Here are two important points from the case that home owners should note.
Direct contribution to property
Buying a home entails paying the purchase price and other costs, such as stamp duties and legal fees. So when it comes to determining your share of the home, all such costs will be considered in the calculation and not just the money that went into the purchase price.
But what about funds spent on renovating the property soon after purchase?
In this case, the couple spent about $76,000 on renovations after they bought the resale flat in August 2019 – $36,000 in cash and $40,000 in the form of a renovation loan from a bank.
During an earlier hearing at the Family Court, the district judge declined to add the renovation costs to the calculation because he considered that the improvement work was basic and did not significantly alter the property.
As a result, he determined the couple’s shares based on what they paid for the flat, a ratio of 41 per cent for the husband and 59 per cent for the wife.
As it was the wife who shelled out the $36,000 in cash for the renovations, her lawyer, Mr Sarbrinder Singh, filed an appeal to the High Court, arguing that such costs should give her a bigger share in the flat.
Justice Choo allowed the appeal and noted that the direct financial contributions of parties should not be limited to funds used to buy the asset, but also include expenses incurred for the “improvement of the matrimonial asset”.
Home renovation often involves substantial facelifts and customisation. In this case, the renovation cost about 20 per cent of the purchase price.
“It would not be just and equitable for the court to ignore sizeable sums of monies expended to improve matrimonial assets,” the judge added.
At the hearing, the man argued that his former wife did not wholly contribute to the renovation cost and he also claimed that he had reimbursed her with cash later. He initially said he paid $15,500, but later said that he had given her $29,000.
Despite his claim of contributing the bulk of the costs, he did not produce any document or proof to support his argument. Not surprisingly, the Family Court had earlier ruled against him and found that his ex-wife paid all the $36,000.
Justice Choo said that given the lack of a consistent position and cogent evidence, he upheld the lower court’s finding that the man did not come up with any cash for the renovation. As a result, the ex-wife’s payment of $36,000 should be counted towards her direct financial contributions.