perhaps that question may never be truly answered as the principle of ‘just and equitable’ division is meant to be flexible to ‘do justice to the parties’.

In applying s 112, the court has to first determine what constitutes ‘matrimonial assets’. It is not as easy as it seems. Some may say that s 112(10) defines what a ‘matrimonial asset’ is and therein lies the answer. However, as with the rest of s 112, s 112(10) is deceptively vague especially sub-s (b) which just states:

...any other asset of any nature acquired during the marriage by one party or parties to the marriage...

Unfortunately, s 112(10) is silent on whether that particular asset or assets must be available for division at the time the question is determined by the court. Can the court divide what is no longer in existence?

In the case of Shih Ching Chia, James v Swee Tuan Kay (mw) (unreported), the husband (among other things) made a claim on 315,150 shares in a public company. The wife’s evidence was that the shares were sold between the period from 1 July 1996 and 30 June 1997 and she no longer had those shares. The wife’s evidence was corroborated by the public company’s annual reports. The husband nevertheless made a claim on those shares. The husband further asked the court to impute a value to those shares as the wife did not produce any evidence on the price at which the shares were sold. The husband produced in evidence the average closing price of the shares on the Singapore Stock Exchange for the period from 1 November 1993 to 10 November 1995. The average closing price was S$1.501 per share. In short, the ‘imputed value’ given by the husband amounted to approximately S$473,040.

The learned district judge agreed with the husband and found that the wife ‘was held to have owned them [the shares] and to have received the benefits of the sale proceeds’. The learned district judge further agreed with the husband that as the wife did not produce any evidence on the sale proceeds, ‘the imputed value’ given by the husband had to be accepted.

On appeal to the High Court, the wife’s (as well as the husband’s) appeal was dismissed. The wife then appealed to the Court of Appeal.

In a written judgment by L P Thean JA (as he then was), his Honour went through the facts in meticulous detail. Having narrated the facts in the judgment, his Honour said that the court was unable to accept the ‘imputed value’ for the reason that:

According to the annual report, the sale took place between 1 July 1996 and 30 June 1997, and there is no valid reason for using a price which was based on the average closing price for the period long before the sale.

Following from that, his Honour went on to say that:

At any rate, even assuming that she [the wife] had realised this amount of proceeds of sale, we do not see any legal basis for her to account for this sum for the purpose of the division of the matrimonial assets. The sales took place sometime before the breakdown of the marriage, and what she received she was entitled to spend it and we do not think it is right now to impute that amount as being retained and still held by her.

This is (it is submitted) a sound decision by the Court of Appeal. Hopefully, it will weed away frivolous claims by parties on assets which are no longer in existence especially when these assets have been disposed of at a time when the marriage had not broken down.

A practical view must be taken on such cases in that it is unlikely that parties will attempt to dissipate assets to put them out of the reach of the other party when the marriage is fine. The decision hopefully will relieve the burden on a party from having to look for evidence which may no longer be available to substantiate his claim. It is submitted that not many people go into a marriage thinking that it will fail one day. As such, in many cases, parties will not have kept a complete record of all transactions.

A common sense approach (as was shown by the Court of Appeal) must be adopted.

In this case, the shares were sold some five or six years before the matter came before the district court for determination and the wife was not able to find any evidence of the sales of the shares. At first instance, the lack of evidence went against her. Whilst she succeeded on appeal before the Court of Appeal, she had to endure the traumatic experience of having an order for committal being issued against her (which was eventually stayed by the High Court pending appeal to the Court of Appeal). For the wife, the ‘victory’ came at a price.

Foo Say Tun
Wee, Tay & Lim
E-mail: saytunf@yahoo.com