Woman fails in appeal to claim divorce assets
Source - Straits Times
Date - 29 Jan 2013
Author - K.C. Vijayan
Husband faced bankruptcy when property transfer was sought
A WOMAN who claimed her former husband's half-share in two private properties will not get her entitlement as he was being made a bankrupt when the move to shift the divorce assets to her took place in 2011.
The Court of Appeal, in a significant first-time ruling last week, held that the move by the former wife was subject to bankruptcy laws, despite the interim consent judgment (ICJ) obtained in February 2011 from the Family Court in the divorce suit for the transfer of his share.
The property transfer from the husband under the ICJ occurred in the six months between the bankruptcy application in December 2010 and the bankruptcy order against him in May 2011.
Madam Sharon Cheo, 40, went to the High Court in July last year to ratify the property transfer as required but failed in her attempt, after which she appealed to the apex court last November.
The appeals court - comprising Chief Justice Sundaresh Menon and Judges of Appeal Andrew Phang and V.K. Rajah - upheld the High Court decision in judgment grounds released last week.
In the case, Madam Cheo had commenced divorce proceedings in November 2010 against her husband Paul Matthew Andriesz, 50, just two weeks after a bank had sought the return of some US$8.67 million (S$10.7 million) from him. The sum was owed to the bank based on guarantees he provided for credit facilities to Amana Foods, of which he was a director.
About a month after the bank began bankruptcy proceedings against him, the couple agreed to the ICJ in February 2011. The court which issued the ICJ was not aware of the bank's bankruptcy application.
The consent judgment required him to transfer his share in two houses, one in Kew Drive here, and the other in Penang.
The Official Assignee represented by Senior Counsel Lee Eng Beng opposed his transfer bid.
Madam Cheo's lawyer Lim Seng Siew argued that the relevant bankruptcy law did not apply in this case. But the Court of Appeal disagreed and clarified the relevant section of the Bankruptcy Act.
"The ICJ may have been the means by which the disposition was made, but the disposition was nevertheless made, in our view, by the bankrupt," wrote Justice Phang in the judgment grounds.
The court called for practice directions to require affected parties to do relevant bankruptcy searches in future before starting such suits.
A spokesman for the Insolvency and Public Trustee's Office (IPTO) said yesterday: "This decision sends a clear message to bankrupts and would-be bankrupts that the law will not condone such blatant attempts to dissipate assets to the detriment of their creditors."
She added that the IPTO will work with the Family Court and the High Court to ensure that the parties in matrimonial proceedings provide information relevant to one's status in bankruptcy to the court.
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