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238 Singapore Academy of Law Journal (2003) at its full value, without having to share in the burden of any loans taken out to acquire it. This would not be equitable. 43 Thus, in the example given above, the wife will be able to obtain a share of the watch, which, after taking into account the $5,000 loan, will have a net value of $3,000. However, if the watch has depreciated in value to $2000 by the time of the ancillary matters hearing, then after the watch is sold, the husband would still have a debt of $3,000. Will this $3,000 debt be taken into account in the division of the matrimonial assets After all, the debt was not incurred for the family, but for the husband’s own purposes—i.e. a watch for himself to wear. Would the wife have to share in the debt of $3,000 if the value of the watch depreciates, in the same way as she would be able to share in the profit of $3,000 if the value of the watch appreciates On the analysis of Ong Tong Liang and Yuan Hsiang Ping set out above, the inference seems to be that she would not. However, this result seems inequitable to the husband. It is submitted that the better view is that the wife should share in the burden as well as the benefit, and that therefore the debt of $3,000 should be taken into account as well. 44 In this regard, it is suggested that a distinction may be drawn between loans taken out to acquire assets (even those considered as luxuries) or to generate income (business debts, for example) which, if the assets had some value, and profit had been made, would have been included in the pool of matrimonial assets available for division; and loans taken out to acquire gifts for third parties (such as the husband’s mistress) or spent on activities (such as the husband’s overseas holiday with his mistress) from which the family did not, and could never, expect to benefit. The former should definitely be taken into account when making an order under Section 112, and hence when making any of the orders set out in Section 2.4.2.1(a)(i)-(iv) above. (ii) The court should also take into account those debts incurred for a party’s sole benefit, even for those cases where the family did not, and could never, expect to benefit from the same. 45 Section 112(2) 44 states that the court may take into account “all the circumstances” of the case, and not just the factors listed within that 44 Section 112(2) of the Women’s Charter (Cap. 353) states: “It shall be the duty of the court in deciding whether to exercise its powers under subsection (1) and, if so, in what manner, to have regard to all the circumstances of the case, including the following matters: [continued next page]
15 SAcLJ Matrimonial Assets and the 3 rd Party 239 section. Thus the court is not confined to taking into account only those debts taken out for the benefit of the family, as set out in Section 112(2)(b). It is clear that any loans taken out by a party would have an impact on firstly, that party’s ability to pay the other party for his/her share of the matrimonial assets, and/or the amount of cash the party would have in hand/be able to realise after the assets are divided; and secondly, that party’s ability to maintain his/her own standard of living after the divorce. It is submitted that these are relevant factors to be taken into account as part of “all the circumstances” of the case under Section 112(2). 46 Thus, the fact that the debt was incurred for a party’s sole benefit (in cases where the family did not, and could never, expect to benefit from the debt) rather than for the benefit of the family should not automatically mean that the court has no jurisdiction to make any of the orders set out in Section 2.4.2.1(a)(i)-(iv) above in relation to that debt. The fact that it was incurred for the party’s sole benefit is merely one of the factors to be taken into account in deciding what orders to make in respect of that debt. (c) Repayment of 3 rd party loan from matrimonial assets 47 Of all the orders which the court could make, as set out in Section 2.4.2.1(a)(i)-(iv) above, the order which would be of the greatest benefit, and the most interest, to a 3 rd party would be the order that he is to be repaid his debt from the matrimonial assets. In the previous paragraph, it was submitted that the court hearing the ancillary matters has the jurisdiction to make orders in relation to liabilities which were not incurred for the benefit of, or which were not incurred with the intention of benefiting, the family. The fact that the said liabilities were not incurred for the benefit of, or with the intention of benefiting, the family is merely one of the factors to be taken into account in the making of such orders. The following section explores the balancing exercise undertaken by the court in this respect: (a) the extent of the contributions made by each party in money, property or work towards acquiring, improving or maintaining the matrimonial assets; (b) any debt owing or obligation incurred or undertaken by either party for their joint benefit or for the benefit of any child of the marriage; (c) the needs of the children (if any) of the marriage….etc.
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