Teo Chee Cheong v. Cham Siew Moi (CA)

Teo Chee Cheong v. Cham Siew Moi (CA)
Family law – High Court’s powers under Section 76 of the Law Reform (Marriage and Divorce) Act 1976 on the division of assets between married couple

The issues in the appeal of Teo Chee Cheong v. Cham Siew Moi (Civil Appeal No. W-02(W)(-1034-05/2021) is in relation to the High Court’s powers under section 76 of the Law Reform (Marriage and Divorce) Act 1976 (“section 76 LRA”) on the division of assets between a married couple whom the Court had decreed a judicial separation.

Background Facts

The material facts are as follows:

a)  Respondent husband (RH) works as a proprietary trader and the petitioner wife (PW) was an air stewardess but resigned before marrying RH;
b) RH and PW registered their marriage on 18.1.1997 and had 2 sons;
c) On 23.10.2015, after filing her JS petition, PW left the matrimonial home with her 2 children;

The Decision  

A. What assets can be divided and/or sold under section 76 LRA

If an asset does not fall within the ambit of section 76(1) and (5), the court has no power to divide the assets. The Court of Appeal further observed that there is no definition of “matrimonial assets” in section 76. The definition of ‘property’ in section 102(2) LRA only applies for the purposes of section 102(1) and therefore could not be applied to section 76.

The Court of Appeal viewed that section 76(1) confers a discretion on the High Court judge to divide and/or sell “any assets acquired…during the marriage”. The Court of Appeal do not propose the term “matrimonial assets” for the following reason:

a) The terms is not used in section 76(1), (2) and (5);
b) The assets in section 76(5) includes any assets owned before a marriage if either one of the conditions is proven:
-There is substantial improvement of the pre-marriage asset during the marriage by the spouse;
-The pre-marriage asset has been substantially improved during the marriage by the joint efforts of both spouses;

(“2 alternative conditions”)

If a pre-marriage asset satisfies either of the 2 alternative conditions:

a)  It will fall within the ambit of assets which can be divided and/or sold by the court pursuant to section 76(1);
b)  A spouse cannot allege that the pre-marriage asset is the subject matter of a resulting trust to be excluded under section 76(1) (see the case of Balakrishnan v Shameena [2019] 5 MLJ 661 at paragraphs 9 and 10);
c)  A spouse cannot claim that a pre-marriage asset is a gift to be excluded under section 76(1) (see the case of Lim Bee Cheng v Christopher Lee Joo Peng [1996] 2 CLJ 697, at 702, 703 and 707);

On this point, the Court of Appeal further decided that the judgment in Yap Yen Piow v Hee Wee Eng [2017] 1 MLJ 17 regarding the distinction between “matrimonial property” and “non-matrimonial property” at paragraphs 34 and 35 of the judgment is per incuriam of section 76 LRA for the following reasons:

a) The distinction of the said terms are not supported by the wordings in section 76(1), (2) and 5;
b) The case was decided before the enforcement of Act A1546 (deleted section 76(3) of LRA)

B. Can the court divide a spouse’s EPF funds under section 76

The Court of Appeal viewed that:

a) A spouse’s EPF funds which have been accumulated after marriage form part of the assets which can be divided by the court as it falls within the meaning of “any assets acquired during the marriage”;
b) EPF funds accumulated before marriage constitute pre-marriage assets if either of the 2 alternative conditions is proven;
c) Section 53A(1) of the Employees Provident Fund Act 1991 does not empower the court to divide pre-marriage EPF funds pursuant to section 76(1);

On the point of whether cases decided in the UK can be referred to, the Court of Appeal was of the contrary view since section 76 is different from the statutory provisions in the UK (see the case of Sivanes v Usha Rani [2002] 3 MLJ 273 at 279).

C. Nature of Court’s discretionary power to divide and/or sell assets

The Court of Appeal viewed that:

a) Considerations on division of assets do not include who has caused the breakdown in the marriage and, therefore, is not an assessment of damages or compensation to be paid by one spouse to the other;
b) The court should adopt a “broad brush” approach as adopted in the Singaporean case of Koh Kim Lan Angela v Choong Kian Haw [1994] 1 SLR 22 and consistent with the case of Sivanes and followed in Koay Cheng Eng v Linda Herawati Santoso [2008] 4 MLJ 863, at 886 and 887;
c) The court has an implied power under section 76(1) read with section 40(1) of the Interpretation Act to divide and/or sell the assets:
-Based on a particular date (including the date when the court decrees divorce) (“Particular Date”);
-Premised on different dates for different assets (“Different Dates”)

as long as reasons why the dates are chosen are provided;

d) The court to divide the assets on an individual basis because different considerations may apply to different assets; and
e) After the court has granted a decree of divorce, the court has no power to order a division of the assets (see the Federal Court case of Manokaram v Ranjid [2008] 6 CLJ 209 at [9] and the case of Chew Ling Hang v Aw Ngiong Hwa [1997] 3 MLJ 107 at 112 and 113).

D. Burden of Proof

Pursuant to sections 101(1) and (2) of the Evidence Act 1950 and on the issue of burden of proof, the Court of Appeal viewed that the petitioner has:

1. The Overall Legal Burden;
2. The Overall Evidential Burden to prove on a balance of probabilities:
   i) What are the assets;
   ii) Should the assets be sold;
   iii) Whether the court should adopt a Particular Date or Different Dates; and
   iv) What is the ratio to be imposed on the division of assets bearing in mind starting point of equal division and considerations in section 76(2).

With regards to Rule 61 of the Divorce and Matrimonial Proceedings Rules 1980:

a) If a particular spouse is illiterate or wholly dependent on the other spouse or does not have any knowledge of the spouse’s assets, the spouse may apply to court for an order that the spouse file an affidavit containing full particulars of the spouse’s property (“full disclosure affidavit”);
b) The filing of the full disclosure affidavit does not displace the Overall Legal Burden imposed on the Petitioner;
c) If the spouse does not comply with the filing of the full disclosure affidavit, the spouse may file committal proceedings;
d) If the full disclosure affidavit is false, the spouse may lodge a police report that the deponent has committed an offence of giving false evidence, punishable under section 193 of the Penal Code.

E. Bank Accounts in RH’s name

The Court of Appeal observed that there are 4 Legal Errors made as follows:

a) High Court judge has failed to ascertain if the Total Sum in RH’s bank accounts consisted of assets acquired during the marriage;
b) High Court judge has failed to decide whether any part of the Total Sum consisted of income derived before marriage and whether there was compliance of the 2 alternative conditions;
c) High Court judge failed to give effect to section 76(2)(a) by not deducting RH’s cost of acquisition of the assets from the Total Sum;
d) The High Court judge chose 6.5.2021 as date for the division of assets but no reasons were provided – High Court judge had unlawfully considered an additional period of 5 years and 5 months from 23.10.2015 during which PW was not contributing to the marriage;

The Court of Appeal observed that there are 2 Plain Factual Errors made as follows:

a) The High Court judge used the Total Sum without accepting RH’s net income which meant that RH had to pay PW in excess of RH’s net income;
b) The High Court judge failed to deduct RH’s monetary contributions made by RH towards the acquisition of assets when there is evidence of RH’s contributions.

The Court of Appeal viewed that the 30% ratio in favour of PW was not plainly wrong though.

Therefore, the calculation is as follows:

RM51,175,966.13 (RH’s net income during marriage) – RM24,793,314.00 (RH’s monetary contribution) = RM26,382,652.13

30% of RM26,382,652.13 = RM7,914, 795.63

F. 2 Properties (sold during marriage)

The Court of Appeal observed that the High Court had committed a Plain Factual Error when awarding 50% of the Sales Proceeds after deducting loan repayment, expenses and RM80,000.00 previously given by RH to PW as this meant double accounting.

PW had the Overall Legal Burden to satisfy the court that the sale proceeds:

a) Had not been credited into the Bank Accounts;
b) Did not form part of RH’s net income

G. Sale Proceeds (Shares in PW’s name)

Similarly, PW had the Overall Legal Burden to satisfy the court that the sale proceeds:

a) Had not been credited into the Bank Accounts;
b) Did not form part of RH’s net income

Additionally, the High Court judge failed to consider the loss suffered by RH in selling the shares in PW’s name and PW did not adduce any evidence to show RH’s losses had not been incurred.

H. Motor Vehicles

The High Court judge failed to deduct the sum from the sales proceeds from the motor vehicles sold by PW and kept by PW.

I. Shares in Astralnet Technology Sdn Bhd (ATSB), company incorporated by RH

The division ration for the same for PW is plainly erroneous since the High Court judge failed to take into account the following:

a) RH contributed solely in terms of money and effort in incorporating ATSB and the purchase of land in the name of ATSB;
b) RH manages ATSB’s operations and affairs; and
c) PW’s contribution to the welfare of the family can be considered but does not support a 30% apportionment to PW.

Instead, 20% of the net value of ATSB’s shares to PW was ordered.

J. RH’s EPF account

The Court of Appeal viewed that in light of the withdrawal of RM500,000.00 made by RH when the case was still pending i.e. RH’s contumelious conduct to defeat PW’s lawful claim, entitlement of the EPF was increased to 40%.

K. Division of 5 properties

High Court’s division of 40% of the reduced value of the properties to PW is not plainly wrong.

L. Son’s policy payout from PW’s entitlement to division of assets

The Court of Appeal viewed that the son’s policy payout need not be deducted from the division of assets since the division of assets under section 76 is not a detailed accounting or auditing process.

M. PW’s spousal maintenance sum

The High Court had not committed a plain error of fact in awarding RM20,000.00 per month since:

a) RH is a person of considerable financial means and the monthly maintenance is not beyond RH’s financial means;
b) PW had resigned from her job and had no financial means to support herself; and
c) RH had given PW a luxurious lifestyle and cannot now deny PW such monthly maintenance.

N. Should the Court release RH from his obligation to pay PW’s monthly spousal maintenance?

In February 2022, pending the disposal of RH’s appeal and PW’s cross-appeal, RH paid PW a sum of RM38,851,440.37. As RH already paid the Division Award, RH is no longer obliged to pay PW’s monthly spousal maintenance since PW can thereafter maintain her lifestyle without any spousal maintenance from RH (see the case of Sivajothi v Kunathasan [2000] 6 MLJ 48). Parties agreed that RH shall be released from his obligation to pay PW’s monthly spousal maintenance sum.

Since RH’s appeal was largely successful, the Court of Appeal ordered PW to pay an amount of RM50,000.00 as costs to RH.

The table below summarises the awards as follows:

Written by

Sandhya Saravanan
Member, Publications Committee

Credit: This case note was also published in the Highlights of the Appellate Court by the Publications Committee of the Malaysian Bar (2024/2025).

View Our Team of Lawyers' Profile