Divorce in a long term single-income family: What you need to know – By Mr Lim Chong Boon, PKWA Law Practice LLC

The recent decision in TNL v TNK [2017] SGCA 15 clarifies how matrimonial assets should be divided in divorces and allowed the Court to emphasize that mutual respect must be accorded for spousal contributions whether in the economic or homemaking spheres as both roles are equally fundamental to the well-being of a marital partnership. This update sets out the facts and implications for couples under-going or considering divorce proceedings.

Facts and decisions

The husband, TNL (“the Husband”) and the wife, TNK (“the Wife”) were married in 1978. The Husband supported the family economically and the Wife looked after the household. After a marriage of 35 years, the Wife filed for divorce in 2013.

The divorce was uncontested but issues were raised by both parties pertaining to the division of the matrimonial assets, maintenance for the Wife and the cost of the ancillaries.

At the court of first instance, the judge ordered an equal division of the matrimonial assets and that a lump sum maintenance payment of S$171,517 be paid to the Wife by the Husband.

Both parties appealed against the decision of the initial court on the issues related to: (a) the division of the matrimonial assets; (b) the maintenance for the Wife and (c) the cost of the ancillaries.

On appeal, the Court of Appeal accepted the appeals of both parties in part but refused to disturb the initial judge’s decision to order an equal division of the matrimonial assets. The maintenance payment for the Wife was reduced to S$100,000. At the same time, the Court of Appeal cautioned parties against appeals as they will not hesitate to order costs even against successful appellants when the Court deems that the appeal lacks sufficient merit.

No spending of money belonging to the pool of matrimonial assets when divorce is imminent or ongoing

Both the Husband and the Wife disputed the total amount of monies that formed part of the pool of matrimonial assets. Their disputes centered around the the sale proceeds of an apartment unit that was sold off in January 2013 and a withdrawn sum of money from a shared account shared between the Wife and her daughter.

These sums of money were found to belong to the pool of matrimonial assets because these were substantial sums that were expended when divorce proceedings were imminent or after the interim judgment but before the ancillaries were concluded. Regardless of whether the money was being dissipated or spent for the benefits of the couple’s children, it has to form part of the pool of matrimonial assets. What this means is that any spouse who spends substantial sums of money will have to account for it and return the money for division.

Financial and non-financial contributions of spouses to be given equal weight

The Court of Appeal reconsidered the application of the ANJ v ANK approach to single-income marriages because it would privilege the working spouse over the non-working spouse. Under the current division of matrimonial assets framework set out in ANJ v ANK, the Court of Appeal set out a 3-step approach towards the division of matrimonial assets whereby the Court:

  1. ascribes a ratio to represent each parties’ direct financial contribution;
  2. ascribes a ratio to represent each parties’ indirect financial contribution and non-financial contributions to the family; and
  3. takes an average of both ratios together with other factors like the needs of the children the presence agreement between the parties with respect to the ownership and division of assets, period of rent-free occupation or other benefits enjoyed by one party in the matrimonial home to the exclusion of the other party, and matters referred to in section 114(1) of the Women’s Charter (Cap. 353, 2009 Rev Ed) relating to the maintenance order for the wife.

This approach is meant to give equal weight to the contributions of the working and non-working spouse. However, the current approach would only work well in a dual-income family where both spouses are working. In the context of a long term single-income marriage,

the limitation of the current approach is exposed because the direct and indirect financial contributions of the spouse will be considered twice; thereby privileging the contribution of the working spouse over the non-working spouse.

The implication of this case is that in future cases, a non-working spouse in a long term marriage may expect to be given equal consideration in the division of the matrimonial assets and may be entitled to at least half of the matrimonial assets (bearing any other exceptional circumstances).

Appeals in divorce proceedings face greater scrutiny

Additionally, the Court of Appeal also encouraged divorcing couples to move on to face the future instead of re-fighting old battles. As appeals causes unnecessary stress to both parties, there is far greater incentive for divorcing couples to move on rather than to appeal against awards that would not adjust the distribution of the matrimonial assets significantly. To this end, the Court of Appeal cautioned that it would not hesitate to order cost against the successful party if the adjustment is less than 10 percent of the initial award. This is to encourage early settlement of divorce matters and to punish unmeritorious appeals that prolong the stress and anxiety for parties involved in the divorce proceedings. Parties to a divorce are therefore advised to proceed cautiously before appealing against the decision of the initial court.

TNL v TNK has allowed the Court to once again reiterate the importance of marriage being an equal partnership between spouses and that due respect has to be accorded to spouses’ financial and non-financial contributions. As a final note, the courts has also emphasized the importance of an amicable separation when a marriage sours and will not hesitate to punish parties for needlessly prolonging divorce proceedings through unmeritorious appeals.

The writer is the Head of PKWA Law Family Department, one of the largest family practices in Singapore. If you have any questions or comments on this article, please contact Mr Lim Chong Boon of PKWA Law Practice LLC at 6854 5336 / 6397 6100 or visit PKWA Law Family Law website at http://www.sgdivorcelawyer.sg/ or PKWA Law Main Website at http://www.pkwalaw.com/.