AYQ v AYR and another matter

Andrew Phang Boon Leong JA (delivering the grounds of decision of the court):

[1] This is an appeal against the decision of the High Court Judge (“the Judge”) in AYQ v AYR [2012] SGHC 80 (“the GD”).

[2] The Judge dealt with the following issues: the division of matrimonial assets between the parties, the maintenance for the Wife (“the Appellant”), the maintenance for the two children from the marriage (“the Children”), and the custody and care arrangements for the Children. In the present appeal, the Appellant appealed only against the Judge’s orders relating to the division of the pool of matrimonial assets and maintenance for herself and the Children. No appeal was made in so far as the custody and care arrangements were concerned.

[3] The Appellant also filed Summons No 4696 of 2012 on 17 September 2012 in order to adduce additional evidence before this court (“the new evidence”), comprising the following (in relation to her recent diagnosis of and treatment for breast cancer): the Appellant’s Histopathology Report, the medical certification of her treatment, her Medical Report, copies of her medical receipts as well as her clinic’s sales summary from March 2012 to September 2012. The new evidence might, if admitted, have impacted the issue of maintenance (both with regard to herself as well as her (percentage) contribution to the maintenance of the Children). Counsel for the Husband (“the Respondent”), Mr Imran Hamid Khwaja (“Mr Imran”), helpfully stated that his client had no objection to the adducing of the new evidence but would make submissions with regard to such evidence. This was, in our view, an eminently fair approach to take. We were, in any event, minded to and eventually did admit such evidence based on the applicable legal principles.

[5] We now give the detailed grounds for our decision and also take the opportunity to clarify the role of indirect contributions (particularly with regard to “the classification methodology” first referred to by this court in NK v NL [2007] 3 SLR(R) 743 (“NK v NL”)).

[6] By way of brief background, the Appellant is presently 51 years old whilst the Respondent is 53 years old. The parties were married in 1986. The Appellant sought a divorce citing, inter alia, unreasonable behaviour on the part of the Respondent. The marriage ended after 23 years, with interim judgment for divorce being granted on 18 March 2009. There are two children of the marriage – a daughter, aged 20 years and currently pursuing a university education in England and a son, aged 16 years, pursuing his studies at an international school in Singapore.

[7] The Appellant is an aesthetics doctor with Singapore citizenship whilst the Respondent is an eye-surgeon with Australian citizenship. They are both presently in private practice and run their own clinics.

[8] The Judge made the following orders on 6 March 2012:

(a) Custody of children: That parties be granted joint custody over the children and that the Wife be granted sole care and control with reasonable access to the Husband (see the GD at [4]).

(b) Division of matrimonial assets:

(i) That the Wife would obtain the following:

(A) 20% of $1,323,655.19 which was the parties’ combined matrimonial assets excluding matrimonial home sale proceeds and Australian house sale proceeds (“other matrimonial assets”),

(B) 39% of $886,887 which was the net sale proceeds of the matrimonial home, and

(C) 5% of $533,122.52 being the Husband’s share of the Australian house sale proceeds.

(ii) That the Husband would obtain the balance. The sums to be paid by the Husband from the division may be set-off against his share of the matrimonial home sale proceeds.

(See the GD at [5]).

(c) Maintenance:

(i) That the Husband pays the Wife $1 per month from 1 January 2010 for her own maintenance.

(ii) That the Husband pays 60% of the Children’s maintenance of $2,000 per month, ie, $1,200 per month, from 1 January 2010.

(iii) That the Wife reimburses the Husband for 40% of the Children’s school fees from 1 January 2009 and 40% of the daughter’s overseas accommodation and living expenses. The Husband is to give reasonable documentary evidence of these items. The sums to be paid by the Wife for reimbursement can be set-off against her share of the matrimonial home sale proceeds.

(See the GD at [6]).

(d) Costs: That each party was to bear his or her own costs of these ancillary proceedings (see the GD at [7]).

[9] As noted above (at [2]), the Appellant appealed with regard to the issues pertaining to the division of the pool of matrimonial assets and maintenance, respectively. In the circumstances, there were, in effect, three issues that were raised before this court, as follows:

(a) Issue 1: Whether the Judge had accorded sufficient consideration to the Appellant’s indirect contributions in dividing the pool of matrimonial assets between the parties;

(b) Issue 2: Whether the Appellant’s percentage contribution to the Children’s maintenance should be decreased (particularly in light of the new evidence); and

(c) Issue 3: Whether the quantum of the Appellant’s maintenance ought to be increased (again, particularly, in light of the new evidence).

[10] We turn, first, to consider Issue 1.

Issue 1: Whether the Judge accorded sufficient consideration to the Appellant’s indirect contributions in dividing the matrimonial assets

[11] The crux of the Appellant’s case centred on the argument that the Judge had failed to value her indirect contributions sufficiently in dividing the pool of matrimonial assets between the parties. Counsel for the Appellant, Mr Tito Isaac (“Mr Isaac”), submitted that his client was not disputing the specific valuation amounts of the various assets making up the pool of matrimonial assets but that the dispute was only with the percentage of matrimonial assets awarded to her. In this regard, he submitted that an appropriate award for his client ought to be 45% of all matrimonial assets. In support of this, Mr Isaac proffered two specific arguments.

[12] First, Mr Isaac argued that the Judge ought to have used “the global assessment methodology”, and not “the classification methodology”, so as to achieve a just and equitable division of the pool of matrimonial assets. He argued that, in applying “the classification methodology”, the Judge had not given due consideration to her indirect contributions, such as homemaking and child caring, to each class of asset. In particular, Mr Isaac pointed out that the Judge had only attributed 20% of the sale proceeds of the matrimonial home to her indirect contributions and was silent as to her indirect contributions as regards the remaining two classes of matrimonial assets (ie, the Australian house and the other matrimonial assets).

[13] Secondly, Mr Isaac argued that the Judge should have used a broad-brush approach in the division of the pool of matrimonial assets and that he had erred in considering irrelevant considerations while failing to consider relevant ones. He argued that the Judge in finding that the Appellant had an increased interest in her social life, placed excessive emphasis on the findings of the private investigator report submitted by the Respondent resulting in his discounting of her indirect contributions as the Children’s primary caregiver and his failure to appreciate the “true” reason for her departure from the matrimonial home.

[14] Turning to the Respondent’s arguments, in so far as the Appellant’s first argument was concerned, Mr Imran submitted that “the classification methodology” used by the Judge was appropriate. He added that an appropriate reading of this court’s statement in NK v NL (at [35]) that “[t]he element of indirect contributions ... must necessarily remain constant in relation to each class of asset” under “the classification methodology” ought to be understood as the fact of indirect contributions in each asset class being constant but that the extent of such contributions may vary. As such, he disagreed with the Appellant’s argument that her indirect contributions were not given due consideration, because, as he submitted, the Judge did consider and award her a proportion of the assets in each class which duly reflected the extent of the indirect contributions on her part. Mr Imran added that the Appellant herself appeared to accept “the classification methodology” as being appropriate at the ancillary hearing below.

[15] In so far as the Appellant’s second argument was concerned, Mr Imran argued that the Judge did consider and did not discount the Appellant’s indirect contributions. This was reflected at [21]–[22] of the GD, and also his (the Judge’s) finding that the Appellant was the Children’s primary caregiver and that she had made career sacrifices accordingly (see the GD at [25]). In addition, Mr Imran suggested that the extent of the Appellant’s indirect contributions had to be appreciated in the context of her preference for a social lifestyle which was seen in the evidence placed before the Judge. On the reason for the Appellant leaving the matrimonial home, the Respondent disagreed that this was due to violence on his part and pointed out that the Judge in fact did not make such a finding as to the reason for this. Finally, Mr Imran submitted that the Judge did, in fact, use the broad-brush approach in dividing the matrimonial assets, this being clear from a reading of the GD itself.

[16] We do not think that counsel were at odds in so far as the basic propositions of law were concerned (including the fundamental proposition that the court will adopt a broad-brush approach towards the division of the pool of matrimonial assets pursuant to s 112). The focal difference appeared to us to centre around, first, whether “the global assessment methodology” or “the classification methodology” ought to be applied and, secondly, assuming (as the Judge did) that the latter methodology applied, whether or not indirect contributions ought to be accorded the same weight in relation to each class of assets.

[17] Turning first to the methodology that ought to be adopted, it is clear that there are no rules that are writ in stone. As this court observed in NK v NL (at [33]):

[18] And, in a similar vein, the court proceeded to observe thus (at [36]):

[19] In our view, the Judge was justified in adopting “the classification methodology” as the various matrimonial assets did lend themselves to classification under the three headings adopted in the court below, viz, the sale proceeds of the Singapore matrimonial home, the sale proceeds from the Respondent’s share of the Australian house and the matrimonial assets (not arising from the sale of real property). However, what engendered more difficulty was the fact that the Judge appeared to accord different weights to the Appellant’s indirect contributions with regard to each class of assets. This was particularly marked in relation to the Australian property, where the Judge held as follows (see the GD at [34]):

[20] It was clear, in our view, that the Judge did not sufficiently take into account the indirect contributions of the Appellant with regard to this particular asset. With respect, this is contrary to the following observations of this court in NK v NL (at [35]):

[21] We would observe – parenthetically – that, pursuant to “the global assessment methodology”, the role of indirect contributions would, of course, be taken into account and, by the very nature of the methodology itself, only once at that.

[22] Returning to “the classification methodology”, we would emphasise the fact that indirect contributions must be factored into – and its weightage to remain constant in relation to – each class of assets. That there might be some confusion at present not only with regard to the present appeal but also with regard to other cases in which on occasion judges rightly hold that the weightage of indirect contributions ought to remain constant with regard to each class of assets (see, for example, the Singapore High Court decision of AJR v AJS [2010] 4 SLR 617 (at [21])) while on other occasions they appear to treat its weightage as differing as between asset classes (see, for example, the Singapore District Court decision of BAA v BAB [2012] SGDC 193 (at [26])), merely underscores the need for the clarification which we have just made.

[23] Indeed, by their very nature, indirect contributions are part of the very warp and woof of the entire marriage and must therefore be reflected consistently throughout each class of assets. To hold otherwise would, in our view, be contrary to this approach and would invariably lead to undesirable anomalies. If, as was the case here with regard to the Australian property, the asset concerned was acquired by, for example, a husband very shortly after the marriage, there would, ex hypothesi, be little or no indirect contributions by his wife which could be taken into account when that particular asset is being considered by the court with regard to division between the parties pursuant to s 112. Simply put, the anomaly would be that for matrimonial assets acquired very early on in the marriage, for instance immediately after the marriage, the indirect contributions concerned would more likely than not be given very little weight. In contrast, for matrimonial assets acquired later on during the marriage, the indirect contributions concerned would likely be accorded heftier weight. However, the fallacy in such an approach is the fact that indirect contributions can only be assessed and applied at the end of the marriage and, by their very nature, relate back and impact the entire marriage to date. The court’s assessment of a spouse’s indirect contribution should thus be performed with retrospective lenses, looking back and fully appreciating the entire context and circumstances of the marriage. It should not be done in a time-specific manner, ie, assessing the extent of indirect contributions of a spouse as at that specific point in time when a particular matrimonial asset was acquired. Further, this assessment should not be done in a blinkered fashion where the court focuses on each individual class of assets and decides the weightage of a spouse’s indirect contribution as regards that particular asset class, resulting in a situation where varying weights are accorded for indirect contributions in different matrimonial asset classes. This approach would accord with the view of the marital enterprise being a partnership of efforts of both spouses and that, during the course of marriage, the spouses contribute to the betterment of it in ways that they can without consciously accounting with mathematical precision as regards the quantum and type of their respective contributions. In this case then, we thought it just and equitable to attribute what was, in our view, a reasonable weight to indirect contributions by the Appellant in the instant appeal across all the classes of assets. We were of the view that a weightage of 30% vis-a-vis the Appellant’s indirect contributions would be appropriate, having regard to all the facts and circumstances of the present case (including the length of the marriage as well as the actual contributions and career sacrifices which the Appellant had made) – which resulted in the apportionment of the various classes of matrimonial assets set out above (at [4]). We should add that we did not think that the Appellant’s allegedly keen interest in her social life was significant when placed in context and certainly would not have warranted any discount of the real efforts and contributions that she had evidently made throughout the course of the marriage.

[24] The approach towards the role of indirect contributions outlined above with regard (especially) to “the classification methodology” is also consistent with the entire spirit behind this court’s view as to the importance of ensuring that indirect contributions are not undervalued but are (on the contrary) given their appropriate weight in the case at hand. Indeed, as this court observed in NK v NL (at [34]):

[25] We did not think that the Judge had exercised his discretion wrongly in so far as this particular issue was concerned. However, we were of the view that given the new evidence presented by the Appellant on appeal, it suggested that there might – in principle - perhaps be scope for some adjustment of the percentage contribution ordered by the Judge in the court below.

[26] Mr Imran very fairly conceded that the Appellant’s recently diagnosed illness might conceivably impact on this particular issue. However, as he also correctly pointed out, there was insufficient evidence before this court to arrive at a concrete decision as to the Appellant’s exact percentage contribution to the Children’s maintenance and therefore the more appropriate route would be by way of an application for variation by her in the court below. Indeed, Mr Isaac himself appeared to focus more on the next issue (viz, Issue 3) – and, in our view, rightly so in view of our finding that the Judge had not exercised his discretion wrongly in the court below in so far as this particular issue was concerned as the new evidence had not yet been discovered and placed before him. In the circumstances, we were of the view that Mr Imran’s proposal was the most appropriate.

[27] Mr Isaac argued that, owing to the recently diagnosed illness of his client, the Appellant ought to receive $2,000 per month in maintenance. Mr Imran, on the other hand, argued that the new evidence did not disclose any significant drop in the Appellant’s income although he (again, very fairly and correctly, in our view) was prepared to concede that, with sufficient evidence, the Appellant would be entitled to apply for a variation of the current maintenance order in the court below.

[28] Not surprisingly, Mr Isaac was unable to explain to this court’s satisfaction how he had arrived at the figure of $2,000 in monthly maintenance and this merely underscored Mr Imran’s argument to the effect that there was really insufficient evidence before this court to enable it to arrive at a principled decision. In the circumstances, we were – as was the case with the previous issue – of the view that Mr Imran’s proposal that the Appellant apply for a variation of this particular maintenance order in the court below was the most appropriate.