When marriage turns sour married couple who intends to divorce, should bear in mind that all their properties wherever they situate, whether in or outside the country may be divided between themselves. They may decide among themselves who gets what and where but when they could not agree to the division, under section 76 of the Law Reform (Marriage and Divorce) Act 1976, the court has power to order for division of matrimonial assets between them.

What Amounts to Matrimonial Assets?

The Law Reform (Marriage and Divorce) Act 1976 does not define what matrimonial assets are but it refers to the matrimonial home and everything that is put into it by either spouse with the intention that their home and chattels should be a continuing resource for the spouses and their children to use jointly and severally for the benefit of the family as a whole – Watchel v. Watchel [1973] 1 All ER 829 CA.

Matrimonial assets include both moveable and immovable properties of the couple gained during marriage. Therefore, matrimonial assets include moneys, EPF, cars, shares, jewelleries, matrimonial home, lands, factories and so forth. Note that, this does not mean properties bought before the marriage is not deemed as matrimonial assets. In accordance with section 76(5) of the Law Reform (Marriage and Divorce) Act 1976, if assets owned before the marriage by one party but have been substantially improved during marriage by the other party or by the joint efforts of both parties, then such property shall be deemed as matrimonial assets and will be subjected for division between them.

Therefore, even if the property is registered in your name or your spouse’s name before or after marriage, the property could be deemed as a matrimonial property. Therefore, the unregistered party can gain a share in the property. For example, the house which you and your spouse reside (known as matrimonial home) is registered in your name before or after marriage, your spouse could also have a share in the matrimonial home and the court, therefore, has power to order division of the matrimonial home provided your spouse could prove that he or she had contributed to the purchase of the property or has made substantial improvements to it.

For example, you bought one unit of condominium in the year of 2010 and got married in the year 2011. The repayment of the condominium is made during your years of marriage. This condominium can be deemed as matrimonial assets and could be subject to division especially when your spouse has “substantially improved it” during the marriage.

After divorce proceedings have been initiated, spouse could be entitled to the property acquired by the other party if the spouse could prove that he had made contributions to the acquisition of the property or has made substantial improvements to the property – Ching Seng Woah v. Lim Shook Lin [1997] 1 MLJ 109

Inherited properties and gifts by a third party are generally excluded from division because, arguably, they do not comprise assets acquired by the “joint efforts” of both spouses or the “sole effort” of either of them. However, applying section 76(5), an inheritance or gift received before marriage may form part of matrimonial assets and be subjected to division if it can be shown that the inheritance or gift has been substantially improved through the efforts of one or both parties during the marriage.  

How Matrimonial Assets are Divided?

In exercising its power in dividing matrimonial assets, the court shall be mindful to the following:

  • the extent of the contributions made by each party in money, property or work towards the acquiring of the assets;
  • any debts owing by either party which were contracted for their joint benefit;
  • the needs of the minor children, if any, of the marriage.

Subject to these considerations, the court shall incline towards equality of division.

Assets acquired by sole effort can also be divided between the parties under section 76(3) and (4) of the Law Reform (Marriage and Divorce) Act 1976 when such assets are acquired during marriage.

Does Conduct Affect the Division of Assets?

This is an often-asked question to lawyers, that is – Whether adultery or unreasonable behaviour by one spouse will entitle the ‘innocent’ spouse to lay a bigger claim on the matrimonial assets? In Malaysia, the parties’ conduct however good or bad does not affect the division of assets as there is no such consideration mentioned in section 76 Law Reform (Marriage and Divorce) Act 1976 .

How are assets acquired by the sole effort of one party has to be divided?

The court shall have regards to:

  • The extent of contributions made by the other party who did not acquire the assets to the welfare of the family by looking after the home or caring the family;
  • The needs of minor children, if any, of the marriage.

However the court would bear in mind to give greater portion to the party who acquired the assets. So it is advisable for you to keep records and evidence of your contributions to the matrimonial assets.