Fkyp v. Khyf
Read the full judgment text of FCMC 17515/2013 on BabelCite. This Family Court judgment was delivered on 19 January 2021 before Deputy District Judge R So.
Matrimonial Proceedings and Property Ordinance – Ancillary Relief – Matrimonial Home – Sale of Property – Child Maintenance – Clean Break – Legal Costs – Full and Frank Disclosure – Whether HK$3.4 Million should be added back – Whether re-finance amount should be added back – Whether MPF amount should be added back – Sale of Former Matrimonial Home ordered – Proceeds divided 40% Husband, 60% Wife – Child maintenance HK$12,000 monthly – No order as to costs
Legal issues: Whether HK$3.4 Million should be added back · Whether re-finance amount should be added back · Whether MPF amount should be added back · Full and frank disclosure · Sale of Former Matrimonial Home · Division of sale proceeds · Child maintenance · Costs of ancillary relief
Outcome: Sale of Former Matrimonial Home ordered; proceeds divided 40% Husband, 60% Wife; Child maintenance awarded; No spousal maintenance; No order as to costs.
Cites 4 cases
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FCMC 17515/2013 [2021] HKFC 10 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO 17515 OF 2013 ________________________
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________________________ J U D G M E N T ________________________ 1.This is the trial of the ancillary relief between the Petitioner husband (“Husband”) and the Respondent wife (“Wife”). The Husband claimed for ancillary relief as stated in the petition for divorce. The Wife claimed for ancillary relief for herself and for the two children of the family. 2.The Husband issued Petition for divorce in 2012 based on unreasonable behaviour of the Wife under the case FCMC 7952/2012(“Previous Proceedings”). Subsequently, by consent, the ground of divorce was changed to separation for more than one year with consent and a new Petition was issued under the present proceedings. 3.There were many applications and hearings since the commencement of the Previous Proceedings, including hearings on children matters, maintenance pending suit hearing, trial for s. 17 application etc. I will only refer to those background, information and rulings relevant for my consideration for this trial. After children matters had been determined after trial, there was the Financial Dispute Resolution hearing, in which no agreement could be reached between the parties and therefore the case had been transferred to this Court for ancillary relief trial. 4.The main dispute in this trial is how the matrimonial assets should be dealt with, which consisted mainly of the most valuable asset, ie. the former matrimonial home (“Former Matrimonial Home”), and how much periodic payments and lump sum payment, if any, should be paid. There are other matters which the parties submit that the Court should consider, including liabilities and costs, and amounts that should be added back to the family pool of assets, which I shall deal with later in this Judgment. 5.Pursuant to the Judgment of Deputy District Judge Pang (as he then was) dated 31 December 2015 ruling on the s.17 application, the 2nd Intervener (ie. the Husband’s mother) was ordered to deposit a sum of HK$250,000 into the Court (details see paragraph 72 below). During the hearing of this trial, by consent, it was ordered that the sum of HK$250,000 was paid out and divided equally between the parties. It was also agreed by the parties that the said sum needs not be considered in this ancillary relief trial. 6.Both parties had legal representatives at the commencement of the proceedings. The Husband used to have private lawyer. The Wife also had private lawyer at the beginning and she later applied for legal aid. Much had been spent on legal costs, or yet to be paid for the outstanding legal costs. Eventually, both parties run out of resources and both act in person in this trial. Background and salient facts of the case 7.The Husband was born in 1974 and was 44 years old at the commencement of this trial. He is an actuary by occupation. 8.The Wife was born in 1969 and was 49 years old at the commencement of this trial. She is also an actuary by occupation. 9.The parties met each other in university, both studying actuarial programme. 10.The parties were married in June 2000, with 2 children born in the wedlock. In December of 2000, the parties purchased a property at Mei Foo Estate in joint names in the amount of HK$2,780,000 (ie. the Former Matrimonial Home). 11.There was re-mortgage of the Former Matrimonial Home with the re-mortgage amounts of HK$2.24 million and HK$2.464 million in 2005 and 2007 respectively. 12.In February 2007, the twin daughters were born (“Children”), who were almost 12 years old at the commencement of this trial. 13.Since about October 2011, the Husband started working in Shanghai, and he has been working in the mainland since about that time. 14.In about January 2012, the Husband took the Children to live and study kindergarten in Shanghai. 15.In June 2012, the Husband petitioned for divorce based on the unreasonable behavior of the Wife. 16.In about July 2012, the Wife left Hong Kong and went to Shanghai to take care of the Children. 17.After trial, on 28 August 2013, Deputy District Judge Pang (as he then was) ordered under the Previous Proceedings that joint custody be granted to the parties, with care and control of the 2 Children be granted to the Wife, with reasonable access be to the Husband. At the same time, the Court also permitted the Wife to bring the 2 Children back to Hong Kong. 18.On 25 October 2013, after hearing the respective counsel then representing the Husband and the Wife, the defined access of the Husband to the 2 Children was granted, with generous access time given to the Husband. 19.Thereafter, there were numerous applications by the parties in relation to Children matters and varying of access arrangement of the 2 Children. 20.There were also substantive or trial hearings in relation to children and financial matters. The major substantive or trial hearings include the following :-
21.In November 2013, the Wife took the 2 Children back to Hong Kong and have been residing at the Former Matrimonial Home since then. The Wife has been residing and working in Hong Kong, while the Husband continues residing and working in the mainland. 22.In December 2013, the Previous Proceedings of FCMC 7952/2012 had been stayed upon the Husband taken out the present proceedings based on 1-year separation with consent. 23.Decree Nisi was granted on 28 August 2015. 24.There are no other witnesses expect the Husband and the Wife. They had filed the respective Form Es in 2012 (“Husband’s Form E” and “Wife’s Form E”) and the updated Form Es in 2017 (“Husband’s Updated Form E” and “Wife’s Updated Form E”). 25.The Husband also relied on the following affirmations and answers to questionnaires as evidence in chief :-
26.The Wife also relied on the following affirmations and answers to questionnaires as evidence in chief :-
27.I notice some of the Wife’s affirmations were made for previous applications, not for ancillary relief, but there are some background and matters that are relevant. I will consider the content of those affirmations that are relevant for my consideration and ruling for this trial. 28.The Husband was born in 1974 and was 44 years old at the commencement of this trial. His father is a retired civil servant and his mother is a retired staff in a local university. Both his parents live in a self-owned apartment. 29.The Husband graduated from actuarial science in a university in Hong Kong. He is an actuary by occupation. 30.He had worked in the company “M” in Hong Kong before he started working in the company “CP” in Shanghai in 2011. He then changed to work in the company “RGA” in Shanghai, then the company “SLIC” and then started working in a company “KM” in Beijing since February 2017. According to the Husband, he has provided employment contracts of all these work. 31.At the time when the Husband gave evidence, he explained that he was about to be out of job as he would have completed the employment contract and he was looking for another job. He agreed that he has earning capacity. In view of his previous salary, he agreed that earning capacity is about HK$90,400 per month based on his salary and bonus for the past 2 years. 32.After the ruling of the custody trial of the Children in 2013, and with the Children back to reside in Hong Kong with the Wife, the Husband has been exercising access by either flying back to Hong Kong, or with the Children flying to visit him in the mainland. 33.The Husband has been residing and working in the mainland. At the time of this trial, he is residing in Beijing with his girlfriend in a rented unit. 34.The Husband’s case is that in view of parties’ financial circumstances, both have incurred much debts and liabilities. It is not practical and not sustainable that the Former Matrimonial Home be kept. After this ancillary relief trial, the Former Matrimonial Home should be sold and the sale proceeds be divided between the parties, so that they could each repay their own loans and liabilities, and start their respective new lives. 35.The Husband is of the view that there should be clean break between the spouse. Regarding the periodical payments for the Children, as the Husband had been granted much defined access, he needs to spend much expenses on Children, especially in view of the fact that the Husband lives and works in the mainland and additional expenses will have to be incurred in travelling and accommodation in conducting access of the Children. 36.The Husband’s open proposals are as follows :-
37.The Husband later revised his open proposal by agreeing not enforce the costs orders previously granted in his favour. He explained that, instead of asking for the repayment of costs the Wife owes the Husband in the previous judgments, the Husband agrees that those amounts be treated as the family liabilities, which in essence, the Husband will be sharing half of those liabilities. Both the open proposal and revised open proposal of the Husband are not agreeable by the Wife. 38.The Wife was born in 1969 and was 49 years old at the commencement of this trial. The Wife and her family were immigrant from the mainland. The Wife’s mother has retired and has been living with the Wife and the Children. The Wife’s father is living on his own in a self-owned apartment. 39.The Wife graduated from actuarial science in the same university as the Husband. She is also an actuary by occupation. 40.According to the Wife, she stopped working in October 2006 when she was pregnant with the twin daughters, who were born in 2007. She stopped working until August 2009 when the Children started kindergarten. The Wife stopped working again from April 2012 to December 2014 due to this divorce case (reference can be made to paragraphs 12 to 21 above). 41.After the custody trial of the 2 Children, with the care and control of the Children granted to the Wife, she took the Children back to reside and study in Hong Kong in about November 2013. Since then, they have been residing at the Former Matrimonial Home, together with the Wife’s mother. 42.The Wife’s case as set out in paragraph 5 of her 24th Affirmation is that “since 2012, I have been paying for the family’s living and household expenses, my daughters’ after-school activities, utilities, management fees and repayment of my debts and monthly mortgage of the Former Matrimonial Home. I also need to support my own aged parents monthly living expense at the rough amount around HK$5,000. Due to the fact that my current salary is insufficient to cover the abovementioned expenses, I had no choice but to borrow money from banks and friends during the period from 2012 to 2017”. 43.The Wife also explained that she had liabilities of legal fees under legal aid and private lawyers in millions of dollars, and other bank loans and debts owed to friends and family, which will be considered further in subsequent paragraphs. 44.The Wife is of the view that the Husband has the financial ability to meet her open proposal, which will be explained below, because of his earning capacity. She is also of the view that there is non-disclosure of income and financial resources of the Husband. Besides, it is the Wife’s position that from the sale of the 3 properties, which is one of the main issues for the s.17 application (refer to paragraph 20(d) above), there is a sum of about HK$3.4 million missing (“HK$3.4 Million”), and the Husband also has non-disclosed assets from the cash he obtained from the re-mortgage of the Former Matrimonial Home. 45.The Wife’s open proposal is as follows :-
46.The Wife revised her open proposal after the Husband has finished giving evidence, including the following :-
47.Both the open proposal and the revised proposal are not agreeable to the Husband. 48.During Closing Submissions, the Wife changed her position again. The difference from the revised proposal is that she asked the Husband to pay her nominal maintenance, instead of clean break between the parties, which the Husband opposed. 49.The jurisdiction of the Court in granting financial provisions for a spouse and for children of the family is governed by sections 4 and 5 of the Matrimonial Proceedings and Property Ordinance, Cap. 192 (“MPPO”). Pursuant to sections 6 and 6A of MPPO, the Court also has the power to grant orders for transfer, settlement or sale of properties. 50.In deciding on ancillary relief claims between the parties to the marriage, the court is required by section 7(1) of MPPO to have regard to the conduct of the parties and all the circumstances of the case including the following matters :-
51.In relation to financial provisions for children, section 7(2) of MPPO provides that the Court should have regard to all the circumstances of the case including a number of matters stated in sub-paragraphs (a) to (e) therein. 52.In the case of LKW v DD [2010] 13 HKCFAR 537, the Court of Final Appeal has provided 4 principles as to how section 7 shall be approached, which are stated as follows :-
53.The Court of Final Appeal has further laid down the following 5 steps as to how the Court should exercise the discretion when considering section 7 as follows :-
(a) Issues not in dispute 54.As at the date of the ancillary relief trial, the parties had agreed the following issues not in dispute :-
55.However, during the stage of closing submissions, the Husband had revised his position and stated that the exchange rate of RMB and HKD should be revised. The Wife also changed her position and asked for a nominal maintenance, instead of a clean break between the spouse. (b) Issues in dispute 56.The parties had identified different issues in dispute. The Wife submitted that the issues she identified were explained in her open proposal and opening submissions. To summarise, the issues identified by the Wife include whether the Former Matrimonial Home should be transferred to her, the amount of periodical payments the Husband should pay and the amount of lump sum the Husband should pay to her. She also asks the Court to take into account the whereabouts of the HK$3.4 Million and the amount the Husband had concealed in relation to his income and assets. 57.For the Husband, he had submitted a list of 27 issues in dispute for the court’s consideration. Items 1 to 17 therein involve mainly of legal costs of the parties incurred and the court’s treatment of those legal costs incurred. Other items identified by the Husband involve the assets, liabilities, income and expenses of the parties and also whether the Former Matrimonial Home should be sold. The Husband further submits that if the Former Matrimonial Home is to be sold, the Court should take into account the China Tax that he has to pay when it is sold and make adjustment accordingly. 58.After consideration of the parties’ submissions and evidence of this case, I am of the view that the issues in dispute include the following :-
59.The above issues in dispute will be considered and determined when I go through the different steps below. Step 1: The identification of assets and to ascertain the financial resources of the parties 60.To ascertain the financial resources of the parties as at the date of the hearing, the court must have regard to “the income, earning capacity, property and other financial resources” which each of the parties “has or is likely to have in the foreseeable future”, as stated in s. 7(1)(a) of MPPO. 61.In relation to assets, the only valuable assets not in dispute is the Former Matrimonial Home, which the parties have agreed the net value is HK$11,417,303 as at the date of this trial. Apart from that, there are some other assets such as bank balance, MPF, insurance and stock which will be explained below. 62.I will consider the financial circumstances of the Husband and of the Wife respectively, in which there are sub-issues that I will consider :-
(A) The financial circumstances of the Husband 63.The background of the Husband can be referred to in paragraphs 28 to 36 above. With reference to his Updated Form E and his further updates, apart from his share of the Former Matrimonial Home, he has other assets including bank balance of about HK$12,495 and monetary provident fund (“MPF”) of about HK$591,205, making a total of about HK$603,700. 64.According to the Husband’s Updated Form E, he had liabilities in the total sum of HK$3,447,807, which include the biggest portion of borrowings from his family (HK$2,478,698 from his parents and HK$80,000 from his grandfather). 65.The Husband provided updates as to his liabilities, which is summarised in a table, with the total amount of liabilities up to a total of HK$5,258,987, as shown in his table on page 24 of his Closing Submissions, out of which the amount of loans from his parents had increased from HK$2,478,698 to HK$3,862,941. When giving evidence, the Husband further demonstrated the calculation of an additional loan from his parents for an additional sum of HK$446,001(shown in Exhibit “P-8”). These might be related to possible financial resources, which will be considered in the next section. Further consideration of the liabilities and legal costs incurred will be discussed in subsequent paragraphs. Income, earning capacity and financial resources of the Husband 66.The Husband is an actuary by occupation. He has been working in the mainland since about 2011 and he has also obtained the licence to work as an actuary in the mainland. At the time of the commencement of the trial, the Husband was about to complete the employment contract and would be out of job, as he would have completed his employment contract for 2 years commencing from about February 2017 and will have no income. I had expressed my observation that given the Husband’s qualification and previous work experience, there is no doubt he could find another job soon and he has much earning capacity, which was agreed by the Husband. 67.With reference to the previous work and income of the Husband, he had been working for the company “KM” in Beijing, earning a monthly income of about RMB45,000, plus bonus to be received which amounts to about RMB45,000 per month in average. The Husband submitted that he has earning capacity of about HK$90,400. I have also considered the Husband’s present and past work and income. 68.The Wife disputed about the income and earning capacity of the Husband. She is of the view that the Husband had not disclosed fully the income and allowance he had received from his employer. 69.I have considered the cross-examination and the Husband’s answers, I accept that the Husband had disclosed his income and had provided supporting documents. 70.However, I have doubt as to the financial difficulties of the Husband as alleged. This is especially so in relation to the insurance the Husband explained that he had bought for the Children with the premium of HK$600,000 required to be paid. 71.About financial resources of the Husband, according to the Husband, he has loans owed to his parents in the updated sum of HK$4,308,942 (HK$3,862,941 + HK$446,001). The Wife disputed. She is of the view that there has been no deficit of the Husband at all and he had been lying all along in relation to all these loans and debts. During cross-examination, she also questioned whether the Husband’s parents had the financial ability to lend that much money to the Husband. 72.I have considered the cross-examination and the explanation carefully. I have also considered the background of this case, including the Judgment for the s. 17 application dated 31 December 2015. With reference to paragraphs 24 to 27 therein, the Court had ruled that 4 out of 17 items applied by the Wife had been allowed by the Court to be set aside, in the total sum of HK$3,800,000 (HK$1,000,000, HK$800,000, HK$1,000,000 and HK$1,000,000 for the 4 items respectively). The Court accepted that a total sum of HK$3.55 million had been transferred by the 2nd Intervener (ie. the Husband’s mother) to the Husband, with details as follows :-
and therefore only a sum of HK$250,000 was ordered to be transferred by the 2nd Intervener to the Husband. 73.The Husband further explained that his parents had further lend him several million dollars. 74.If the Husband has been telling the truth about the borrowing from his parents, that a total sum of about HK$4.3 million had been borrowed from his parents, his parents are clearly one of his financial resources that the Court cannot ignore and the loans are likely to be soft loans which may not need to be repaid, or repaid in full. 75.I have considered the background of the case, including the numerous applications and hearings, and the legal costs the parties had spent throughout these years. I accept that the Husband had borrowed money from his parents, but some, if not all the amounts could be regarded as soft loans, with no evidence of the repayment terms and period. Interests had also been included in the loans. 76.Before going to the following sub-issues of whether some amounts should be added back to the matrimonial asset pot, I have considered the legal principle as set out by the Court of Appeal in ARAV v VP [2011] 3 HKLRD 759, where “such conduct must be taken into account because a spouse cannot be allowed to fritter away the assets by extravagant living or reckless speculation and then to claim as great a share of what was left as he would have been entitled to if he had behaved reasonably." Whether the sum of HK$3.4 Million should be added back 77.In relation to whether the sum of HK$3.4 Million as ruled in the Judgment s. 17 should be added back in the matrimonial asset pot, I have considered the background of the case. It is not in dispute that there was a period of time when the Husband resided and worked in Shanghai, with the 2 Children also residing in Shanghai before the custody matter of the Children were ruled. The Wife had stopped working and had gone to Shanghai to take care of the Children. It was a period of time that the Husband had to maintain 2 households in Shanghai and also pay for the mortgage of the Former Matrimonial Home in Hong Kong. Therefore, the Husband had to maintain 3 households. 78.I have considered the Judgment of Deputy District Judge Yim dated 7 March 2013 ruling on the Wife’s application for variation of maintenance pending suit and legal cost contribution. Deputy Judge Yim had ruled, in particular paragraph 42 therein, that given the fact the Husband had to maintain 3 households, the Court accepted that he has been drawing on capital to meet the shortfall. It was at a time when the HK$3.4 Million had already been transferred back to the Husband (details see paragraph 72 above). Considering the background of the case, I am of the view that the HK$3.55 million had been used up for family expenses and possibly partially in paying of legal costs. Therefore, I do not agree that the HK$3.4 Million should be added back in the matrimonial asset pot as the Wife alleged. 79.In relation to how legal costs are to be considered and treated by the Court, I will further consider in subsequent paragraphs. Whether the amount of re-finance the Husband obtained should be added back 80.It is not in dispute that the Husband had obtained re-finance of the Former Matrimonial Home during marriage, and he had obtained sums of money. It is the Wife’s evidence that the Husband had obtained the re-finance without the Wife’s knowledge and he had spent the money and therefore the amount he had obtained should be added back. 81.The Husband agreed that he was the one applied for and obtained some cash from the re-finance, however, the Wife was well aware of such applications, as she is one of the joint owners and she signed on the documents, consenting to and being made aware of the applications. Under cross-examination, the Wife agreed that she was aware of the re-finance and the reason was that there was lower interest rate, but at the same time, the Husband had cashed out some money from the re-finance. With the documents supplied by the Wife, I accept that there were 2 re-finance with the re-finance amounts of HK$2.24 million and HK$2.464 million in 2005 and 2007 respectively. The Husband explained that the re-finance amounts have to be used to pay off the existing mortgage first, and there was a sum given to the Husband. 82.Considering the background of the case, as the re-finance was applied in 2005 and 2007, way before the parties’ relationship has turned sour, I am of the view that the money had been genuinely used, not concealed, by the Husband, and possibly to invest in properties and had already been reflected in parties’ financial circumstances, possibly in the amount he got from the sale of the 3 properties involved in the s.17 application which the Court has considered already. 83.As I am of the view that the money from the re-finance was obtained many years ago and had been absorbed and reflected in parties’ respective financial circumstances, the amount of re-finance should not be added back to the matrimonial asset pot. Whether the 1 million obtained from MPF should be added back 84.According to the Husband’s Updated Form E, he has MPF in the sum of HK$492,124. The Wife pointed out that in 2011, the Husband has MPF of HK$1,041,763 as shown in a statement dated 1 May 2011. According to the Husband, his then MPF included voluntary contribution, which he had withdrawn before he went to Shanghai. The Wife is of the view that the amount of MPF withdrawn (“HK$1 Million”) should be added back. 85.The Husband disagreed. He is of the view that as the amount had already been withdrawn earlier and had been spent on family expenses and legal costs, the sum should not be added back. 86.I notice the amount was withdrawn in 2011, and eventually there was a period of time the Husband had to maintain 3 households. I accept that the money had been spent and there is no evidence that the amount was wantonly or recklessly frittered away. I am of the view that the amount should not be added back. (B) The financial circumstances of the Wife 87.The background of the Wife can be referred to in paragraphs 38 to 44 above. With reference to her Updated Form E, apart from her share of the Former Matrimonial Home, she has other assets including bank balance of about HK$10,344, MPF of about HK$269,312 and stock of HK$12,650, making it a total sum of HK$292,306. Liabilities of the Wife incurred 88.According to the Wife’s Updated Form E, she has liabilities, including legal costs, in the total sum of about HK$9,437,180, with the breakdown including the following :-
89.During trial, the Wife further updates and clarifies her liabilities. But her evidence was not clear and the numbers do not add up and the Wife was asked to summarised her position with page reference of the supporting documents in her Closing Submissions. 90.The Wife provided a table “Figure 4: Respondent’s liabilities from personal loan, bank loan and legal costs” under paragraph 20 of her Closing Submissions, which include the items with dates as follows :-
91.I have to point out that the Wife had not clearly presented her financial circumstances, especially in relation to liabilities and the legal costs involved. As summarised in Figure 4 as shown above, for items (f) and (i), the Court was referred to list of assets and liabilities for FDR and the Wife’s statement of issue for FDR. I have to emphasise that I will disregard any without prejudice information when I consider this trial. Further, the numbers from the Wife’s evidence does not add up. There are overlaps of (f) private legal fee and (i) legal costs outstanding. From my understanding of the Wife’s evidence, especially her summary in paragraphs 32 to 36 of her Closing Submissions, her liabilities, which include legal costs unpaid, include the following :-
92.The legal costs of the Wife will be further considered in paragraph 121 below. Income, earning capacity and financial resources of the Wife 93.The Wife is an actuary by occupation. At the time of the commencement of the trial, the Wife has been working in a company as an actuarial manager with a monthly salary of HK$62,515 in average. 94.In relation to the Wife’s earning capacity, the Husband is of the view that as the Wife is now taking the final subject of the examination of professional fellowship qualification, she could soon get a higher salary. It is the Husband’s case that after the Wife had passed the final subject, she would be having similar earning capacity as the Husband. The Husband submitted in the Closing Submissions that “[Husband] & [Wife] were both graduate from actuarial science program. [Husband] & [Wife] earning similar income upon graduation. The difference in income later could be attributed to [Husband]’s early China strategy while entering China actuarial field in early days during China’s emerging phase of development.” 95.In relation to earning capacity, while it is not in dispute that the Wife could expect a raise in salary after she passed the final subject of the professional examination, I do not agree that the parties have similar earning capacity. Given the background of this case, there were period of time the Wife stopped working when she was pregnant with the twin daughters until they enter kindergarten. In 2012, when the Husband took the 2 Children to Shanghai, the Wife flew to Shanghai to take care of the Children and stopped working again, until she was granted the care and control of the 2 Children, brought them back to Hong Kong in 2013 and resumed working in about December 2014. The Husband had been working continuously as an actuary, except with brief period of time of being unemployed and looking for another job. The Husband had passed all professional qualification examinations much earlier than the Wife, and had much work experience in the industry. I am of the view that the Husband has higher earning capacity than the Wife. 96.About the financial resources of the Wife, she has loan from her family and friends in the total sum of about HK$2.5 million, which could be regarded as her ability to borrow and assistance from family and friends. Comparing that of the Husband, clearly the Wife has weaker financial resources than the Husband, in terms of her ability to borrow from family or friends. Also revealed from the evidence as shown in previous judgments, there were 3 properties in Hong Kong bought and sold in the Husband’s name back in 2007 and 2009. Matters in relation to the 3 properties had been dealt with in the Judgment for s.17 application. From the facts as shown in the Judgment, I accept that the Husband’s ability to invest to make money is much greater than the Wife. 97.The Husband had suggested that there were properties owned by the Wife’s parents, which the Wife might have contributed to some amounts, and the Wife’s parents could be the Wife’s financial resources. After consideration of evidence before me, I am of the view that these allegations by the Husband are only bare allegations. From the evidence, the amounts the Wife had borrowed from her family is relatively minimal, compared to other debts of hers. (C) Whether there is full and frank disclosure of the parties 98.There is allegation from both the Husband and the Wife that the other side had not made full and frank disclosure, and they attack each other’s credibility. 99.The Wife also alleges that the Husband has non-disclosed income and assets. I will analyse the parties’ evidence as a whole and consider their credibility. 100.It is the Husband’s case that the Wife had not disclosed fully and frankly her finance, which include mainly the following areas :-
101.About (a), the Husband explained that from July 2011 to June 2012, there are amounts ranging from HK$41,300 to HK$100,000 each month of withdrawal, added up to a total sum of HK$616,590. As 2 months of bank statements during that period had been missing, the Husband calculated that in average HK$61,659 had been withdrawn each month times 12 months, making it a total of about HK$740,000 withdrawn by the Wife in cash without receipt or documents showing where the Wife had spent the money on. 102.I notice that it was during the period of time before the Husband petitioned for divorce in June 2012. With the work and income of the parties, I am of the view that they had been living a comfortable life. It is not unreasonable for the Wife to spend in the way she had chosen, even including giving money to her parents more generously. 103.It was the Husband who petitioned for divorce. With the evidence before me, I do not form the view that the Wife had plans to conceal money back in 2011 and 2012. The amounts should not be added back in the matrimonial pot of assets. 104.About (b), the Husband is of the view that the Wife could not provide sufficient evidence of the liabilities and legal costs incurred. He also questioned the genuineness and reasonableness of the amounts as alleged by the Wife. While it is true that the Wife had not produced all the supporting documents for all her liabilities and costs incurred and while I also observed in earlier paragraphs about the evidence of the Wife’s liabilities, I do notice the practical difficult in view of the background of this case, which started in 2012, and with all the previous hearings and change of circumstances as time goes, it is impractical, if not impossible, for the Wife to provide each and every single piece of supporting documents, whether for liabilities or legal costs. 105.I am of the view that it is likewise for the Husband. Even with the evidence of the Husbands, it is not practicable for him to prove, with supporting documents, how each and every single dollar of expense was incurred, and how much or in what proportion the loans he borrowed was spend on legal costs and on family expenses. 106.In relation to the loan owed to Mr. Tam, the Wife submitted that the Husband had indicated in the Pre-Trial Review Hearing that he did not dispute the related loan of about HK$2 million, and that was the reason why the Wife had not included all the supporting documents, but she had included explanation and some documents in support in the earlier affirmations filed into the Court, and the Husband did not ask for discovery to follow up. In the circumstances, it would be unfair to criticise the Wife of not providing all the supporting documents during trial. 107.Further, from the earlier judgments, it is observed and ruled that both parties had spent much on legal costs, with each spending several millions of dollars, and it is accepted that both had incurred liabilities from family expenses and legal costs, also in several millions of dollars. After consideration of the evidence as a whole, I do not form the view that the Wife is lying about her liabilities and legal costs incurred, but I do have reservation as to the accuracy of the amounts involved. 108.It is the Wife’s case that the Husband had not disclosed fully and frankly his financial circumstances. She is of the view that the Husband has been concealing his true income, allowance and subsidies from his employer in the mainland, and he has much money concealed. 109.The Husband denied having concealed any money as alleged. He explained that he had disclosed all his employment contract, including income, allowance from his employer. There may be bonus with amounts not as certain as his basic salary, as the amount involved depending on how the Company was working, which is yet to be paid. 110.As analysed above, I accept that the Husband has provided the relevant documents in relation to his income. However, it is dubious if the Husband is encountering such financial difficulties as he alleges, as he had chosen to further take out insurance for the Children, which he is required to pay HK$600,000. The Husband had explained that he bought the insurance for the benefit of the Children and it was bought when he got his job in Beijing, expecting stable income for at least 2 years during the duration of the employment contract period. There is no doubt that both parties love their Children very much. But this shed light on the finance of the Husband and his confidence of his earning capacity. If the Husband is genuinely facing the financial difficulties as he alleged, I have reservation of whether such insurance policy would be taken out. Court’s view on the evidence of the parties and whether there is full and frank disclosure 111.It is trite to repeat the importance and duty for full and frank disclosure of one’s financial means in any ancillary relief proceedings. This duty is absolute and continuing. As explained in paragraph 73 of LKW v DD (supra) :-
112.After hearing the evidence, I do not form the view that either the Husband or the Wife had been so dishonest or intentionally misleading the Court. I form the view that each of them had been trying their best to present the evidence and their respective case to the Court. But at the same time, I do have reservation as to the accuracy of their evidence. 113.I observe that both are well educated and each is an actuary by occupation, earning or capable of earning a comfortable level of income. Without disrespect to the Wife, I observe that the Husband is more intellectual, higher in articulate ability and well organized, which could be evidenced partly by the way the Husband organized and present the tables and different scenarios in each of his over 100 pages of opening and closing submissions, and with the detailed analysis therein. The Husband’s insight to choose to develop in the mainland market and having obtained the license to be an actuary there, together with the Husband’s ability to make money in investment, including in investing in properties (as shown from the facts in the Judgment of the s. 17 application). 114.Even if I do not rule that they had been dishonest or intentionally misleading the Court, I do express my concern of the Husband’s financial resources available to him, in view of this buying of insurance as explained above. 115.I also observe that both parties have been emphasizing skillfully their strong points, and sometimes even either intentionally or subconsciously exaggerating their own difficulties, and at the same time refusing to consider the difficulties the other side is suffering. I do have reservation in the accuracy of some of the aspects of their evidence, of whether they have disclosing the full picture of their finance fully and frankly, and how much weight I should put on their evidence. 116.Considering all the evidence as a whole, I am not of the view that there is non-disclosure of income and assets of the Husband or the Wife that should be added back. But at the same time, I have reservation as to the accuracy of their evidence, especially in relation to their reasonable expenses and how much they had exaggerated or inflated the liabilities and costs incurred. Whether the legal costs of the parties should be considered and deducted from the matrimonial asset pot 117.The Husband had included in items 1 to 17 of his Statement of issues in dispute various aspects of how legal costs of him and of the Wife in the previous orders should be treated and how much legal costs had been involved. 118.I can see the Husband’s concern, but I do not agree that I should approach the legal costs in the way the Husband had proposed. I am of the view that it is practically impossible to do a post-mortem of how each and every single dollar had been spent in the past, and how much had been spent on legal costs. It is not the duty of the Court to do such futile minute investigation at ancillary relief trial. 119.I will only consider the legal costs that are relevant for my consideration for ancillary relief issues. But I also notice that in this case, the issue of legal costs is intertwined with the liabilities of the parties, as both parties had alleged that they had borrowed money in the past to pay for legal costs and therefore liabilities had been incurred and accumulated. Therefore, it is not a simple yes or no of whether legal costs should be deducted from the matrimonial asset pot. But I will consider the legal costs incurred in my analysis. 120.Therefore, I will take a practical approach in the consideration of these legal costs and liabilities of the parties. As the evidence now stands before me, it is the Husband’s case that he had spent about HK$4.2 million on legal costs, which had been paid to the solicitors already. The Husband had provided a breakdown of his legal costs incurred in exhibit “P1”. 121.For the Wife, it is her case that she had incurred private legal costs and legal aid costs. For private legal aid costs of about HK$5 million (though in Figure 4 in her Closing Submissions, it was only HK$4,812,740), of which about HK$2.5 million had been repaid through loans borrowed from bank, family and friends, with about HK$2.5 million unpaid yet. In relation to legal aid costs, that had not been paid yet, which the Wife stated the amount is HK$4,414,959 when she filed her Updated Form E and at the time she had already started acted in person. During her evidence, she confirmed that she was told a lower amount of costs had been incurred, and she estimated the legal aid costs to be about HK$3.5 million. 122.According to the Husband, if the legal costs are to be taken into account, together with the parties’ liabilities, the family’s finance is in deficit. But the Husband also submits that not all the legal costs alleged by the Wife is substantiated by documents. Moreover, the legal costs incurred with the Legal Aid costs are estimated costs, not costs already taxed, and when the Wife gave evidence, she said that the Legal Aid costs was estimated to be only HK$3.5 million, which after taxation should be much less than that. The Husband also submitted that some of the legal costs of the Wife had been unreasonably incurred, which should not be considered as family expenses. 123.It should also be noted that there is the practical difficulty that before the ancillary relief trial ends, taxation cannot be commenced, and there is no way to know the exact amount of costs taxed. This is the same for all family cases. The Court could only consider and make analysis based on the evidence before the Court. 124.With the background of the case, and by considering the evidence before me, I am of the view that the Wife had honestly represented the amounts of costs incurred, but it is also correctly pointed out by the Husband that the legal aid costs are estimated costs, and if not agreed, they are to be taxed. For taxation, the costs will generally be taxed down to a certain extent. I accept that the Legal Aid costs would not be as high as the Wife alleged. 125.I should point out that in ancillary relief trial, there is no absolute equality in the amount of lawyer’s expenses spent by each of the parties. It is neither fair nor practical in the real world to expect the lawyer’s expenses are the same. However, a huge difference in the amount of legal costs incurred between the parties may have some indication on the reasonableness and even genuineness of such costs incurred. But this has to be balanced with a number of considerations, such as the nature and complexity of the actual hearing, the experience and fees charged of the legal representative etc. In this case, I have not lost sight of some of the costs orders given in previous judgments. What is the total value of the matrimonial assets 126.With the aforesaid, the total value of the matrimonial assets is HK$12,313,309 (net value of Former Matrimonial Home of HK$11,417,303 + Husband’s other assets of HK$603,700 referring to paragraph 63 above + Wife’s other assets of HK$292,306 referring to paragraph 87 above). 127.The net assets, with liabilities of the parties including some of the costs issues taken into account, will be considered after Step 2, when I consider whether in this case the assets are sufficient to satisfy the needs and to move on to other steps for consideration. 128.At this stage, with the evidence presented by the parties, with the parties’ liabilities including some costs unpaid and some costs included when the loans were borrowed, it seems that the whole value of the Former Matrimonial Home has to be utilised to satisfy parties’ needs and to pay off for liabilities. 129.It should be noted for parties’ liabilities, they include costs paid and costs yet to be paid. If those legal costs, especially the Wife’s legal aid costs, are not to be considered and deducted from the matrimonial assets, there may still be some value of the matrimonial assets left over for the parties to be distributed between them. 130.But it should be noted that even if those costs are not considered under Step 1 as liabilities to be deducted from the value of the matrimonial assets, they have to be considered as financial obligations under Step 2, which the Court cannot ignore and I will consider below. Step 2: Financial needs of the parties and of the Children 131.With reference to paragraphs 77 to 79 of the case LKW v DD, the process of evaluating “needs” involves assessing the financial needs, obligations and responsibilities which each of the parties has or is likely to have in the foreseeable future in the light of present and foreseeable resources. 132.The parties’ needs should be “generously interpreted”. However, it has to be practicable in the circumstances. While on one hand the Court will try to ensure that each party and their children have enough to supply their needs set at a level that equates, in so far as resources allow, to the standard of living they enjoyed during the marriage, there should be flexibility in the light of all the relevant circumstances, especially whether it is practicable to do so with the parties’ resources available. (a) Financial needs of the Husband and of the Children 133.The Husband now lives in Beijing with his girlfriend, living in a rented unit. According to the Husband’s evidence, he has to support his girlfriend and the girlfriend’s mother financially, as he stated in his Updated Form E that there is an item of expense of HK$5,000 for them per month. It is the Husband’s case that his girlfriend is not working, as she needs to take care of her mother who is not in good health. 134.The financial needs of the Father are stated in his Updated Form E, with some updates in his evidence in Court. It is the Father’s case that the total monthly expenses are about HK$98,107, with the amount converted from RMB to Hong Kong dollars (with general expenses of HK$31,302 + personal expenses of HK$31,315 + children expenses of HK$35,490), with breakdown as follows :- General expenses
Personal expenses
Children expenses
135.In relation to the Husband’s expenses, the Wife agrees that reasonable amounts have to be spent on general and personal expenses, and to spend on Children as well. However, the Wife is of the view that some of the expenses had been exaggerated, such as food, household expenses and transport etc. The Wife is of the view that the price index in Beijing is not as high as alleged by the Husband and he does not need to spend that much as alleged. 136.Before I go through the disputed items, I have to make it clear that for the consideration of reasonable expenses, I have to consider what is reasonable in the circumstances, with the background of the case and the standard of living of the parties. It is not the case that all the expenses with documentary proof will be allowed automatically. Having spent the amounts with documentary proof does not mean the items and amounts have been proved to be reasonable and should be allowed. Equally, it is not the case that those expenses without documentary proof will not be allowed. The Court has to consider whether the items and amounts are reasonable in the circumstances, with documentary proof useful only for the court’s consideration and reference. 137.Under general expenses, the Wife disputes food and household expenses. For household expenses, I am of the view that HK$2,220 is excessive. I rule that HK$1,500 is reasonable, the same amount as for the Wife. 138.For food, the Wife is of the view that the amount the Husband asks for is excessive, as the Husband is asking for “food” under general expenses for HK$3,996, “meals out of home” and “costs of meal with parents and family” under personal expenses of HK$2,775 and HK$2,500 respectively, and “food” under children’s expenses of HK$2,000. The Wife is of the view that these items should be HK$1,000, HK$1,500, zero and HK$900 respectively. I have considered the circumstances of the case, I am of the view that costs of meal with parents and family should not be included, as the Wife submitted that she had not included that in her expenses. For dependent family members of HK$5,000, the Husband has agreed not to include. 139.For the general expenses and personal expenses, I agree with the Wife’s observation that there is room for reduction. I rule that for food under general expenses, the reasonable amount is HK$3,000. 140.Under personal expenses, I am of the view that HK$2,000 for meals out of home is reasonable. For transport under personal expenses, I am of the view that 1,000 is reasonable. 141.Under Children expenses, the Wife is of the view that a number of items and the amounts had been exaggerated, including food, clothing / shoes, entertainment / presents, the Husband’s and the Children’s tickets to Hong Kong and transport to airport. I have considered the Wife’s cross-examination and the Husband’s answer, evidence, reasons and documents for these items. While I understand that the Husband resides in Beijing, and has to fly to Hong Kong for access, I am of the view that HK$35,490 is excessive. I have not lost sight of the amount of days the Husband is allowed to have access with the Children, but I also have to be practical in the circumstances. I allow HK$1,000 for food, HK$500 for clothing / shoes, HK$500 for entertainment / presents. 142.In relation to other items under Children expenses, I notice that much expenses had been incurred, which are related to access of the Children. While I had not lost sight of the need to have access of the Children and the physical distance between the Husband and the Children, I am of the view that the amounts of some of the items claimed is excessive. In view of the circumstances of the case and having considered the submissions and evidence, I rule HK$9,000 for the Husband’s ticket to Hong Kong, HK$3,758 for the kids tickets to Beijing, HK$3,758 for the long holiday accompany person, HK$1,000 for transport to airport, HK$200 for lunches and pocket money, HK$500 for other transport and HK$200 for others. 143.After consideration of the submissions, evidence and the documents in support, I rule that general expenses of the Husband be in the sum of HK$29,586, personal expenses be in the sum of HK$8,500 (without taking into account any maintenance to be paid yet) and children expenses be in the sum of HK$28,616, with a total of about HK$66,702. (b) Financial needs of the Wife and of the Children 144.The Wife and the 2 Children have been living at the Former Matrimonial Home with a domestic helper. The Wife’s mother also lives there. The Wife used to take care of her parents financially. 145.With reference to the Mother’s Updated Form E and her 24th Affirmation, the total monthly expenses are HK$70,460 (with general expenses of HK$45,660 + personal expenses of HK$12,600 + children expenses of HK$12,200), with breakdown as follows :- General expenses
Personal expenses
Children expenses
146.It is the Mother’s case that she needs an additional sum of about HK$20,000 per month for repayment of legal fees, which should be added to her household expenses, making the total expenses to HK$90,460 (HK$70,460 + HK$20,000). 147.In relation to the Mother’s expenses, the Father agrees to most of the items. He is of the view that there is room to reduce the Wife’s personal expenses, including living expenses for her parents and others. For living expenses for the Wife’s parents, while acknowledging that being filial to parents is a virtue, in ancillary relief trial, when considering the reasonable expenses, I do not agree to include the item of living expenses for her parents, but I acknowledge that it is financial obligation of the Wife, especially when she has the financial ability to pay for such item and amount. 148.For other expenses under the personal items, including self-education, music learning costs and charity in the total sum of HK$2,500 (ie. HK$500 + HK$2,000), I allow that some amounts for self-education may be included and I allow the inclusion of some expenses on music learning, but I disallow the charity to be included here. Under this head of others, I allow a total of HK$1,500. 149.The Husband also disputed extra-curricular activities. He is of the view that the amount of HK$4,500 is reasonable as a whole, but as he gets almost half of the non-school day time for access, the reasonable apportionment should be HK$3,000 for the Wife and HK$1,500 for the Husband. Considering the circumstances of the Children, their age, their need and the standard of living, I am of the view that HK$4,000 is allowed. Although the Husband has almost half of the holiday access time, I am of the view that it is not unreasonable for the Wife, being the main carer, to pay for more, if not most of the expenses for extra-curricular activities. 150.The Husband also submitted that the bank loan repayment of HK$18,160 and the newly added legal costs of HK$20,000 should not be included. 151.In general, the Husband is of the view that with the Wife’s present income, it is sufficient for her to meet the expenses, if she does not have to pay for the repayments for loan and costs. 152.After consideration of the evidence and the documents in support without taking into account the bank loan repayment and the legal costs, I rule that the reasonable household expenses are HK$27,500, the personal expenses of HK$6,600 and Children expenses of HK$11,700, making it a total sum of HK$45,800. 153.I notice that there are expected increased expenses in future for both the Husband and the Wife, which I have considered. But I have to point out that while one household split into two, parties have to expect some compromise and future expenses to increase will be considered and balanced with the income and financial resources of the parties. 154.But there is one future expense that the Court cannot ignore is the accommodation expenses if the Former Matrimonial Home is to be sold and the Wife and the Children have to rent a place to stay. If that is the case, I am of the view that the existing amount of HK$11,600 for mortgage payment and HK$1,300 management fees could not cover finding an alternative place for them. The Wife had submitted that much more expenses will be incurred, but the Husband is of the view that they could move to a smaller flat of 2 bedrooms, with the rent much lower than property of 3 bedrooms. I am of the view that an additional HK$5,000 to HK$7,000 is expected to be incurred, with some expenses of moving and buying of furniture expected as well. Steps 3 and 4: whether to apply the sharing principle and whether there are good reasons to depart from the principle of equal sharing 155.As stated in paragraph 80 of the case LKW v DD, if surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the Court to apply the sharing principle to the parties’ total assets, leaving the “needs” question previously considered to be dealt with under that principle. However, if there is no surplus of assets, the Court should consider the outcome in view of the needs of the parties. 156.I have considered under Step 1 the matrimonial assets. Without taking into account the liabilities and costs of the parties, the total matrimonial assets amount to HK$12,313,309 (details see paragraph 126 above). 157.As explained in paragraphs 128 to 130 above, after taking into account the liabilities and costs of the parties, I am of the view that no surplus assets would remain after the parties’ needs have been catered for. 158.Even if the liabilities and costs of the parties are not to be included in and deducted from the total matrimonial assets, they are to be considered as the financial obligations of the parties, which the Court cannot ignore. This is especially the case when the Court consider the Husband’s proposal asking for the sale of the Former Matrimonial Home, in which case distribution of the Wife’s share will be subject to Legal Aid first charge. 159.As I am of the view that there would be no surplus assets, I will now consider the needs of the parties along with other factors, and move to Step 5, the outcome of the case. Although there is no need to technically move to Step 4, the legal principles of Step 4 of whether there are good reasons to depart from the principle of equal division will be considered below, when I consider whether or not the Former Matrimonial Home should be sold and if yes, how should the sale proceeds be distributed. 160.To consider the outcome of this trial and what ancillary relief orders to make, the first issue to decide is what order(s) to make in relation to the Former Matrimonial Home, whether to order to sell it, as suggested by the Husband, or allow the Wife and the Children to continue residing in it, as suggested by the Wife. 161.I remind myself to consider all relevant circumstances of the case, including s. 7(1) and s. 7(2) of MPPO, and when considering the different factors therein, there is discretion of the court to give different weights for different factors, with the aim to reach a final fair result. 162.In considering whether or not to order to sell the Former Matrimonial Home, I have considered parties’ submissions and evidence of the case. The Wife is of the view that the Former Matrimonial Home should not be sold, mainly for the following reasons :-
163.Apart from asking the Court not to order selling the Former Matrimonial Home, the Wife is in fact asking the Court to transfer the Husband’s half share of it to her and she also asks for a lump sum of about HK$4.6 million, which she later revised to HK$1 million, to be paid by the Husband to her, so that she could manage her finance and continue living at the Former Matrimonial Home with the Children. 164.I have considered these reasons submitted by the Wife, together with other reasons why the Former Matrimonial Home should not be sold. I have also considered the Husband’s reasons of why it should be sold. Having considered all the evidence and with my analysis above, I do not think the Wife’s proposals are fair in view of the circumstances and evidence of the case. 165.If the Former Matrimonial Home is not to be sold and the Husband’s half share is to be transferred to the Wife, that means the Husband is not to share anything from the fruit of the most valuable matrimonial asset. I have ruled in paragraph 126 above that the total value of all the matrimonial assets (before deducting or taking into account the liabilities and costs) is HK$12,313,309, with the net value of the Former Matrimonial Home being HK$11,417,303. 166.Considering whether or not the Former Matrimonial Home is to be sold or not, from the Wife’s own evidence and submissions, she knows full well that without selling the Former Matrimonial Home, there is no way that she can maintain her finance at the moment, with the Wife still has liabilities to be paid off, as explained by her. It is her case that her monthly income of HK$62,515 cannot cover the monthly expenses of HK$90,460. 167.It is simply impracticable to allow keeping status quo. The Wife further submits that the Husband should be ordered to pay her a lump sum of HK$4.6 million, or revised to paying her HK$1 million (as in her revised proposals, referring to paragraph 46 above), so that she could pay off some, if not all, of the liabilities and could manage her finance, while living at the Former Matrimonial Home. 168.While it sounds workable for the Wife, the Court has to consider whether it is fair in the circumstances. With the evidence of the case and with my analysis above, even if I am of the view that both parties may have exaggerated their expenses and at the same time undermined their financial resources, and even if I have reservation as to whether the Husband had fully disclosed his financial resources in the full picture in view of the insurance he had bought with the amount of premium of HK$600,000 in total (with about HK$200,000 premium yet to be paid), I am not of the view that the Husband has concealed assets as alleged to be added back. The evidence of the case simply does not support the Wife’s request for having the entirety of the whole value of the Former Matrimonial Home and with the Husband giving her either HK$4.6 million or just HK$1 million. 169.As a result, I am of the view that it is not practical and not fair to both parties not to sell the Former Matrimonial Home. While I have considered all the circumstances of the case, especially the background, the emotional reasons and the hope of the Wife that she and the Children could continue living at the Former Matrimonial Home, which is their home since the birth of the twin daughters, with the facts of this case, it is simply not sustainable or practicable to keep the Former Matrimonial Home any longer. 170.While it may not be appropriate at an earlier time when the Children were much younger and were just brought back to live in Hong Kong at the time when the Wife had not resumed work yet, the Children are now in secondary school, and they have returned to Hong Kong for a number of years already. The Court has not ignored the accommodation needs of the Wife and the Children. I have to point out that residing at a self-owned flat may be desirable and beneficial to the Children, but it is not a must. They could find alternative accommodation by renting another unit. 171.With the reasons aforesaid, I rule that an order for sale of the Former Matrimonial Home has to be made. The next question is how should the sale proceeds of the Former Matrimonial Home be divided between the parties. 172.The Husband suggests sharing equally between the parties. Although I have ruled that the analysis exercise should stop at Step 3, as I am of the view that no surplus assets would remain after the parties’ needs have been catered for, I have not lost sight of the equal sharing principle and I have considered carefully the Husband’s submissions and analysis in his detailed Opening and Closing Submissions, convincing the Court to order distributing the sale proceeds equally between the parties for reasons of fairness and in view of the circumstances of the case. 173.With the consideration of the evidence, I have to consider the needs of the parties, alongside all other material factors, when considering what orders to make. 174.I have considered parties’ needs under Step 2 above. With the Former Matrimonial Home to be sold, the Wife’s share will be subject to Legal Aid first charge. As explained above, the legal aid costs will be lower than HK$3.5 million after taxation, and I am of the view that it will be about HK$2.8 million after taxation. Taken into account some other payments for private legal costs and other borrowings from family and friends (which I have reservation as to the accuracy and whether they had been exaggerated, a discount has to be considered as to the total amount of liabilities). 175.In view of the needs of the Husband, I have not lost sight of the fact that at the commencement of the trial, the Husband was about to be out of work as he would soon complete his employment contract. But having considered his background and past work experience, I have no doubt that the Husband could soon find another job with similar, if not higher, salary, in view of the increase in experience. The Husband agreed with the Court’s observation in this respect and agreed that he has much earning capacity. I am of the view that the Husband was just in between jobs. 176.In view of the Husband’s needs, leaving aside the Husband’s liabilities, I am of the view that with the level of income he used to earn and is able to earn in future, his expenses could be covered. 177.In view of the Husband’s liabilities, he asks the Court to order equal sharing of the sale proceeds of the Former Matrimonial Home, so that he would have his share to pay off his liabilities and to start afresh. As analysed above, I have reservation as to the Husband’s evidence in relation to the amount of liabilities in the total sum of HK$5.7 million. 178.While I agreed that the Husband had incurred liabilities, as ruled by the judges in previous judgments, I do have reservation as to the level of liabilities incurred since the Husband filed the Updated Form E in July 2017, with the liabilities in the sum of HK$3,447,807 to the sum of HK$5.7 million at the commencement of the trial in January 2019. From July 2017 to January 2019, ie. in 17 months, there is the increase of liabilities from HK$ 3.44 million to HK$5.7 million, I am of the view that the liabilities incurred had been exaggerated. 179.While some consideration and allowance will be made in view of the fact that the Husband is out of work and as shown in the previous judgments, there were some time when the Husband had been out of work, I am of the view that the Husband’s liabilities are exaggerated. I accept the amount of loans owned to banks, which are supported by documents, but I have reservation as to the borrowings from his parents. 180.The Husband explained that because of the strict requirement to borrow loans from the mainland banks, he has to borrow loans from his family and they borrow loans from the banks in turn. The Husband’s parents had not been called to give evidence. On balance of probabilities and in view of all the evidence of this case as a whole, I do not accept that Husband’s liabilities amount to HK$5.7 million now, and a discount as to the amount of liabilities has to be taken into account. 181.In view of the amount of liabilities of the Husband and of the Wife, with my analysis above, I am of the view that the amounts have to be discounted. It is not possible for the Court to rule with accuracy on the exact amount of the liabilities incurred and accumulated, as I am of the view that both had exaggerated their liabilities. 182.Before making the ruling, I have reminded myself to consider all the relevant factors and all the circumstances of the case, and in particular those stated in section s.7(1) and s. 7(2) of MPPO. I have considered the income, earning capacity, property and other financial resources of the parties under Step 1 above. I have considered the financial needs, obligations and responsibilities of the parties in Step 2 above. 183.The parties married in 2000 and the Husband petitioned for divorce in 2012. There are 2 Children born in the wedlock. During the marriage, I accept that the parties have average to comfortable standard of living enjoyed by the parties during marriage. There is no physical or mental disability of the parties or the Children. 184.I now consider the contributions made by the parties to the welfare of the family. I am of the view that both had contributed in different aspects to the welfare of the family. The Husband has always been working, earning a living for the family. The Wife has been a working wife as well, though there were periods of time she stopped working, during the pregnancy period and when the Children were just born, and during the time she was in Shanghai taking care of the Children while parties were fighting for custody of the Children. The Wife also explained that there were amounts she contributed to the renovation of the Former Matrimonial Home. I am of the view that both had contributed in different aspects to the welfare of the family. 185.Before making my ruling, I have also considered the conduct and behaviour of the parties as in their evidence and submitted in their submissions. The parties have various and grave allegations of the conduct and behaviour against each other. To summarise, the Wife’s allegations against the Husband include :-
186.The Husband’s allegations against the Wife include the following, which the Husband had summarised in p. 112 to 116 of his Closing Submissions the different incidents for the Court’s consideration :-
187.I have considered all the allegations between the parties, including mainly the above, and the parties’ answer to these allegations, if any, and all the evidence as a whole. 188.I have to reiterate the 4th principle stated in the case LKW v DD (supra) which is applicable when the court is considering matters about conduct and contribution, as follows :-
189.It is well established legal principle that “conduct” was only relevant to financial provision if it was “obvious and gross”. The court should refrain from permitting parties to indulge in a post mortem of their marriage and to find guilt and blame. 190.Having considered the conduct and behaviour of the parties as alleged and all the evidence as a whole, I am of the view that there is nothing so obvious and gross. I have considered all these before reaching my ruling. 191.I have considered all the evidence, submissions and circumstances of the case, in particular, I take note of the following :-
192.Having considered all the evidence as a whole, I am of the view that it is fair to order sale of the Former Matrimonial Home. After paying of all the relating expenses for the sale of the Former Matrimonial Home, the sale proceeds should be divided in the proportion that the Husband should get 40% while the Wife should get 60%. Reasonable time should be given for the Wife and the Children to find an alternative accommodation after receiving this Judgment. 193.Before reaching the ratio of the distribution of sale proceeds, I have considered the parties’ case carefully, including the equality principle and the needs of the parties, along with all other factors. Given the parties’ respective case of liabilities incurred, even with the proportion of 40% and 60% between the Husband and the Wife, there is a possibility that it may not be sufficient to pay off their liabilities. But with my analysis above, given the fact that the parties’ income is able to cover the expenses, after repayment of the bulk of the liabilities, I am of the view that the remaining liabilities, if any, can be managed by re-arrangement of finance by taking out bank loans or seeking assistance from their family and friends. This is the only way both parties can start a new life after divorce. 194.In relation to the periodical payments between spouses, the parties initially agreed to clean break. At the Closing Submissions, the Wife asked for nominal maintenance from the Husband. 195.With the evidence before me, I accept that both the Husband and Wife have earning capacity and can support their own living. In view of the circumstances and background of this case, starting in 2012, there should be a clean break so that the parties could start afresh. I am of the view that there should not be any periodical payments between the parties. Upon the sale of the Former Matrimonial Home and the distribution of sale proceeds, the parties’ claim for ancillary relief should be dismissed. 196.In relation to the periodical payments for the Children, having considered all the evidence, submissions and circumstances of the case, especially in view of the needs of the parties and the Children, the amount of access time the Husband has, parties’ earning capacity and the ability to pay of the Husband, I am of the view that the Husband do pay a monthly sum of HK$12,000 for the Children, until they reach the age of 18 or each of them completes full time education, whichever is later. 197.With the reasons aforesaid, I make the following orders:
198.Generally, costs should follow the event. In the present case, I am of the view that there are no winning party of the parties’ respective claim for ancillary relief. Given the parties’ having exhausted their financial means in fighting for previous hearings in these proceedings and both of them acts in person for this trial, and having considered parties’ submissions and evidence of this case as a whole, I am of the view that it is fair to order no order as to costs for ancillary relief, including all costs reserved. This is a costs order nisi, which shall be made absolute within 14 days from the date hereof. 199.A section 18 declaration to issue.
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Cases cited in this judgment
Further hearings and rulings under FCMC 17515/2013