SUPREME COURT OF SINGAPORE
29 November 2024
Case summary
WVS v WVT [2024] SGHC(A) 35
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Decision of the Appellate Division of the High Court (delivered by Justice Debbie Ong Siew Ling):
Outcome: The Appellate Division of the High Court (the “AD”) dismissed the appeal against the decision of a Judge of the Family Division of the High Court (the “Judge”) on the issues of division of matrimonial assets, access and maintenance of the children and cost orders made below.
Pertinent and significant points of the judgment
• The AD reiterated that a rigid, mechanistic and overly-arithmetical application of the structured approach in ANJ v ANK [2015] 4 SLR 1043 (“ANJ”) must be assiduously avoided. The structured approach is a guide in achieving a just and equitable division of matrimonial assets; it was never intended to supplant the broad-brush approach in dividing matrimonial assets. In situations where properties purchased during the marriage are sold and the proceeds are used to acquire more properties, the parties should refrain from engaging in a mathematical exercise of tracing the funds through successive property acquisitions. What the court will do in such situations is to consider the relevant evidence and use a broad-brush approach in assigning direct contribution ratios: at [27] to [28].
Background
1 The parties were married on 2 May 2001. The appellant (the “Wife”) commenced divorce proceedings on 10 October 2019 and an interim judgment of divorce was granted on 23 December 2019. This ended their 18-year marriage. The parties have three children (the “Children”) who were 15, 13 and 11 years old respectively at the time of the ancillary matters (“AM”) hearing. The AM orders were made on 19 March 2024, where the Judge ordered that the parties were to have joint custody of the Children, the respondent (the “Husband”) was to have care and control and the Wife was to have access on stipulated terms.
2 In respect of maintenance, the Judge ordered that maintenance for the Children was to be borne by the parties in the proportion of 55% by the Wife and 45% by the Husband. As the Husband had care and control of the Children, the Wife was ordered to pay the Husband a monthly maintenance of $2,475.00 for the Children from 1 June 2024 and thereafter on the 1st of each subsequent month. She was also ordered to pay the Husband a lump sum of $100,000.00, being backdated maintenance for the Children.
3 In respect of the division of matrimonial assets, the Judge valued the total pool of the matrimonial assets at $7,500,214.61. This pool included properties jointly held by the parties referred to as the Teck Whye Property and Owen Road property, as well as a share of a property referred to as the Clementi Avenue property inherited and held by the Husband and his mother. Central to the Judge’s reasoning was his adoption of a rough and ready approximation of the profits of their joint business, “NG shop”, as a key component of the parties’ respective financial contributions to their jointly held properties because the parties had capitalised on the success of their joint business by using the profits earned to invest in multiple properties. Given the Wife’s more significant contributions to the business, the Judge attributed the profits earned from the NG shop in the ratio of 65:35 in favour of the Wife.
4 In the final analysis, the Judge held that the matrimonial assets were to be divided in the ratio of 59% to the Wife and 41% to the Husband. The Judge ordered parties to bear their own costs.
5 The Wife appealed against the Judge’s decision on the division of matrimonial assets, access and maintenance of the children as well as the cost orders made below.
Decision
Division of matrimonial assets
Typographical error in the valuation of Teck Whye property
6 The AD allowed a correction to be made to the value of the Teck Whye property as it was undisputed that the correct figure should have been $1,394,190.49 instead of $1,349,190.49: at [10].
On the unaccounted rental proceeds from the Owen Road property
7 In respect of the unaccounted rental proceeds from the Owen Road property, the AD found that the Judge’s conclusion was not against the weight of the evidence, and thus he did not err in his decision on this issue. The Judge found that the evidence was unclear and did not support the Wife’s position that the Husband had misappropriated some rental proceeds. He declined to add into the pool the sum alleged by the Wife to be unaccounted rental proceeds: at [11].
8 The AD found that, in any event, the Wife had not advanced any principled legal basis to add the purported unaccounted rental proceeds into the matrimonial pool. Counsel for the Wife clarified at the hearing that the Wife’s submissions were based on purported unaccounted rental proceeds from 2013, spanning the years when the marriage was intact. Thus, her submissions were not that dissipation of marital funds occurred when divorce was imminent and the “TNL dicta” referred to in UZN v UZM [2021] 1 SLR 426 did not apply: at [12].
9 The Wife argued that the Husband had not properly explained where the money went and this was justification for adding the unaccounted rental proceeds into the matrimonial pool. This appeared to be a contention that the Husband had taken or used their joint funds without her explicit consent: at [15].
10 The AD pointed out that before the time that divorce is imminent, parties may expend sums while managing their financial affairs in the usual ways that married couples do. If one party was alleging that the other has spent significant sums of money without his or her consent during the marriage (before divorce is imminent), the allegation appears to be of financial irresponsibility, which may, depending on the facts of the case, be relevant to the parties’ direct and indirect contributions to the marriage. The parties’ direct and indirect contributions to the marriage were relevant not to the identification of the asset pool but to the proportions of division of the pool: at [16] to [17].
11 The Wife failed in this issue as she had not shown that the proceeds fell within the TNL dicta, or that they were spirited away or concealed in order to deprive the other spouse of a share in them, or any other situation justifying the inclusion of the proceeds in the pool: at [18].
On the value of the Clementi Avenue property to be included in the pool
12 The AD disagreed with the Wife’s contention that the Judge erred in the value attributed to the Clementi Avenue property to be included in the pool, relying on the Court of Appeal’s decision in USB v USA and another appeal [2020] 2 SLR 588 (“USB”). USB addressed the different situation of a spouse who purchases property some years before marriage and makes payments towards acquiring the property before and during the marriage by way of mortgage repayments. In the present case, the Clementi Avenue property was acquired by inheritance and was prima facie not a matrimonial asset. It was not the Wife’s case that this inherited asset was substantially improved during the marriage by the other party or by both parties to the marriage. The burden of proving that the inherited Clementi Avenue property was transformed into a matrimonial asset fell on the Wife and this burden was not discharged: at [21] to [22].
On the Judge’s adoption of 65:35 as the ratio of the parties’ financial contributions to various properties derived from parties’ business profits
13 The AD found that the Judge did not err in using the broad-brush approach in adopting a rough and ready approximation of 65:35 as the ratio of the parties’ financial contributions to various properties derived from the parties’ joint business profits. The exact amounts of contributions could not be fully obtained from documentary evidence of direct payments made, such as evidence of bank statements or CPF account statements showing payments towards the property acquisitions. The AD noted that the Wife’s reliance on the tracing of proceeds of properties bought and sold over the years to calculate the sums she alleged are the exact sums contributed was essentially an invitation for the court to take an arithmetic (and calculative) approach to the assessment of the parties’ direct contributions by tracing the ownership of proceeds from successive properties at the first step of the structured approach in ANJ: at [26].
14 The AD reiterated the Court of Appeal’s observations in UYQ v UYP [2020] 1 SLR 551 at [3] that a “rigid, mechanistic and overly-arithmetical application of the structured approach in [ANJ] must be assiduously avoided”. The structured approach is a guide in achieving a just and equitable division of matrimonial assets; it was never intended to supplant the broad-brush approach in dividing matrimonial assets. In situations where properties purchased during the marriage are sold and the proceeds are used to acquire more properties, the parties should refrain from engaging in a mathematical exercise of tracing the funds through successive property acquisitions. What the court will do in such situations is to consider the relevant evidence and use a broad-brush approach in assigning direct contribution ratios. Accordingly, the AD declined to disturb the Judge’s finding on this issue and affirmed the Judge’s use of the broad-brush approach in reaching the parties’ direct contributions: at [27] to [29].
Children’s access
15 The AD found that the Judge did not err in making the access orders or in declining to make the counselling orders sought by the Wife. Considering the counselling report, custody evaluation report and the totality of the circumstances, it was evident that the Children had a stronger bond with the Husband, likely due in no small part to his consistent care for them and his provision of a stable structure and routine: at [34].
Children’s maintenance and backdated maintenance
16 The AD did not disturb the Judge’s orders on the parties’ share of the Children’s maintenance and the Wife’s obligation to pay the Husband backdated maintenance for the Children. The order for the Wife to pay the sum of $2,475.00 to support three teenage children was reasonable considering the Wife’s substantial financial resources. The order for the Wife to pay backdated maintenance of $100,000.00 was also not made in error. The Wife had left the matrimonial home in 2018 and she was unable to prove that she had made the alleged substantial contributions to the Children’s expenses since then. The order on backdated maintenance was one within the exercise of a court’s discretion: at [37] to [42].
Conclusion
17 The AD dismissed the appeal, save for the correction of the typographical error in the Judgment regarding the valuation of the Teck Whye property. The costs of the appeal were fixed at $45,000.00, inclusive of disbursements, to be payable by the Wife to the Husband: at [48].
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.