When a marriage breaks up, the spouses may agree on who gets what which will lead to a joint petition for divorce to end the marriage in a peaceful way. But, if either party disagrees with the agreement to divide the property, an application for division of matrimonial assets may be made to the court in a contested petition for divorce and in most of the cases, the parties tend to wash dirty linen in public through the court proceedings. Section 76 of the Law Reform (Marriage and Divorce) Act 1976 (“the Act”) empowers the court when granting a decree of divorce, to order the division between the parties of any assets acquired by them during the marriage, or the sale of any such assets and the division between the parties of the proceeds of sale thereof. Division of Matrimonial Assets The Act is silent on what constitutes matrimonial property. Besides matrimonial home, all immovable properties, like cars (James Jemut Masing v Fiona Frances Masing Nee Henderson [1994]2 CLJ 39) , jewellery (Lim Siaw Yiing v Wong Seng & Anor [2009] 5 CLJ 579), fixed deposits (Lim Tin v Yap Mooi Hee [2011] 1 LNS 1745), shares in a company (Wong Kim Fong v Teau Ah Kau [1998] 1 MLJ 359), gratuity payments (Ching Seng Woah v Lim Shook Lin [1997] 1 MLJ 109) and insurance policies (Parkunan Achulingam v Kulaiyarasy [2004] 7 CLJ 175) have been held by the court as matrimonial assets. In dealing with matrimonial assets, it is incumbent upon the court to have first identified the category of assets which would have to be dealt with under the Act, in particular, Section 76 (1), (3) and (5). In addition, consideration had to be given to minor children’ interests as provided under Section 76 (2) (c) and 76 (4) (b). (i) Section 76 (1) - Division of Assets Acquired by Joint Effort
When dividing assets acquired by the parties during the marriage by the joint effort of the parties, the court needs to consider a few factors as provided under Section 76(2) of the Act: (i) the extent of the contributions made by each party in money, property or work towards acquiring the assets; (ii) any debts owing by either party which were contracted for their joint benefit; (iii) the needs of the minor children of the marriage. Subject to these factors, the Court will incline towards equality of division.
(ii) Section 76 (3) - Division of Assets Acquired by Sole Effort
Assets acquired during the marriage by sole effort of one party to the marriage are also subject to division. Under Section 76(3) and (4) of the Act, the court shall have regard to (i) the extent of the contributions made by the other party who did not acquire the assets to the welfare of the family by looking after the home or caring the family; and (ii) the needs of the minor children. Subject to these considerations, the court may divide the assets in such proportions as the court thinks reasonable; but in any case, the party whose effort the assets acquired shall receive a greater proportion.
(iii)Section 76 (5) - Division of Property Acquired before the Marriage
Section 76(5) of the Act specifically provides that assets acquired during the marriage also include assets owned before the marriage, which have been substantially improved during the marriage by the other party or by their joint effort.
A gift from a 3rd party and inherited properties acquired before the marriage are excluded from division as these are not assets acquired by the joint efforts of both spouses or the sole effort of either of them, unless substantially improved by the claimant during the marriage.
Section 76 of the Act does not mention the role of each party in the breakdown of the marriage as one of the factors to be considered when deciding on the division of matrimonial property.
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