Introduction

The division of matrimonial assets in a divorce is guided by the circumstances of a case, including matters identified in section 112(2) of the Women’s Charter (the “Charter”). The main considerations in most cases are conventionally centred on spousal contributions in the economic sphere and the home-making sphere.

These considerations are generally viewed with a ‘broad-brush’ approach with the aim of achieving a “just and equitable” division. The case of ANJ v ANK [2015] 4 SLR 1043 gave the Court of Appeal (“CA”) the opportunity to clear the air and remind us of the proper method of balancing these considerations.

Previous Methods

A common approach previously practised, coined as the ‘uplift’ method, would have spouses’ financial contributions first assessed as a ratio before adjustments are applied to the spouse who made more indirect contributions. The method is illustrated below:

  1. A percentage ratio is ascribed between the spouses for their direct contributions to the asset.
  2. The judge would then decide whether one spouse provided more indirect contributions and, if so, how much more.
  3. An ‘uplift’ would then be applied to the percentage of direct contribution of that spouse to reflect the indirect contribution, while the share of the other spouse would be reduced accordingly.

Click here to view the table.

Other methods previously seen include the 8-step methodology in AJR v AJS [2010] SGHC 199 and the approach taken in Yeo Chong Lin v Tay Ang Choo Nancy and another appeal [2011] 2 SLR 1157, which rejected a mathematical calculation for a less structured approach.

The Approach to Adopt

The CA in ANJ v ANK has now suggested that the ‘uplift’ method is inconsistent with the underlying spirit of section 112 of the Charter. It further warned of the unfair results that might occur in the form of unreasonably low or unreasonably high figures awarded.

While advocating the use of broad discretion, the CA also highlighted that a complete lack of structure might create a rule so ambiguous that it would provide no meaningful guidance. As such, the CA took the chance to prescribe a more structured formula. As guidance from Singapore’s highest Court, the method has been applied in subsequent cases. In TEG v TEH and another matter [2015] SGHCF 8:

  1. First, the matrimonial pool is delineated, making clear the time period to be used for such an assessment.
  2. Second, a ratio that represents each spouse’s direct financial contributions relative to the other spouse is ascribed.
  3. Third, a ratio that represents each spouse’s indirect contributions is decided.
  4. Fourth, each spouse’s average contribution is derived.
  5. Fifth, adjustments as to weightage of each ratio may be made as necessary.

Click here to view the table.

The court in ANJ v ANK also highlighted that the methodology was not designed to provide a definitive answer in all cases. These further points were raised:

Unequal ratio: There may be cases where one of the above components should assume greater weightage. Three (non-exhaustive) types of circumstances that could influence this ratio were identified:

  1. The length of the marriage - Indirect contributions tend to feature more prominently in longer marriages.
  2. The size of the matrimonial assets - Direct financial contributions may command greater weight if the pool of matrimonial assets is very large and is accrued by the efforts of one party.
  3. The extent and nature of indirect contributions - The engagement of a domestic helper would lessen the burden of home-making, whereas sacrifices in career advancement for the sake of child rearing would be given great consideration by the court.

Other factors: Other factors under section 112 may be relevant when considering the division of assets. The CA prescribed flexibility in making adjustments to the principles so as to achieve a just and equitable result.

Failure to disclose: The court maintains its power to draw adverse inferences against either party when they are found to have failed to make full and frank disclosure of matrimonial assets. Weightage of the known assets may be altered in favour of the other party.

Following the Approach

Aside from the structured process reiterated in TEG v TEH and another matter, the malleability of this approach has also been demonstrated in TDS v TDT. The court in that case awarded a 30% interest in the matrimonial assets to the wife on the basis of her indirect contributions during the marriage.

Quoting principles in ANJ v ANK, the court decided the matter based on its feel of what would be an equitable result and awarded the division without going through the steps proposed above.

In a recent decision released on 2 October 2015 in Twiss, Christopher James Hans v Twiss, Yvonne Prendergast [2015] SGCA 52, the Court of Appeal reversed the High Court’s decision to award 100% of the matrimonial home and net proceeds of sale of another property to the wife after observing that there were no exceptional or extreme circumstances justifying the use of the ‘uplift’ method. The Court of Appeal took the opportunity to reiterate the structured approach in ANJ v ANK:

  1. Express the spouses’ direct contributions towards acquisition or improvement of the matrimonial assets, relative to each other, as a first ratio;
  2. Express the spouses’ indirect contributions, relative to each other, as a second ratio; and
  3. Take an  average of both ratios, bearing in mind  that a ratio can be given more weight as appropriate.

Concluding Words

Whether spouses intend to mediate or litigate the issue of how to divide the matrimonial assets, the Court of Appeal’s recent reminders on the proper approach to consider when navigating section 112 of the Charter will hopefully produce results which are more acceptable to both spouses.