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Appeal court rules postnuptial agreement binding

SINGAPORE — The Court of Appeal has ruled that a postnuptial agreement formed under the proper circumstances can carry “significant weight” in determining how matrimonial property is to be divided.

SINGAPORE — The Court of Appeal has ruled that a postnuptial agreement formed under the proper circumstances can carry “significant weight” in determining how matrimonial property is to be divided.

It overturned a High Court ruling in a case involving the division of about S$7.4 million in matrimonial assets, where the judge had decided to split the assets in question equally, having determined that the Settlement Agreement in question was only one of the factors the court needed to take into account in deciding what division was “just and equitable”.

The judge had ruled that the proposed division in the agreement was not so and carried out his own division exercise.

The case dates back to 2011, when Mr Surindar Singh and his former wife Sita Jaswant Kaur reached a Settlement Agreement after mediation. Later that year, however, Ms Kaur changed her mind about being bound by the agreement. Mr Singh then applied for the agreement to be recorded as an order of court. When the matter came before the High Court last year, the judge declined to give the agreement — which would leave Mr Singh with 68 per cent of the assets and Ms Kaur with 32 per cent — “conclusive weight” and awarded an equal share of the assets to each party. Mr Singh then appealed against this decision.

Upholding his appeal, the Court of Appeal, in its grounds of decision published on Monday, said it found the terms of the Settlement Agreement to be binding and should be given conclusive weight.

It also noted that separation agreements “generally carry significant weight”. “The parties to a marriage are in the best position to determine what is a just and equitable division of the matrimonial assets based on their own assessment of each party’s direct and indirect contributions to the marriage and their knowledge of the extent and value of the assets,” said Justice Judith Prakash, delivering the judgment of the court.

She added: “Due to the inherent limitations of fact-finding in the litigation process, the court should not lightly depart from such a separation agreement.”

While the final decision on attributing weight to such an agreement ultimately depends on the precise circumstances of the case, the court also found that where it is “reached after a well-considered process” such as mediation, significant weight will be attached to its terms.

The court also emphasised the importance of the fact that the Settlement Agreement in question resulted from a mediation process.

Marriages, Justice Prakash said, do not end until all outstanding matters are settled and the parties are “free to walk away and rebuild their lives”, but this cannot happen as long as they are disputing the division of assets, a process that often “breeds contention and bitterness”.

Mediation can facilitate solutions, without parties having to resort to determination by the courts, which would resuscitate old complaints and acrimonious feelings, added Justice Prakash. The process also takes time and can be costly.

Justice Prakash added that if the mediation process is properly followed and an agreement results, the court will “attach significant weight to the agreement” unless there are strong grounds for doing otherwise.

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