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DIVSION OF MATRIMONIAL ASSETS IN SHORT MARRIAGES 

Based on the case law on the division of matrimonial assets in short marriages, it is evident that direct contributions will usually be accorded more weight, often in the region of 70% to 80%.

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DIVISION OF MATRIMONIAL ASSETS IN SHORT MARRIAGES

MATRIMONIAL ASSETS DIVSION IN SHORT MARRIAGES

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How does the Court divide matrimonial assets in short marriages?

Following the landmark decision in ANJ v ANK, the courts have consistently applied the “structured approach” to achieve a just and equitable division of matrimonial assets. The application of the structured approach, however, is unlikely to result in an equal division of assets in short marriages given that the indirect contributions of the parties may be too trivial to influence the quantum in such marriages. Thus, the courts tended to put the parties back in the position they were in prior to the marriage.

Based on the case law on the division of matrimonial assets in short marriages, it is evident that direct contributions will usually be accorded more weight, often in the region of 70% to 80%. Indirect contributions, as a result, is given less weight in the region of 20% to 30% during computation. This means that division of the matrimonial assets will be favourable to the party who had made significant direct contributions notwithstanding that the other party had made more indirect contributions during the marriage.

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Division of Matrimonial Assets in Short Marriages

 

The cases below illustrate the general approach of the Court in the division of matrimonial assets in short marriages:

 

ANJ v ANK [2015] SGCA 34 (“ANJ vANK”)

Facts:  The parties were married for 9 years and the court adjudicated on the issues relating to the division of matrimonial assets and maintenance for the wife and children.

 

Held:   The Court introduced the “structured approach” and cautioned against using the “uplift methodology” to determine the parties’ indirect contributions which carries the risk of undervaluation and overvaluation.

The “uplift methodology” carries the risk of undervaluing a party’s indirect contributions as direct contributions will often be taken as the starting point in the division of assets. As a consequence of direct contributions assuming the dominant position in such an approach, indirect contributions will not receive due emphasis.

The methodology above also bears the risk of overvaluing a party’s indirect contribution when applying an “uplift” as it unfairly deducts one party’s share to provide for the “uplift”. To illustrate this, a 5% uplift to the wife in a 50:50 division creates a 10% disparity as the same 5% is deducted from the husband’s share, resulting in a final 55:45 division in favour of the wife. This ultimately means that while the uplift is only valued at 5%, the real value of indirect contributions is 10%.

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The “Structured Approach” introduced in ANJ v ANK

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Step 1: Court to first assign a ratio to represent each party’s direct financial contributions towards the acquisition and/or improvement of matrimonial assets;

Step 2: Court to assign a second ratio to represent each party’s non-financial and indirect financial contributions throughout the marriage; and

Step 3: The final ratio to divide the matrimonial assets is derived from the average of the two ratios above, taking into account the weightage that is given to each type of contribution. Based on the circumstances of the case, the Court may adjust the weightage accordingly to achieve a just and equitable outcome if it opines that one type of contribution warrants more weightage than the other. Without going so far as to limit the possibilities, the Court in ANJ v ANK identified 3 categories that could potentially warrant an adjustment:

(i)                 length of marriage;

(ii)               size of matrimonial assets; and

(iii)             extent and nature of parties’ indirect contributions made.

With regards to the length of marriage, indirect contributions would generally be accorded less weight in short marriages compared to long marriages.

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AZZ v BAA [2016] SGHC 44

Facts:  The parties were married with two children. The pool of matrimonial assets in contention is large and the parties kept their finances separate during their relatively short marriage of 4.5 years. The parties also had domestic help in the form of maids and a driver.

Held:   Following ANJ v ANK, the Court adjusted the weightage and attributed a weight of 70% to direct contributions and 30% to indirect contributions for the following reasons:

(i)                 the marriage was a relatively short one, lasting 4.5 years;

(ii)               the pool of matrimonial assets is large;

(iii)             the parties managed their own finances and kept it separate; and

(iv)              the parties had engaged domestic help and this naturally reduced their level of indirect contributions.

The average ratio derived from the parties’ direct and indirect contributions is therefore:

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Wife Husband
Direct contributions

(70% weight)

36.3%

(25.4%)

63.7%

(44.6%)

Indirect contributions (both financial and non-financial)

(30% weight)

55%

(16.5%)

45%

(13.5%)

Average percentage contributions

(weighted 70:30)

41.9% 58.1%

In contrast to the above, the courts maintained the equal weightage of 50:50 for direct and indirect contributions in TME v TMF [2016] SGHCF 6 despite that the pool of matrimonial asset was large as the marriage was a long one of almost 20 years.

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Note:   No family law case is alike. You should seek legal advice as to the likely outcome with regards to a division of matrimonial assets.

 

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