When a marriage breaks down, what remains is often a tangled web of conflicts, a large part of which is a relentless and at times, bitter battle over assets.
 
On 18 November 2024, the Court of Appeal in Teo Chee Cheong v Chiam Siew Moi [2025] 1 AMR 476¹ dealt with an appeal stemming from the High Court of Malaya concerning a judicial separation of a married couple involving over millions of Ringgit in assets. In this complex legal saga, the monetary value of the assets awarded (as claimed by counsel for both parties) was the highest award for any spouse in this country in a contested divorce or judicial separation matter. As the exercise of the Court’s discretion over the division of assets is highly fact-centric, this case note will only focus on the key principles in the judgment concerning the division of assets in a contested divorce or judicial separation matter.
 
Brief Facts
 
The parties were married for more than 18 years and 10 months before the marriage had irretrievably broken down. In October 2015, the wife filed a judicial separation petition and then left the matrimonial home. The husband subsequently filed a cross-petition for divorce. The High Court ruled in favour of the wife, granting her spousal and child maintenance and ordering the division of assets with a total value of RM87,774,567.52.
 
The husband appealed against the High Court’s entire judgment except for the order that the costs of the proceedings be borne by each party. On the other hand, a cross-appeal was filed by the wife to vary parts of the High Court’s judgment relating to the division of assets.
 
Judgment of the Court of Appeal
 
The key legal issues considered by the Court of Appeal are set out below.

1.	Does the Court have a discretionary power to divide and/or sell any assets in a divorce or judicial separation matter?

The Court of Appeal confirmed that the High Court has the discretionary power to divide and/or sell assets in a contested divorce or judicial separation matter.² This includes the discretion to divide and/or sell the assets based on a particular date (including the date when the court decrees a divorce or judicial separation) or premised on different dates for different assets with reasonings provided.
 
After the Court has granted a decree of divorce or judicial separation, the Court then has no power to order a division and/or sale of the assets.³

2.	What constitutes “assets” that can be divided and/or sold by the Court?

The shoulder note of Section 76 of the Law Reform (Marriage and Divorce) Act 1976 (“LRA”) states that the Court is empowered to order a division of “matrimonial assets” but there is no definition of “matrimonial assets” in the LRA. The definition of “property” in Section 102(2) LRA does not apply to Section 76 LRA as it only applies for the purposes of Section 102(1) LRA which empowers the Court to set aside and restrain dispositions of properties to defeat claims for child maintenance, spousal maintenance, division and sale of assets.
 
With that, the Court of Appeal held that “assets” in Section 76 LRA refers to “all assets acquired during a marriage which can be divided and/or sold by the Court”. This includes the following categories of assets: 

If a pre-marriage asset falls within either of the categories of assets mentioned in paragraphs (b) or (c) above, a spouse cannot argue that the asset is the subject matter of a resulting trust or a gift, which can then be excluded from the purview of Section 76 LRA.
 
The Court of Appeal in this case did not propose adopting the term “matrimonial assets” as it is not used in Sections 76(1), (2) and (5) LRA. On the same note, there is no need to distinguish between “matrimonial property” and “non-matrimonial property” as it is not supported by the words of Sections 76(1), (2) and (5) LRA. 

3.	Who bears the burden of proving assets that can be divided and/or sold by the Court?

It is trite that he who alleges must prove.⁴
 
The Court of Appeal referred to the Federal Court decision of Letchumanan Chettiar Alagappan @ L Allagappan (as executor to SL Alameloo Achi Alias Sona Lena Alamelo Acho, Deceased) & Anor v Secure Plantations Sdn Bhd [2017] 4 MLJ 691 and held that “the elementary rule in onus is always on the plaintiff/claimant/petitioner”.
 
Therefore, a petitioner who has filed a petition for divorce or judicial separation has the legal burden to prove on a balance of probabilities: 

By reason of Section 23(1) of the Interpretation Acts 1948 and 1967 (“IA”), rule 61 of the Divorce and Matrimonial Proceedings Rules 1980 (“DMPR”) (a subsidiary legislation made under Section 108(1) LRA) is subject to Sections 101(1) and (2) of the Evidence Act 1950 (“EA”) (provisions in an Act of Parliament). Rule 61(2) DMPR only confers a discretionary power on the Court to order a spouse to file an affidavit which contains full particulars of his property and income in matrimonial proceedings. It cannot displace the legal burden which is imposed on a petitioner in matrimonial proceedings. 

4.	How should the Court exercise its discretion to decide on the ratio(s) to be imposed by the Court in respect of the division and/or sale of the assets?

The Court of Appeal explained that the Court should always start with an equal division of the assets (50:50)⁵ and then consider the considerations stipulated in Section 76(2)(a), (aa), (b), (c) and (d) LRA before ordering a division and/or sale of the assets. The issue of who has caused the breakdown in the marriage does not form part of the considerations.
 
The considerations are reproduced as follows: 

In this regard, the Court should adopt a “broad brush” approach in the exercise of its discretion to divide and/or sell the assets. A marriage is not a business venture and thus, the exercise of the Court’s discretion should not be a detailed accounting or auditing process.¹¹ 

5.	Can the Court divide a spouse’s EPF funds under Section 76 LRA?

The Court of Appeal held that a spouse’s EPF funds which have been accumulated after the marriage (“Post-Marriage EPF Funds”) would form part of the assets. However, with regard to the spouse’s EPF funds which have been accumulated before the marriage (“Pre-Marriage EPF Funds”), it can only be part of the assets if it had been substantially improved during the marriage by the other spouse or by both spouses.
 
Logically, it is difficult to envisage how the Pre-Marriage EPF Funds can be substantially improved during the marriage by the other spouse or by both spouses. Therefore, Pre-Marriage EPF Funds cannot fall within the meaning of “assets” and cannot be divided by the Court pursuant to Section 76(1) LRA.
 
Section 53A(1) of the Employees Provident Fund Act 1991 which, inter alia, authorises the EPF Fund to transfer a member’s credit in the Fund in accordance with a court order for the division of matrimonial assets, only applies after the Court has divided a spouse’s EPF funds under Section 76(1) LRA.
 
However, given the exceptional circumstances of the present case, namely the husband's withdrawal of money from his EPF account when the case was still pending to defeat the wife's lawful claim for a share of Post-Marriage EPF Funds, the Court of Appeal dismissed the husband’s appeal against the division of 30% of his EPF funds in favour of the wife. Instead, the Court of Appeal allowed the wife’s cross-appeal to increase her entitlement to the husband’s EPF funds to 40%.
 
Conclusion
 
It is noted that cases involving the exercise of the Court’s discretion under the LRA, particularly Section 76 LRA, are based on the particular facts of those cases. In this case, although no new law is involved, the methodology used by the Court of Appeal in applying the established principles of division of assets will be helpful guidance for future cases. The Court of Appeal clarified that, whilst EPF funds could form part of the assets which are subject to a division of matrimonial assets, only Post-Marriage Funds would be subject to such a division.
 
 
Case Note by Trevor Jason Mark Padasian (Partner) and Tan Yng Yiin (Associate) of the Family Law Practice of Skrine.
 

---