Fraudulent Non-Disclosure in Matrimonial Proceedings – The Case of BMI v BMJ
The decisions of the High Court and the Court of Appeal in BMI v BMJ  3 SLR 177;  SGHC 112, affirmed on appeal in BMI v BMJ and another matter  1 SLR 43;  SGCA 63 provides clarity on the consequences of fraudulent non-disclosure in relation to setting aside a consent order. It sends a stern reminder to spouses in matrimonial proceedings of the importance of their duty in providing full and frank disclosure to the court.
BMI v BMJ (the High Court and Court of Appeal) established the principle that an ex-spouse who has been the victim of fraudulent non-disclosure during divorce proceedings would be entitled to set aside any existing divorce settlement any time after it was made and that a delay (of 16 years in BMI v BMJ) would not disentitle an application to set aside a consent order.
The Wife’s Application
BMI v BMJ was an application commenced by the wife in 2016 to set aside a consent order that recorded a settlement deed between the husband and wife for ancillary matters during the divorce proceedings, which concluded in 1990. The marriage between the husband and the wife lasted for a brief period of about 5 years which bore 2 children to the marriage. Throughout the divorce proceedings, the wife alleged that the husband did not make full and frank disclosure of his assets by hiding his assets or holding them through nominees. Orders were made for the issues relating to the children and the issues relating to maintenance and the division of matrimonial assets were resolved after parties entered into settlement negotiations facilitated by the trial judge. The agreed terms were recorded in a settlement deed dated 30th June 2000 and were then recorded into a consent order. Under the consent order, as full and final settlement of the wife’s claim to the division of matrimonial assets, the husband would pay the wife over a period of about 4 years approximately $13 million in 10 instalments. The consent order had been fully implemented.
In support of the wife’s application to set aside the consent order, the wife relied on section 112(4) of the Women’s Charter and contended that the Court has the power to set aside a consent order at any time regardless of the amount of time that has come to pass. The wife contended that in the 16 years that had passed since the date of the consent order, she discovered and obtained evidence, based on tangential observations made in previous court judgments, admissions by third parties in those previous proceedings, newspaper reports and magazine interviews and inferences drawn from these sources, that the husband’s assets were substantially wider than what was disclosed during the divorce proceedings. The husband’s arguments in disputing the wife’s application were, inter alia, that the wife’s claim of the husband’s non-disclosure was insufficient of any finding of fraudulent non-disclosure and that the settlement deed in the consent order was a final settlement of any outstanding and future claims between parties. The husband also contended that the delay of 16 years would prejudice the husband especially since the consent order has been fully implemented.
Threshold for Fraudulent Non-Disclosure
The High Court held that, as affirmed by the Court of Appeal, the threshold for fraud is a high one of which compelling evidence of fraud is required. The Court used the test for fraudulent misrepresentation as a benchmark and held that the burden would lie on the party alleging fraud to show that, based on the available and admissible evidence, the non-disclosure was both deliberate and dishonest in order to ground a claim in fraudulent non-disclosure. The burden is then shifted to the other party to prove that the non-disclosure was not material.
Decision of the High Court and the Court of Appeal
The wife’s application was dismissed by the High Court and affirmed by the Court of Appeal on the grounds that the wife’s evidence of the husband’s dishonesty to show a probable or conclusive finding of dishonesty and were, at best, “mere suspicions” of the husband’s dishonesty and could not prove a claim in fraud. The court held that the wife’s evidence could not be relied to show a probable or conclusive finding of dishonesty and were, at best, “mere suspicions” of the husband’s dishonesty.
Delay of 16 years
With respect to the 16 year delay, the court applied the decision in The Siew Hua v Tna Kim Chiong where it was held by the High Court that the equitable defences of laches and acquiescence would not apply to an application under section 112(4) of the Women’s Charter as it was a statutory remedy. Therefore, the court agreed with the wife’s submission that in line with a literal reading of section 112(4) of the Women’s Charter, the defence of laches would not operate as a bar to her application to set aside a consent order.
No Legal Effect of Compromise Agreement on Fraud
Even though the wife’s application was dismissed due to the inadequate evidence of fraud on the husband’s part, the High Court went on to decide, and rejected, the husband’s submission that the wife’s claim was barred on the basis that she had compromised her claims for non-disclosure under the consent order. It was held that a Court has the power to set aside a consent order despite the fact that the issue of non-disclosure was raised during the trial and/or negotiations between parties, and which parties eventually recorded a consent order purported to be a full and final settlement of any outstanding and future claims between parties. The High Court highlighted that “the legal effect of a consent order in the matrimonial context is not derived from the agreement made between the parties, but, instead, from the court order itself”. Therefore, an act of fraudulent non-disclosure of a party to the consent order would not only vitiate the crux of the parties’ consent as the innocent party’s consent was exercised on false premises but would also “undermines the court’s ability to exercise its powers as the final arbiter as to the appropriateness of the arrangements agreed upon.“
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