Divorce assets and spousal support distributed in foreign union dissolution in Singapore
In a landmark decision, a Singapore court has ruled on the division of substantial international assets in a divorce case involving a US couple who are permanent residents of Singapore. The case, known as XRM v XRN, has garnered attention due to its complex nature and the high value of assets at stake.
The husband, a design manager earning SGD 111,951.33 (USD 88,000) per month, and the wife, a former regional marketing manager, found themselves in court over the division of their matrimonial pool, which includes property in Singapore, Hong Kong, and the United States, multiple investment accounts, and shares in Apple.
The contested Apple shares, valued at USD 2.9 million, were transferred from the husband to the wife. The husband claimed they were for tax planning and held on trust for him, but the court found that due to their framing as 'gift-tax exemptions' designed to mislead tax authorities, enforcing a resulting trust would undermine the statutory regime, leaving the legal ownership with the wife.
Justice Choo Han Teck ordered that the husband should receive 55% of the SGD 8.37 million (USD 6.6 million) matrimonial pool, with the wife receiving 45%. In assessing contributions, the court attributed 57% of direct financial input to the husband and 43% to the wife, reflecting his higher earnings but also her sizeable payments toward the matrimonial home.
Indirect contributions were more difficult to assess, but the court treated them equally at 50:50, recognizing both parties' efforts during the marriage. This decision was based on the wife's claim that the Apple shares were a gift to compensate for financial, emotional, and physical sacrifices made during the marriage.
The wife's lucrative career took a backseat after marriage, with her earnings dropping to about SGD 5,000 (USD 3,900) a month at the time of trial. In contrast, the husband's income remained steady. The wife was represented by Hing Wei Yuen Angelina and Andrew Koh Zhiwei of Integro Law Chambers, while the husband was represented by Jayesh Kishor Melvani and Khwaja Imran Hamid of Tan Rajah & Cheah.
The court also ruled that investment accounts should be valued at the AM (Ancillary Matters) hearing, not the date of the interim judgment. This decision was significant as it could potentially impact the division of assets in similar cases.
The wife contended that her Hong Kong flat, purchased before the marriage, should be excluded from the matrimonial pool. However, the court found that about HKD 824,000 (USD 106,000) of mortgage payments were made during the marriage, and therefore included a portion of the property, valued at SGD 245,263.04 (USD 192,000), in the divisible pool.
The interim judgment for divorce was granted in March 2024, and the final division of assets marks the end of a lengthy legal battle for the couple. The law firm representing the wife in the case, XRM v XRN, was Clifford Chance.
This case serves as a reminder of the complexities involved in dividing international assets in a divorce, and the importance of accurate valuation and careful consideration of both direct and indirect contributions made during the marriage.
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