112.—(1) The court has power, when granting or subsequent to the grant of a judgment of divorce, judicial separation or nullity of marriage, to order the division between the parties of any matrimonial asset or the sale of any such asset and the division between the parties of the proceeds of the sale of any such asset in such proportions as the court thinks just and equitable.

(2) It is the duty of the court in deciding whether to exercise its powers under subsection (1) and, if so, in what manner, to have regard to all the circumstances of the case, including the following matters:

(a) the extent of the contributions made by each party in money, property or work towards acquiring, improving or maintaining the matrimonial assets;

(b) any debt owing or obligation incurred or undertaken by either party for their joint benefit or for the benefit of any child of the marriage;

(c) the needs of the children (if any) of the marriage;

(d) the extent of the contributions made by each party to the welfare of the family, including looking after the home or caring for the family or any aged or infirm relative or dependant of either party;

(e) any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce;

(f) any period of rent-free occupation or other benefit enjoyed by one party in the matrimonial home to the exclusion of the other party;

(g) the giving of assistance or support by one party to the other party (whether or not of a material kind), including the giving of assistance or support which aids the other party in the carrying on of his or her occupation or business; and

(h) the matters referred to in section 114(1) so far as they are relevant.

16 In the division of matrimonial assets upon divorce, the court is concerned with ensuring the just and equitable division of the material gains of the marital partnership between the spouses. “[M]arriage yields, upon its termination, a deferred community of property” (BPC v BPB and another appeal [2019] 1 SLR 608 (“BPC”) at [52]). A necessary prerequisite for this endeavour is a fair assessment of the size of the pool of matrimonial assets to be divided.

17 Unlike proceedings in civil trials, the determination of the pool of matrimonial assets in family proceedings takes place in the absence of cross-examination (unless, exceptionally, cross-examination is specifically ordered by the court). As this court explained in USB v USA and another appeal [2020] SGCA 57 (“USB”) at [46], these procedural constraints result in the parties’ duty of full and frank disclosure taking on particular significance. Each party’s discovery obligations must be strictly observed; since it is ultimately for the court to decide which of the parties’ assets belong in the matrimonial pool, it is not for the parties to tailor the extent of their disclosure in accordance with their own views on what constitutes their matrimonial assets (USB at [58]).

18 If a party fails to make full and frank disclosure in the AM proceedings, an adverse inference may be drawn against the party. The drawing of an adverse inference in this context has been the subject of an extensive discussion in the recent decision of this court in BPC. An adverse inference may be drawn where (BPC at [60]):

(a) there is a substratum of evidence that establishes a prima facie case against the person against whom the inference is to be drawn; and

(b) that person must have had some particular access to the information he is said to be hiding.

19 In AZZ v BAA [2016] SGHC 44 at [107], the High Court interpreted the first criterion as referring to a prima facie case of concealment by the party against whom the inference is to be drawn. For convenience, we will refer to this spouse as “the non-disclosing party”, and to the other spouse as “the other party”.

20 The drawing of an adverse inference in the context of the duty to fully and frankly disclose assets enables the court to reach a fair assessment of the total pool of matrimonial assets liable to be divided in accordance with the judicial philosophy undergirding s 112 of the Women’s Charter. In the context of matrimonial proceedings, when considering whether a party has failed to make full and frank disclosure, the court ought to bear in mind that it is an impossible exercise to have a detailed record of every transaction in a marriage, particularly when the marriage was a long one. Thus, in UYQ v UYP [2020] 1 SLR 551 (“UYQ”), this court held:

2 … Indeed, the nature of a marriage stands in stark contrast to a cold commercial relationship, where parties generally keep a close and calculative eye on each other. Attempting to dredge up every record is futile because human memory is fallible, and also constitutes an exercise in obfuscation, when viewed against the tendency for parties to try to locate every detail in their favour in the aftermath of a marriage breakdown.

…

4 In our view, it would assist the parties to find a way forward and put this painful chapter of their lives behind them by focusing on the major details as opposed to every conceivable detail under the sun. We caveat that this does not mean parties should swing to the other extreme by being remiss in submitting the relevant records. Put simply, there ought to be reasonable accounting rigour that eschews flooding the court with details that would obscure rather than illuminate. …

[emphasis in original]

21 An adverse inference ought not to be easily drawn against a party unless both the criteria we have referred to above (at [18]) are satisfied. Not every shortfall in the account provided by a party would present a suitable occasion for an adverse inference to be drawn. Parties in a functioning marriage may not always keep fastidious records, and it is understandable that they may genuinely be unable to recount past transactions in the AM proceedings (see UBM v UBN [2017] 4 SLR 921 (“UBM”) at [15]). In fact, requiring or incentivising parties to dredge up every record far into the past runs contrary to the legal exhortation in s 46(1) of the Women’s Charter: spouses must not be incentivised to be calculative, nor constrained from being generous and loving while they cultivate trust during their marriage and build their joint lives together. Upon divorce, the termination of the marriage does not abruptly transform the parties into adversaries such that the past years of marriage are examined through the lens of a cold, commercial partnership. It would simply be unrealistic to ignore the fact that spouses in a marriage do not conduct themselves in the way they would with business parties. Even though divorced parties are no longer spouses, there is every reason to treat one’s former spouse, and current co-parent of one’s children, with respect and a measure of give-and-take.

[emphasis in original in italics; emphasis added in bold]

27 … We begin with the question of how the adverse inference should be given effect to.

28 It is well-established in the jurisprudence in this area that there are generally two approaches the courts have used to give effect to an adverse inference against a non-disclosing party (see BPC ([16] supra) at [64], Chan Tin Sun v Fong Quay Sim [2015] 2 SLR 195 (“Chan Tin Sun”) at [64], Yeo Chong Lin v Tay Ang Choo Nancy and another appeal [2011] 2 SLR 1157 (“Yeo Chong Lin”) at [65], and NK v NL [2007] 3 SLR(R) 743 (“NK v NL”) at [61]–[62]):

(a) First, the court may make a finding on the value of the undisclosed assets based on the available evidence and, subject to the party dissatisfied with the value attributed showing that that value is unreasonable, include that value in the matrimonial pool for division. We will refer to this as “the quantification approach”.

(b) Second, the court may order a higher proportion of the known assets to be given to the other party. We will refer to this as “the uplift approach”.

29 The judgments of this court have made it clear that whether the court adopts the quantification approach or the uplift approach is a matter of judgment in each individual case (see Yeo Chong Lin at [66] (cited in BPC at [66]), Chan Tin Sun at [65], and NK v NL at [64]). The court should adopt the method it considers most appropriate in achieving a just and equitable result. What is just and equitable must be seen in the light of the objective of drawing an adverse inference in this context in the first place – to counter the effects of non-disclosure of assets which diminishes the value of the matrimonial pool and thereby places those assets out of the reach of the other party for the purposes of division under s 112 of the Women’s Charter as matrimonial assets (see [16] above). The preferred approach should enable the court to most appropriately reach a just and equitable division of the true material gains of the parties’ marriage.

30 The quantification approach may be used where a specific asset (such as immovable property or a sum of money) has not been disclosed by a party, and the court finds sufficient evidence that such an asset exists and ought to have been disclosed. The court may then include into the matrimonial pool the value of the undisclosed asset if it is able to make such an assessment of its likely value.

31 The quantification approach may also be used even where the value of the undisclosed assets cannot be determined with precision. This was explained in BPC at [66], citing the comments made by this court in Yeo Chong Lin at [66]:

It has been observed in reported decisions that the [quantification] approach … might not be appropriate where there are numerous undeclared assets, given that ascribing a specific value to these undeclared assets would involve ‘unnecessary speculation’: see Chan Tin Sun at [64], Yeo Chong Lin at [65] and NK v NL at [62]. Hence, in the circumstances, it might appear that it would be more just and equitable and more practical to adopt the [uplift] approach … . However, we consider the [quantification] approach to be appropriate here for the reasons explained in Yeo Chong Lin (at [66]) as follows:

… In the nature of things, whichever approach the court adopts in such a situation, it is undoubtedly to a large extent speculative; whether it decides to give a value to what it considers to be ‘undisclosed assets’ or to give a higher percentage of the disclosed assets to the other party. Either approach would translate to giving something more to the other spouse by way of a specific sum. The very fact that the court is confronted with the problem of ‘undisclosed assets’ means that the position is unclear and far from certain. In the final analysis, it is for the court to decide, in the light of the fact-situation of each case, which approach would in its view best achieve an equitable and just result. What must be clearly recognised is that when the court makes such a determination it is not undertaking an exercise based on arithmetic but a judgmental exercise based, in part at least, on feel.

[emphasis added in italics and bold italics]

32 The decision in BPC illustrates how the quantification approach can be adopted even when it is difficult to quantify the value of the undisclosed assets. In BPC, the only undisclosed assets which had been valued totalled only $294,461.69 and no value could easily be ascribed to the assets in respect of which the court had concluded there had been insufficient disclosure or to the sources of income that the non-disclosing party had been found to be hiding (at [65]). There were thus other undisclosed assets which were difficult to value. This court found it fair to estimate the total value of all the undisclosed assets at 10% of the value of the total matrimonial pool. This corresponded to about $3,183,578, which the court added to the pool, commenting that this was “a fair figure in the circumstances of this case where the [non-disclosing party] has proved himself capable of earning very substantial sums in a relatively short space of time and has also sought to withhold relevant financial information” (at [67]). Similarly, in Mok Kah Hong (m.w.) v Zheng Zhuan Yao (formerly known as Tay Chuan Yao) CA 177/2013 (13 October 2014), this court estimated that the true value of the matrimonial pool in that case should be about 40% larger than the total value of the known matrimonial assets, based on the extensive failure by one party to disclose his assets (as recounted in Mok Kah Hong v Zheng Zhuan Yao [2016] 3 SLR 1 at [24(c)]).

33 Thus the quantification approach may result in adding into the pool of matrimonial assets the amount assessed by the court to be the likely value of a specific undisclosed asset, or adding a sum into the pool of matrimonial assets by calculating a value based on a percentage of the total value of the pool.

34 The uplift approach, on the other hand, seeks to eliminate the effects of non-disclosure by awarding a greater share of the total pool of matrimonial assets to the other party. In NK v NL ([28] supra) at [55]–[56], this court found that one party had failed to make full and frank disclosure owing to a decline of some $2.7m in his cash assets in the one-year period leading up to the decree nisi. Nevertheless, the court decided to adopt the uplift approach. This was because the court accepted that some of the non-disclosing party’s cash assets could have been expended in the course of the year, and there was nothing to shed light on what proportion of the decline in the cash assets could be attributed to the actual expenditure and what proportion was concealed or wrongfully dissipated (at [60] and [62]). In another decision, TQU v TQT [2020] SGCA 8 (“TQU”), the non-disclosing party provided no information on various overseas properties (see TQU at [139]). As a result, this court applied the uplift approach by adjusting the ratio for the division of the matrimonial assets by 10% in favour of the other party (TQU at [142]). The High Court has also taken the uplift approach in other cases similarly involving assets of entirely unknown value (see, eg, VBS v VBR [2020] SGHCF 10 at [6] and [14], UTN v UTO and another [2019] SGHCF 18 at [94], and TLB v TLC [2016] SGHCF 3 at [9] and [13]).

35 Giving effect to the drawing of an adverse inference enables the court to better reflect the true extent of the matrimonial pool (see Lau Loon Seng v Sia Peck Eng [1999] 2 SLR(R) 688 at [30]). This can be achieved under either the quantification approach or the uplift approach. In practice, any adjustment of the ratio for the division of the matrimonial assets under the uplift approach has an effect equivalent to adding some corresponding value of undisclosed assets to the matrimonial pool under the quantification approach (see [39] below for an illustration in respect of the present case). We suggest that where there is a genuine doubt or dispute as to the true extent of the non-disclosure, the court should prefer a finding which results in a higher share of the matrimonial assets being awarded to the other party. This follows from the very reason why the court is confronted with this task in the first place – the withholding of full disclosure or the concealment of assets by the non-disclosing party, which had led to the drawing of an adverse inference. On appeal, the exercise of discretion by the judge at first instance will not easily be disturbed unless the effect of the judge’s decision was out of proportion to any reasonable estimate of the value of the undisclosed assets, and therefore resulted in the value of the matrimonial assets awarded to the other party being significantly different from what would have been just and equitable.

[emphasis in original in italics; emphasis added in bold]

62 Apart from the drawing of an adverse inference, the values of certain assets may also be added into the pool, but not as a consequence of a lack of full and frank disclosure. One such situation is when a party has expended substantial sums when divorce is imminent. This court held in TNL v TNK and another appeal and another matter [2017] 1 SLR 609 at [24] (“TNL”):

… [T]he issue is how the court should deal with substantial sums expended by one spouse during the period: (a) in which divorce proceedings are imminent; or (b) after interim judgment but before the ancillaries are concluded. We are of the view that if, during these periods, and whether by way of gift or otherwise, one spouse expends a substantial sum, this sum must be returned to the asset pool if the other spouse is considered to have at least a putative interest in it and has not agreed, either expressly or impliedly, to the expenditure either before it was incurred or at any subsequent time. Furthermore, this remains the case regardless of whether: (a) the expenditure was a deliberate attempt to dissipate matrimonial assets; or (b) the expenditure was for the benefit of the children or other relatives. The spouse who makes such a payment must be prepared to bear it personally and in full. In the absence of consent, he or she cannot expect the other spouse to share in it. What constitutes a substantial sum is, of course, a question of fact and we do not propose to lay down a hard and fast rule in this regard, except to emphasise that it is not intended to include daily, run-of-the-mill expenses.

[emphasis added]

63 For convenience, we will refer to this as the “TNL dicta”. Expending a large sum of money when divorce is imminent, without more, is not in itself a “wrongful dissipation” in the character of dispositions contemplated by s 132(1) of the Women’s Charter, part of which provides:

… the court shall have power on application —

(i) to set aside any disposition of property, if it is satisfied that the disposition of property has been made within the preceding 3 years, with the object on the part of the person making the disposition of —

…

(B) depriving that person’s wife, former wife, incapacitated husband or incapacitated former husband of any rights in relation to that property; …

64 The basis for adding the sums back into the pool of matrimonial assets under the circumstances described in the TNL dicta is that the consent of the other party was not obtained, rather than a suspicion of concealment. For example, a mother uses a sum of $35,000, which would have constituted part of the matrimonial pool, to pay for their child’s school fees in an overseas institution. The mother’s reason for withdrawing the sum is to fund their child’s overseas education. If this is true, it is not a “wrongful dissipation” intended to put assets out of reach of the other party. However, if it is made without the father’s consent, this withdrawal may be more appropriately dealt with when addressing how the parents should maintain their child, and the sum should be returned to the matrimonial pool in the meantime. The father may argue that he never agreed that the child should have an overseas education, which is far more expensive than a local one. Thus, his consent was not given when the mother withdrew the sum of $35,000 for this purpose at a time when divorce was imminent, and the TNL dicta would apply.

65 Although the label of “dissipation” is commonly used to describe dispositions intended to put assets out of reach of the other spouse, a dissipation falling within the TNL dicta is not necessarily a culpable act. It may also not involve a non-disclosure. Instead, this category may be seen to encompass a disposition of matrimonial assets during the relevant period when one spouse has failed to obtain the other’s consent, even for “innocent” reasons, as illustrated in the hypothetical example above. Adding a sum back into the pool on the basis of the TNL dicta does not rest on the making of an adverse inference in the way we have described at [18] above.

66 This does not mean, however, that outflows of money or assets before divorce is imminent can never be called into question. There have been cases discussing the possibility of an adverse inference being drawn from the withdrawal of significant sums of money during the course of the marriage: see, for example, BOR v BOS and another appeal [2018] SGCA 78 at [107], Koh Bee Choo v Choo Chai Huah [2007] SGCA 21 at [31] and Shih Ching Chia James v Swee Tuan Kay [2002] SGCA 2 at [41]. It is important to recognise the context in which these discussions arose. If an adverse inference had been drawn in such cases, it would have been because of the court’s suspicion that the sums withdrawn had been stashed or spirited away instead of being expended in the ordinary course of the family’s life. This would give rise to a prima facie case of concealment of assets or wrongful dissipation (with the intention to put assets out of reach of the other party). However, in those cases cited, the courts declined to draw such a conclusion – not surprisingly so, as it is difficult to believe that the parties would have intended to withdraw assets for the purpose of concealing or putting them out of reach of the other spouse during a time when their marital relationship was still functioning.

67  Therefore, before divorce is imminent, parties may use their financial resources in the various ways that functioning families would. If there is a large sum of money withdrawn by a party in the early years of the marriage, it is usually hard to believe that there is concealment or wrongful dissipation carried out to put assets out of the reach of the other party. If, for example, a spouse has indeed used up large sums of moneys on gambling activities long before divorce became imminent, such conduct may be relevant in determining the parties’ direct and indirect contributions under the ANJ structured approach, but these sums spent have not been wrongfully dissipated in the relevant sense; nor are they concealed assets, for they are no longer in existence. As such, there is no basis to add such sums back into the matrimonial pool. It would, however, be appropriate to take the “dissipation” (in the different sense of wasteful whittling away) of moneys into account when assessing the parties’ contributions to the marriage.

68 On the other hand, if there are indeed sums expended or given away especially nearer to the time when divorce is imminent, say, on gambling activities (especially when one had not previously indulged in gambling), or purchasing a property for a third party with whom one is having an adulterous affair, it may be possible to view such acts as wrongful dissipation carried out with the intention of depleting the matrimonial pool. Whether a court finds such wrongful dissipation depends on the evidence and facts of the particular case. In such situations, the underlying reason for adding the assets back into the pool is the wrongful dissipation of assets carried out with the purpose of depleting the pool of matrimonial assets, or because of the concealment of assets (if the giving away of the assets was found to amount to a parting with the legal title, but not the beneficial interest). This is not necessarily based on an adverse inference arising out of a finding of non-disclosure; indeed, a party may fully disclose that he had given away or whittled away assets and if this is proven, there is in fact no failure to disclose one’s assets and means. However, if such assertions are disputed and not proven by that party, then that party could be found to have failed to disclose the true facts and an inference may be drawn that he is in fact concealing the assets elsewhere. In the latter situation, an adverse inference arising from non-disclosure is plausible.

[emphasis in original in italics; emphasis added in bold]

36 As to the reasonable maintenance that parents must provide, the law is clear – both parents are equally responsible for providing for their children, but their precise obligations may differ depending on their means and capabilities (see AUA v ATZ [2016] 4 SLR 674 at [41]). I do not find that the DJ erred in calculating the proportions of both parties’ income on the evidence that was before him and relying on that to calculate their share of expenses. …