AKAR V SNKSH [2018] 4 SHLR 19

Syariah Court of Appeal (Selangor) 

Interpretation of Current Market Value of Matrimonial Property

1.  The parties were married on 18 September 1980 in Terengganu and later divorced on 10 August 1988 in Pejabat Kadhi, Petaling Jaya, Selangor with first talaq.

2.  On 9 July 1996, the Selangor Syariah High Court, in the case Mal Case No Bil 3 Tahun 1994, issued an order regarding the division of matrimonial property. The order identified the following properties:

(a) the property located at No. XX, Medan XX, Taman Tun Dr Ismail, Kuala Lumpur registered under the name of the Respondent was a matrimonial property;

(b) property located at Lot XXX, Rasah Jaya, Seremban, Negeri Sembilan registered under the name of the Respondent is a matrimonial property;

(c) a piece of land at Lot XXX, Mukim Jerong, Daerah Marang, Terengganu registered under the name of the Appellant is a matrimonial property;

(d) In total, the Respondent had 1/3 distribution of the properties whilst the Appellant had a 2/3 distribution of the properties; and

(e)  the properties must be sold or valued with the current market value.

3.  On 2 November 2006, the Respondent made an application to apply for an execution order as in Mal Case No 10200-034-0436 of 2006.

4.  On 19 June 2007, the parties agreed for a settlement on a disputed issue. The issue was whether the property addressed at No XX, Medan XXX, Taman Tun Dr Ismail, Kuala Lumpur registered under the name of the Appellant’s name, should be valued based on the current value on the date of the order for Mal Case No 3 of 1994, which was on 9 July 1996 or on the current value on June 2008.

5.  On 25 Jun 2008, Selangor Syariah High Court decided that the properties should be valued based on the current value and distributed as ordered by the Court based on 1/3 portion given to the Respondent and another 2/3 portion given to the Appellant.

1. Whether the property registered under the Appellant’s name should be valued based on the current value on the
   date of the order for Mai Case No 3 of 1994, which was on 9 July 1996 or the current value in June 2008?

1.  Whether the property registered under the Appellant’s name should be valued based on the current value on the date of the order for Mal No 3 of 1994, which was on 9 July 1996, or the current value in June 2008?

(a)  Section 122(1) of the Islamic Family Law (State of Selangor) Enactment 2003 (Enactment 2 of 2003) provides that –

“Power of Court to order division of harta sepencarian”

(1) The Court shall have power, when permitting the pronouncement of talaq or when making an order of divorce, to order the division between the parties of any assets acquired by them during their marriage by their joint efforts or the sale of any such assets and the division between the parties of the proceeds of sale”

(b)  In the case of Md Zan bin Hassan v. Siti Normala bt Shiekf Obid (Kes Semakan Negeri Selangor No. 10000- 003-0022 Year 2016), the court held that when a property is declared as a matrimonial property, it must be distributed according to the respective shares, including all the earnings and benefits derived from the property such as rental income or lease payments, as well as any expenditures and obligations including monthly financing installments, taxes, fees and other financial responsibilities. Hence, the distribution continues until the property is put into practical use or sold as per the provision outlined in Section 122(1) of the Enactment 2 of 2003.

(c)  In the present appeal, the Court referred to the following order of Mal Case No Bil 3 Tahun 1994 issued by the Selangor Syariah High Court regarding the divisional of matrimonial property between the Appellant and the Respondents –

     (i)  the property located at No. XX, Medan XX, Taman Tun Dr Ismail, Kuala Lumpur registered under the name of the Respondent is a matrimonial property;

     (ii)  property located at Lot XXX, Rasah Jaya, Seremban registered under the name of the Respondent is a matrimonial property;

       (iii)  a piece of land at Lot XXX, Mukim Jerong, Daerah Marang, Terengganu registered under the name of the Appellant is a matrimonial property;

      (iv)  the Court held that the properties declared as matrimonial properties are divided between the Parties with a distribution ratio of 1/3 to the Respondent and 2/3 to the Appellant.

      (v)  The said properties should be sold and valued based on the current value, and the distribution should be made after any outstanding debts related to the acquisition of these assets have been duly deducted.

(d) In the present appeal, by referring to paragraph c (iv) above, the Court was of the view that the Selangor Syariah High Court order i.e. “the said properties must should be sold or valued based on the current value” means that the division of matrimonial property between the parties should be based on the current market value when the order of the Selangor Syariah High Court in the case of Mal No Bil 3 Tahun 1994 is enforced and not upon which the same order was granted in June 2008.

(e)  As a result, since 1/3 of these properties belonged to the Respondent as per the Selangor Syariah High Court order in Mal  Case No Bil 3 Tahun 1994, the Respondent is considered as the owner of these properties, even though the Appellant has not registered the same under the Respondent’s name. The Respondent’s one-third share became effective on 9 July 1996, and it remains in force unless the Appellant pays 1/3 of the share value based on the market value of the properties at the time of payment, not based on the value at the time of the Court order.

(f)  Hence, the Court held that the Respondent holds 1/3 interest in the income and benefits generated from these properties, including rental income and lease payments, in line with their ownership stake in these assets. Furthermore, if these properties are sold, the Respondent is entitled to 1/3 of the proceeds from the sale as part of the matrimonial properties.

1. In Malaysia, Syariah Court has the power to order the division of the matrimonial property for the divorced spouse based on the consideration as per the factors in Section 122 of Enactment 2 of 2003.
2. Accordingly, the Court is responsible in determining the matrimonial property subjected for division, the relevant criteria to be considered during the division process, and establishing the appropriate shares for the divorced spouses.
3. Therefore, when a property is considered matrimonial, the Court may order such property to be shared equitably among the involved parties, considering their respective interests and contributions, including income, benefits, and financial responsibilities in the distribution process ensuring a comprehensive and just approach to property division for a divorced spouse.