Case Summaries

USB v USA and anor appeal [2020] SGCA 57

SUPREME COURT OF SINGAPORE

12 June 2020

Case summary

CA/CA 39/2020 & CA/CA 40/2020

USB v USA and anor appeal [2020] SGCA 57

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Decision of the Court of Appeal (delivered by Judith Prakash JA):

Outcome: Court of Appeal holds that parties’ cohabitation prior to the marriage is not relevant to the division of matrimonial assets

Pertinent and significant points of the judgment

  • In determining the length of the marriage and assessing parties’ indirect contributions to the marriage, the court ought not to consider the period of time when parties were cohabiting with each other.
  • The structured approach set out in ANJ v ANK [2015] 4 SLR 1043 (“ANJ v ANK”) should continue to apply to short marriages.
  • The court’s power of division is confined to assets that were acquired during marriage. The interpretation of the term “acquired” under s 112(10)(a) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“the Charter”) should be approached sensibly in line with the overall legislative purpose of the relevant provisions. The focus is on identifying the material gains of the marital partnership. Thus for example “acquired” includes the acquisition of an equitable or beneficial interest of a mortgagee where parties pay off an outstanding mortgage loan during the marriage.
  • In assessing indirect contributions to the marriage, the broad-brush approach should be applied with particular vigour to avoid needless acrimony.

 

Background

1 The parties (“the Husband” and “the Wife”) were married for approximately five and a half years before they were divorced. Prior to the marriage, they had cohabited for about 12 years. The parties did not have children together but the Wife’s two children from her earlier marriage lived with the couple while they were cohabiting and when they were married.

2 The Wife owned 17 properties in her sole name which made up the majority of the pool of matrimonial assets. The dispute revolved around nine of these properties that had been purchased before the marriage (“the Disputed Properties”). The Husband argued that the full value of the Disputed Properties should have been included in the pool of matrimonial assets while the Wife argued that the Disputed Properties should not have been included at all.

The court’s decision

 

3 In determining the length of the marriage, the court ought not to take into account the period of time during which parties were cohabiting. Marriage confers a legal status on the parties which carries specified rights and obligations. It is inherently self‑contradictory to treat parties as “married” when they were simply cohabiting (at [18]).

4 The court’s power of division is confined to assets that were acquired during marriage or were transformed into matrimonial assets. This transformation may occur if the asset has been substantially improved or used by the family as part of family life during the marriage, as this creates a nexus or link between the marriage and the assets in question. The interpretation of the term “acquired” under s 112(10)(a) of the Charter should be approached sensibly in line with the overall legislative purpose of the relevant provisions. The focus is on identifying the material gains of the marital partnership. For example, where parties pay off the outstanding mortgage loan on a house during the marriage, the court may conclude that a portion of the value of the asset was “acquired” during the marriage. Through the process of repayment, what is “acquired” is the equivalent proportion of the equitable or beneficial interest of the mortgagee (at [18] to [20], [27] to [28]) and [29]).

5 When a marriage is dissolved, all the parties’ assets will be treated as matrimonial assets and the burden of proof is on the party to show that any particular asset was either not acquired during the marriage or was acquired through gift or inheritance. Where an asset is prima facie not a matrimonial asset, the burden lies on the party asserting that it is one to show how it was transformed (at [31] to [32]).

6 The structured approach set out in ANJ v ANK should continue to apply to short marriages and the court should not incline towards equality of division in short marriages. The court is constrained by the statutory language to have regard to all the circumstances of the case. A key feature of the approach in ANJ v ANK is that it provides the court with the discretion to vary the weightage between direct and indirect contributions. Generally, indirect contributions are less significant in short marriages, but the court is not compelled to arrive at an unequal weightage even in a short marriage. There are good reasons for the court to retain equal weightage between direct and indirect contributions in a short marriage, especially if there are children. Apart from short marriages, adjusting the weightage between direct and indirect contributions should be done only as an exception (at [37] to [42]).

7 In assessing indirect contributions, the broad-brush approach should be applied with particular vigour. The court should not focus unduly on the minutiae of family life but should direct its attention to broad factual indicators, such as the length of the marriage, the number of children, and which party was the children’s primary caregiver. Often the evidence will not have been tested by cross‑examination and it will be difficult to determine matters evidencing indirect contributions. In the circumstances, each party’s duty of disclosure to the court takes on greater significance (at [43] to [46]).

8 It would be wrong in principle for the court to take account of the parties’ indirect contributions during cohabitation to determine the extent of their contributions to the marriage (at [47] and [51]).

9 In the present case, it was undisputed that the Wife continued to pay off the loans on the Disputed Properties during the marriage. This brought a portion of the value of the Disputed Properties within the pool of matrimonial assets. Though the Wife was initially stubborn about providing disclosure, she eventually produced the relevant documents and the prorated values of the Disputed Properties would already have been included by the Judge below (at [54], [58] to [59] and [66]).

10 The Judge should not have considered parties’ indirect contributions during the period of cohabitation but there was no need to adjust the ratio as both parties’ indirect contributions prior to the marriage must be disregarded. There was no reason to disturb the decision to divide the assets 89:11 in favour of the Wife (at [76] and [78]).

11 The Court was in general agreement with the Judge’s methods of calculating the portion of the assets in the pool save for the prorated values of two of the Disputed Properties. The sum of $206,049.44 was added to the pool. This did not significantly move the parties’ financial positions from where they were prior to the appeals and parties were ordered to bear their own costs (at [69] to [73] and [79] to [82]).

This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.

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