Inside the Bar

Suggested Clauses in Respect of Orders to Charge Monies in a Central Provident Fund Account — Version 16 September 20041

The article examines and explains the latest revisions to the suggested clauses for the charging of Central Provident Fund (‘CPF’) monies in matrimonial cases.

The Central Provident Fund Board (‘CPF Board’) had issued a revised version of its ‘Suggested Clauses in Order of Court’ on the division and charging of CPF monies consequent to divorce on 24 January 2003 (‘the first revised Suggested Clauses’). The first revised Suggested Clauses had addressed various points of concern encountered in past cases. A revised version of the first revised Suggested Clauses has now been issued by the CPF Board (version 16 September 2004) (‘the second revised Suggested Clauses’). The second revised Suggested Clauses essentially contain more comprehensive footnotes and address (at clause 3 of the Suggested Clauses) the legislative amendments made in 2004 to the CPF minimum sum, Medisave Minimum Sum and Medisave Required Amount. Please see the Annex for a copy of the second revised Suggested Clauses. Those portions of the second revised Suggested Clauses which differ significantly from the first revised Suggested Clauses have been written in bold in the Annex for your easy reference.

 

Noteworthy points in the second revised Suggested Clauses (many of which had earlier been incorporated into the first revised Suggested Clauses) are as follows:

 

1    The previous version2 of the Suggested Clauses provided for the charging of CPF monies already standing to the credit of the party whose CPF account is charged (‘member’) as at the date of the Court hearing. The second revised Suggested Clauses include the charging of:

 

(a)  monies already standing to the credit of the member in his CPF account; and

(b)  monies refunded to the member’s CPF account upon the sale or transfer of his estate or interest in a matrimonial property and upon the refunds being effected either:

 

      (i)           by the member himself; or

      (ii)          from the proceeds of sale of 
         the matrimonial property.

 

      A party would need to ascertain the feasibility of obtaining a charging order against the member’s CPF monies, by obtaining information regarding the balances in the member’s CPF account and studying the relevant case-law and provisions of the CPF Act and the subsidiary legislation made thereunder (see footnotes 2, 4 and 8 of the second revised Suggested Clauses).

 

      A party would also need to obtain the appropriate orders or ensure that the orders she obtains are phrased in the appropriate manner in each of the following scenarios:

 

Under the scenario set out in para 1 (a) above

When drafting the order, the party should:

 

•    refer to footnotes 7 and 9 in the second revised Suggested Clauses and adopt the word ‘now’ and the phrase ‘with immediate effect’ in clause 1(a) of the revised Suggested Clauses after ascertaining the amounts standing to the credit of the member and studying the feasibility of the orders sought; and

•    refer to footnote 16 in the second revised Suggested Clauses and adopt the phrase ‘the service of this Order on the Board’ in clause 8 of the second revised Suggested Clauses. The engrossed Order of Court must accordingly be served on the CPF Board.

 

Under the scenario set out in para 1(b)(i) above

The party should:

 

•    obtain orders for the sale or transfer of the member’s estate or interest in the matrimonial home;

•    obtain orders for the member to effect the requisite CPF refunds to his own CPF account upon such sale or transfer; and

•    when drafting the order:

 

(a)  refer to footnotes 7, 9 and 11 of the second revised Suggested Clauses and adopt the word ‘then’ and the phrase ‘with effect from the making of the refund of the requisite CPF monies in respect of the matrimonial home by the [Respondent]’ in clause 1(a) of the second revised Suggested Clauses, after ascertaining the amounts to be refunded to the member’s CPF account and studying the feasibility of the orders sought;

(b)  refer to footnote 16 of the second revised Suggested Clauses, and adopt the phrase ‘the service of this Order on the Board and the making of the requisite CPF refunds into the [Respondent’s] CPF account’ in clause 8 of the revised Suggested Clauses. The engrossed Order of Court must accordingly be served on the CPF Board. The CPF Board also requires that the following documents be served together with the said Order of Court, in order to enable it to assess the viability of, and facilitate its compliance with, the said Order:

 

      (i)           the completion account 
                on the matrimonial home; 
                and


(ii)              a covering letter stating the 
           date(s) when the matrimonial 
           home was sold/transferred 
                and the requisite CPF refunds 
          effected to the member’s CPF 
           account.

Under the scenario set out in para 1(b)(ii) above

The party should:

 

•    obtain orders for the sale of the matrimonial home;

•    obtain orders for the requisite CPF refunds to be effected to the member’s CPF account from the proceeds of sale of the matrimonial home; and

•    when drafting the order:

 

(a)  refer to footnotes 7, 9 and 11 of the second revised Suggested Clauses and adopt the word ‘then’ and the phrase ‘with effect from the making of the refund of the requisite CPF monies from the sale proceeds of the matrimonial home’ in clause 1(a) of the revised Suggested Clauses, after ascertaining the amounts to be refunded to the member’s CPF account and studying the feasibility of the orders sought;

(b)  refer to footnote 16 of the second revised Suggested Clauses, and adopt the phrase ‘the service of this Order on the Board and the making of the requisite CPF refunds into the [Respondent’s] CPF account’ in clause 8 of the revised Suggested Clauses. The engrossed Order of Court must accordingly be served on the CPF Board. The CPF Board also requires that the following documents be served together with the said Order of Court, in order to enable it to assess the viability of, and facilitate its compliance with, the charging orders:

 

      (i)    the completion account on the 
           matrimonial home; and

      (ii)   a covering letter stating the 
  date(s) when the matrimonial 
           home was sold/transferred and 
        the requisite CPF refunds effected 
         to the member’s CPF account.

 

            The CPF Board would object to 
the charging of the monies 
refunded to the member’s CPF 
Account if the refunds are made 
by the member’s ex-spouse as such charge and consequential orders are, in their view, not in line with the Court of Appeal’s decision in Central Provident Fund Board v Lau Eng Mui [1995] 3 SLR 109, and contravene s 24 of the Central Provident Fund Act (Cap 36). The CPF Board is also of the view that it would not be appropriate for a charging order to be made in respect of the member’s CPF account if there are other freely disposable matrimonial assets against which the member’s ex-spouse’s proprietary entitlement can be settled from (see footnote 6 of the second revised Suggested Clauses).

 

2    The second revised Suggested Clauses (as in the first revised Suggested Clauses) provide for situations where the member whose CPF account is charged becomes insane or dies (see clauses 1(b) and 4(c) of the revised Suggested Clauses).

 

3    The second revised Suggested Clauses include improvements to clause 3 to address CPF legislative amendments made in 2004 to the CPF minimum sum, Medisave Minimum Sum and Medisave Required Amount.

 

4    The member whose CPF account is charged is prevented from using any of his CPF monies for education, investment or any other purpose, unless it is that amount in excess of the Charged Amount, the Minimum Sum, Medisave Minimum Sum, Medisave Required Amount, Living Expenses and any other prescribed requisite amounts that the member is obliged to set aside when he is entitled and does withdraw his CPF monies (see clause 3 and footnotes 13 and 14 of the second revised Suggested Clauses). However, the CPF Board does not police the member’s compliance with this clause (see footnote 14 of the second revised Suggested Clauses).

 

5    If the member whose CPF account is charged fails to apply to withdraw his CPF monies within one month of his entitlement to do so, the Registrar is empowered to execute all the relevant documents to enable the party in whose favour the charge has been made to apply to the CPF Board for the Charged Amount to be paid to him or her (see clause 4(a) of the revised Suggested Clauses).

 

6    As in the first revised Suggested Clauses, under the second revised Suggested Clauses, the charge will only take effect from the date of service of the Court Order on the CPF Board and/or when the requisite CPF monies are refunded to the member’s CPF Account (see Clauses 1(a) and 8 of the revised Suggested Clauses).

 

7    The CPF Board is now expressly authorised to release the Charged Amount or any part thereof to the party entitled to such monies. There is therefore no longer a need for the member to execute the relevant Letter of Authorisation in favour of the CPF Board (see clause 5 of the revised Suggested Clauses).

 

Please ensure that you are familiar with the second revised Suggested Clauses. They will be relevant when you apply to the court for consent orders, argue ancillary matters, or are engaged in mediating matters, involving a charge against the member’s CPF monies for his ex-spouse’s proprietary entitlement under s 112 of the Women’s Charter (Cap 353).

 

Please note, however, that the court is not bound to make an order in the exact terms as set out in the second revised Suggested Clauses. The court retains the discretion to decide to depart from or add onto the second revised Suggested Clauses in appropriate cases, on the merits and in accordance with the law. However, as the second revised Suggested Clauses have been endorsed by the CPF Board, parties who are applying to depart from the second revised Suggested Clauses in their court orders should, before the court hearing, write to the CPF Board for their comments on the parties’ modified clauses (see footnote 1 of the second revised Suggested Clauses) and at the court hearing draw the court’s attention to this and the CPF Board’s reply and make the appropriate legal submissions in 
the matter.

 

Finally, please note that if there is a shortfall between the amount of money actually paid to the party in whose favour the charge is made and the Charged Amount, clause 7 of the revised Suggested Clauses provides that the party may recover the shortfall as if it were a civil debt.

 

Deputy Registrar Lim Hui Min3

Family Court

 

Endnotes:

 

1     This write-up supersedes the same author’s write-up entitled ‘Suggested Standard Clauses in Respect of Orders to Charge Monies in a Central Provident Fund Board Account’ dated 24 January 2002.

2     The previous version of the suggested clauses was dated 4 March 2000.

3     I am grateful to the Central Provident Fund Board for their comments and suggestions on this 
write-up.

 

 

Annex

CPFB/Revised Version 16-9-2004

 

Suggested Clauses in Order of Court1

1    (a)      Subject to the Central Provident Fund Act (Cap 36) (‘CPF Act’) and the subsidiary legislation made thereunder2 {as well as any existing Order of Court dated (state date) in (state Suit / Summons Number) made in respect of the [Respondent’s] CPF monies},3 the [Petitioner] shall be entitled to $[ (state amount) ]4 of the [Respondent]’s Central Provident Fund (‘CPF’) monies pursuant to [s 112 of the Women’s Charter (Cap 353), Revised Edition 1997/s 52(3)(d) of the Administration of Muslim Law Act (Cap 3)]5 which shall be charged6 against the CPF monies [now/then]7 standing to the credit of the [Respondent]’s CPF [Ordinary Account/Ordinary and Special Accounts]8 {with immediate effect/with effect from the making of the refund of the requisite CPF monies in respect of the matrimonial home by the [Respondent]9/with effect from the making of the refund of the requisite CPF monies from the sales proceeds of the matrimonial home10}11 (‘Charged Amount’).

 

      (b)     The Charged Amount or, where the CPF monies standing to the credit of the [Respondent]’s [Ordinary Account/Ordinary and Special Accounts]12 and payable to:

 

      (i)                       the [Respondent] or his Committee of Persons & Estate when he becomes entitled to and does withdraw his CPF monies; or

    (ii)  the [Respondent]’s CPF nominees/beneficiaries upon his death,

 

                is less than the Charged Amount, the lesser sum shall be payable to the [Petitioner] at such time.

 

2    The [Respondent] is hereby restrained, whether by [himself], [his] servants, or agents, howsoever from receiving from the CPF Board (‘the Board’) the Charged Amount or any portion thereof then payable under the CPF Act and the subsidiary legislation made thereunder.

 

3    Without prejudice to the generality of the forgoing, the [Respondent] is hereby restrained, whether by himself, his servants, or agents, howsoever from utilising monies in his CPF Ordinary Account/Ordinary and Special Accounts12 for investment purposes under the CPF Investment Scheme, or funding another party’s or his own education under the CPF Education Scheme, or participating in any other CPF scheme which allows the [Respondent] to utilise his CPF monies before he is entitled to withdraw them under s 15 of the CPF Act, unless the monies so proposed to be utilised are in excess of the Charged Amount after the setting aside of the prescribed/requisite minimum sum, Medisave Minimum Sum/Medisave Required Amount, Living Expenses13 and any other prescribed/requisite amounts, where applicable, at the time of the [Respondent’s] application(s) for such utilisation.14

 

4    (a)      Save as is provided in clause 4(c) below where the [Petitioner] is entitled to apply to the Board directly, the [Respondent] or any person entitled under the CPF Act to apply to withdraw any CPF monies from the [Respondent]’s CPF account is hereby directed to apply to the Board for the withdrawal of the Charged Amount or any portion thereof then payable under the CPF Act and the subsidiary legislation made thereunder within one (1) month of such entitlement to withdraw the CPF monies from [the Respondent’s] CPF account, failing which [the Registrar or Deputy Registrar of the Subordinate Courts under s 45 of the Subordinate Courts Act (Cap 321)/the President or Registrar of the Syariah Court under s 53A of the Administration of Muslim Law Act]15 is hereby directed/authorised to execute, sign, or indorse all necessary documents relating to such application to the Board on behalf of the [Respondent] or any person so entitled.

 

(b)      Upon the Board’s approval of the application for withdrawal referred to in clause 4(a) above, the Board shall make payment of the Charged Amount or any portion thereof then payable under the CPF Act and the subsidiary legislation made thereunder, whichever is less (‘Payment’), directly to the [Petitioner] upon her request in writing.

 

      (c)      For the avoidance of doubt, upon the death of the [Respondent] before the said Payment being made, the [Petitioner] shall be entitled to apply to the Board directly for the same.

 

5    The Board is hereby authorised to release the said Payment to the [Petitioner] in compliance with this Order and generally to do or cause to be done all acts, deeds and things whatsoever, which may seem to the Board to be necessary or expedient to comply with this Order, including but not limited to notifying the [Petitioner] that the Board holds the said Payment for the Petitioner.

 

6    The [Petitioner] is hereby empowered to receive the said Payment directly from the Board in the name of the [Respondent] which receipt shall be a good and valid discharge to:

 

(a)      the Board as regards its obligation as stated in this Order, including the Board’s cessation of any liability towards both the [Petitioner] and the [Respondent] pertaining to the Charged Amount; and

(b)      the [Respondent] as regards his obligation to pay the [Petitioner] to the extent of the said Payment so received by the [Petitioner].

 

7    The Charge ordered herein shall be discharged upon the [Petitioner] receiving the said Payment under clause 6 herein, and the [Petitioner] shall recover any shortfall between the Charged Amount and the said Payment received by her as a debt due from the [Respondent] to her.

 

8    The Board shall impose the Charge as required herein only upon {the service of this Order on the Board / the service of this Order on the Board and the making of the requisite CPF refunds into the [Respondent’s] CPF account}.16

 

9    The parties including the Board shall be at liberty to apply for further directions or orders generally.

 

 

Footnotes:

 

1    Parties and/or their lawyers may also seek the Board’s assistance or comments when modifying any part of the Board’s Suggested Clauses in Order of Court before they apply to Court for a proprietary charging order against the[Respondent]’s CPF monies. When seeking the Board’s assistance, parties and/or their lawyers should furnish the Board with a proposed draft Order of Court incorporating the Suggested Clauses in Order of Court, in which they should:

 

(a)     underline their proposed modifications;

(b)     delete any clauses or portions of the Board’s Suggested Clauses in Order of Court that are not applicable to their case; and

(c)     provide the Board with an explanatory note on their proposed modifications.

 

2    The Central Provident Fund Board (‘the Board’) will take into consideration the balances standing to the credit of the [Respondent] in the Fund (including the Charged Amount) as at the date of his entitlement and application to withdraw when:

 

(a)      setting aside the prescribed/requisite minimum sum [see ss 15(6), 21, 21A and 21B (and related subsections thereto) of the CPF Act and the provisions of the Central Provident Fund (Minimum Sum Scheme) Regulations, Central Provident Fund (Revised Minimum Sum Scheme) Regulations, Central Provident Fund (New Minimum Sum Scheme) Regulations 2004 and the Central Provident Fund (Minimum Sum Plus Scheme) Regulations 2000]; and

(b)     setting aside the prescribed/requisite Medisave Minimum Sum [the Medisave Minimum Sum is ‘the prescribed amount’ under s 16 of the CPF Act and the provisions of the Central Provident Fund (Prescribed Amount for Medisave Account) Regulations] or the Medisave Required Amount [the Medisave Required Amount is ‘the specified amount’ under ss 15(6)(b) and 15(6D) of the CPF Act and the provisions of the Central Provident Fund (Specified Amount for Medisave Account) Order 2004 and is ‘the relevant amount’ under the provisions of the Central Provident Fund (Topping Up of Medisave Account) Regulations 2003] (as the case may be);

(c)      setting aside the Living Expenses [see s 27 of the CPF Act]. (This is only applicable to a member who is an undischarged bankrupt upon his entitlement and application to withdraw his CPF monies); and

(d)     setting aside any other prescribed/requisite amounts under the CPF Act and the subsidiary legislation made thereunder. [As the charge is subject to the provisions of the CPF Act and its subsidiary legislation prevailing at the time of the [Respondent’s] entitlement and application to withdraw his CPF monies, the parties should be appropriately advised on this issue].

 

      Parties and/or their lawyers should refer to the CPF Act and the subsidiary legislation made thereunder in respect of the bankruptcy situation, Minimum Sum Scheme/Revised Minimum Sum Scheme/New Minimum Sum Scheme, Medisave Minimum Sum/Medisave Required Amount and any other prescribed/required amounts that the proprietary charge will take subject to when the [Respondent] is entitled to and does withdraw his CPF monies.

 

      The provisions of the CPF Act and subsidiary legislation mentioned in this footnote are subject to amendments that may be made from time to time. Hence parties and their lawyers should treat the CPF legislation mentioned herein as a guide and should, at all times, verify the correctness of the said provisions.

 

3    Applicable, for example, where there is an existing Ancillary Order made in respect of the Respondent’s CPF monies or an existing Charging Order against the Respondent’s CPF monies made in previous divorce proceedings. If applicable, parties/lawyers are to complete the particulars in the blanks. To delete, if not applicable. If the current charging order sought is an amendment or variation of a previous charging order, parties are instead to state in the Order of Court how the variations or amendments are to be read together with the previous orders, or whether they are to replace the previous orders completely. This would facilitate the understanding of the variations or amendments sought/made on the existing orders.

 

4    To ascertain the feasibility of obtaining a charging order against the [Respondent]’s withdrawable CPF monies, it would be appropriate for parties and/or their lawyers to study:

 

(a)     the Court of Appeal’s decision in Central Provident Fund Board v Lau Eng Mui [1995] 3 SLR 109 (‘Lau’s Case’) for circumstances when the Court may impose a charge against the [Respondent]’s withdrawable CPF and other issues relating to the charging of withdrawable CPF monies;

(b)     the [Respondent]’s CPF balances in the Fund and the monies (if any) refundable upon the member’s disposal of any matrimonial home; and

(c)     the provisions of the CPF Act and the subsidiary legislation made thereunder.

 

5    Delete whichever is not applicable.

 

6    The Board would generally not object to the charging of the [Respondent]’s CPF if the [Petitioner]’s entitlement and charge:

 

(a)     are in line with the Court of Appeal’s decision in Lau’s Case;

(b)     are in relation to the division of matrimonial assets acquired during the parties’ marriage and are made pursuant to s 112 of the Women’s Charter, Revised Edition 1997 or s 52(3)(d) of the Administration of Muslim Law Act (as the case may be); and

(c)     do not contravene the CPF Act and the subsidiary legislation made thereunder.

 

      In respect of footnote 6(a), parties and their lawyers should verify and ensure that there are no other freely disposable matrimonial assets against which the [Petitioner]’s proprietary entitlement can be settled from and that the [Respondent]’s CPF monies form the whole or the bulk of the parties’ matrimonial assets (see pages 113E-I and 114 of Lau’s Case).

 

7    Refer to footnote 11 and delete accordingly. In the case where the charge is with immediate effect, the charge shall be against the [Respondent]’s monies now standing to the credit of his CPF account(s). In the case where the charge is with effect from a later date, the charge shall be against the [Respondent]’s monies then standing to the credit of his CPF account(s).

 

8    Parties are to specify in which account the monies are to be charged, ie Ordinary or Ordinary and Special Accounts, and to delete whichever is not applicable.

 

(a)      If they choose to charge the monies in both the Ordinary and Special Accounts, parties are to ascertain the viability of such charge and to state the exact amount to be charged in each of these two accounts.

(b)     When the [Respondent] uses his CPF towards the purchase of a matrimonial home, such usage of monies is generally from his CPF Ordinary Account unless he has exhausted the use of all his Ordinary monies and the Board has permitted him to use his Special Account monies to continue servicing his housing loan. Accordingly, when the [Respondent] disposes of his matrimonial home, the requisite refunds are made to the account against which he had earlier drawn from. As the circumstances are different in each case, lawyers should verify the actual circumstances from the parties before obtaining charging orders against the requisite CPF refunds when the [Respondent] sells, transfers or otherwise disposes of his interest, estate and share in the matrimonial home.

 

9    If the refunded monies or any part thereof is to be subsequently charged to secure the [Petitioner’s] proprietary entitlement, parties are to ensure that the [Respondent] is the party making the refund of the requisite CPF monies into his CPF account(s) or that such refunds are to come from the sales proceeds of the matrimonial home so as not to contravene s 24 of the CPF Act.

 

10  If elsewhere in the Decree Nisi or Order of Court, ‘the matrimonial home’ is described in another manner, parties and/or their lawyers should, where appropriate, change the reference to ‘the matrimonial home’, for consistent use of terminology and clarity in the Order of Court.

 

11  Delete whichever is not applicable. Further, if the second or third option is elected (ie with effect from the making of the refund of the requisite CPF monies in respect of the matrimonial home by the [Respondent], or with effect from the making of the refund of the requisite CPF monies from the sales proceeds of the matrimonial home), the parties are to ascertain from the relevant provisions of the CPF Act and the subsidiary legislation made thereunder as well as from making any necessary inquiries from the relevant lending institutions and/or the Housing and Development Board, as the case may be, what is refundable upon the sale of the matrimonial home or upon the [Respondent]’s disposal of his interest, estate and share in the matrimonial home. This will help the parties to ensure that there would be sufficient monies in the [Respondent]’s relevant CPF account(s) to enable the charge to be effected at the relevant time.

 

12  Refer to clause 1(a) above, and accordingly delete whichever is not applicable.

 

13  In the event that the member is a bankrupt upon his entitlement and application to withdraw his CPF, he would have to set aside the requisite Living Expenses in addition to the prescribed/required minimum sum and the Medisave Minimum Sum/Medisave Required Amount.

 

14  Parties are to give due consideration to the existing as well as forthcoming CPF policies and CPF legislation to ascertain the viability of the intended Charging Order. As the Board does not police the [Respondent]’s compliance with the restraining orders as in clause 3, the [Petitioner] or her lawyers should liaise directly with the [Respondent] regarding his observance of the orders granted in terms of clause 3.

 

15  Delete whichever is not applicable and amend accordingly as and when the provisions of law are amended from time to time.

 

16  Refer to clause 1(a) above and accordingly delete whichever is not applicable. Where the Board is to impose the charge upon the service of this Order on the Board and the making of the requisite CPF refunds into the [Respondent’s] CPF account, it would be appropriate for the parties and/or their lawyers at the time they serve the Order of Court on the Board, to also furnish the Board with the following documents, in order to enable it to assess the viability of, and to facilitate its compliance with, the said Order:

 

(a)     a copy of the completion account on the matrimonial home; and

(b)     a cover letter stating the date(s) when the matrimonial home was sold/transferred and when the requisite CPF refunds were effected to the [Respondent’s] CPF account. This would enable the parties and their lawyers to study and ascertain the viability of the charging orders before the Order of Court is served on the Board and would also facilitate the Board in imposing the charge accordingly.