The Split After The Split - Part 2

Article By: PracticeForte Advisory Affiliate Ms. Susan Tay of OTP Law Corporation.

Explaining Fair and Equitable Division of Matrimonial Assets-Global Assessment Method for Long, Single-Income Marriage

Just when we thought the law is fairly settled after ANJ v ANK [2015] SGCA 34, our apex court concludes in a recent case of TNL v TNK [2017] SGCA 15 that the approach in ANJ will not work for a single income family as it tends to favour the working spouse over the non-working spouse. In the ANJ approach, financial contributions are given weight in both steps. To recollect, the steps stated in the ANJ approach are as follows:

1st Step, work out the proportion of direct contributions (cash paid directly toward the acquisition of assets)

2nd Step, work out the proportion of indirect contributions (contributions other than in the 1st step including non-financial ones)

3rd Step: average the ratio and then

I have then proposed a 4th Step as follows:

4th Step: if applicable, a non-mathematical balancing tweak to accommodate special elements like very long marriage, exceptional size of asset pool and extra-ordinary efforts in the acquisition and nature of indirect contributions  as well as adverse inference.

The apex court in TNL illustrates how the ANJ approach in a single income family will not be in line with “the court’s philosophy of marriage being an equal partnership.”

Under Step 1, the working spouse in a Single-Income Marriage would be accorded 100% (or close to 100%) of direct contributions. He or she would also be accorded a substantial percentage under Step 2 solely on the basis of his or her indirect financial contributions, and this could well be the case even if he or she made little or no non-financial contributions. On the other side of the equation, this means that the non-working spouse is, in this sense, doubly (and severely) disadvantaged.”

This court is decisive in not ascribing any mathematical formula therefore for the 2nd Step. It also dismisses any attempts at sub-dividing the indirect contributions at the 2nd Step 2 to financial and non-financial as there is no legal basis for doing so.

“In the nature of things, for the court to ascribe a ratio in respect of the non-financial or indirect financial contributions of the parties, the court is clearly not indulging in any mathematical calculation because often there is very little concrete evidence to be relied uponContributions in the form of parenting, homemaking and husbandry, by their very nature, are incapable of being reduced into monetary terms. No mathematical formula or analytical tool is capable of capturing or accommodating the diverse and myriad set of factual scenarios that may present themselves to court as to how the parties may have chosen to divide among themselves duties and responsibilities in the domestic sphere. It is in making this determination that what is known as the broad brush approach would have to come into play. What values to give to the indirect contributions of the parties is necessarily a matter of impression and judgment of the court. In most homes, even in a home where both the spouses are working full time, in the absence of concrete evidence it is more likely than not that ordinarily the wife will be the party who renders greater indirect contributions. That said, even in a home where the wife is a full-time homemaker, it would be an exceptional home where the husband renders no indirect contribution at all. What values to attribute to each spouse in relation to indirect contributions would be a matter of assessment for the court and in that regard broad strokes would have to be the order of the day. In seeking to arrive at a ratio that represents both parties’ comparative indirect contribution towards the family, the court must, in the final analysis, exercise sound discretion along with a keen emphasis on all the relevant facts of each case. [emphasis added]”

This case is about a long marriage of 35 years in which the parties play traditional roles i.e. husband was the sole breadwinner and a wife who gave up her job to take care of 3 children through top their adulthood.

The decision by the court of appeal in TNL by upholding the below judge’s decision of an almost 50-50 split (more precisely 49.4:50.6) is yet another such decision favouring equal division of matrimonial assets in a long marriage. The court in TNL alluded to how different considerations would apply to a short single income family but stopped short of saying how, proposing to leave the issue to be dealt with in the appropriate  cases.

Conclusion:

In a long single income marriage, the court favours an equal distribution of matrimonial assets. There may be exceptions to this case for example where the asset pool is a sizable one (e.g. Yeo Chong Lin v Tay Ang Choo Nancy and another appeal [2011] 2 SLR 1157 where the asset pool was worth S$69m and was largely acquired through the extra-ordinary effort of the husband and the court gave 65:35 in favour of the husband) but such exception tends to be rare and unique.

It is nonetheless the author’s view that the ANJ formula with the author’s proposed 4th Step can still work for long marriages in a single income family as the 4th Step is precisely designed for extra-ordinary elements like the one in TNLwhere the marriage lasted over 3 decades with only 1 breadwinner.

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