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 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 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 portion of 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-XXX-XXXX of XXXX as the Appellant has failed to execute the division of matrimonial property order given.

4.    On 19 June 2007, the parties agreed that only one issue is disputed.  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 June 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.

(a) Subsection 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 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; and

(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.

(c)  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.

(d) The Court referred to the case of MZH v. SNSO (Kes Semakan Negeri Selangor No. 10000-003-0022 Year 2016), where 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 instalments, 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 subsection 122(1) of the Enactment 2 of 2003.

(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 1/3 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)   The Court was of the view that it would be unjust for the Respondent to receive 1/3 of the share based on the market value when the Mal Case No Bil 3 Tahun 1994 order was made.

(g) The Appellant was under the duty to sell the house in accordance with the Courts’s order, however, he has failed to do so.

(h)  Hence, the Court held that the division of proceeds/sale value of joint property between the parties is based on the market price at the time the property is sold, rather than the market value at the time the order was issued. The Court held that Appellant cannot benefit from their non-compliance and failure to execute the division of matrimonial property order given by the court in 1996, because ‘a person who does not comply with the law is not entitled to benefit from their non-compliance.

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 property, 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.