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WJZ v WJY [2024] SGHCF 2
Outcome: Appeal Allowed in part, Dismissed in part.
Facts
1 The parties married in 1992 in India and have one child (“S”) in 1995. The parties were no longer in any meaningful relationship or contact after September 2007. The Wife filed for maintenance for S and herself in August 2018, after her father’s financial support ended upon his death. The Husband filed for divorce in December 2018 and Interim Judgment was granted in February 2019.
2 During the marriage, the parties purchased an executive masionette (the “Flat”), which was sold in 2007. Around the same time, the Husband purchased the Disputed Property. The Wife claimed that the Disputed Property was purchased using the sale proceeds from the Flat. The Husband claimed that the sale proceeds were used for investment instead. Further, over the course of the marriage, the Husband also took numerous loans from a third party (“SB”). SB obtained a default judgment against the Husband for the return of $2.04m she claimed was lent to him. The Husband claimed that the monies from SB were used to pay for the Disputed Property, repay trading losses, and pay for his daily living expenses, and argued that his debt should be paid out of the proceeds of sale of the Disputed Property.
Court's Decision:
3 The Husband had full control of the sale of the Flat, necessarily had all the knowledge of the sale transactions involving the Flat and his purchase of the Disputed Property, and kept the Wife ignorant of both these property transactions. The Husband therefore bears the burden of proving that he had not used matrimonial monies to purchase the Disputed Property.: at [88].
4 In law, until the grant of IJ, the marriage is legally intact although the union may have undergone factual disintegration post separation. Both parties, being still married under the law, must be presumed to intend to continue with their joint contributions to their marriage and with their joint accumulation of assets and investments using matrimonial assets for the benefit of their subsisting marriage. The default position does not apply if it can be shown that the other party is against such an investment, has no wish to participate in that investment to avoid the risk of less, and accepts at the same time to forgo the potential gain: at [120] and [128].
5 If a party wishes to advocate a departure from the default position for the purpose of division of matrimonial assets, that party must at least be able to prove that both parties have mutually manifested a clear intention to have a clean break both financially and non-financially. The burden is on the Husband to show that come to such a mutual agreement; that the Husband himself may harbour this intention himself is insufficient. If the Husband wished to sever all bonds including the bond of mutual contributions and mutual accumulation of assets during the legal subsistence of the marriage, then he should have applied for divorce as soon as he was eligible to do so, or sought an express agreement from the Wife at the start of their separation.: at [125] to [127].
6 The default position for the property investments is that unless the contrary is established, the other party is taken to have implicitly agreed to that property investment and to participate in it. Where investments turn out to be losses, and if there is an express view from the other party not to participate in the investment, then the pool of matrimonial assets may exclude the losses by adding back notionally to the pool the initial amount of monies paid for those investments. Where the investments make money, the party making the investments will gain the entire benefit of those gains without having to share them with the other party.: at [129] and [131].
7 The default position for investment in very risky and speculative shares is that there is no participation by the other party unless consent is sought from that other party. The party investing in such shares using matrimonial assets will bear the losses and keep the gains. If the shares are instead safe, non-risky blue-chip shares, then the default position will be the same as if the investments are property investments. A common sense approach must be applied to determine how the gains or losses are to be shared depending on the risks undertaken by each party.: at [132].
8 Loans extended to the family and used for family purposes in the course of a marriage that remain outstanding and enforceable have to be taken into account in the division of matrimonial assets. The default treatment is to subtract such outstanding loans from the pool of matrimonial assets prior to division, on the basis that these loans would have to be accounted for first (ie by having the loan treated as being discharged first) before the division takes place.: at [172].
9 However, the burden is on the Husband to prove that he had in fact borrowed monies from SB because he could not fulfil his financial obligations at that time. He must further establish (a) the true quantum of all the loans taken from SB; (b) that the loans were taken during the subsistence of the marriage: (c) that he had applied the loan monies for the benefit and the purposes of the marriage, ie for the joint benefit of H and W or for the benefit of S; (d) that the loans remain outstanding; and (e) that such loans are enforceable against him, and are not time-barred.: at [187].
The full text of the decision can be found here.
This summary is provided to assist the public to have a better understanding of the Court’s judgment. 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 judgment.
2024/10/07
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