SINGAPORE – In divorce cases where a party is allowed to take over the other's share of marriage property, who should carry current mortgage and property tax payments until the transfer is completed?
The Court of First Instance clarified the question on Thursday, November 8, to reject a wife's argument that she would not have to pay exclusively the current debts – about $ 30,000 – for a $ 1.78 million home that she would ultimately own.
Mortgage payments should be borne by the final owner of the property, said the triumph court, considering that the payment of any outstanding mortgage loan would only benefit that person.
However, the court ruled that it was important to distinguish between mortgage and property tax, which are charges levied on property rights to the property.
Therefore, property tax should be paid by who is considered the owner of the property as at the day of the court order, the court said in a verdict written by the judge of appeal Andrew Phang.
In the judgment, the court, which also included Judge Appellant Steven Chong and Senator Chao Hick Tin, pointed out that these are only fine facie positions – correct until proven otherwise.
It was still open to the courts when they made decisions about such cases to take an opposite position if an appropriate situation arose, for example, if it would be unfair to order the final owner to bear the current liabilities.
The ruling of the court occurred in a case where a woman had agreed to buy her husband's share of the marriage home for $ 377 684.
She appealed to a High Court order that she was solely responsible for mortgage and property tax payments in anticipation of the transfer.
In her judgment, the court of appeal rejected the wife's argument that she had not actually received any benefit because the value of the property had fallen from $ 1.78 million to $ 1.73 million.
By taking up the opportunity to take over the spouse's share of the property, she had shown that there was a real chance that the value of the property would fall, the court said.
"Thus, in our opinion, it is not relevant if the wife has actually made a profit or loss after the transfer has ended."
The Supreme Court ruled that the wife is both the final owner and the ideal owner, as she confirmed during two hearings before the High Court in 2017 that she would take up the opportunity to buy her husband's share of the property.
There were no special circumstances to shift the prima facie position that she must carry mortgage and property tax payments, the court said.