Finances on Divorce

Finances on Divorce

What financial orders can the court make on divorce?

The court is empowered, when granting a judgment of divorce, to order the division or sale of matrimonial assets in such proportion as is just and equitable (s 112(1), Women’s Charter). The court is also empowered to make orders for maintenance for the wife, incapacitated husband and children of the marriage (ss 113, 127, Women’s Charter).

With respect to the division of matrimonial assets, the court may make any order necessary or expedient to effect the division, which includes making an order for sale, vesting any asset owned jointly by the parties in both the parties in common in such shares as the court deems just, vesting any asset or any part thereof in either party, ordering for any asset to be held in trust on such terms as may be specified in the order, and ordering a payment of sum of money by one party to the other party (ss 112(3), 112(5), Women’s Charter).

With respect to maintenance orders, in addition to the typical orders of payment of a lump sum or periodical payments, the court may provide for an attachment of earnings order, or require security for the maintenance by vesting property in trustees upon trust to pay the maintenance out of the income of the property (ss 81, 115, Women’s Charter).

 

Do matrimonial regimes exist and do they need to be addressed by the court on divorce? Is there a default regime?

There is no equivalent concept of matrimonial regimes which parties could elect or which could operate by default, whether of separate or community property regimes, in Singapore.

 

How does the court decide what orders to make? What factors are taken into account?

To determine the appropriate order to make, the court takes into account all the circumstances of the case, including certain statutorily required factors.

With respect to the division of matrimonial assets, the court takes into account the factors in s 112(2) of the Women’s Charter, such as the contributions made by each party in money, property or work towards acquiring, improving or maintaining the matrimonial property, and to the welfare of the family (ss 112(2), Women’s Charter), and the factors listed in s 114(1) of the Women’s Charter.

In practice, we loosely categorise all contributions as either “direct financial contributions” or “indirect financial/non-financial contributions” towards the acquisition of the matrimonial assets.

The court may adopt a structured approach by first ascribing a ratio representing the parties’ direct contributions relative to each other, followed by ascribing a ratio representing the parties’ indirect contributions (non-financial or indirect financial contributions) relative to each other, and finally averaging both the direct and indirect contributions (ANJ v ANK [2015] SGCA 34).

With respect to spousal and child maintenance, the courts take into account the factors listed in s 114(1), such as the income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future, the parties’ standard of living and their ages (ss 114(1), 127(2), Women’s Charter).

Different policy considerations underlie spousal and child maintenance. It should be noted that the courts have decided that even nominal maintenance (i.e. $1 maintenance) for a former wife is not to be awarded automatically or as a matter of course (ATE v ATD [2016] SGCA 2).

 

Is the position different between capital and maintenance orders?

The Women’s Charter requires the court to take into account all the circumstances of the case whether in making orders for division of matrimonial assets or for maintenance orders, although the principles and the specific factors between the two differ. Broadly speaking, the division of matrimonial assets is aimed to be “just and equitable” (s 112(1), Women’s Charter) in light of parties’ respective contributions towards the marriage, while maintenance is aimed at preserving the wife’s standard of living during the marriage (s 114(2), Women’s Charter).

 

If a couple agrees on financial matters, do they need to have a court order and attend court?  

Yes, the parties’ agreement would be incorporated by way of a consent order which is filed with, and subsequently granted by, the court. If the proceedings are uncontested, the court can waive the requirement for attendance. Please see question 1.3 above.

 

How long can spousal maintenance orders last and are such orders commonplace?

If the maintenance is for a lump sum, it is intended to extinguish all further and future claims. Otherwise, if the order for periodic payments is not expressed to be for any shorter period, the order would last until either the death of the paying spouse (if the maintenance is unsecured), or upon the payee spouse’s remarriage or death (s 117, Women’s Charter).

 

Is the concept of matrimonial property recognised in your jurisdiction?

Yes, all “matrimonial assets” are subject to division upon a divorce (s 112(1), Women’s Charter). “Matrimonial assets” are defined as (s 112(10), Women’s Charter):

■ all assets acquired during the marriage by one or both parties to the marriage; or

■ all assets acquired before the marriage by one or both parties to the marriage and:

■ ordinarily used or enjoyed by both parties or their children for shelter, transportation, household, education, recreational, social and aesthetic purposes; or

■ substantially improved during marriage by one or both parties to the marriage.

Assets that are excluded are those (not being a matrimonial home) acquired by gift or inheritance by one party at any time and that have not been substantially improved during the marriage by the other party or both parties.

 

Do the courts treat foreign nationals differently on divorce, if so, what are the rules on applicable law? Can the court make orders applying foreign law rather than the law of the jurisdiction?

Apart from the court’s jurisdictional requirements for granting a decree for divorce, there is no explicit rule stating that foreign nationals are to be treated differently on divorce (see question 1.1) and the Women’s Charter applies even in cases of divorce between two foreign nationals in Singapore.

 

How is the matrimonial home treated on divorce?

A matrimonial home would be considered a “matrimonial asset” under the Women’s Charter, and be placed in the pool of matrimonial assets for division under Part X of the Women’s Charter. However, depending on the circumstances, the home need not inevitably be sold and the proceeds divided. One party may retain title of the home whilst reimbursing the other party for that party’s share of the matrimonial home or have the right to occupy the home to the exclusion of the other party (s 112(5)(f), Women’s Charter).

 

Is the concept of “trusts” recognised in your jurisdiction?

Yes, trusts are recognised in Singapore. Generally, a fixed/irrevocable trust settled in favour of a third party will be left alone unless it was created to deprive the spouse of his/her claim to maintenance or asset division (CH v CI [2004] SGDC 131). As for a discretionary/ revocable trust in favour of a third party, the court would exercise its discretion as to whether the trust is a matrimonial asset. The court has power to set aside the trust on application under s 132 of the Women’s Charter (NI v NJ [2006] SGHC 198; AQT v AQU [2011] SGHC 138). In any case, the court has the discretion to treat the value of the assets of the trust or the value of the assets expended to set up the trust as a resource to the settlor/beneficiary, whether for division of matrimonial assets or in determining spousal maintenance (Marie Eileen Guin nee Fernandez v Arun Guin [1994] SGHC 157).

 

Can financial claims be made following a foreign divorce in your jurisdiction? If so, what are the grounds?

Yes, financial claims following a foreign divorce may be made in Singapore subject to the court’s jurisdictional requirements and leave being granted, by way of Chapter 4A, Part X of the Women’s Charter (Tan Poh Leng v Choo Lee Mei [2014] 4 SLR 462). Further, in respect of foreign maintenance orders, a person may enforce such maintenance orders under either the Maintenance Orders (Facilities for Enforcement Act) or the Maintenance Orders (Reciprocal Enforcement Act), as applicable to the reciprocating country.

 

What methods of dispute resolution are available to resolve financial settlement on divorce? E.g. court, mediation, arbitration?

The family justice system has undergone substantial reform, with the unified Family Justice Courts, comprising the High Court (Family Division), the Family Court and the Youth Court, being established on 1 October 2014; and a Judge-led approach coming into operation on 1 January 2015.

With effect from 1 October 2014, for divorce proceedings involving children (below 21 years old), it is mandatory for the court to order the parties to attend mediation, counselling or both (s 50(3A), Women’s Charter), but the court is empowered to refer the parties to attend mediation, counselling or other family support programmes in other instances (s 50(2), Women’s Charter). Such mediation is conducted by specially appointed judge-mediators or legal professionals, at the Child Focused Resolution Centre or Family Resolution Chambers. With effect from 1 October 2016, the courts no longer mediate in cases where assets are above a gross value of $3 million and there are no contested child issues, but may refer such cases to private mediation.

Private mediation is available through the Singapore Mediation Centre, as well as a number of organisations and individuals in Singapore. The Singapore Mediation Centre also has an accredited Collaborative Family Practice panel. Whilst family arbitration is not expressly disallowed under the Arbitration Act, there are no known instances of family arbitration in Singapore.