Case Summaries

BPC v BPB and another appeal [2019] SGCA 03

SUPREME COURT OF SINGAPORE

10 January 2019

Case Summary

BPC v BPB and another appeal [2019] SGCA 03
Civil Appeals Nos 226 and 227 of 2017

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Decision of the Court of Appeal (delivered by Judge of Appeal Judith Prakash)

Outcome: CoA dismisses Wife’s Appeal and allows Husband’s Appeal in part, ordering pool of matrimonial assets to be divided between the parties to be reduced from $38,010,639 to $35,019,353.

Pertinent and significant points of the judgment

  • Continuing care for the children by the wife in any marriage after interim judgment has been granted cannot, in and of itself, be a sufficient basis for the court to adopt the date of the ancillary matters hearing (instead of the date of interim judgment) as the operative date for determining the pool of matrimonial assets. Also, it is inappropriate to depart from the starting point of adopting the date of interim judgment as the operative date in order to give effect to an adverse inference drawn against a party when that party has accumulated a significant amount of assets in the period following the grant of interim judgment: at [30], [31] and [40].
  • As long as a property falls within the definition of a “matrimonial asset” under s 112(10) of the Women’s Charter (Cap 353, 2009 Rev Ed), regardless of whether it is jointly or separately owned, it should generally be valued at the date of the ancillary matters hearing and be subject to the vagaries of movements in the property market during the period leading up to the hearing of the ancillary proceedings: at [49] and [52].
  • When dividing a pool of matrimonial assets, the court should first enquire whether the marriage is a long single-income or dual-income marriage. If it is the former, then the approach in TNL v TNK and another appeal and another matter [2017] 1 SLR 609 applies, and the court will generally tend towards equal division, except if the marriage involves an exceptionally large matrimonial asset pool. If it is the latter, then the approach in ANJ v ANK [2015] 4 SLR 1043 will apply, and a whole host of possible factors might ultimately lead the court to find that direct contributions ought to be given greater weight than indirect contributions: at [102].

Background

1 These were cross-appeals against orders specifically relating to the division of the matrimonial assets and the maintenance for the children made by the High Court judge (“the Judge”) in Divorce Suit No 4447 of 2010 (“the Divorce Proceedings”). The Divorce Proceedings ended a 17-year-long dual-income marriage which produced two children (“the Children”) and a pool of matrimonial assets valued at $38,010,639

2 The parties married in December 1993, and had two children in 2002 and 2006 respectively. In the early stages of their marriage, the wife, [BPC] (“the Wife”), consistently commanded a steadier income than the husband, [BPB] (“the Husband”). In 2005, the Husband co-founded, with four partners, a venture capital fund (“the Fund”), in which he was granted numerous share options. Since the inception of the Fund, the value of the Husband’s interests in the Fund has grown astronomically, particularly in 2015 and 2016, to the extent that the assets in the Husband’s sole name now completely dwarf those in the Wife’s. The Fund required the Husband to shuttle frequently between Singapore and Shanghai, with the trips increasing in frequency in 2006. In 2008, the Husband’s appointment as the Vice Chairman (China) of the Fund required him to be stationed in China on a full-time basis

3 In August 2008, the Wife confronted the Husband about her discovery of his adultery with a Chinese woman (“the Partner”). The Husband confessed to having an extramarital affair with the Partner. On 2 September 2010, the Wife commenced divorce proceedings. Thereafter, the Wife changed the locks to their matrimonial home on Bukit Timah Road (“the Home”), thereby preventing the Husband from entering the Home freely. The divorce proceeded and interim judgment was granted on 8 November 2011. The ancillary proceedings commenced on 21 June 2016.

4 In the Judge’s decision, the Judge held, regarding the determination, valuation and division of the matrimonial assets, that: (a) the date of the ancillary matters hearing (and not the date of interim judgment) shall be the operative date for both determining the pool of matrimonial assets and valuing the matrimonial assets; and (b) pursuant to these dates, the assets in the matrimonial pool were valued at $38,010,639 and were to be divided between the parties in the ratio 66.76:33.24 in favour of the Husband, with this ratio being obtained from valuing: (i) the ratio of their respective direct contributions as 87.94:12.06 in favour of the Husband; (ii) the ratio of their respective indirect contributions as 65:35 in favour of the Wife; and (iii) the relative weightage assigned between the direct and indirect contributions as 60:40 in favour of direct contributions. As regards the issue of maintenance, the Judge decided, among other things, that the Husband was to pay the Wife $11,000 per month as general maintenance for the Children and also 75% of the Children’s school fees, related education expenses and the first child’s growth hormone expenses.

5 In Civil Appeal No 226 of 2017 (“the Wife’s Appeal”), the Wife appealed against the Judge’s decision to assign a 60:40 weightage between direct and indirect contributions. The Wife argued that the Judge should have assigned a 50:50 weightage between direct and indirect contributions. In Civil Appeal No 227 of 2017 (“the Husband’s Appeal”), the Husband appealed against various aspects of the Judge’s decision. Regarding the determination, valuation and division of the asset pool, the Husband contended that: (a) the operative date for both determining the pool of matrimonial assets and valuing the matrimonial assets should be the date of interim judgment; (b) the Wife should be found to have only made 60% of the direct financial contributions towards the purchase of the Home; (c) the Husband should be found to have made more than merely 35% of the indirect contributions; and (d) the court should have assigned a 70:30 weightage between direct and indirect contributions. As regards maintenance for the Children, the Husband submitted that he should only be required to pay: (a) $5,435.34 per month in child maintenance (excluding school fees); and (b) 50% of the Children’s school fees, related education expenses and the first child’s growth hormone expenses

Decision on appeal

6 The court dismissed the Wife’s Appeal and allowed the Husband’s Appeal in part. In the result, the court held that the pool of matrimonial assets to be divided between the parties was to be reduced to $35,019,353, the ratio for the division of the matrimonial assets was to remain at 66.76:33.24 in favour of the Husband, and hence the Husband was to pay the Wife the sum of $6,025,043. The court also held that the maintenance orders made by the Judge in respect of the Children would stand unchanged. Finally, the court ordered each party to bear his or her own costs for the cross-appeals: at [22] and [113].

Reasons for the decision

Determination, valuation and division of the matrimonial assets

7 The court held that while the date of the ancillary matters hearing was rightly adopted as the operative date for valuing the matrimonial assets, the date of interim judgment should have been adopted as the operative date for determining the pool of matrimonial assets. Hence, the value of the pool of matrimonial assets must be reduced from $38,010,639 to $31,835,775. But in the light of the Husband’s insufficiently full and frank disclosure of his assets and income, the court considered it appropriate to draw an adverse inference against the Husband and give effect to it by adding the equivalent of 10% of the value of all disclosed assets to the existing asset pool, which gave a total asset value of $35,019,353: at [23].

8 The court should generally rely on the date of interim judgment as the starting point in determining a pool of matrimonial assets, and any decision to depart from this should be accompanied by cogent reasons. On the facts, there was no cogent reason for the Judge to have departed from this starting point. First, continuing care for the children by the wife in any marriage after interim judgment has been granted cannot, in and of itself, be a sufficient basis for the court to adopt the date of the ancillary matters hearing (instead of the date of interim judgment) as the operative date, because everything that the wife would have done for the children post-interim judgment would have been done as mother, and no longer as spouse. Second, although it is in principle open to the court to adjust the operative date for determining the pool of matrimonial assets in order to give effect to the adverse inference drawn against the Husband, it is inappropriate to depart from the starting point of adopting the date of interim judgment as the operative date when the party against whom the adverse inference is drawn has accumulated a significant amount of assets in the period following the grant of interim judgment. Such an approach would involve bestowing upon the other party a windfall that he or she did not contribute to: at [26], [30], [31], [36], [40] and [41].

9 The court should generally rely on the date of the ancillary matters hearing as the starting point in valuing matrimonial assets, and any decision to depart from this should be accompanied by cogent reasons. The Judge was correct to adopt the date of the ancillary matters hearing as the operative date for valuing the matrimonial assets. There was no reason, let alone a cogent one, to depart from this starting point. First, as long as a property falls within the definition of a “matrimonial asset” under s 112(10) of the Women’s Charter (Cap 353, 2009 Rev Ed) (“the Charter”), regardless of whether it is jointly or separately owned, it should generally be valued at the date of the ancillary matters hearing and be subject to the vagaries of movements in the property market during the period leading up to the hearing of the ancillary proceedings. This is because it should be regarded as a material gain accumulated during the marriage which should be divided between the parties in accordance with the notion that marriage yields, upon its termination, a deferred community of property. Drawing a distinction between jointly owned and separately owned property is antithetical to this treatment of matrimonial assets as community property, and would not assist in achieving an equitable division. Second, there was also no reason to value the Husband’s shares and share options in the Fund as at December 2014 because that date is not tied to any legally significant event in the course of the Divorce Proceedings. Also, the Husband had benefitted from the Wife’s indirect contributions before the date of interim judgment, which was at a time when the Wife would have been caring for the children qua spouse (and not solely qua mother): at [43], [44], [49], [52] and [55] to [57].

10 The Judge was justified in drawing an adverse inference against the Husband that his assets exceeded what had been disclosed in the proceedings. It would be fair and equitable to give effect to this adverse inference by quantifying the value of the Husband’s undisclosed assets and income at about 10% of the value of the assets included in the pool of matrimonial assets. That would correspond to a figure of $3,183,578: at [63] and [67].

11 As regards the division of the pool of matrimonial assets, first, the Judge was correct to fix the direct contributions to the purchase of the Home to the parties in the ratio of 22:78 in favour of the Wife, with the Wife contributing $3,081,000 and the Husband contributing $869,000. The Husband’s submission – that the Wife should be found to have contributed $1,980,000 while he should be found to have contributed $1,320,000 – would have no practical impact on the Judge’s finding, and the court should not interfere to make minute adjustments. Second, the Judge was correct to determine that the indirect contributions of the parties should be weighted 35:65 in favour of the Wife. The Husband’s allegation that the Wife had kept him out of the Children’s lives did not change this determination. There was no finding by the Judge that the Wife had ever obstructed the Husband in his attempts to obtain access to the Children, and even if the Wife did obstruct the Husband’s access to the Children, that still fell some way short of the level of misconduct needed in order to justify the ascription of a negative value to the impugned conduct: at [81], [82], [85] and [87].

12 Third, the Judge was correct to determine the weightage between direct contributions and indirect contributions to be 60:40 in favour of direct contributions. None of the arguments raised by the Husband in favour of a 70:30 weightage in favour of direct contributions is valid. The Wife’s submissions in favour of equal weightage between direct contributions and indirect contributions also have no merit. In dividing a pool of matrimonial assets, one must first enquire whether the marriage is a long single-income or dual-income marriage. If it is the former, then the approach in TNL v TNK and another appeal and another matter [2017] 1 SLR 609 applies, and the court will generally tend towards equal division, except if the marriage involves an exceptionally large matrimonial asset pool, when it will be treated as an exception to the norm of equal division. If it is the latter, then the approach in ANJ v ANK [2015] 4 SLR 1043 will apply, and a whole host of possible factors might ultimately lead the court to find that direct contributions ought to be given greater weight than indirect contributions. The Wife’s proposal that direct contributions should only be given greater weight in cases involving long single-income marriages with exceptionally large asset pools would restrict the degree of discretion currently afforded to the court to arrive at a finding that greater weight ought to be placed on direct contributions as compared to indirect contributions: at [93], [100] and [102].

Maintenance for the Children

13 There was no reason to vary the amounts adopted by the Judge in making her orders on maintenance. First, the Judge was, in accordance with s 114(2) of the Charter, merely imposing upon the Husband the financial obligations and responsibilities that he had been assuming for the family prior to the breakdown of the marriage. Second, s 68 of the Charter did not mandate that each parent should bear an equal share of the burden of providing maintenance for their children. It was open to the Judge to consider other factors, including the relative circumstances of both parties, in making the maintenance orders. Third, the Husband’s contention that maintenance for the Children should be reduced because the Wife was already receiving a substantial amount of assets through matrimonial division was a non sequitur, and must be rejected: at [108], [110], [111] and [112].

This summary is provided to assist in the understanding of the Court’s judgment. 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 judgment.

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