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WHAT IS “JUST AND EQUITABLE” DIVISION OF MATRIMONIAL ASSETS

What is “Just and Equitable” division of matrimonial assets?
just and equitable division of assets

What is “just and equitable” division of matrimonial assets? Deputy Head Dorothy Tan successfully argued in favour of her client at the Court of Appeal in a landmark decision.

Twiss, Christopher James Hans v Twiss, Yvonne Prendergast[2015] SGCA 52

Case Number: Civil Appeal No 22 of 2015

Decision Date: 02 October 2015

Tribunal/Court: Court of Appeal

Coram Chao Hick Tin JA; Judith Prakash J; Quentin Loh J

Counsel Name(s): Tan Xuan Qi Dorothy (PKWA Law Practice LLC) for the appellant; Isaac Tito Shane, Justin Chan Yew Loong and Zee Ning En Jasmine Mildred (Tito Isaac & Co LLP) for the respondent.

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Family Law – Matrimonial assets – Division

2 October 2015

Chao Hick Tin JA (delivering the grounds of decision of the court):

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Our decision

Relying on ANJ v ANK, Miss Tan argued that if the ratio of the parties’ direct financial contributions was 70:30 and the ratio of their indirect contributions was precisely the same, the matrimonial assets should be divided in the ratio of 70:30 in favour of the wife.

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Our decision

15. In advancing her arguments, Miss Tan highlighted the fact that the Judge had erred in law by applying what was generally known as the “uplift” methodology. This error consisted of taking the view that the wife’s indirect contributions should be reflected by applying an “uplift” to the share she would have been entitled to on the basis of her direct financial contributions only. We accepted Miss Tan’s contentions on this score and we considered that the Judge had erred in that regard. This court warned against the use of the “uplift” methodology in ANJ v ANK and referred to some possible pitfalls of that methodology (at [18]-[20]). We reaffirm what was said there.

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16. We were of the view that the Judge’s decision to award the entirety of the matrimonial assets to the wife was untenable. Such a division could be justified only in the most exceptional or extreme circumstances, eg, where the husband’s direct financial contributions and indirect contributions amounted to nothing at all, or where his contributions were very insignificant and it was thought fit to draw an adverse inference against him such as to reduce his share to zero. We did not think that such extreme circumstances obtained in the present case. To all intents and purposes, during the first decade of the marriage, the husband fulfilled his role as a family man, caring and providing for the entire family. While he strayed during the second decade of the marriage, he had nevertheless provided financially for the family.

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17. We were therefore of the opinion that it was just that we should allow the husband’s appeal. In determining what would be a fair and equitable division of the assets, we followed the structured approach set out in ANJ v ANK(at [22]-[27]), which comprises the following broad steps:

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(a) Express as a ratio the parties’ direct contributions relative to each other, having regard to the amount of financial contribution each party made towards the acquisition or improvement of the matrimonial assets;

(b) Express as a second ratio the parties’ indirect contributions relative to each other, having regard to both financial and non-financial contributions; and

(c) Derive the parties’ overall contributions relative to each other by taking an average of the two ratios above, keeping in mind that, depending on the circumstances of each case, the direct and indirect contributions may not be accorded equal weight and one of the two ratios may be accorded more significance than the other.

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18. Applying this structured approach to the matrimonial home, we began with parties’ direct financial contributions. In this connection, we accepted Miss Tan’s argument that the correct ratio was 70:30 in the wife’s favour and not 75:25. We accepted her contention that the husband should be given some measure of credit for the mortgage payments that had been made out of the proceeds of renting out the matrimonial home for the period from May 2008 to August 2013 at $7,800 a month. It was not disputed that the wife had paid $1,500 in CPF monies and $1,405 in cash per month towards the mortgage during that period. The cash component was paid out of the rental proceeds, which ought to be considered as belonging jointly to the parties, as this was income earned on an asset that was jointly owned. Thus, it was only fair that half of the $1,405 cash payment of the mortgage instalments during that period should be regarded as having been contributed by the husband.

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19. Doing the arithmetic, it would mean that, having contributed $702.50 per month over the 63 months from May 2008 to August 2013, the husband had contributed $44,257.50 more and the wife $44,257.50 less than what the Judge thought that they had. This meant that the husband’s direct financial contributions to the matrimonial home amounted to $352,743.73 and the wife’s $810,867.51. The ratio representing their direct financial contributions was therefore approximately 70:30 in the wife’s favour.

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Read full decision here.

Related articles:

Division of matrimonial assets

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