DISCLOSURE & ADVERSE INFERENCE IN DIVISION OF MATRIMONIAL ASSETS
DISCLOSURE & ADVERSE INFERENCE
IN DIVISION OF MATRIMONIAL ASSETS
I. Introduction
1. This article is concerned with the issues of disclosure and adverse inference in the context of division of matrimonial assets in Singapore. If you are going through divorce proceedings, consulting an experienced divorce lawyer can help ensure that your rights and entitlements are properly protected.
II. What Is Full and Frank Disclosure?
2. The starting point for the division of assets is the “identification of the material gains of the marital partnership”. To ensure that the assets to be divided truly reflect the material gains of the partnership, a proper discharge of the duty of full and frank disclosure is crucial and must be strictly observed. The Husband and Wife cannot decide what to disclose based on what they think constitutes matrimonial assets.
3. In practice, the Parties must disclose all relevant financial documents for assets they own, whether solely, jointly, or beneficially, in Singapore or overseas.
III. When Does the Court Draw an Adverse Inference?
4. An adverse inference may be drawn against a party if they breach their duty to provide full and frank disclosure – the objective of which is to counter the effects of non-disclosure.
5. Mere assertions do not suffice to convince the Court to draw an adverse inference. An adverse inference may only be drawn where (1) there is a “substratum of evidence that establishes a prima facie case against the person against whom the inference is to be drawn” and (2) “that person had some particular access to the information he is said to be hiding”.
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USB v. USA and another appeal [2020] 2 SLR 588 at [27].
WRX v. WRY and anor [2024] SGHC(A) 22 at [35].
UZN v. UZM [2021] 1 SLR 426 at [16]-[17].
A non-exhaustive list of standard documents for disclosure is set out in Section 16 of Form 15 (First Ancillary Affidavit) of the Family Justice Practice Directions 2024. The Court may require additional disclosure if deemed relevant or necessary.
6. To give effect to an adverse inference, the Court may generally adopt two approaches, namely (1) the Quantification approach, and/or (2) the Uplift approach. Under the Quantification approach, the Court estimates the value of the undisclosed asset(s) and restores it in the matrimonial pool for division. The Uplift approach, on the other hand, involves awarding the other party a higher proportion of the known assets.
IV. WZF v. WZG [2025] SGHCF 1 (“WZF”)
7. In the case of WZF, “one of the most brazen attempts to shield assets from the matrimonial pool [the] courts have seen”, the Husband (“H”) attempted to evade the disclosure of assets at every turn. At the outset, H failed to disclose any of his key assets. H only eventually declared certain assets after the Wife (“W”) identified them. Even then, H refused to provide the relevant valuation documents, asserting that they were unavailable. When W produced evidence showing that the assets were of significant value, H ignored it and urged the Court to assume that his assets were worth nothing.
8. To reflect the “utter contempt” for such behaviour, the Court drew an adverse inference by restoring the amount of S$10,054,716 (being W’s valuation of H’s interest in an entity which he failed to disclose) back into the matrimonial pool through the Quantification approach and uplifted the division ratio for the Wife from 59% to 69% through the Uplift approach.
V. Conclusion
9. Ultimately, “nondisclosure is the cancer of family law” and the importance of the duty to provide full and frank disclosure cannot be understated.
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BPC v. BPB and another appeal [2019] 1 SLR 608 at [60].
The Courts are not restricted from using either approaches (BPC at [39]) and whether the Court ultimately decides to use either the Quantification or Uplift approach depends ultimately on the facts of each case (UZN at [29]. In certain egregious cases of adverse inference, the Court may also apply both approaches (WRX at [38] – [41] and [49]; and WZY at [71] and [91].)
Leitch v Novac [2020] at [44]. Cited in WZF at [2].
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29 November 2024
BY OOm SEO