Introduction
 
Although all good things inevitably come to an end, it may sometimes not be a swift end for some couples who find themselves embroiled in a divorce involving a bitter court battle over the division of matrimonial assets, particularly in well-to-do families.
 
Generally, any assets acquired during the marriage are considered matrimonial assets. Assets acquired before the marriage or after the separation, gifts, and inheritance to one party are considered non-matrimonial assets. But, what if a substantial monetary gift was handed over by the parents of the bride or groom to their child as a wedding ‘hongbao’ at the Chinese customary tea ceremony? This is where things get murky when the marriage goes south. Fortunately, the Appellate Division of the High Court in Singapore has recently handed down a decision in VOD v VOC [2022] SGHC(A) 6 which indicates how assets of this nature could be treated pursuant to a divorce.
 
Brief Facts
 
H and W had a short-lived marriage when they divorced less than three years after their wedding. The dissatisfaction of both parties with various aspects of a High Court decision as to whether certain assets, including among others, moneys in multiple bank accounts, a one-third interest in a prime residential property, membership in a prestigious golf and country club, dividends from shares in a private company, two luxury cars and a collection of wines, comprised matrimonial assets, resulted in this appeal before the Appellate Division of the High Court.
 
Interestingly, the estranged couple were also involved in a bitter brawl over a S$1 million ‘hongbao’ given to H by his father when the newlyweds paid their respects to their parents during the Chinese customary tea ceremony. W asserted that the ‘hongbao’ was a wedding gift for both her and H and thus should be included in the pool of matrimonial assets. H, on the other hand, contended that the ‘hongbao’ was a gift from his father to him alone as the S$ 1 million cheque was in H’s name and was personally handed to H only. The High Court Judge found that the S$1 million ‘hongbao’ was intended as a gift by H’s father only to his son based on, amongst others, evidence that the money was deposited in H’s personal account (instead of a joint account) after the wedding, and that W had already received substantial wedding gifts from H’s parents.
 
Findings by the Appellate Division of the High Court
 
Three judges of the Appellate Division of the High Court (comprising Belinda Ang Saw Ean JAD, Woo Bih Li JAD and Quentin Loh JAD) (“Appeals Court”) disagreed with H’s assertions. The Appeals Court unanimously ruled that the S$1 million ‘hongbao’ was for both H and W and should be included in the pool of matrimonial assets that were up for division. The decision was made on a two-fold basis which are further elaborated below.
 
The Occasion When The S$1 Million Gift Was Presented
 
The timing and manner in which the S$1 million ‘hongbao’ was presented was pivotal to the Appeals Court’s decision. Justice Woo Bih Li noted that if H’s father had intended for the ‘hongbao’ to be a gift solely for his son, he could have chosen to give the ‘hongbao’ to H before or after the wedding, but he chose to do so at the tea ceremony for the marriage. Although the ‘hongbao’ carrying the million-dollar cheque was only in H’s name, the Appeals Court found that the fact that the ‘hongbao’ was handed to H during the customary tea ceremony, which is a "significant occasion where the parties pay their respects to senior members of the family", must be treated as an indication of H’s father’s intention that the ‘hongbao’ was meant as a gift for the couple.
 
According to Justice Woo Bih Li, “The overt act of presenting a gift during such a ceremony would be viewed objectively as a gift to the couple in the absence of evidence to the contrary, and unless the nature of the gift suggested otherwise” and “The fact that the gift was in the form of a cheque in the name of H and handed to H was equivocal. What was more significant was that it was handed to H in the presence of both parties at that ceremony.”
 
Interestingly, the Appeals Court rejected the High Court’s finding that the gift of jewellery from H’s mother to W at the tea ceremony was a “useful indication” of H’s father’s intention that the S$1 million ‘hongbao’ to H at the same tea ceremony was therefore a gift for his son alone. The rationale for the Appeals Court’s decision was that the S$1 million gift was unlike the jewellery given by H’s mother to W “because by its nature, the jewellery would be intended for W alone...”
 
Recorded Conversation Between H And W After The Marriage Had Broken Down
 
An ancillary but compelling point was the evidence produced by W of a secretly recorded conversation between H and W on the ‘hongbao’ some 2½ years after the tea ceremony, when their marriage was already on the rocks. Justice Woo Bih Li held that although W had recorded the conversation without H’s knowledge and thus had an advantage over him, nevertheless the substance of the conversation fortified W’s version as H did not correct W’s numerous assertions that the S$1 million ‘hongbao’ was a wedding gift for her and H, and H’s ultimate concession that the money was meant for both of them.
 
Comment
 
This decision is noteworthy as it suggests that gifts given at a tea ceremony of a Chinese wedding could be treated as matrimonial assets. Thus, to all parents who intend for the gifts to belong only to their children – you know what to do (or ought not to do).
 
Case summary by Karen Tan Wee Sean (Senior Associate) of the Dispute Resolution Division of Skrine