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Singapore Sling

Wong Kai Yun from Singapore and Sarah Lucy Cooper from England and Wales mull over differences between divorce proceedings in Singapore and England.

Wong Kai Yun, Co-Managing Partner, Chia Wong LLP

Sarah Lucy Cooper, barrister, Thomas More Chambers


















Wong Kai Yun, Co-Managing Partner of Chia Wong LLP, and Sarah Lucy Cooper, Barrister of Thomas More Chambers 

As one of the most diverse nations in the world, Singapore is no stranger to cross-national marriages. Of course, this means a conjunctive rise in cross-jurisdictional divorces, of which a significant proportion involves British expatriates. One such expatriate was the client (M), who is of Japanese descent, and holds both Japanese and British passports, whereas her husband holds a British passport. The family was then living in Singapore. M had not worked since their marriage and was a homemaker whilst her husband supported the family financially. On separation, M planned to relocate with her two young children to England, while her husband remained in Singapore for his work.

M sought legal advice on how to file for divorce and whether, if the choice presented itself, she should file in Singapore or in England.

This was how the authors found themselves collaborating on M's case as advisors. Distance was no object: over a series of emails, Skype conferences and consultations, the authors quickly flagged five main areas to ascertain possible differences in divorce proceedings between the two jurisdictions.


Division of assets

The first difference was how Singapore and England divide matrimonial assets. Briefly, Singapore uses the "broad brush" approach to identify what would be "just and equitable" on the facts of the case under loose guidelines of "direct financial contributions" and "indirect financial/non-financial contributions" to matrimonial assets (Women's Charter, ss 112(1)-(2), ATT v ATS [2012] SGCA 22). In revising these ever-elusive concepts, the courts recently devised a more calculated framework dubbed the "structured approach" in ANJ v ANK [2015] SGCA 34. Under this approach, two different ratios – one representing direct financial contributions, and the other representing indirect contributions – are averaged to give an eventual ratio to divide assets. 

The case of ANJ v ANK itself illustrates this approach well. It was not disputed that the parties' relative financial contributions to the matrimonial assets were 60:40 representing the husband's and wife's direct contributions respectively. In respect of indirect contributions, the court found that credit should be given to the wife who was the primary caregiver of the children, one of whom was assessed to be at risk of suffering from learning disorders. At the same time, the husband had made certain indirect financial contributions, such as paying for utility bills and the children's enrichment classes, and helping out with household affairs. Having regard to these considerations, the court determined that the second ratio representing indirect contributions should therefore be 40:60 in favour of the wife. The court then averaged the first and second ratio to arrive at a final division ratio of 50:50 between the husband and the wife. Clearly, for M, who had made no direct contributions to the acquisition of the matrimonial assets, this "structured approach" was of concern to her.

On the other hand, the courts here take into account the factors under s 25 of the Matrimonial Causes Act as informed by caselaw. Drawing from the seminal case of White v White [2000] UKHL 54, [2001] 1 AC 596, a "yardstick of equal division" is exercised to avoid "[discriminating] between husband and wife and their respective roles". Even though the courts have since disregarded this starting position to compensate for losses dealt to the wife's earning capacity during the marriage (Miller v Miller: McFarlane v McFarlane [2006] UKHL 24), there is still a tendency to split assets on a 50:50 ratio in practice.


Matrimonial home

A second prominent difference between the jurisdictions was how courts deal with the matrimonial home. Singapore does not typically single out the matrimonial home for special consideration. Instead, it is placed within the pool of assets to be divided between the parties according to the broad brush approach (Women's Charter, ss 112(10)).

In contrast, s 25(1) of the Matrimonial Causes Act compels the court to consider the welfare – which would include accommodation needs – of any minor children as a first consideration.


Relevance of bonuses to spousal maintenance


The third difference raised concerned future bonus payments: could a wife have a stake in the husband's future earnings? Divorcing in Singapore meant that M could raise her husband's present bonuses as a consideration for gauging maintenance for herself (Women's Charter, s 114(1)(a)). However, future income and bonuses cannot be claimed as matrimonial assets (AJR v AJS [2010] SGHC 199):

"In my opinion … the matrimonial assets available for distribution should be restricted to the assets acquired in the course of the marriage by both parties up to the date of the Interim Judgment. Hence, all the matrimonial assets (including … future bonuses arising from employment prior to the date of interim judgment) which existed as at the date of the Interim Judgment are the relevant assets for distribution. Any asset acquired after the date of the Interim Judgment should not be considered a matrimonial asset to be distributed between the parties." Emphasis added.

Conversely, English law provides a small window to treat future bonus payments as matrimonial assets. In B v B [2014] EWHC 4545, the court held that bonus payments were included in the division of capital in cases where the husband's income is comprised largely of bonuses. This is on top of how, similar to Singapore, bonuses are also distributed as maintenance at a capped percentage (H v W [2013] EWHC 4105).

On the topic of maintenance, it should also be noted that Singapore and England and Wales operate with different principles in mind for calculating spousal maintenance. A financially dependent wife in Singapore can expect to receive only "reasonable" maintenance according to the "standard of living" she previously enjoyed (Women's Charter, s 69(4)(f)). The courts in England and Wales likewise have wide discretion under s 25 of the Matrimonial Causes Act, but have exercised it in such a way that to M, generous as Singapore appeared to be, England and Wales carries the reputation of being more so.

That being said, England and Wales' 'generosity' towards spousal maintenance appears to be dwindling in recent years. Spousal maintenance may be limited to a certain duration, and spouses may be required by the courts to support themselves thereafter. An apt example is the case of Wright v Wright [2015] EWCA Civ 201. This court criticised the wife's failure to find gainful employment, and in addition to upholding a downward variation of a periodical payments order, the court further concluded that the husband need not pay any maintenance once he retires. The outcome may have been influenced by the fact the wife "worked for a considerable period before the marriage", but the discerning lawyer in England and Wales would credit this to the changing consensus on the factors involved for calculating maintenance for spouses.

Interestingly enough, Singaporean family lawyers are also experiencing a similar trend towards much less generous spousal maintenance – perhaps a reflection of women's increasing visibility in the employment marketplace and certainly a warning for all non- working spouses in the expatriate community.


Calculating child maintenance

The fourth area for comparison was how each jurisdiction calculates maintenance for children. In Singapore, similar to spousal maintenance, child maintenance is calculated from a myriad of factors to determine "reasonable maintenance" according to the "standard of living" enjoyed by the child (Women's Charter, s 69(4)(f)). The matters the court will have regard to when ordering child maintenance are set out in s 69(4) and include the financial needs and resources of the child, any physical or mental disability of the child, and the manner in which the child was being or was expected to be educated or trained.

In contrast, England and Wales employs a data-based formula for calculating child maintenance through the Child Maintenance Service (CMS), namely the 2012 Child Maintenance Scheme. In a nutshell, the maintenance figure is a percentage of the parent's gross salary, as well as other straightforward factors such as the number of qualifying children claiming maintenance under the scheme. The paying parent will be classified into one of five different rates: nil rate, flat rate, reduced rate, basic rate (including 'basic rate plus'), and default rate. Each rate represents a fixed amount for the parent to pay as maintenance.

However, the scheme is not applicable to M because a payer who is working outside of the UK is not subject to the Child Support Act. In the end, both Singapore and England and Wales will still apply a list of factors to calculate maintenance for children, with the factors set out in Schedule 1 to the Children Act 1989 largely similar to those applicable in Singapore.


Claiming for pensions

The fifth and final possible difference raised during the discussions pertained to M's husband's pensions. Singapore deals with pensions (Central Provident Fund savings) as a part of matrimonial assets (TIT v TIU [2016] SGHCF 8).

England and Wales is guided by another approach, which calculates pensions separately from the typical matrimonial assets. Parties would make an application under s 24B of the Matrimonial Causes Act, following which the courts will "make a distribution of the resultant value that is fair in all the circumstances" (Martin-Dye v Martin-Dye [2006] EWCA Civ 681). In the same case, the court prescribed a different ratio from the one used to divide matrimonial assets in order to reflect how "pensions are in truth non-transferable income streams and are quite different in kind from the other assets owned by the parties."

As a potential warning, the recent case of Goyal v Goyal [2016] EWCA Civ 792 has set a precedent barring pension sharing orders from applying to foreign pensions. This would be a significant hurdle for M should she file for divorce in England and Wales, given that her husband's pensions were largely derived from Singapore in the form of Central Provident Fund savings.


Conclusion

After a careful deliberation of the aforementioned points, it seemed clear that M would still get a better outcome if she filed for divorce here. She would likely claim 50%, or even more, of the matrimonial assets. Her husband would also have to provide her with suitable accommodation as the parent with whom the children spent most of their time. She would also have a stake in the husband's future income/bonus payments.

Unfortunately, M's case hinged on whether there was jurisdiction to apply in England. As M had been residing in Singapore for more than three years, she could file for divorce locally (Women's Charter, s 93(1)(b)). However, in order for her to file under English law, M would have to qualify under the European Council Regulation No. 2201/2003, Art 3 s 1(a).

While M was in the process of moving to England with her children, this could not immediately make her 'habitually resident' nor was she 'domiciled' here. In short, this meant that unless M was willing to wait a year before filing for divorce, she would have to file in Singapore instead.

The authors are pleased to report that M and her husband did eventually reach an amicable global settlement in the Singapore divorce proceedings, with parties incorporating various (novel) aspects, which stemmed from an English angle.

19/7/17