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Cohabitation not counted when dividing marriage assets: Court

Cohabitation not counted when dividing marriage assets: Court

Source: Straits Times
Article Date: 29 Jun 2020
Author: K.C. Vijayan

Ruling given in case where couple lived together for 12 years before marrying.

Singapore's top court has ruled that a couple's cohabitation period before marriage is not counted as part of the duration of a marriage when considering how much a spouse gets from their matrimonial assets on divorce.

The length of the marriage is a key factor in dividing matrimonial assets between a divorcing couple based on their direct and indirect contributions during the time span.

The Court of Appeal's ruling was given in a case earlier this month, in which a couple had cohabited for about 12 years before marrying.

They were husband and wife for about 5½ years before divorcing in 2016.

The issue of their cohabitation period arose in relation to the court's powers to divide matrimonial assets under the Women's Charter following a divorce.

"The court cannot and should not wade into matters of social policy where the legislature has established a clear statutory framework providing for the division of assets relating to marriage," said Judge of Appeal Judith Prakash on behalf of the Court of Appeal, which included Chief Justice Sundaresh Menon and Justice Debbie Ong.

"It is, thus, axiomatic that the court must disregard assets which were acquired during pre-marital cohabitation or during any non-marital relationship," she added.

Also, it is wrong in principle for the court to take account of the parties' indirect contributions during cohabitation when determining the extent of their contributions to the marriage, stressed the court.

Its power of division is confined to assets acquired during marriage or were transformed into matrimonial assets, said the judge.

The transformation may occur if the asset was improved substantially or used by the family as part of family life during the marriage, as this creates a link between the marriage and the assets in question.

Such assets would satisfy the statutory criteria under Section 112 of the Women's Charter, said the court.

"Marriage confers a legal status on the parties which carries with it specified rights and obligations. Thus under our law, it is inherently self-contradictory to treat parties as 'married' when they were simply cohabiting," added the court.

The ruling involves the matrimonial assets of a 52-year-old woman and her 66-year-old lawyer husband.

In 2016, the wife applied for divorce and the interim judgment was issued pending settlement of ancillary matters, including the division of the matrimonial assets.

A senior real estate executive, she owned 17 properties which made up the bulk of their assets.

The dispute was over nine of them, which were bought before they married. These were sited in various locations, including in Marina Boulevard, Robertson Quay and Telok Blangah.

Earlier, the High Court held part of the value of each of the disputed assets should be included in the matrimonial pool as the mortgage payouts had continued into the marriage period, among other things.

The court assessed the total value of their matrimonial assets to be $9.6 million and ruled the husband was entitled to 11 per cent of it, based on his contributions during the marriage.

Both sides appealed, with lawyers Koh Tien Hua and Chew Wei En representing the wife, and lawyers Josephine Chong and Esther Yeo arguing for the husband at the January hearing.

The Appeal Court, noting it was a short marriage, affirmed the assets should be divided 89:11 in favour of the wife.

It, however, allowed the husband's appeal in relation to two properties.

This raised the total value of the matrimonial assets by another $206,049.44, resulting in the husband getting an additional $22,665.44.

In all, he will receive a total of $1,081,609.


Countries' laws can differ

Countries have different laws on cohabitation in relation to dividing up a couple's assets in a divorce or separation.

Earlier this year, the husband of a Singapore-based Australian couple applied for the division of matrimonial assets to be settled in Australia, while his wife sought to have the case heard in a Singapore family court where she had applied for a divorce.

They had lived together in a relationship from 1997 to 2014. They have three children and were married for about 5� years before divorcing in 2016.

Melbourne-based family court judge Joshua Wilson noted in decision grounds, earlier this year, that "periods of marriage as well as periods of cohabitation unmarried are taken into account in Australian family law, a seemingly different regime to that encompassed by Section 112(2) of the Women's Charter (in Singapore)".

"The point of remarkable significance in this case is that no assets exist in Singapore beyond the (wife)'s start-up business and an unknown sum in her bank account. Plus, the wife and the children have no real connection to Singapore," he said.

"Significantly, Singapore will not have regard to the wife's interest in her late father's estate valued at approximately $5 million nor will it have regard to the parties' assets acquired prior to their marriage but during their lengthy relationship, such as superannuation and other investments."

Justice Wilson deemed it undesirable for a proceeding to be on foot in Singapore in which the precise subject matter is being addressed in his court. "The financial cost, personal toll to the litigants and inconvenience to say nothing of the risk of inconsistent decisions of the two courts is manifest," he added, ruling that the case be heard in Melbourne.

The wife is appealing.

Singapore lawyer Wong Kai Yun said, from her experience with the cases she has handled: "It appears the Australian Courts, unlike Singapore's, recognise contributions of the respective parties during the cohabitation period when assessing what each should get from the matrimonial assets."

For instance, in Australia, the contributions of a housewife during the cohabitation period would also be taken into account, which may result in her getting a bigger share of the assets, added Ms Wong of Chia Wong Chambers.

"So for divorce proceedings involving Singapore and Australia, such differences in the two jurisdictions are important to bear in mind, given the limited powers of the Singapore Courts to make enforceable orders relating to immovable property and superannuation located in Australia."

K.C. Vijayan

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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