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Inheritance can be divided in divorce if intent shown to share it with spouse: Apex court

Inheritance can be divided in divorce if intent shown to share it with spouse: Apex court

Source: Straits Times
Article Date: 17 Mar 2023
Author: Selina Lum

Apex court says man had shown clear intention to treat it as part of family estate.

A man who tried to exclude inheritance totalling $3.8 million from the pool of matrimonial assets he has to share with his former spouse has lost the court fight.

Singapore’s highest court ruled that the man had shown a clear intention to treat these assets as part of the family estate.

While they were married, the man had sent his wife e-mails and text messages in which he included the inherited assets as part of their total wealth, using terms such as “our liquid assets” and “our net wealth”.

He had also kept some of the inherited monies in the couple’s joint account, until he emptied it out when the marriage broke down in late 2018.

The Court of Appeal found that these assets had lost their character as a gift or inheritance, and could therefore be regarded as a matrimonial asset. 

Section 112 of the Women’s Charter, which sets out the power of the courts to order the division of matrimonial assets, excludes assets that have been acquired by gift or inheritance from the pool. 

The rationale for this is twofold: it recognises that the gift or inheritance may have been intended to benefit only the receiving spouse; and it acknowledges the need to prevent the other party from getting a windfall.

The Court of Appeal noted that the Women’s Charter did not expressly provide for the intention of a spouse to bring non-matrimonial assets into the matrimonial pool.

But it added that the law did not preclude the courts from giving effect to a spouse’s intention by applying property law principles.

In its written judgment on March 3, the apex court said: “Where one of the parties to the marriage has received a gift or inheritance but evinces an intention to deal with that asset by, for example, giving it to the other party or incorporating it into the family estate, it is not inconsistent with section 112 for the court to give effect to such intention.”

In the present case, the apex court found that the husband showed a “clear and unambiguous intention” to treat the assets as part of the matrimonial pool.

The court ordered the total pool of matrimonial assets, valued at about $12.7 million, to be divided equally between the parties.

The parties, who married in September 2003, were granted an interim judgment of divorce in July 2019.

On the division of matrimonial assets, the husband argued that six bank accounts and investment portfolios in his name should be excluded, as they were derived from gifts or inheritance from his father, who died in 2008.

He said the sources of these assets were money from his father’s Australian will, money from the winding up of a company, and money from the sale of the shares of another company.

He also argued that another Australian bank account in his sole name, identified as ANZ-55, which was valued at more than $10,000, should be excluded, as it was a pre-marriage asset.

A High Court judge included these assets in the matrimonial pool.

On the husband’s appeal, however, the appellate division of the High Court removed these assets from the pool.

The wife then appealed to the Court of Appeal.

In its judgment, the apex court said the husband’s correspondence with the wife demonstrated that he viewed these assets as part of the family estate.

The court added that the man’s intention can also be inferred from the fact that he had placed some of the inheritance monies into the couple’s joint account. 

It said that when non-matrimonial assets are placed into a joint account which the other spouse can also operate, then a “rebuttable presumption indeed arises that the transferring spouse intends to share the said monies with the other”.

The court said it was not convinced by the husband’s explanation that the purpose of the joint account was only to provide for the family if anything untoward were to happen to him.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.


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