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Case Number | : | |
Decision Date | : | 25 April 2001 |
Tribunal/Court | : | |
Coram | : | Woo Bih Li JC |
Counsel Name(s) | : | V Kanyakumari and Janaine Ong (Sim Hill Tan & Wong) for the petitioner; Anamah Tan and Veronica Ann Joseph (Ann Tan & Associates) for the respondent |
Parties | : | Leong Mei Chuan — David Chan Teck Hock |
JUDGMENT:
Cur Adv Vult
1. This is an appeal against some parts of a decision by the District Judge Mrs Emily K Wilfred on ancillary matters of a divorce petition.
2. The parties are David Chan Teck Hock (the Husband) and Leong Mei Chuan (the Wife). They were married on 21 September 1983 but unfortunately their marriage eventually floundered.
3. On or about 10 February 1997, the Husband left the matrimonial home.
4. On 21 November 1997, the Wife petitioned for divorce and a Decree Nisi was granted on 24 September 1998.
5. The parties then fought over the ancillaries and on 20 January 2000, the District Judge made an Order on various aspects of the ancillaries, some of which are the subject of appeal by the Husband and some by the Wife.
6. I set out below those parts of the Order which are the subject of appeal by either party:
(1) The Wife has sole custody, care and control of the 3 children of the marriage with reasonable access to the Husband as follows:
[The details of access are not material for the appeals before me. However, the Husband is appealing for an order that on the issue of the childrens education, the Wife is to consult and obtain his prior consent. His appeal in respect of the childrens religion was withdrawn before me.]
(2) The Husband is to pay the Wife a sum of $16,000 per month for the maintenance of the 3 children and the Wife ($5,000 per child per month and $1,000 per month for the Wife) with effect from 1 January 2000 and thereafter the first day of each month, payment to be made directly.
[The Husband is appealing that the maintenance be reduced to:
(a) $8,000 per month for the children as follows:
(i) $3,500 for the eldest child Cheryl,
(ii) $2,500 for the second child Sean, and
(iii) $2,000 for the youngest child Valerie, and
(b) $500 per month for the Wife.
On the other hand, the Wife is appealing that (a) the maintenance for her be increased to $5,000 per month, and (b) the maintenance for her and the children be paid with effect from February 1996.]
(3)
(4)
(5) The Wife shall be entitled to 15% of the Husbands Dell stocks, namely:-
(i) 111,100 shares purchased from the open market and valued at US$4,575,986.80;
(ii) 10,821 shares bought from the Employee Stock Purchase Plan valued at US$445,695; and
(iii) The gains from Dell stocks vested and exercised by the Respondent under the Non-Statutory Stock Option Agreement scheme amounting to US$2,573,328 less tax to be paid on such gains (proof on demand of payment from the IRAS).
[The Wife is appealing for 30% instead of 15%.]
(6) There shall be no division of Dell stocks in the Non-Statutory Stock Option Agreements which have yet to be vested in the Husband.
[The Wife is appealing for a 30% or 15% share.]
(7)
(8)
(9)
(10)
(11)
(12)
7. The Wifes appeal with regard to a property in Gold Coast, Australia, was withdrawn before me.
Childrens education
8. I refer to para 5 of the Grounds of Decision (GD) of the District Judge:
There had been umpteen applications for access since 1997 and the parties had resorted to communicating with each other through their lawyers on every small issue concerning the children. It can be gleaned through their numerous affidavits that their relationship was highly contentious and acrimonious. I could not foresee the parents cooperating with each other on the education and religion of the children. Furthermore I was of the view that (sic) children were old enough to voice their own views on such matters and if the wife was to force her views on the children, they could inform their father who could then make the necessary application to court . With regard to education, the children are already attending schools. In all fairness, the husband has not accused the wife of being incapable of raising the children. In fact he consented to her having care and control of them. I was of the view that it would be detrimental to the welfare of the children if I made an order that the husbands consent be obtained on matters of religion and education in view of their acrimonious relationship.
9. I have considered the many affidavits filed by the respective parties. The acrimony between the parties is clear.
10. In my view, it is unrealistic to compel the Wife to consult and seek the prior consent of the Husband on the childrens education. That would be a recipe for disaster.
11. As the Husband has consented to the Wife having care and control of the children, he should not qualify his consent by imposing the condition which is the subject of his appeal before me. Much as he loves the children, he should come to terms with the situation.
Maintenance
12. Section 69(4) of the Womens Charter (Cap 353) 1997 Edition requires the court to have regard to all the circumstances of the case when ordering maintenance for a wife or child including various factors listed as (a) to (h) under sub-section (4).
13. The Wifes job history is as follows:
Description of Job Remuneration per month Duration of Employment
(a) Private Banker with Citibank $3,000 (1983) 1983 1989 N.A. $5,000 (1984) (b) Private Banker with the Royal Bank of Canada
(The Wife alleged that she $12,000 resigned to follow the Husband to Tokyo at his request. The Husband said she resigned because she was having problems with an ex-boss. The reason for the Wifes resignation is not material to me.)Started with $11,000 and then increased to 1990 1991 (c) Regional Treasurer with Carnaud Metal Box (Pte) Ltd (the name was described differently and the spelling was different between paras 74 and 85 of the Wifes AEIC)
(The Wife resigned at end 1993 presumably to look after 3 children)$13,000 1993 (d) Private Client Advisor with Kim Eng Securities (Pte) Ltd
$4,000 (basic salary excluding bonus) 19/8/96 and still continuing.
14. The Wife said she received $13,000 per month from the Husband when she resigned from her job with Royal Bank of Canada. This was for six months and the Husband was to continue paying for family and household expenses. The Husband said the $13,000 per month was to include the family and household expenses and the Wife was supposed to look for a job.
15. It is immaterial to me whether the $13,000 per month was to include or exclude family and household expenses. It was obviously given to the Wife because she had resigned from her job. She had also accompanied the Husband to Tokyo. It was a special situation then.
16. As can be seen from the Wifes job history, the Wifes earning capacity was quite great. However she alleged that all her previous jobs required her to travel on a frequent basis. Subsequently, she decided not to take a job which required her to travel as that would mean leaving the children alone for long periods. Her present job with Kim Eng Securities (Pte) Ltd was taken on the basis that she does not have to travel at all, hence her low income (see para 96 of her affidavit filed on 30 August 1999).
17. However, although the Wifes current basic salary is $4,000 per month, she is entitled to receive a bonus.
18. I had asked for the Form IR8A and Notice of Assessment of the parties for Year of Assessment (YA) 1999 and YA 2000.
19. For YA 1999, the Notice of Assessment shows the Wifes income from employment to be $42,736. This was less than $4,000 a month but it was not explained to me why this was so.
20. For YA 2000, the Notice of Assessment shows her income from employment to be $92,657 which was about $7,700 per month.
21. The Husband was working with IBM but stopped in about March 1994. His job history from 1994 is as follows:
Description of Job Remuneration per month Duration of Employment (a) Managing Director of Quorum Growth (Singapore) Pte Ltd (Quorum) (but subsequently instead of being paid direct, his services were rendered through CSV Holdings Pte Ltd (CSV) so that his income from Quorum would be paid to CSV. CSV is jointly owned by the Husband and the Wife although not in equal shares. The income from Quorum was re-directed in January 1996 by the Husband to another company which he had incorporated with his brother-in-law). About $36,000 (including bonus) 3/94 - 5/96 (b) -- Unemployed 6/96 - 12/96 (c) Dell Computer Asia Pte Ltd (Dell Asia) (a) $24,730 (from Feb 98)
(b) $27,001 (from Jul 98)
(c) $28,352 (from 1/3/1999)According to affidavit evidence, the Husband worked for Dell Asia in Singapore from 1/1/97 to March 98 and then went to work for the same company in Hong Kong. The tax return filed in Hong Kong shows that his income from Hong Kong started from 1 October 1998.
22. The Husbands income from Dell Asia was not confined to his basic salary. Aside from allowances, he was also entitled to receive a bonus provided targets were met.
23. For 1998, the Notice of Assessment shows his income from employment in Singapore was $181,405. The Form IR8A indicated that this income from Singapore ceased on 30 September 1998.
24. The Employers Return of
Remuneration & Pensions for Hong Kong income for the year ended 31 March 1999 showed his income
for six months from 1 October 1998 to 31 March 1999, excluding various allowances, to be HK$820,438
(i.e about $182,320 at an exchange rate of, say, HK$4.5 to S$1). There was nothing for bonus.
25. It is easier to consider the Employers Return for Hong
Kong income for one full year from 1 April 1999 to 31 March 2000. This was HK$1,792,829 for salary
and HK$1,333,283 for bonus, i.e a total of HK$3,126,112 (or about $694,692 at the same exchange
rate). This works out to $57,891, say, $58,000 per month (including bonus) or about S$33,200 per
month (excluding bonus). Neither figure includes G & S allowance, Auto allowance and Stock
Purchase discount or gains realised from stock options for the Husband.
26. At this stage, I refer to the case of Susy Suryani
Santoso v Lee Kong Eng & Alexis Khoo (Divorce 1704/98 and RAS 95 and 96/99). In that case,
Justice Judith Prakash ordered that the husband pay additional maintenance based on each months
bonus received by the husband if and when he was paid any bonus. Her decision on this point was
reversed by the Court of Appeal but no written reasons were given.
27. I am of the view that the decision of the Court of Appeal
does not mean that bonuses should never be taken into account on the issue of maintenance. Each case
must depend on its own particular facts and it should be borne in mind that bonuses may not be paid
or, if paid, may not be for the same sum each year.
28. Prior to the District Judges order on maintenance, there
were two earlier orders for maintenance.
29. On 2 February 1998, the Wife applied for maintenance. The
parties then consented to an order dated 13 February 1998 under Summons No MSS 265/1998 (the 1st
Maintenance Order).
30. Under the 1st Maintenance Order, the Husband was
to pay $11,000 per month for maintenance of the Wife and the three children with effect from 15
February 1998 and thereafter on the 15th of each month.
31. Just a few months later, the Wife applied on 25 June 1998
for an increase in the maintenance.
32. The parties again consented to an order this time dated 13
August 1998 and made under Summons No MSS 3099/1998 (the 2nd Maintenance Order).
33. Under the 2nd Maintenance Order, the Husband was
to pay $14,500 per month for maintenance of the Wife and three children with effect from 15 August
1998 and thereafter on the 15th of each month.
34. However the 2nd Maintenance Order was made
without prejudice to the ancillary issues to be dealt with in the divorce petition. The 1st
Maintenance Order did not have this qualification.
35. While Counsel for each party stressed that the 2nd
Maintenance Order was made without prejudice to the ancillaries, neither was too keen to say much,
if anything, as to why her client had agreed to the amount of maintenance ordered under the 1st
Maintenance Order. The reason for this was obvious. In the case of the Husband, he was seeking less
than what had been ordered thereunder and in the case of the Wife, she was seeking more.
36. After considering various factors, as set out in paras 15
to 17 of her GD, the District Judge made an order for maintenance at $16,000 per month, as set out
in para 6 above.
37. In so far as the Husband had sought to use the 1st
Maintenance Order and the 2nd Maintenance Order against the Wife, he was not entitled to
use the 2nd Maintenance Order to do so as it was made without prejudice to the
ancillaries (even though the without prejudice qualification may have been included at his request).
The without prejudice privilege applies to both parties and Mrs Anamah Tan for the Husband did not
contend otherwise.
38. As for the 1st Maintenance Order, it can be
taken into account for or against either of the parties, and not just against the Wife.
39. It is incumbent on either party seeking less or more than
what had been ordered under the 1st Maintenance Order to justify why a decrease or
increase should be allowed.
40. As for the Wife, her Counsel Ms Kanya submitted that when
the Wife agreed to the $11,000 per month, this was because the Husband was supposed to continue
paying the utility bills, payments in respect of the matrimonial home as well as supermarket
expenses. These were paid by GIRO and when the Husband stopped the GIRO payment subsequently, the
Wife sought an increase in maintenance which resulted in the 2nd Maintenance Order.
41. However, this reason turned out to be untrue.
42. Under the 1st Maintenance Order, the Wife was to
pay for the mortgage, TAS, PUB, maintenance charges and property tax for the matrimonial home. The 1st
Maintenance Order was silent about the subsequent supermarket expenses. I am of the view that it was
for the Wife to require an express stipulation if the Husband was to continue paying supermarket
expenses.
43. In any event, the Wife herself did not give the reason
which Ms Kanya gave when the Wife sought an increase in maintenance which resulted in the 2nd
Maintenance Order.
44. In the Wifes second complaint which led to the 2nd
Maintenance Order, she gave the following reasons for seeking an increase to about $33,000 per
month:
2(a) That the maintenance sum of $11,000-00 is insufficient to meet the
needs of the Complainant and the children of the family. (b) That the Respondent has not fully declared his means to the Court and is
able to support the family in the sum to be varied. (c) That the Respondent has not been paying sufficient maintenance since
January 1996. 45. I am of the view that her paragraph 2(c) is not a valid
reason for increasing maintenance from a consent order.
46. As for her paragraph 2(a), I do not agree that $11,000 per
month is insufficient to meet the needs of the children and the Wife. Whether it is sufficient to
enable them to live in the lifestyle they were used to is another matter.
47. The real reason for the Wife seeking an increase was her
paragraph 2(b). This reason is reiterated in paras 25 to 28 of her affidavit filed on 12 August 1998
i.e one day before the 2nd Maintenance Order was made.
48. Furthermore, in para 20 of her Affidavit of Evidence in
Chief 1st for the Ancillary matters filed on 25 June 1999 (AEIC) the Wife said that
she was seeking maintenance of at least $33,000 per month, based on the Respondents last known
income earned in Singapore of $840,416.15 in 1997, and his last known income earned in Hong Kong,
for the period 1 April 1997 to 31 March 1998, of HK$18,735,755. This income was earned by the
Respondent prior to his promotion from Vice President, Asia Direct, to President of Dell, Hong
Kong/China. This translates to an (sic) approximately monthly income of S$382,297.26.
49. This reinforces the point that her ground for seeking an
increase in maintenance in June 1998 and later in her AEIC for ancillaries was because she had found
out more about the Husbands income.
50. The question I have to consider is whether there is some
basis for the Wife to say that she would not have agreed to $11,000 per month had the Husband not
misrepresented his income.
51. From the correspondence between solicitors and the Husbands
own affidavit filed on 11 August 1998 in respect of the 2nd Maintenance Summons, it is
clear to me that the Husband had said that he was earning slightly over $20,000 per month when the
Wife first agreed to $11,000 per month for the 1st Maintenance Order (of 13 February
1998).
52. The Husband sought to explain this away by saying that he
was not asked to state the exact figure. Even so, I am of the view that he was giving a lower round
figure than he should have and he had omitted to mention his eligibility for bonus.
53. I am of the view that the Wife has established that she
would not have agreed to the $11,000 per month had the Husbands true income then been disclosed
and certainly not when his income for the year 1 April 1999 to 31 March 2000 (see para 25 above) is
known.
54. However, I have still to consider the alleged expenses for
the children and her.
55. For this purpose, I start with the Wifes initial claim
for maintenance which led to the 1st Maintenance Order. She had listed out various
alleged expenses.
56. According to Ms Kanya and Mrs Tan, the total of the alleged
expenses amounted to $24,340.14.
57. Both Counsel then assumed that the Wife had claimed
maintenance of about $24,000 per month.
58. I noted that both Counsel had used an incomplete complaint
made by the Wife under s 133(1) of the Criminal Procedure Code. Item 5 of the complaint in which the
Wife was to state the amount of maintenance claimed was blank. Therefore I asked for a copy of the
completed complaint to be provided to me and eventually this was done.
59. As it turned out, the completed complaint showed that the
Wife was then claiming $21,000 (and not $24,000) per month as maintenance for herself and the three
children. This is quite telling because it was a claim she had made before she was misled about the
Husbands income.
60.In just under five months, she was subsequently alleging that her expenses,
and corresponding claim for maintenance, had increased to $33,000 per month for her 2nd
claim for maintenance.
61. The Wife provided a list of alleged expenses for her 2nd
claim for maintenance. She also provided a list of such expenses in her AEIC (for ancillaries) and
it is this list which I have considered. It appears to me that she had inflated her expenses in an
attempt to justify her claim for $33,000 per month. Also, some of the items should not be included
in a maintenance order.
62. For example, the Wife included insurance premiums for
policies she had taken out. These appeared to have a savings or investment element in them as the
premiums were rather high bearing in mind the sums insured. The Wife did not deny this but
considered it right that the Husband should pay the premiums. I do not agree. When the policies
mature, the Wife or the children will have the benefits and not the Husband.
63. The Wife also claimed for monies given to her mother and
for making gifts to relatives and friends. While a court would encourage filial piety and
generosity, this cannot be at the expense of the Husband.
64. Also, in claiming for household expenses, the Wife was
claiming for a household of seven i.e herself, the three children, a maid and her parents. She gave
the reason that her parents were helping to take care of the children but I do not accept that the
parents contribution to the care of the children was to such an extent that it was right to
compel the Husband to provide for household expenses for the parents.
65. The Wife also said that the amounts paid by CSV from 1994
to January 1995 would support her claim of expenses amounting to about $33,000 per month. She
alleged that all payments by CSV were for such expenses. I have considered the payments made by CSV
during this period. Some of the payments for large sums were to the Husband or to the Wife for their
respective salaries. Some were for their respective credit card expenses and it was unclear what
other payments to the Husband were for. Some of the other payments were also dubious, eg there were
payments of $1,000 a month to Leong Kuan Swee (the Wifes father) for transport, presumably as
some sort of chauffeur, of $800 a month to Tan Cheng Poon (the Wifes mother) for tuition, and of
$2,000 a month to Kam Swee Kee (the Husbands mother) for tuition. I doubt that such payments were
genuinely for chauffeur services or for tuition. They were probably to draw money out from CSV for
these relatives.
66. At this point, I would mention that the Husband sought to
use the Wifes new list of alleged expenses to his advantage. That new list had three headings:
(a) Household Expenses, (b) the Wifes Expenses and (c) the Childrens Expenses. The Childrens
Expenses amounted to slightly over $9,000 per month. Using this, the Husband said that $8,000 per
month for the children was fair after taking into account some exaggeration on the part of the Wife.
67. I am of the view that the Husbands approach was not
correct. Obviously some of the Household Expenses would also be for the account of the children.
Furthermore, he himself had consented to maintenance of a total of $11,000 per month for the Wife
and the children under the 1st Maintenance Order and yet was now seeking to convince the
court that it should be $8,500 per month (ie $8,000 per month for the children and $500 per month
for the Wife).
68. Mrs Tan did not give any reason why the Husband had agreed
to $11,000 per month in the first place.
69. Coming back to the Wifes appeal for an increase in
maintenance, Mrs Tan had submitted that the Wife was trying to have two bites at the cherry, first,
by using the Husbands stock options to claim higher maintenance and, secondly, by claiming a
share in the Husbands stock options in the division of matrimonial assets.
70. Ms Kanya denied this. She referred to para 15 of the GD in
which the District Judge had determined that the Husbands average monthly income was $44,281
without taking into account his stock options or gains therefrom.
71. However, I note that in para 20 of the Wifes AEIC, the
contents of which I have cited in para 48 above, the Wife did take into account the Husbands
gains from stock options when she was seeking $33,000 per month as maintenance (see also para
40(2)(g) and (h) at p 32 and p 307 and 310 of the Wifes AEIC).
72. In any event, at present, the Wife is no longer seeking
$33,000 per month in her appeal before me but $20,000 per month (instead of the $16,000 per month
allowed by the District Judge) for the children and herself. The increase of $4,000 per month is
sought for herself.
73. In the light of Ms Kanyas argument, as mentioned in para
70 above, it appears that Ms Kanya is not relying on the stock options to seek the additional $4,000
per month for the Wife. Accordingly, I am disregarding the stock options for the issue of
maintenance.
74. After taking into account the Wifes initial claim for
maintenance, the amount consented to under the 1st Maintenance Order and the factors I
have mentioned as well as the factors listed in s 69(4) of the Womens Charter, and using a
broad-brush approach, I am of the view that the maintenance should be $15,000 a month and that it
should be spread more evenly among the children and the Wife, ie $4,000 per month for each of the
children and $3,000 per month for the Wife.
75. Taking into account the Wifes income, she should have
$19,000 per month, even if she does not receive bonuses, for the children and herself.
76. On the part of the Husband, he will have enough for himself
even if he does not receive bonuses.
77. According to paragraph 18(ii) of Mrs Tans submissions,
the Husband has left Dell Asia since October 2000. However, Mrs Tan pointed out, and I agree, that
this is not relevant because I am not dealing with an application or appeal based on a change of
circumstances.
Back-dating of maintenance 78. The Wife has sought maintenance from February 1996 on the
basis that the Husband has not provided any maintenance since then. Accordingly, if the maintenance
ordered by the District Judge is increased under the Wifes appeal, the Wife is also seeking that
the increase be back-dated to start from February 1996.
79. The claim for the maintenance to be back-dated to February
1996 was mentioned in an affidavit of the Wife but Mrs Tan pointed out to me that it was not pursued
in the submissions on the Wifes behalf to the District Judge.
80. Furthermore, if the maintenance is reduced under the
Husbands appeal, the Wifes position is that it should not be back-dated to the effective date
of maintenance under the District Judges order i.e 1 January 2000 or to the effective date of
maintenance under either the 2nd Maintenance Order or the 1st Maintenance
Order.
81. Ms Kanya even took the technical point that the Husbands
Notice of Appeal did not say that any reduction should be with effect from 1 January 2000. Therefore
any reduction should be from the date of my decision or thereabouts. I am of the view that this
argument is a non-starter. The Husband is appealing from the decision of the District Judge and
hence any order made by me to reduce maintenance should take into account the effective date of
maintenance under the District Judges order.
82. It is clear to me that the Wife is trying to have her cake
and eat it.
83. In any event, I am not satisfied that the Wife has
established that the Husband has failed to pay any maintenance between February 1996 to 15 February
1998. Indeed I note from the completed complaint leading to the 1st Maintenance Order
that her allegation then was that the Husband had failed to maintain her and the three children
since January 1996 adequately as opposed to at all.
84. In the circumstances, my order on maintenance is to take
effect from the effective date of maintenance under the District Judges order i.e 1 January 2000.
The 2nd Maintenance Order will cease to apply from this date.
Stock Options 85. The Husband was employed by Dell Asia. From time to time he
received agreements from Dell Computer Corporation (the Corporation), a Delaware corporation,
to grant him stock options in the Corporation which he in turn had apparently agreed to.
86. The terms of each agreement are similar but not identical
as I will elaborate below.
87. Under each agreement, the Husband was granted what is
described as a Non Statutory Stock Option to purchase a certain number of the Corporations stock.
However the option does not vest in him immediately i.e. he cannot exercise the option immediately.
88. Portions will vest at stated periods, for example, 20% on
each of the first, second, third, fourth and fifth anniversaries of the date of the grant.
89. Once the option vests, it must be exercised before a
termination date which, for example, is ten years from the date of the grant but there may be
periods of unexercisability, to be determined by the Corporation, to avoid insider trading.
90. Should the Husband decide to exercise a vested option, he
has to give notice for the number of shares of stock being purchased with payment of the exercise
price. I was informed by both Counsel that this had been done in the past and the Husband then sold
some shares or stock and made a profit although there appears to be no obligation on him to sell
them.
91. Ms Kanya categorised the options into three categories:
(a) options which have vested and which have been exercised by the Husband (the
1st category), (b) options which have vested but have not yet been exercised by the Husband (the
2nd category), (c) options which have not vested in the Husband (the 3rd
category). 92. The District Judge granted the Wife 15% of the gains from
the 1st category but nothing for the 2nd and 3rd categories.
93. The Wifes position is that as regards the 1st
category, she should be granted 30% for her indirect contributions to the marriage as that was the
District Judges decision in respect of the matrimonial home.
94. As for the 2nd and 3rd categories,
the Wifes position is that she should also be granted 30% of the value of the options, or
alternatively, 15%. However, Ms Kanya accepted that the options may not vest or, even if vested, may
not be exercised by the Husband. That is why she sought an if and when order to be made rather
than ask for a value to be ascribed to the 2nd and 3rd categories.
95. Ms Kanya also submitted that an if and when order is
within the purview of s 112(5)(e) of the Womens Charter.
96. Section 112(5)(e) states:
(5) In particular, but without limiting the generality of subsections (3)
and (4), the court may make any one or more of the following orders: (a) (b) (c) (d) (e) an order postponing the sale or vesting of any share in any matrimonial
asset, or any part of such share, until such future date of until the occurrence of such future
event or until the fulfilment of such condition as may be specified in the order; 97. In my view, s 112(5)(e) enables a court to postphone the
sale or vesting of any share in any matrimonial asset which is already vested in one or both of the
parties. It does not apply to the situation where the vesting of a matrimonial asset is delayed
under the terms of the agreement which allegedly gives rise to the acquisition of the asset.
98. The Amended Notice of Appeal of the Wife in respect of the
2nd and 3rd categories seeks that:
3. There be a division of Dell stocks in the Non-Statutory Stocks Option
agreements which have vested but yet to be exercised by the Respondent and which have yet
to be vested in the Respondent. 99. Technically, even with the amendment, it is not appropriate
to refer to a division of Dell stocks because no Dell stock has been acquired yet as regards the 2nd
and 3rd categories. However it is clear to me that this prayer was intended to refer to a
division of the stock options under the 2nd and 3rd categories and indeed, the
submission of both Counsel proceeded on that basis.
100. Section 112(1) and (10) of the Womens Charter (1997 Ed)
states:
Power of court to order division of matrimonial assets 112. (1) The court shall have power, when granting or subsequent to the grant
of a decree of divorce, judicial separation or nullity of marriage, to order the division between
the parties of any matrimonial asset or the sale of any such asset and the division between the
parties of the proceeds of the sale of any such asset in such proportions as the court thinks just
and equitable. (10) For the purposes of this section, "matrimonial asset" means (a) (b) any other asset of any nature acquired during the marriage by one party
or both parties to the marriage, but does not include any asset (not being a matrimonial home) that has been
acquired by one party at any time by gift or inheritance and that has not been substantially
improved during the marriage by the other party or by both parties to that marriage. 101. Ms Kanya submitted that the 2nd and 3rd
categories are choses in action and that they come within the wide definition of any other asset
of any nature.
102. She referred to Halsburys Laws of England, Fourth
Edition Reissue Volume 6 at para 8 which states:
8. Enumeration of choses in action. In order that a more
comprehensive idea as to the nature and extent of the expression "chose in action" may
be formed, it may be convenient to show in some detail what kinds of things and property have been
held to be choses in action. The following things have been held to be choses in action; they are
grouped in five divisions for purposes of convenience only. (1) Debts, whether due by specialty or by simple contract, . (2) The benefit of a contract, including an option to purchase shares, ;
a right to be issued shares in a company . (3) Recognised subjects of property, such as stock in public funds; a share of
bank stock; shares in joint stock companies, and presumably in every kind of company, including
stock issued by national corporations; a fund in court; . (4) Equitable rights to property, such as beneficial interests under trusts . (5) Miscellaneous rights, such as a right of action arising under contract,
including a claim for unliquidated damages for breach of contract; . 103. Ms Kanya further submitted that although the Singapore
High Court and the Court of Appeal have not in the past made any decision as to whether stock
options are matrimonial assets for the purpose of dividing them, these courts have included shares
or stocks for the purpose of dividing matrimonial assets.
104. She also referred me to the American case of Barbara
Green v Michael Green (8 July 1985, Court of Special Appeals of Maryland).
105. In that case, Karwacki J, delivering the judgment of the
Court of Special Appeals of Maryland said:
In Deering v. Deering, 292 Md. 115, 437 A.2d 883 (1981), the Court of
Appeals held that a spouses pension rights, to the extent accumulated during the marriage,
constitute "marital property" within the meaning of The Marital Property Act. The Court
of Appeals emphasized that its holding applied to all pensions, whether vested or unvested, or
whether matured or unmatured. This Court in Ohm v. Ohm, 49 Md.App. 392, 431 A.2d 1371 (1981)
had earlier reached the same conclusion. The Court of Appeals in Deering noted: "It is
significant that over the past several years, pension benefits have become an increasingly
important part of an employees compensation package which he or she brings to a marriage
unit". 292 Md.at 122, 437 A.2d 883. And in Ohm, this Court identified, through
citations to numerous cases, those jurisdictions which have held that rights under a private or
public pension plan, to the extent such rights were acquired during the marriage, are property
subject to division upon dissolution. We noted that these decisions rested upon the rationale
"that retirement benefits are a form of deferred compensation or wage substitute and the
right to receive such benefits, being contractual in nature, is a chose in action and thus,
property" Ohm, 49 Md.App. at 397, 431 A.2d 1371. As with pension plans, restricted stock option plans like those we consider
here are a form of employee compensation, providing to the employee the right to accept within a
prescribed time period and under certain conditions the corporate employers irrevocable offer
to sell its stock at the price quoted. If the employer attempts to withdraw that offer, the
employee has "a chose in action" in contract against the employer. We therefore conclude
that stock option plans, like other benefits in an employees compensation package, constitute
"property" as used in the definition of marital property. Furthermore, because the plans
in the case sub judice granted stock options to the appellee while he was married to the
appellant, those options were "acquired" during the marriage. See Harper v. Harper,
294 Md.54, 448 A.2d 916 (1982). The stock options are therefore marital property under the
terms of 8-201(e) and as such are subject to valuation and equitable adjustment in the form of a
monetary award, pursuant to 8-204 and 8-205. The trial court stated in its memorandum opinion that the stock options were
valueless because they had no "fair market value". Although it is true that an
unassignable, unsalable option has no fair market value, it is nonetheless an economic resource,
comparable to pension benefits, to which a value can be attributed. We will comment briefly upon
the method by which the trial court may value and adjust the parties equities in this form of
marital property. The appellate courts of Maryland have recognized the complexity of the task
confronting trial courts in properly valuing and allocating certain forms of marital property. Deering,
292 Md. At 129, 437 A.2d 883; Ohm, 49 Md.App. at 405-06, 431 A.2d 1371. An elastic approach to
the problem is required so as to accommodate the circumstances presented by each case. Nisos v.
Nisos, 60 Md.App. 368, 383, 483 A.2d97 (1984). As with pensions, the valuation and allocation
of stock options necessitates such a flexible approach. In completing steps 2 and 3 of the
procedure for allocating this marital property by formulating an equitable monetary award, the
court must take into consideration the nature of the appellees property right in the options.
In simple terms, the appellees property interest can be described as the right to choose
whether or not to purchase 5,000 shares of Network Systems stock on certain dates at specified
prices. Thus the court may not adopt an approach to the equitable adjustment of that property
which would operate to compel the appellee to exercise his option, since to do so would in effect
deprive him of the essence of his property interest; i.e., the right to make a choice regarding
the exercise of the options. The trial court may in its discretion, however, adopt an "if, as and
when" approach to the valuation and equitable allocation of the unexercised options,
including the 2,500 matured options as well as the 2,500 unmatured options. This approach has
proven to be a workable method for the allocation of unmatured pensions, see Deering, supra, and
we believe, is equally effective in the allocation of stock options. We explain. Under the second
of the three step process for the determination of a monetary award in adjustment of this marital
property, the court must attach a value to options as of the date of the decree, see Nisos, 60
Md.App. at 381-85, 483 A.2d 97. That value may be determined by taking into consideration the
market value of shares of Network stock as of the time of that decree, and the cost to the
appellee of exercising the options. The court may, then, pursuant to the third step of the
process, determine a percentage by which the profits should be divided if, as and when the options
are exercised. Under such an approach to the equitable allocation of this marital property, the
appellee is under no compulsion to exercise his options. At the same time, however, the appellants
equitable interest in the options, if exercised, is protected. We believe this approach fairly
implements the process of adjusting the equities between the parties with respect to marital
property as mandated by the Act. For these reasons, we hold that the trial court was clearly erroneous in its
conclusion that the stock options were valueless and in failing to include them in its
determination of the marital property. We will thus remand this case in order that the court may
make appropriate findings of fact with respect to the valuation of those assets, and make such
adjustment to the monetary award as it deems equitable. 106. Mrs Tan submitted that it was arguable whether a stock
option per se is in fact a chose in action.
107. She also submitted that it is not a matrimonial asset to
be divided by the court under s 112 of the Womens Charter. She said that our courts have always
divided tangible assets but she did not dispute that our courts have considered shares as
matrimonial assets.
108. She sought to distinguish
stock options from shares by saying that shares are tangible and already belong to someone whereas
stock options in the 2nd and 3rd categories do not yet belong to anyone.
109. She argued that there must be certainty of ownership and
to include a stock option or a chose in action as a matrimonial asset would have far-reaching
ramifications. It will mean that a debt owing to one party would then be a matrimonial asset but
this would create a problem if the monies were not recovered.
110. She also argued that the Green case cited by Ms Kanya was
not applicable in Singapore as, first, the system of American matrimonial law differs from ours as
theirs is based on community property, and secondly, even within their country, it may differ from
state to state.
111. She further argued that the Husband had not yet acquired
the stock options under the 2nd and 3rd categories. He acquires these stock
options only when the same are both vested and exercised by him.
112. Mrs Tans main point was that there were too many
uncertainties until the options are vested and exercised by the Husband. For this argument, she
referred to various provisions in the agreements granting the stock options.
113. One provision in point is that the options are not vested
immediately upon the execution of the stock option agreements.
114. A second provision in point is that the vesting of the
options can be deferred, but not beyond a certain date which can be specified in the respective
agreements.
115. A third provision in point is that the options will be
terminated if the Husbands employment is terminated for serious misconduct. If it is terminated
for reasons other than serious misconduct, options in the 3rd category will expire then
and options in the 2nd category will expire after a certain time.
116. A fourth provision in point is that in some (but not all)
of the agreements granting the stock options, there is also a provision for the forfeiture of option
proceeds. Under such a provision, certain option proceeds will have to be repaid by the Husband if
he competes with the Corporation within a certain time frame after the termination of his
employment.
117. Mrs Tan further supported her argument about
non-acquisition by referring to the definition of the word acquired in The Shorter Oxford
English Dictionary. It defines acquire as to gain, or get as ones own (by ones own
exertions or qualities); to receive, come into possession. She argued that, By this
definition, once an asset is acquired, it is yours period and no one can take it away from you.
118. It is not disputed that the Green case involved the
consideration of what constitutes martial property within the meaning of a different
legislation i.e. The Marital Property Act.
119. However, in my view, that
case is authority for the proposition that a stock option is a chose in action. This is similar to
the position under English law as set out in Halsburys Laws of England (see para 102 above). That
case also illustrates the use of an if, as and when order. I will refer to such an order as an
if and when order for simplicity.
120. I am of the view that clearly the stock options in the 2nd
category are choses in action. As regards the stock options in the 3rd category, where
the options have not yet vested in the Husband, these are also choses in action. The Husband has a
benefit under a contract or contracts to have the options vested in him at some future date.
121. I am also of the view that the stock options of the 2nd
and 3rd categories come within the wide definition of matrimonial asset under s
112(10)(b) of the Womens Charter i.e. any other asset of any nature. In my view, matrimonial
asset is not confined to tangible assets.
122. Accordingly a debt owing to one of the spouses can be a
matrimonial asset if acquired during the marriage.
123. I do not agree with Mrs Tans argument about
far-reaching ramifications. Indeed, if she were correct, a spouse will be encouraged to lend monies
to various persons when the marriage is floundering, and then claim that such debts should not be
treated as part of matrimonial assets for the purpose of s 112.
124. I am also of the view that any difficulty in establishing
the value of a matrimonial asset should not be confused with its existence.
125. The uncertainties mentioned in Mrs Tans arguments are
conditions subsequent to the acquisition of the choses in action. They are not pre-conditions to the
acquisition. Accordingly, the Husband has acquired the choses in action under the 2nd and
3rd categories.
126. I also do not think that it is correct to describe a share
as a tangible asset but, in the circumstances, it is unnecessary for me to elaborate further on this
point.
127. As regards Mrs Tans argument that the provision for the
forfeiture of option proceeds (which would apply if the Husband were to compete with the Corporation
within a specified time frame of the termination of his employment) demonstrated non-acquisition,
this is not a valid argument. If she were correct, then even the stock options under the 1st
category cannot be said to be acquired by the Husband if such a provision applies to those options.
128. As regards Mrs Tans
argument that once an asset is acquired, no one can take it away from you, this is also not a valid
argument. For example, a house bought by the Husband and mortgaged to a bank can be taken away from
the Husband if he fails to pay the bank. Yet no one would say that the house has not yet been
acquired by the Husband for the purpose of s 112.
129. As for the definition of acquire in The Shorter
Oxford Dictionary, I am of the view that it is neither here nor there.
130. Mrs Tan had one other argument. She submitted that the
Wife had taken all the stock options into account in determining the Husbands remuneration for
the issue of maintenance and the Wife should not be allowed to have them taken into account in the
division of matrimonial assets. Otherwise, the Wife would be having two bites of the same cherry.
131. I have already mentioned above that Ms Kanya is not
relying on the stock options to claim additional maintenance for the Wife and I have disregarded it
for that issue.
132. I now turn to the District Judges reasons for not
ordering a division of the stock options in the 2nd and 3rd categories. In
para 14 of her GD, she said:
14. There was no doubt that the unvested Dell stock options were part of the
husbands salary package and although they were allotted to him once in every six (6) months,
they were intrinsically tied up with his performance in the company. Furthermore if his employment
were to be terminated with just cause, he would lose all the vested stock options, which he had
exercised. In Susy Suryani Santoso v. Lee Kong Eng & Alexis Khoo (Divorce 1704/98 and
RAS 95 & 96/99), the wife had asked for a portion of his year end bonus. The court of the
first instance declined to make such an order as bonuses were invariably a discretionary measure
contingent on several factors e.g employees performance, companys performance and a variety
of other imponderable conditions. On appeal, her Honour, Justice Judith Prakash reversed the
earlier decision on the issue of bonus and ordered that "the husband pay the wife additional
maintenance of S$6,000 for each months bonus received by him if and when (the emphasis
is mine) he was paid any bonus". The Court of Appeal in their oral judgment, delivered on 25th
January 2000, reversed her decision on this issue. I declined to make a "if, as and
when" order for the following reasons:- the share value of the stock option was based on market value at the time
it was exercised; the husband had, in the past, not exercised his rights to those stock
options and this may cause the wife to enquire why he had failed to do so; there may be double counting as the husband was paying maintenance and the
stock options form part of his salary package; the "if, as and when" order was vague and posed uncertainty as
there would be liabilities to be met when he exercised those rights; the above order also runs contrary to the clean break principle in the
division of matrimonial asses; and most importantly, the unvested stock options were allotted to the husband
after the breakdown of the marriage and her indirect contribution was not substantial enough to
merit a share in his unvested stock options (see para 11 above). 133. The case of Susy Suryanti Santoso v Lee Kong Eng &
Alexis Khoo cited by the District Judge is not applicable here because there the question was
whether the husbands bonus should be taken into account for the issue of maintenance. That point
did not involve stock options or the division of matrimonial assets.
134. Furthermore, as there was no written judgment from the
Court of Appeal in that case, I am of the view that it is likely that the decision of the Court of
Appeal was on the particular facts in that case. It is not an authority for the proposition that an
if and when order should, generally, not be made.
135. As for the list of reasons given by the District Judge, I
am of the view that:
(a) Although it may be said that the share value of a stock option is based on
market value at the time the option is exercised, it does not follow that this is the only value
that can be ascribed to a stock option. If the option is vested but not yet exercised, its value
may be less, and if it is not yet vested, its value may be even lesser. However, as I have already
said above, this does not detract from the fact of its existence. Furthermore, any difficulty in
valuing share options under the 2nd and 3rd categories is not an adequate
ground for denying their existence or for refusing to attempt to divide them. Thirdly, there is no
need to give a value at present if an if and when order is made. (b) Although the Wife had made inquiry in the past as to why the Husband did
not exercise any of the unexercised stock options, this is also not an adequate ground for
refusing to take such options into account in the division of matrimonial assets. Besides, suffice
it to say that the Husband is not obliged to exercise the stock options. If he has chosen not to
exercise them bona fide, the Wife has no legal basis to complain. However if, for example, the
Husband has given up any right to have the stock options vested in him in exchange for other
rights or assets in order to defeat the Wifes claim, then the Wife can pursue her legal rights.
However, the burden will be upon her to establish her assertion. (c) There is no question of double counting if the stock options are not taken
into account for the maintenance issue. (d) While an if and when order poses some uncertainty, this is also not
an adequate reason to disregard the stock options in the 2nd and 3rd
categories for the purpose of division. That the Husband would have to pay the exercise price can
be taken into account in an appropriately worded if and when order. (e) If such an order is vague and does not cover all the eventualities which
subsequently arises, this can be addressed by the parties seeking clarification or further
directions. After all, under s 112(3) to (8) of the Womens Charter, the court is given very
wide powers to give effect to any order it makes for the division of matrimonial assets.
Furthermore, it is open to the parties to agree on a lump sum settlement of the Wifes
entitlement to the stock options rather than be troubled with having to comply with an if and
when order. (f) I would add that the concept of stock options is not novel although it
appears to be used more and more for so-called New Economy businesses. A scheme for stock options
provides the answer to attracting and retaining key personnel without causing the businesses to
fail under the weight of huge salaries before huge returns are achieved. Furthermore, very often,
it is such a scheme, and not the salary, that attracts the key personnel. 136. Therefore, it is my view that it would be only realistic
to take into account stock options in the context of maintenance or the division of matrimonial
assets, unless there are reasons on the particular facts of a case why this should not be done. No
such reasons exist in the case before me.
137. While an if and when order would not achieve the
clear-break principle, this principle is not paramount. It must be subject to the more important
principle of justice in accordance with the law.
138. Furthermore, if the stock options (in any of the
categories) were allotted to the Husband after the breakdown of the marriage, that is a factor in
determining whether the Wife should be granted a share in them and if so, the extent of the share.
It is not a reason to deny any division outright. In so far as the District Judge said that the Wifes
indirect contribution after the breakdown of the marriage was not substantial enough to merit a
share, I will come back to this point later below.
139. As this stage, I need refer only to Yeo Gim Tong
Michael v Tianzou We agree that the husbands CPF moneys accrued or accumulated prior to the
date of the marriage should be excluded in the computation of the husbands assets for division
under s 106 of the Womens Charter. But, we are unable to accept that assets acquired by a
party, and in this case the husband, after the date of the breakdown of the marriage should not be
included. Subsection (1) and (3) of s 106 each refer to assets acquired during the marriage,
and the marriage is only dissolved when the decree nisi is made absolute. Normally the ancillary
matters come before the court for hearing prior to the date when the decree nisi is made absolute.
As a matter of practically, the court would take, for the purpose of determining the assets
falling within s 106, in the case of CPF moneys of the spouses, the latest statements issued by
the Central Provident Fund Board, and in other cases the assets of the spouses as of that date. Therefore
any assets acquired during the marriage including those acquired after the marriage has broken
down fall to be considered under these provisions. What contribution a spouse makes to the
acquisition of such assets during this period depends on the facts of the case. In making a
division under s 106(3) the court would have regard to the period in which the husband and wife
have ceased to cohabit and the indirect contribution, if any, made by the wife during the period.
In this case, the wifes indirect contribution continued: she continued to look after the child
after she had filed the petition, and her contribution fell within s 106(3). [Emphasis added.]
140. Although that case was
applying s 106(1) and (3) of the then Womens Charter (1985 Edition) which are not identical with
s 112(1) and (10) of the present Womens Charter, the judgment of the Court of Appeal on the
meaning of assets acquired during the marriage would still apply to the same phrase in the
present s 112(10)(b).
141. I have already set out the provisions of s 112(1) and
(10)(b) of the present Womens Charter.
142. For easy comparison, I set out the provisions of s 106(1)
and (3) of the Womens Charter (1985 Edition):
106(1) The court shall have power, when granting a decree of divorce,
judicial separation or nullity of marriage, to order the division between the parties of any
assets acquired by them during the marriage by their joint efforts or the sale of any such assets
and the division between the parties of the proceeds of sale. (2) (3) The court shall have power, when granting a decree of divorce, judicial
separation or nullity of marriage, to order the division between the parties of any assets
acquired during the marriage by the sole effort of one party to the marriage or the sale of any
such assets and the division between the parties of the proceeds of sale. 143. I should also mention that the Wife is confining her claim
to stock options already granted as at the date of the decree nisi (whether vested or not and
whether exercised or not). This is a fair cut-off point.
Share of the Wife in the stock options 144. As regards the 1st category of stock options,
the District Judge had granted the Wife a 15% entitlement.
145. Ms Kanya submitted that the Wife should be entitled to 30%
which was the percentage granted by the District Judge to the Wife for her indirect contribution in
respect of the matrimonial home. She submitted that the same percentage should apply to the stock
options.
146. However, the facts in relation to the stock options are
not the same as the facts pertaining to the matrimonial home. The latter had been acquired when the
marriage had not broken down.
147. The first agreement to grant stock options to the Husband
was dated 12 August 1996. The Husband left the matrimonial home in February 1997.
148. There was no suggestion that all was well with the
marriage until February 1997. On the contrary, it is clear that some years before, the marriage had
already broken down.
149. For example, when the Husband was performing services for
Quorum between 1994 to 1996, he was already under severe stress because of his marital problems,
although I would add that he is not as blameless as he would like the court to think.
150. The Wife had been extremely suspicious about the Husband
and harassed his secretary on his whereabouts and even complained to his boss about him. Apparently
she also threatened to complain to the President of Dell Corporation when the Husband was
subsequently working for Dell Asia.
151. Although the Wife denied harassing the secretary and
complaining to the boss in Quorum, I am of the view that she did complain about him and had been
harassing his secretary and him.
152. The situation did not improve when the Husband began to
work for Dell Asia in January 1997.
153. Thereafter, the Divorce Petition was filed on 21 November 1997. The 1st Maintenance Complaint was filed on 2 February 1998, the 2nd Maintenance Complaint was filed on 25 June 1998. The Decree Nisi was made on 24 September 1998. The parties were engaged in all kinds of acrimonious disputes including access to the children which entailed the filing of numerous affidavits.
154. It was because of these factors that Mrs Tan submitted that the Wifes indirect contribution was a negative one and that even 15% was generous although the Husband had decided not to appeal against the decision of the District Judge on the 15% entitlement of the Wife in respect of the 1st category. Mrs Tan submitted that the Wife should not be entitled to any share of the stock options as regards the 2nd and 3rd categories.
155. As regards the argument about
the Wifes negative contribution, Ms Kanya submitted that the District Judge had taken this
argument into account and had nevertheless granted the Wife 15% of the stock options under the 1st
category.
156. However, Ms Kanyas submission would in turn detract
from her other argument seeking 30% for the Wife for all the three categories.
157. The District Judges reasons for awarding 15% are set out in para 11 of her GD. It includes some of the factors I have mentioned and the fact that notwithstanding the Wifes so-called negative contribution, the Wife was still taking care of the children while the Husband was pursuing his career in Hong Kong.
158. The District Judge also took into account factors like the Wife (a) having had exclusive use of the matrimonial house since February 1997 when the Husband left, (b) had obtained 60% of the matrimonial property and (c) 100% of a property in Gold Coast, Australia, although there is an outstanding mortgage on it which the Wife will be responsible for.
159. I am of the view that the District Judge was correct in awarding 15% of the stock options under the 1st category to the Wife. However, I do not agree that this should be confined to the 1st category only.
160. I have already dealt with the District Judges reasons for declining to give the Wife anything for the stock options under the 2nd and 3rd categories.
161. As regards her last reason i.e that the unvested stock options were allotted to the Husband after the breakdown of the marriage, I have already mentioned that the marriage did not breakdown only when the Husband left the matrimonial home but some time before. Even the stock options under the 1st category were allotted to the Husband after the breakdown of the marriage.
162. In my view, the fact that the marriage had broken down was one of the main reasons for the District Judges decision to allot 15% instead of 30% to the Wife for the 1st category. That reason should not be used again to reduce the 15% to nil for the 2nd and 3rd categories.
163. Accordingly, I am of the view
that the Wife is entitled to 15% of the stock options under the 2nd and 3rd
categories.
Summary 164. As regards RAS 720014 of 2000 (i.e the Husbands
appeal):
(a) Prayer (a) as regards the childrens education is dismissed. The Wife is
not required to consult and obtain the prior consent of the Husband on any issue relating to the
childrens education. (b) Prayer (b) is allowed in part in that the maintenance to be paid by the
Husband for the three children is $4,000 per month for each of the three children, Cheryl, Sean
and Valerie. This is with effect from 1 January 2000. The 2nd Maintenance Order ceases
to apply with effect from 1 January 2000. (c) Costs of the Husbands appeal is reserved pending arguments thereon.
165. As regards RAS 720013 of 2000
(i.e the Wifes appeal):
(a) Prayer 1 is allowed in part in that the maintenance to be paid by the
Husband to the Wife is $3,000 per month. This is with effect from 1 January 2000. The 2nd
Maintenance Order ceases to apply with effect from 1 January 2000. (b) Prayer 2 is dismissed. (c) As regards Prayer 3 i.e the stock options under the 2nd and 3rd
categories, the Wife is entitled to 15% of the net gain, if any, made by the Husband from such
stock options provided that the written agreements from the Corporation granting such options are
dated before the date of the Decree Nisi, but regardless of whether the stock options have been
vested or exercised as at the said date. (d) For the purpose of paragraph (c) above: (i) the Husband is to notify the Wife in writing within thirty days of the
sale of the stocks or shares giving rise to the net gain and to provide supporting documents of
the net gain or estimated net gain. If the Husbands position is that he has not exercised any
of the stock options and/or that he has not made any gain from the exercise of the stock
options, the Husband is to notify the Wife in writing of this position by 30th June
and by 31st December of each calendar year with written confirmation from Dell. (ii) The net gain means the gain after deducting any amount paid by the
Husband to exercise any stock option, any fee or charge in the sale of the stock or shares
resulting from such an exercise and any tax on the gain. (iii) Within thirty days of the sale of the stocks or shares resulting in the
net gain, the Husband shall pay the Wife 15% of the net gain or estimated net gain provided that
within thirty days of the determination of the Husbands tax liability in respect of the gain,
the Husband is to pay to the Wife any difference due to the Wife and if any difference is due to
be paid by the Wife to the Husband, the Wife is to do so within thirty days of written
notification from the Husband with supporting documents. (iv) If there is a term pertaining to the Forfeiture of Option Proceeds in
relation to any of the agreements to grant stock options to the Husband, then within thirty days
of the sale of the stocks or shares resulting in the net gain, the Husband shall pay to the Wifes
solicitors, instead of to the Wife, 15% of the net gain or estimated net gain, subject to the
same proviso as in (iii) above. The monies are to be held by the Wifes solicitors in an
interest-bearing escrow account until the said term ceases to apply whereupon the monies and
interest thereon shall be paid to the Wife. However, if the Husband is required under the said
term to pay the net gain to the Corporation, then the Wifes solicitors shall release the
monies held in the interest-bearing account to the Husband upon receipt of supporting documents
that the net gains have to be paid to the Corporation under the said term. If the interest
earned need not be paid to the Corporation, then the interest shall be paid to the Wife. (e) The parties are at liberty to apply to a judge or judicial commissioner for
directions or for variation of the orders made in paragraph (d) above with the view of giving
effect to the intention behind the order in paragraph (c) above or to apply for an assessment of
the value of 15% of the stock options under the 2nd and 3rd categories in
place of the orders in paragraphs (c) and (d) above. (f) Costs of the Wifes appeal is reserved pending arguments thereon. Woo Bih Li Judicial Commissioner
Copyright © Government of Singapore.
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