Legal Update 3 of 2017

Distribution of matrimonial assets in accordance with Section 76 of Law Reform (Marriage and Divorce) Act 1976 (LRA 1976)

 CASE:

Yap Yen Piow v Hee Wee Eng [2016] 1 LNS 1060 CA


BRIEF FACTS:

The marriage between the parties laster for 37 years. They have 3 children aged 30,32 and 34 who have all graduated with professional qualifications and have remarkable careers. 

The respondent (wife) was a nurse who had supported the petitioner (husband) and their family when the husband who was a doctor did his post graduate- Dermatology course in London. After the birth of her last child, the wife was a homemaker.

The breakdown of the marriage took place about 15 years before the petition was presented. Both parties were staying separately in the same matrimonial home at Damansara Jaya. 

The High Court ordered the following:

  1. The wife to transfer 1/2 of her shares in their Damansara Jaya home ("Damansara Property") to the husband in consideration of cash payment of RM800,000.00 to be paid by the husband;

  2. The wife to move into the condominium known as Residence 8. If she declines, then the husband to pay her the sum of RM 3,150.00 a month to rent a suitable place ("Petaling Jaya Condominium")

  3. The husband to purchase a new car Honda Civic 2.01 vehicle for the wife and 

  4. For the husband to pay the following to the wife:

    • 1/2 of the proceeds of the sale of the property in Australia ("Australia Property");

    • 1/3 of the proceeds from the sale of property in Wisma Pantai KL ("Wisma Pantai House");

    • 1/3 of the proceeds from the sale of Shop Lot Nilai ("Nilai Property");

    • 1/3 of the proceeds from the sale of orchard in Negeri Sembilan ("Sg Muntoh Orchard");

    • 1/2 of the proceeds of the sale of the husband's practice - Yap Skin Klinik ("the Clinic");

    • 1/3 of the proceeds from the sale of stocks in Affin Hwang Investment Bank Bhd ("Stocks");

    • 1/2 share of the balance of RM 124,506.30 in the husband's EPF Account ("EPF Monies");

    • A sum of RM5,000.00 per month for maintenance and 

    • Annual premium of the wife's medical insurance policy with Pacific Insurance.

Thus, the current appeal by the husband in respect of distribution of matrimonial assets and payments within the framework of Section 76 of LRA 1976. 


 DECISION: Appeal Allowed in Part

Section 76 of LRA 1976 does not define what a matrimonial asset is but it differentiates assets acquired during the subsistence of marriage into three types. They are as follows:

  • Any assets acquired by joint efforts which are classified as matrimonial property. In this category, the court has an obligation to divide the assets;

  • Any assets acquired by one party by sole effort are classified as non-matrimonial property. In this category, the court is not obliged to divide but may do so. 

  • Assets which were acquired before the marraige, but has been substantially improved by the other party or by their joint efforts. In this category, if there is no substantial improvement, the property is not subjected to division at all. 

Based on the facts, the Court shall have considered the following factors in exercising discretion under Section 76 LRA

  • The wife never provided any financial contribution towards acquisitions of the Assets;

  • The duration of separation and the strained relationship between the Parties;

  • The needs of minor children under S76(4)(b) and 

  • The 65 years old husband's health is deteriorating thus is unable to work as hard as before

Applying the above, the Damansara Property which is jointly owned by the Parties is a matrimonial home, thus should be distributed on equal basis. 

The Petaling Jaya Condominium's rental is not within Section 76 thus be made as part of the maintenance. 

The husband odes not need to purchase a new Honda Civic but to sell off 3 of their existing cars and divide the proceeds equally.

The Australian Property is to be held on trust for their daughter as it was intended to be gifted to her. 

Wisma Pantai House, Nilai [roperty and Sungai Muntoh Orchard were acquired by the husband after the separation of the parties, thus were not matrimonial assets. 

The Clinic is the husband's sole source of income, thus it is unrealistic to order the husband to sell the Clinic in the best interests of all parties. Sale of the clinic would cause grave hardship to the husband. 

The Stocks acquired by the husband for investment, 10 years after the parties separated, belongs to him. 

Division of assets for which one spouse has no immediate right under the law such as EPF or insurance are not matrimonial property. Thus, the payment for medical insurance and transfer of EPF funds are set aside.

However, given that there is some evidence that the respondent's family members have contributed towards the clinic, the order in relation to EPF should be sustained on just and equitable basis with the sum being reduced to quarter as opposed to half of the EPF sum. 

The order for maintenance be varied to be read as RM 8,150.00 (to include rental). 

 

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