SUPREME COURT OF SINGAPORE
29 July 2024
Case summary
WRX v WRY and another matter [2024] SGHC(A) 22
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Decision of the Appellate Division of the High Court (delivered by Judge of the Appellate Division Debbie Ong Siew Ling):
Outcome: The Husband’s application to admit further evidence was allowed. The Appellate Division of the High Court allowed the Husband’s appeal in relation to the division of matrimonial assets, maintenance for the Wife, and maintenance for the children.
Pertinent and significant points of the judgment
• In the context of s 112 of the Women’s Charter 1961 (2020 Rev Ed) (the “Charter”), an adverse inference may be drawn where there was a substratum of evidence that established a prima facie case against the person against whom the inference was to be drawn; and that person had some particular access to the information he was said to be concealing. The adverse inference that would be drawn was that the non-disclosing party had more assets that were not before the court and hence what was disclosed did not fully reflect the true extent of the material gains of the marital partnership which the court was to divide: at [37] to [38].
• In determining how to give effect to the adverse inference drawn, the Court was not restricted to adopting only the Quantification Approach or the Uplift Approach. The Court would employ the method that best achieved a just and equitable result. In this case, it was appropriate to employ both approaches cumulatively: at [40] to [41].
• Where the value of an undisclosed matrimonial asset was notionally restored to the pool of matrimonial assets as a consequence of giving effect to an adverse inference, the restored sum should not be credited as the direct contributions of the party against whom the adverse inference was made under the structured approach in ANJ v ANK [2015] 4 SLR 1043 (“ANJ”): at [43].
Background
1 The Husband brought an appeal against the decision of a Judge of the Family Division of the High Court (the “Judge”) in respect of ancillary matters following the parties’ divorce.
2 The Husband appealed against four aspects of the Judge’s decision on the division of matrimonial assets.
3 First, for two stock trading accounts and an investment policy (the “Investment Accounts”), the Judge adopted the higher valuation that was closest to the date of the interim judgment of divorce rather than the lower valuation that was closest to the date of the ancillary matters hearing, because it was impossible to tell from the evidence how and why the composition of the Investment Accounts had changed.
4 Second, the Judge valued an insurance policy held by the Wife (the “Sunlife Policy”) based on the total estimated value of the premiums paid by the Wife.
5 Third, the Judge declined to award a further uplift to the Husband’s final share of matrimonial assets to give effect to the adverse inferences drawn against the Wife. The Judge found that there was a decrease of $1,258,047 in the Wife’s disclosed bank accounts between June 2020 and June 2021. The Judge had drawn adverse inferences against the Wife for failing to disclose details of her bank accounts and produce a significant number of bank statements. However, the Judge also accepted that the Wife’s extended family had transferred $813,263 to her in May 2019 and early 2020, based on some bank statements adduced by the Wife. Although the Wife was required to disclose bank statements dating prior to 2020 under a discovery order, she failed to make full disclosure. Nevertheless, the Judge declined to award a further uplift to the Husband’s final share on the basis that the adverse inferences would be best given effect by restoring the sum of $444,784 to the pool of matrimonial assets (this sum being derived from deducting $813,263 from $1,258,047).
6 Fourth, the Judge held that the ratio of the parties’ indirect contributions under the third step of the structured approach in ANJ was 50:50.
7 The Husband also appealed against the Judge’s decision to order him to pay maintenance for the Wife, as well as the Judge’s decision on the quantum of maintenance for the children payable by the Husband.
8 The Husband also applied to admit additional evidence. First, communications that took place from 26 November 2023 to 1 March 2024, after the decision on ancillary matters was rendered (the “Post-Hearing Communications”). Second, records showing that the fall in valuation of the Investment Accounts was caused by market volatility rather than by the Husband’s dissipation (the “Investment Accounts Statements”).
Decision
Application to admit additional evidence
9 The Post-Hearing Communications were admitted. The principles of Ladd v Marshall [1954] 1 WLR 1489 (“Ladd v Marshall”) did not apply as the Post-Hearing Communications related to matters occurring after the date of the decision being appealed against. They were potentially material and the Wife accepted that the evidence was credible: at [19] to [20].
10 The Investment Accounts Statements were admitted. The Ladd v Marshall principles would not apply stringently to ancillary matters hearings. The Investment Accounts Statements were material and credible, and the Husband had been somewhat constrained from adducing the evidence because the District Judge had directed that no further applications were to be filed. The Investment Accounts Statements were also material and would have had an important influence on the case: at [21] to [22].
Division of matrimonial assets
11 The Investment Accounts Statements supported the Husband’s case that the value of the assets had dropped due to market forces, rather than by any act of wrongful dissipation by the Husband. However, legal fees which the Husband had withdrawn from the Investment Accounts had to be returned to the matrimonial pool: at [25].
12 The Husband’s proposed method of valuing the Sunlife Policy based on its pro-rated value as enhanced by the premiums paid by the Wife during the marriage would ordinarily have been the correct basis for assessing its value as a matrimonial asset. However, because of the Wife’s non-disclosure of evidence in breach of the discovery order, there was no evidence of the surrender value in 2017, the year the Wife claimed to have had taken over the policy. A value that was more reflective of the value of the Sunlife Policy as a matrimonial asset could not be obtained: at [29].
13 A proper discharge of the duty of full and frank disclosure was crucial to ensure that the pool of assets to be divided reflected the material gains of the marital partnership. The duty to completely disclose must be strictly observed and cannot be tailored based on the parties’ own views on what constituted matrimonial assets: at [35].
14 In the specific context of s 112 of the Charter, the drawing of an adverse inference for the failure to disclose one’s assets and means and the consequence of drawing that adverse inference depended on principles that were specific to ancillary matters proceedings. In this context, an adverse inference could be drawn where there was a substratum of evidence that established a prima facie case against the person against whom the inference was to be drawn; and that person had some particular access to the information he was said to be hiding. The adverse inference that would be drawn was that the non-disclosing party had more assets that were not before the court and hence what was disclosed did not fully reflect the true extent of the material gains of the marital partnership which the court was to divide: at [37] to [38].
15 Giving effect to an adverse inference that has been drawn was necessary to counter the effects of the breach of the duty to make full and frank disclosure. Two approaches were generally adopted to give effect to an adverse inference arising from non-disclosure. First, the court could estimate the value of the undisclosed assets and include that value in the matrimonial pool for division (the “Quantification Approach”). Second, the court could order a higher proportion of the known assets to be awarded to the other party (the “Uplift Approach”): at [38] and [39].
16 In determining how to give effect to the adverse inference drawn, the Court was not restricted to adopting only the Quantification Approach or the Uplift Approach. The Court would employ the method that best achieved a just and equitable result. In this case, it was appropriate to employ both approaches cumulatively: at [40] to [41].
17 The Judge erred in crediting the Wife with $444,784 as part of her direct contributions under the structured approach in ANJ. Where the value of an undisclosed matrimonial asset was notionally restored to the pool of matrimonial assets as a consequence of giving effect to an adverse inference, the restored sum should not be credited as the direct contributions of the party against whom the adverse inference was made: at [43].
18 The Judge erred in restoring only $444,784. The Wife dissipated at least $1,258,047 within the short span of one year, a sum which was very large, both objectively and relative to the matrimonial pool. Attributing $813,263 to the Wife’s extended family based on piecemeal statements created a real risk that the true extent of the Wife’s assets would be excluded from the matrimonial pool due to the absence of a link between the transfers in May 2019 and early 2020 and the sum of $1,258,047 dissipated between June 2020 to June 2021. Without full disclosure by the Wife, there was no material to properly contextualise the transfers shown in the piecemeal statements from May 2019, which could give a misleading impression: at [44] to [47].
19 The Wife’s non-disclosures indicated intentional concealment. It was incumbent on the Wife to make full disclosure as it was her own case that the $1,258,047 was simply a “return” of moneys that had been transferred to her extended family. Selective disclosure of the May 2019 statements was not full and frank disclosure: at [48].
20 It was necessary to restore the entire dissipated sum of $1,258,047 as there was no credible explanation for the dissipation. This sum was not to be credited to the Wife in assessing her direct contributions. An additional uplift of five per cent was applied to the Husband’s final share of the assets, because the circumstances of the Wife’s non-disclosures indicated that she could have concealed or depleted more assets, and her non-disclosures also prevented the determination of the value of the Sunlife Policy: at [49].
21 Contributions to family expenses were relevant to the assessment of indirect contributions as a significant form of indirect financial contribution: at [51].
22 The Judge’s determination of a 50:50 ratio of indirect contributions was not plainly wrong and would not be disturbed: at [52].
Maintenance for the Wife
23 There was no basis to order maintenance for the Wife. She was working throughout the dual-income marriage and had been gainfully employed at the date of the interim judgment of divorce. Her earning capacity was sufficient for her own expenses as well as for part of the children’s expenses. The Wife’s unemployment only came about a year after interim judgment, and she was given severance pay to tide her over. Additionally, the Wife would obtain a substantial share of the matrimonial assets: at [56] to [58].
Maintenance for the children
24 Parties should not to take an overly mathematical or calculative approach to children’s maintenance. A maintenance order was not based on the parties curating a list of specific expenses, as if each item on the list represented an item to be specifically provided for. A maintenance order does not cast in stone the list of claimed expenses as if only those specific expenses were allowed to be incurred. Instead, the order would be based on broad budgeting rather than the itemisation of specific expenses: at [62].
25 The Husband was to bear 65 per cent of the children’s expenses: at [63] to [64].
26 The total reasonable monthly expenses of both children was $5,700. The reasonable personal expenses of the children comprised budgets of $2,000 for enrichment classes, $650 in schooling and transport needs, and $550 in upkeep and entertainment. The reasonable household expenses of the children totalled $2,500: at [65] to [67].
27 It was more practical in the circumstances of this case to allow the Husband to make direct payments to the relevant service providers for certain expenses: at [68].
This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.