Case Document

100%Judiciary

FCMC 15494/2016 & FCMC 11524/2017

[2021] HKFC 119

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

FCMC 15494 of 2016 & FCMC 11524 of 2017

_______________

BETWEEN
	NWSA	Petitioner

	and
	CTYT	Respondent

_______________

Coram: Deputy District Judge Susan Wong in Chambers (Not Open to Public)

Date of Hearing: 10-13 November 2020; 17 November 2020; 16-17 December 2020

Closing Submissions for the Petitioner: 22 January 2021

Closing Submissions for the Respondent: 2 March 2021

Petitioner’s Reply Submissions: 29 March 2021

Respondent’s Further Submissions: 16 April 2021

Petitioner’s Further Reply Submissions: 30 April 2021

Date of Judgment: 17 June 2021

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JUDGMENT

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1.This is the Petitioner Wife’s (W) claim for ancillary relief against the Respondent Husband (H) for herself and the children of the family.

Brief background of the case

2.H was born in 1963 and is now 58. He graduated from the London School of Economics (“LSE”) in 1985 and worked in London for 7 years, during which he was qualified as a chartered accountant. He returned to Hong Kong in 1992.

3.H’s father passed away in 1990 and since then, H has assumed responsibility as head of the household and has taken care of his mother (“H’s Mother”) and his blind and autistic younger brother (“H’s Brother”).

4.Mr Yim representing H submitted that H had a successful career as a fund manager as demonstrated by his increasing remuneration from 1999 to 2006, during which he was employed by an investment company. After he began studying Buddhism, he resigned on 30 June 2006 and pursued a Master’s program in Buddhist Studies at the University of Hong Kong. He has since retired and never returned to employment.

5.W was born in 1977 and is now 43. She also graduated from LSE albeit in 1999, and began developing a career in the finance industry in 2000. W’s last job was a financial analyst with a hedge fund firm but she was made redundant on 26 November 2008, after which she enrolled in a Master’s program in Philosophy at the Chinese University of Hong Kong.

6.The parties were acquainted through work in 2001 and after they left the workforce, they reconnected and began dating in May 2009.

7.The parties were married on 31 August 2009 and 3 boys were born in the wedlock. The eldest one (born in November 2011) has just turned 9 ½ and the two younger boys (born in April 2013) are twins, now aged 8.

8.During the marriage, the parties agreed that;

(i)     Neither of them would return to employment;

(ii)     H would be responsible for generating income for the family by managing their assets and investment portfolios; and

(iii)    W would be a full-time homemaker and caregiver of the children.

9.The parties separated on 1 July 2016 and there is no dispute that the marriage only lasted 6 years and 10 months.

10.By way of a Consent Order dated 24 January 2019, joint custody was granted to both parties with care and control to W and defined access to H.

11.The only outstanding matter is the ancillary relief claim against H for the benefits of W and the 3 children of the family.

Legal Principles Applicable to Ancillary Relief claims

12.There is no dispute that in deciding on ancillary relief claims between the parties to the marriage, the court is required by section 7(1) of Matrimonial Proceedings and Property Ordinance, Cap 192 (MPPO) to have regard to the conduct and all the circumstances of the case including the following matters:

(a) the income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefits (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

13.In the case of LKW v DD [2010] 13 HKCFAR 537, the Court of Final Appeal has provided 4 guiding principles:-

(a) The objective of section 7 exercise is to arrive at a distribution of assets which is fair between the parties.

(b) The concept of fairness requires the refutation of any gender or role discrimination.

(c) In order to eliminate insidious discrimination and promote fairness, judges should check their tentative views of distribution against a “yardstick of equal division” which should be departed from only for good, articulated reasons.

(d) The court should not countenance any attempt to engage in costly and often futile retrospective investigations of the failed marriage which tend to deplete the parties’ (and the courts’) resources and to increase antagonism and discourage settlement.

14.The Court of Final Appeal has laid down 5 steps in determining ancillary relief applications: -

(a) identification of the assets and to ascertain the financial resources of each of the parties calculated as at the date of the hearing;

(b) assessment of the parties’ financial needs;

(c) 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;

(d) considering whether there are good reasons to depart from equal division; and

(e) when deciding the outcome, the court is not bound to depart from equality in the division of the parties’ assets even if one or more of the factors considered are engaged on the facts. The weight to be given to such considerations is a matter of discretion for the court.

15.In the same case, Ribeiro PJ identified six particular factors that might be relevant to the issue of departing from equal sharing. The source of the assets was identified as one of the factors. However, effort and expense should not be wasted in trying to establish a sharp dividing line between what is and what is not matrimonial property (See LKW v DD (supra) at §§87-88). He stated that the existing case-law identified two classes of assets as possible candidates for exclusion on the basis of source (See LKW v DD (supra) at §89):

“The first involves property acquired during the marriage by one of the parties from a source wholly external to the marriage, such as by gift or inheritance. The second involves assets derived from a business or an investment conducted solely by one party (sometimes called ‘unilateral assets’)”.

16.Conduct was also identified as one of the factors. The court is required by s.7 (1) of the MPPO to have regard to the conduct of the parties in exercising its discretionary jurisdiction. However, this does not permit the parties to indulge in a post-mortem of their marriage in order to find fault with each other, or to air their mutual recriminations. Conduct will only be regarded as a material factor if it is “gross and obvious” (See LKW v DD (supra) at §§99 and 104).

17.The third factor identified was financial needs. Such needs may arise from the care of children, an inability to re-enter the job market, or some other particular responsibility.

18.The fourth factor was the duration of the marriage. Where the marriage was short, there is likely to be less call upon each other by the parties. In addition, in short marriages, the court may well be inclined to regard as excludable non-matrimonial property, assets acquired by one of the parties before the marriage or acquired in the course of the marriage from some wholly external source. However, after a long marriage, those factors are likely to have much less weight (See LKW v DD (supra) at §93).

19.The fifth factor was the contribution made by each of the parties to the welfare of the family, including the contribution made by looking after the home or caring for the family. Where the parties to the marriage occupy the traditional roles of breadwinner on the one hand and homemaker or child-carer on the other, their contributions are of a quite different character and are very difficult to assess, particularly in money terms. The argument that a financial contribution was special was dealt with by the judge at §118 in these terms:

“In my view, our courts ought to proceed on the footing that the parties’ respective contributions to the welfare of the marriage are implicitly recognized within the sharing principle itself and that there will, if at all, only be rare and exceptional cases where an issue can properly be raised in favour of departing from equality on the basis of ‘special’ or ‘stellar’ contribution”.

20.The final factor was that of compensation. This factor would take into account issues such as the loss of a benefit, e.g. a pension, which a party to the marriage would lose as a result of the dissolution of the marriage. But it also recognized, and dealt with, disadvantages incurred as a result of the way in which the parties arrange their affairs during the marriage. Thus, the inherent disadvantage in the traditional roles of a husband and wife in the marriage, to the wife, in being able to identify the production of income or assets, might be the subject of compensation.

21.Ribeiro J recognized the risk of double-counting in the application of this factor and gave this guidance at §130:

“Our courts ought to proceed on the footing that compensation for relationship-generated disadvantage is generally already factored in upon any application of the sharing principle. The extent of the compensation allowed for in applying that principle and deciding the extent of any possible departure from an equal division is, in any particular case, a fact specific question which will depend upon the nature, certainty, permanence and other qualities of the disadvantage incurred, viewed in a broad brush way. It will only be in exceptional cases that a separate element of the award over and above the amount already factored in should be dedicated to such compensation on the special facts of the particular case. In such exceptional cases, the court should not attempt to try the issue evidentially or conceptually as if it were a damages claim. A broad brush attribution of some percentage of the award to the element of compensation would generally be sufficient.”

22.As to children’s maintenance, it is governed by s.5 of the MPPO (Cap 192):

5. Financial provision for child of the family in cases of divorce, etc.

(1) Subject to the provisions of section 10, in proceedings for divorce, nullity of marriage or judicial separation, the court may make any one or more of the orders mentioned in subsection (2)—

(a) before or on granting the decree of divorce, of nullity of marriage or of judicial separation, as the case may be, or at any time thereafter;

(b) where any such proceedings are dismissed after the beginning of the trial, either forthwith or within a reasonable period after the dismissal.

(2) The orders referred to in subsection (1) are—

(a) an order that a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments and for such term as may be so specified;

(b) an order that a party to the marriage shall secure to such person as may be so specified for the benefit of such a child, or to such a child, to the satisfaction of the court, such periodical payments and for such term as may be so specified;

(c) an order that a party to the marriage shall pay to such person as may be so specified for the benefit of such a child, or to such a child, such lump sum as may be so specified.

(3) Without prejudice to the generality of subsection (2)(c), an order under this section for the payment of a lump sum to any person for the benefit of a child of the family, or to such a child, may be made for the purpose of enabling any liabilities or expenses reasonably incurred by or for the benefit of that child before the making of an application for an order under this section to be met.

(4) An order under this section for the payment of a lump sum may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court.

(5) While the court has power to make an order in any proceedings by virtue of subsection (1)(a), it may exercise that power from time to time; and where the court makes an order by virtue of subsection (1)(b) in relation to a child it may from time to time make a further order under this section in relation to him.

Step 1 - Identification of family assets

23.Subject to two issues, the followings are regarded by the parties as family assets.

(i) Bank Accounts

24.It is agreed that shortly before or during the marriage, H transferred bank accounts in his sole name containing balances totalling approximately HK$12-15 million to the joint names of W and himself (“Joint Bank Accounts”).

25.In 2014, W converted her personal cash savings of RMB into Hong Kong dollars worth approximately $1-3 million and transferred the proceeds to the parties’ joint bank account.

(ii) Yuanta Securities Account

26.It is agreed that in or around late 2009 or early 2010, H added W’s name to this account.

27.However, H argued that the source of funds in this account was from H, H’s Mother, H’s Brother and his aunt, Josephine (“Aunt”) whereas W disagreed.

(iii) Duplex Flat A on 43/F and 45/F with Flat Roof Island Harbourview (“Flat 43A”)

28.There is no dispute that H bought it and H and H’s Mother have held it jointly since November 2003. On 20 April 2012, it was assigned so that it is now held in the joint names of H and W. It is currently vacant and has been put on market for sale.

(iv) Smithfield Terrace, Smithfield Road, Kennedy Town (“Smithfield Property”)

29.W purchased under her sole name in 2006 and in April 2012, it was transferred to H so that they both held the property as joint tenants. The Smithfield Property was subsequently sold in December 2015 for HK$4.15 million and the proceeds of which were transferred into the parties’ joint bank account for the family’s use.

(v) Flat A, 8th Floor, Island Harbourview (“Flat 8A”)

30.It was purchased in 2000 in the joint names of H and H’s Mother as the residence for H’s Mother and H’s Brother and they have been living there ever since. Mr Yim submitted that H has always intended for H’s Brother to live there even after H’s Mother’s eventual passing.

31.For W’s part, H’s 50% beneficial interests should be included in the matrimonial pool. Further and in the alternative, Mr Ah-Weng representing W invited this Court to find that H is the beneficial owner of the entire Flat 8A because he paid for the purchase price and all necessary outgoings including rates, management fees as well as maintenance and refurbishment costs.

(vi) Others

32.There were other properties such as Florient Rise and Babington which were sold during the marriage.

33.The two issues are therefore:-

(1) Whether the beneficial interests of H’s Mother, H’s Brother and Aunt (collectively referred to as “the third parties”) in their previous stockholdings in the Securities Account should be included in the matrimonial assets?

(2) Whether the sums withdrawn by H to meet the medical and insurance expenses of himself, H’s Mother and H’s Brother should be added back to the matrimonial assets?

Securities Account

34.There is no dispute that upon the parties’ agreement, the stocks and shares were all sold on 29 May 2020 and all the cash balance plus interests were converted into US dollars on 4 June 2020 and deposited in Hang Seng Bank. As at 31 July 2020, the sum was US$3,924,234 @7.75 =HK$30,412,813.

35.H is claiming USD280,566, USD83,060 and USD200,780 for H’s Mother, H’s Brother and Aunt respectively[1].

36.Mr Ah-Weng submitted that W accepts that H did at one stage hold money and invest for Aunt. However, he submitted there is no objective evidence as to the initial amount.

37.Mr Ah-Weng also submitted in his Closing Submissions[2] that H failed to provide independent evidence to show the amounts invested by H’s Mother, H’s Brother and Aunt and produced no deposit/transfer slips for each of the sums injected from H’s Mother, H’s Brother and Aunt. Mr Ah-Weng argued that H simply produced his homemade worksheets and Excel spreadsheets, which were never audited or verifiable.

38.Mr Ah-Weng also submitted that for the periods of 2001-2008 and 2013 – November 2016, the Yuanta statements are very oddly missing.

39.Mr Ah-Weng drew my attention to the case of Fisher Meredith v JH & PH [2012] 2 FLR 536, where it states in the judgment that it should be H’s burden to prove that the disputed 11% belongs to the third parties:

[44] In the latter situation, which is the case here, the duties are by no means so clear cut. If an asset is (say) in the name of the respondent husband then in my judgment the starting point, or prima facie position, is that it belongs to him both legally and beneficially. In my judgment this cannot be seriously disputed in the light of Stack v Dowden [2007] UKHL 17, [2007] 2 WLR 831, [2007] 1 FLR 1858, [2007] BPIR 913 where Baroness Hale of Richmond stated at para [56]:

'[56] Just as the starting point where there is sole legal ownership is sole beneficial ownership, the starting point where there is joint legal ownership is joint beneficial ownership. The onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership. So in sole ownership cases it is upon the non-owner to show that he has any interest at all. In joint ownership cases, it is upon the joint owner who claims to have other than a joint beneficial interest.”

40.As for the missing statements, Mr Yim submitted that:

(i)      It is completely reasonable for H not to have records of statements dating as far back as more than 12 years ago;

(ii)      H replied during cross-examination that the statements for the years 2013 to 2015 did not need to be attached to any of the Forms E that he had submitted;

(iii)      W could have asked for the statements in her Questionnaire but failed to do so;

(iv)     H had already made his best efforts to locate all of the Yuanta Statements from January 2009 to December 2012[3].

41.In relation to the transfer slip from H’s Mother, Mr Yim submitted that during the trial, H admitted that the majority of H’s Brother’s initial investment funds of HK$250,000 in 2008 was given by H’s Mother, and that it is understandably very difficult (or unusual) to produce receipts for family transactions such as these.

Discussion

42.First of all, there is no dispute that H did the investments under his own name and not through any company limited. I therefore accept that having no receipts being issued for a family transaction like the present one is not unusual.

43.As for the allegation that there is no original or raw data to support H’s allegation and that he has also failed to produce some of the statements, H has produced some worksheets to show that H’s Mother, H’s Brother and Aunt also had shares in the account in Yuanta Securities. Since November 2017 and except for the months of February 2018, July 2018, and December 2019[4], hundreds of thousands of dollars had been withdrawn from that account in order to settle the household bills and the respective parties’ legal costs. W has no dispute with that.

44.From the worksheets, I can see that because of the monthly withdrawals, the parties’ share has been decreasing from 90.6% in November 2018 to 87.3% in December 2019, whereas the shares of the third parties’ interests have gone up instead.

45.Furthermore, there are performance worksheets showing shares portfolio from September 2001 to 2018, which are contemporaneous records kept by H[5]. There are also partners’ worksheets from 2001 to 2015 showing some figures with the names Mom, Chung, Aunt, H/W[6].

46.Mr Yim submitted in his Closing Submissions that,

“As can be seen from the spreadsheets, H’s Mother’s and Aunt’s initial investments date back in October 2001, with subsequent additional investments by H’s Brother and by Aunt 2008[7] as well as withdrawals by H’s Mother in 2010 and by Aunt in 2012 in the form of offset against H’s and W’s share of investment[8].”

47.Mr Ah-Weng submitted that H could have easily separated such funds into separate physical bank accounts but H failed to do so.

48.For my part, I accept H’s evidence when he said during cross-examination that he was an investment manager operating under an investment portfolio partnership model, and not as a stock broker, and that it was more efficient to operate the investments using one securities account rather than having four different ones and executing the same trade four different times in different quantities. I find nothing wrong with his answer.

49.Mr Ah-Weng also challenged the accuracy and integrity of H’s homemade worksheets because even on H’s admission, they are unreliable. Mr Ah-Weng also submitted that,

(i)   H did not explain how he suddenly noticed those errors after H had been using these sheets and he must have referred to other materials not disclosed and were not submitted to Court.

(ii)   even H admitted after discovering the error, he did not correct it with Aunt. Furthermore, as a former professional investor, the veracity of the worksheets is questionable.

(iii)   in the years where H’s investment performance suffered losses (i.e. 2013 – 2015) and where the third parties allegedly injected funds (i.e. 2001-2008), those records were not available for the underlying securities account statements.

50.Mr Yim submitted in his Closing Submissions:

“47. To prove that the spreadsheets are genuine and to address W’s concern regarding independent evidence. H requested several times during his cross-examination to show the Court how the total balances in the statements of the securities account could be reconciled with those in his spreadsheets. When H requested to do so on day 6 of the trial, the Court told H that his lawyers would find the bundle references for him so that he could look at the relevant bundles in the morning of Day 7.”

51.Mr Yim submitted that the following is the relevant exchange between H, the Court and W’s Counsel:

H: “想提一提法庭，想報返Yuanta statement 比法庭先。”

W’s Counsel: “可以臨尾先，睇下進度點 …”

Court:. “係想臨尾先?”

H: “個worksheet對案情好緊要，

唔做到我唔會好公平。”

W’s Counsel: “Yuanta~睇唔到阿姨入能?”

Court: “爭議真確度定係11%？”

W’s Counsel: “兩樣都爭議。”

Court: “真確度都爭議？”

W’s Counsel: “真確度有兩方面

佢話某某人比左錢我，總共11%。”

Court: “如果你爭議真確度，佢話影響到誠信佢想嘗試話你聽佢worksheet係點計出黎。”

W’s Counsel: “無爭議”

H’s Counsel: “琴日有一兩條問題話，話依個表即時做，就唔會有呢D錯誤…”

W’s Counsel: “唔爭議worksheet係基於Yuanta任何原始文件。”

Court: “爭議就係40萬。大阿姨唔知廿幾萬…”

W’s Counsel: “係”

Court: “就像11%。”

W’s Counsel: “可以咁講。”

Court: “如果唔爭議真確度，就唔洗晒時間。”

H: “好。For the record, worksheet

所有record可以到返Yuanta。佢話我自己做。如果佢唔爭議，即係佢相信我既record可以Yuanta搵得返。

Court: “佢淨係爭議入數紀錄。”

H: “明白，多謝。”

Court: “你同意無盤古初開入數紀錄？”

H: “啱。” (Emphasis added)

52.Mr Yim then submitted,

“48. As can be seen from the above exchange, W’s Counsel accepted that the spreadsheets were indeed prepared on the basis of the balances in the Yuanta Statements. After clarifying with H’s Counsel, the Court explained to H (who was testifying) that W did not dispute the authenticity or the calculation method of the spreadsheets, but that W disputed only the current amount claimed as belonging to H’s Mother, H’s Brother and H’s Aunt on the basis that the original deposit or funds transfer slips which evidence their initial investments were not available. There was no suggestion from W’s Counsel that this was not the case and he proceeded to question H on other matters. Therefore, it is not open for W to now turn around and challenge the authenticity of the spreadsheets as submitted in paragraph 69.1, 70 and 71 of W’s Closing Submission.”

53.Looking at the exchange of the conversation, I agree with Mr Yim.

54.In relation to the errors in the spreadsheets, Mr Yim submitted in his Closing Submissions that by virtue of H’s correction, the third parties’ interests had been decreased from 12.3% (5.2% + 2.2% +4.9%)[9] to 10.7% (5.3% + 1.6% + 3.8%)[10].

55.Mr Yim therefore submitted that by going through the trouble and façade of correcting the allegedly contrived and artificial spreadsheets would result in an increase in the value of the matrimonial pot that showed H had demonstrated his honestly and credibility.

56.I agree and in particular, I also agree with Mr Yim that H was never cross-examined as to how he came to discover the errors.

57.Mr Yim in his Closing Submissions rightly pointed out that,

“30. It is stated in 12-12 of Phipson on Evidence, 19^th Edn [RLOA#12] that in general a party is required to challenge in cross-examination the evidence of any witness of the opposing party if he wishes to submit to the court that the evidence should not be accepted on that point.”

58.I accept H’s evidence that he discovered the error in the course of reviewing the spreadsheets for the purpose of filing his Answer.

59.H has also produced some emails between Aunt and himself from 2014 to 2018[11] and some email correspondence in January 2020[12]. All the emails were under the subjects of either Portfolio Report or Investment Reports.

60.Take the email from H to Aunt dated 15 January 2016 at 16:28[13], H said at the beginning of the email,

“I forgot to mention that the value of your investment. It was HK%1,499,730 as at 31 December 2016.”

61.On 6 January 2015 at 15:55, H said,

“I am sorry to report that the portfolio was down 16.8% last year, while the Hang Seng Index was up 1.2%. Your investment was worth HK$1,542,791 on 31 December 2015.”

62.On 17 January 2018 at 23:28, H wrote,

“Your investments on 31 December 2017 and 31 December 2016 was worth HK$1,947,665 and HK$1,561,498 respectively.”

63.In his submission[14], Mr Ah-Weng also said that on 15 January 2014 (concerning his portfolio in 2013 – the twins were born in April), H emailed Aunt that,

“(a) Your investment was worth HK$1,854,934 as at 31 December 2013, down 5.65% year on year. My own investment suffered the same loss…I am sorry that it was a down year, when the Heng Seng Index was up 2.87%. The loss was due to one single mistake: I under-estimated the risk posed by internet shopping…

(b) I admit that finding the time to do investment research is sometimes a problem because with a toddler and two babies at home, both W and I need to be very hands-on with their care.”

64.On 6 January 2015 (concerning his portfolio in 2014), H emailed Aunt that;

“(a) It was a terrible year for our portfolio. About half the losses were due to loss-making stocks brought forward from 2013…As you know, I like to buy stocks when they are down, but some of the new stocks continued to fall after I bought them, resulting in further losses. Clearly I bought them too early.

(b) I have had two down years in a row, which is disappointing…The reasons were a lack of time to do research and a lack of patience to wait for better entry prices. With three toddlers in the family, it is difficult to find the time and patience to do it really well.”

65.On 13 January 2016 (concerning his portfolio in 2015), after moving to Stanley, H emailed Aunt to say that,

“(b)….I have been more in control over my time because I don’t have to take them to school anymore. That means I can spend a meaningful block of my time each day on i-depth invest research….

(c) We managed to avoid the big fall in stocks middle of last year, and end of the year down 2.8%, which looks quite good against the 7.1% decline in the Hang Seng index. However, when I consider that the portfolio has been falling for three straight years, I think we can do better....”

66.Although Mr Ah-Weng was criticising H, amongst other things, for blaming the children for his losses in the investments when making the above submission, my view is that H has been reporting regularly to H’s Aunt about her investments with him all along.

67.Mr Ah-Weng also submitted that Aunt’s emails in January 2020 portrayed an element of confusion because:

(a) There was no logical reason for Aunt to send H emails of similar wording 5 times on same day, each with symbols and/or typos;

(b) It is questionable if not highly suspicious why Aunt would do so, which was in contrast with her earlier emails.

(c) There is no evidence why Aunt would send such odd messages to H. She may well have already withdrawn or spent the funds. Aunt is not a witness and cannot be cross-examined.

68.In this regard, I entirely agree with Mr Yim that I only knew this issue in Mr Ah-Weng’s Closing Submissions. As Mr Yim put it in his Closing Submissions[15], Mr Ah-Weng when questioned H did say “有錯字, 可能係電腦問題, 見唔見到”. H was never cross-examined as to the so-called suspicious emails.

69.Mr Yim also submitted that in the Open Offer sent by W’s solicitors Messrs Chan, Wong & Lam (“CWL”) dated 17 May 2019 (“Open Letter”)[16], it is evident that W had always known about and acknowledged the fact that H had been investing on behalf of H’s Mother, H’s Brother and H’s Aunt for a long time.

70.I agree. Again, Mr Yim rightly pointed out the principle in his Closing Submissions,

“33. ….an open letter is the reverse of a “without prejudice” letter. By nature, when a party makes a proposal to the other side by way of an open letter, he/she is conveying a message to the other party that is such proposal is not reasonably considered and accepted, the trial judge will be entitled to take into account the contents of the open offer and any reply thereto.”

71.In the said letter, it states,

“2. Parties’ respective entitlements to the assets and cash balance in the Securities Accounts:-

(i) Upon clarification of your client’s mistaken calculations, the parties’ combined entitlements in the Securities Accounts as of January 2019 should be about 89% of the total assets and cash balance of the Securities Accounts.

(ii) The parties also agreed in principle to split 89% of the total assets and cash balance of the Securities Accounts (after deducting any costs and expenses for realization) on a 50:50 basis.”

72.As both parties were legally represented, I do not believe W’s evidence when she said in her oral testimony that the content in the Open Letter was nothing but為了達致和解.

73.Mr Ah-Weng submitted that H did not call Aunt, H’s Mother and H’s Brother as witnesses. Since the dispute is factual, he submitted that finding on credibility is crucial.

74.In my view, there is enough evidence to support the existence of third parties’ interests in the security account.

75.In light of my finding, I accept that the sum of USD564,405 in the USD Account belongs to the third parties and should be excluded from the family assets.

Adding back

76.There is no dispute that H has made a total of 4 withdrawals for the medical expenses of H’s Mother and H’s Brother and the insurance premium payable for them.

77.In the letter from Messsrs Fairbairn Catley Low & Kong (“FCLK”), W’s solicitors, to CWL dated 17 December 2019[17], the history of the 4 requests from H is set out:

“(3) As a matter of proper record, we would like to take this opportunity to set out the history of your client’s requests for making similar withdrawals during the course of these proceedings:-

(1) On 11 January 2018, your client requested to withdraw about HK$200,000 from “his split of the Stocks and Cash Balance in the Securities Account held in the join names of our respective clients” for payments of his mother’s medical expenses and the medical insurance premium of himself, his brother and mother, On 13 January, 2018, we replied with instructions from our client that she had in principle no objection to such request provided that such sum to be withdrawn by your client would be entirely paid out from his own portion of entitlement to family assets and would be so calculated/reflected at the division of family assets. On 18th January 2018, you replied with your client’s appreciation of our client’s kind understanding and reassurance to our client that no part of the said withdrawal would be deducted from our client’s split of the Stocks and Cash Balance in the joint name Securities Account.

(2) On 9th and 15th February 2018, your client requested to withdraw about HK$65,000 from his split of the Stocks and Cash Balance in the joint name Securities Account for payment of his mother’s medical expenses with the same undertaking from your client that no part of such withdrawal would be deducted from our client’s split of the Stocks and Cash Balance in the joint name Securities Account. We replied on 12th and 232nd February 2019 reminding your client that since such withdrawal was not within the ordinary course of living of the parties themselves and the family children, prior consent must be obtained from our client before withdrawing the same, and our client clearly stated that no blanket approval had ever been given to your client regarding withdrawals of such nature.

(3) On 5th December 2018, your client once again requested to withdraw about HK$138,372 from the Joint Account (HS Bank) for payment of medical insurance premium of himself, his brother and mother. We replied on 10th December 2018 reiterating that such withdrawal should only be paid out of your client’s own entitlement to the pool of family assets and such withdrawal should be so calculated/reflected at the division of family assets.”

78.W’s case is that as the amounts of money withdrawn by H were not part of the living expenses of the parties or the children, therefore the withdrawals should be added back to the family assets.

79.Further and in the alternative, when H’s solicitors wrote to W’s solicitors asking for W’s consent for the withdrawal of money from the parties’ joint account, “W agreed on the condition that the withdrawal was to be made from H’s own entitlement to the pool of family assets and such withdrawal must be so calculated/reflected at the division of family assets.[18]” W therefore argued that H had promised to repay the withdrawals.

80.H, on the other hand, argued in his 3^rd Affirmation dated 28 September 2020 (“H’s 3^rd Affirmation”),

“56…..the payment of the medical and insurance expenses of my mother, brother and myself should not have to be added back as these expenses have always been part of my ordinary and regular expenditure during the marriage.”

81.H also argued that some of the contents of the 2 letters sent by CWB to FCLK had been redacted, therefore this Court cannot see the whole picture as to what was agreed. They should therefore be excluded from the evidence.

Discussion

82.Mr Ah-Weng submitted in his Closing Submissions that I should allow the add-back because this item is a non-marital expense. He cited the case of YBH v TYC (Ancillary relief) [2019] HKFLR 132 whereby the court disregarded W’s request for payments to dependent family members. It was held that such payments were voluntary in nature and were made out of love and concern for the wife’s sisters and her god daughter, which might not be necessarily shared by the husband[19].

83.Mr Yim drew my attention to the case of ARAV v VP, LJ aka PJ [2011] 3 HKLRD 759, where the Court of Appeal stated,

“53. It is clear that, where a spouse has frittered away assets due to his or her extravagance or reckless speculation, the court can take this into account in ancillary relief proceedings by notionally re-attributing (or adding back) the value of the assets so squandered to that spouse’s side of the list of matrimonial assets. By doing so, the reckless spouse is deemed still to have those assets and, depending on the division of assets, to share them with the other spouse.

54. Martin and Norris referred to above are instances of the court doing so. Similarly, in C v C [1990] 2 HKLR 183, a proportion of the wife’s gambling and futures speculation was added back to the assets to be divided between the parties to redress the wife’s financial irresponsibility.”

84.Mr Yim submitted that there are no elements of extravagance or any kind of misconduct because W was fully aware that H had always been paying for this item.

85.For my part, I note that in the case of MKKWH v. RKSH CACV 197/2012, Hon Lam VP said,

“1….There are two alternative ways to achieve a fair result in dealing with non-marital expenses,

(a) Adding back of specific sums as in Norris and Vaughan;

(b) Departure from equal distribution as in ARAV.

10. The relationship between these two routes has not been subject to much discussion in the authorities. In ARAV both Cheung JA and Fok JA considered the submissions of add-back under the umbrella of misconduct. In that case, it was held that it is a matter of the discretion of the judge to decide what would be the appropriate relief in light of a finding of such misconduct.

11. Following that approach, whether the conduct is so obvious and gross that it would be inequitable to disregard must be the threshold. The Norris route can be regarded as a means to deal with such misconduct. But it suffers from the drawback that one may lose sight of the overall assessment on fairness in light of other factors since in adding-back one would usually focus on the nature of the expenditure. For this reason, a higher threshold is adopted for this approach in the English cases where the frittering away of assets was described as “wanton”, “reckless” or “extravagant”. Thus, the English cases suggested a cautious approach is to be adopted: Vaughan; H-J and BJ. The rationale was explained by Mostyn J in N v F (cited at para 50 of BJ) in terms of the separate ownership of property between husband and wife,

“ In this country we have separate property. If a party disposes of assets with the intention of defeating the other party’s claim then such a transaction can be reversed under s 37 of the MCA 1973. Similarly, where there is ‘clear evidence of dissipation in which there is a wanton element)’ then the dissipated sums can be added back or re-attributed … But short of this a party can do what he wants with his money. …”

86.In the present case, W agreed in her oral testimony that H has all along been paying insurance premiums for H’s Mother and H’s Brother throughout the marriage from the family income.

87.W also agreed in her oral testimony that the medical insurance premiums covered H as well, and she agreed that they were reasonable expenses. Furthermore, when cross-examined by Mr Yim, she also admitted that H has been paying the medical insurance premiums for H’s Mother and H’s Brother. As a matter of fact, she added in her oral testimony that those were the company’s benefit that H was entitled to before his retirement and as H’ Mother was not happy with H’s early retirement, H tried to make her happier by not cutting those benefits even though that meant H would have to pay out of his own pocket.

88.W also admitted in her oral testimony that H is frugal except in relation to his Mother’s expenses. She also admitted that it is reasonable given that he is frugal but only spends money on the medical insurance of H’s Mother and Brother.

89.If that is the case and by virtue of W’s admission, it is my view that the medical and insurance expenditure has all along been treated as the family’s expenditure in this regard.

90.I therefore do not agree when Mr Ah-Weng submitted in his Closing Submissions that there is no evidence that this item is a necessity as the Mother might have provided for the Brother’s future already.

91.With regard to the allegation that H has promised to add back to the family pot H’s withdrawal, I set out the contents of the correspondence between the two law firms in relation to the 4 withdrawals: -

1^st request for withdrawal of at least HK$200,000

92.By a letter from CSB to FCKL dated 11 January 2018[20],

(4)   Our client understands that to be fair to your client, the said sum of HK$200,000 should not be withdrawn from the Joint Account which is the joint account covering the expenses of both parties and the children.

(5)   Therefore, our client will:

(a)   withdraw the said sum of HK$200,000 from “his split” of the Stocks and the Cash Balance in the Securities Account held in joint names of our respective clients;

(b)   in other words, the whole sum of HK%200,000 is to be withdrawn entirely out of our client’s entitlement XXXXXXXXX;and

(c)   for avoidance of doubt, no part of the said sum of HK$200,000 will be deducted from “your client’s split” of the Stocks and the Cash Balance in the Securities Account held in joint names of our respective clients.”

2^nd withdrawal

93.By a letter from CWL to FCKL dated 9 February 2018, it states,

(2)   We are instructed that our client needs to make payments for his mother’s medical expenses of about HK$65,000 due payable in early March 2018.

(3)   As mentioned in our letter to you dated 11 January 2018, our client understands that to be fair to your client, the said sum of HK$65,000 should not be withdrawn from the Joint Account which is the joint account covering the expenses of both parties and the Children.

(4)   Therefore,

(a) our client will withdraw the said sum of HK$65,000 from “his split” of the Stocks and the Cash Balance in the Securities Account held in joint names of our respective clients;

(b) in other words, the whole sum of HK$65,000 is to be withdrawn entirely out of our client’s entitlement XXXXXXXXXXXXXXXX; and

(c) for avoidance of doubt, no part of the said sum of HK$65,000 will be deducted from “your client’s split” of the Stocks and Cash Balance in the Securities Account held in joint names of our respective clients.

3^rd and 4^th withdrawals

94.In the letter from CSB to FCKL dated 5 December 2018,

“(1) We are instructed that our client need to make a payment to settle the BUPA medical insurance premium notice dated 11 October 2018 for the period from 1 December 2018 to 30 November 2019….

(a) Medical insurance of himself …,

(b) Medical insurance of his brother ….and

(c) Medical insurance of his mother…

(2) ….We propose that our client will make a transfer of the said sum ….to the Joint Account …which is the account used by our client to pay out his expenses…

95.In her 2^nd Affirmation dated 13 February 2020 (“W’s 2^nd Affirmation”), W admitted that at the PTR hearing on 11 October 2019, the parties’ respective legal teams found that some of the exhibits attached to W’s affirmation namely, the correspondence between solicitors referred to certain without prejudice information. She said[21],

“5……Such without prejudice information should be redacted, so that the exhibits can be understood without reference to the same.

7 The redactions cover only a small part of the relevant letters. They do not impede proper understanding of those letters. Those letters were not exchanged for settlement negotiations. Instead, the exchange was initiated by CWL and related to H’s request for (and later agreement by W) (“H’s Advance Withdrawal Agreement”) early/advanced withdrawals from his share of the family pot for his alleged purposes (i.e. settling the medical expenses and insurance premium for H’s mother and brother). They are not part of the ordinary living expenses of the parties or the children.

8. I am also advised and verily believe that wholesale removal of the redacted letters….. would mean removing the written evidence of H’s Advance Withdrawal Agreement, which is not without prejudice. This would be unfair and unjust, because this was how and why we came to agree to let H withdraw money early.”

96.Mr Yim pointed out that contrary to what Mr Ah-Weng submitted, it was H’s share of the family pot and the redacted part could be H’s entitlement of an amount of money that was supposed to be paid to him but did not.

97.As for W’s allegation that H has agreed in the respective lawyers’ correspondence that the withdrawal should only be from H’s own entitlement of the family assets, H said in his 3^rd Affirmation,

“55…..the Petitioner seeks to replace… in her 1^st Affirmation by…. In her 2^nd Affirmation which are redacted versions of the same letters of which I object for the following reasons:

(a) By redacting the parts of the 3 letters…., the meaning and effect of the contents thereof would not be truly reflected which is unfair to me;

(b) In paragraph 5 of the W’s 2nd Affirmation, the Petitioner has acknowledged that the redacted parts of the letters referred to “without prejudice information”;

(c) In paragraph 2(1) of the letter from FCLK to CWL dated 15 November 2019, the Petitioner has acknowledged that the redacted parts of the letters contained “figures referred to in without prejudice negotiations”…;

(d) As mentioned in the letter from CWL to FCLK dated 22 November 2019, it was expressly stated in the redacted part of the 3 letters… that the expenses payable by me were to be withdrawn entirely “out of” the amount of a payment to be made to me. However, eventually, no such amount of payment, or any part thereof, was made to me; and (page 3341/42B11

(e) Therefore, I invite the Court not to admit the redacted correspondence….. as evidence or alternatively, not to give any weight to these redacted exhibits.”

98.For my part, I agree with Mr Yim and what H said in his affirmation. The redacted part containing the without prejudice negotiations between the parties could be something very important to change the context of the correspondence. I agree that the redactions, be they small, if I am not able to read, this Court will not have the full picture.

99.I will not allow those letters containing the redacted parts to be admitted as evidence. W therefore cannot rely on those letters as a promise made by H. It follows that there has been no agreement by H to repay the withdrawals.

100.In relation to the 3^rd and 4^th withdrawals, Mr Yim pointed out that in the last paragraph of the letter from CSB to FCLK dated 5 December 2018, it states,

“(3) Without prejudice to our client’s rights, in the event that your client has any dispute of any issue or matter in relation to the said medical insurance premium …., our client proposes that, to save time and cost, such issue or matter (if any) is to be reserved for arguments at the trial of the present proceedings as to avoid any unnecessary arguments at this stage.”

101.Therefore, Mr Yim submitted that H had already reserved his rights to argue the matter in Court.

102.I agree and in any event, in paragraph 3 of the Open Letter sent by CWB to FCLK, it is stated that[22]:-

“3. Before setting out the open proposal, in order to limit the outstanding issues and the scope of negotiations between the parties, we list the following common grounds which the parties have basically reached mutual understanding during the course of negotiations:-

4. The following items were initially issues in dispute between the parties: -

(1) Beneficial ownership in Flat A on 8th Floor of Tower 8, Island Harbourview, 11 Hoi Fai Road, Kowloon, Hong Kong (“Flat 8A”); and

(2) Medical expenses and insurance payments in favour of your client’s mother and/or brother.

5. However, as part of this open proposal as a package deal, our client is willing to waive all her claims, causes of action, interests and entitlements to Flat 8A and account for the medical expenses and insurance payments made by your client in favour of your client’s mother and/or brother, as a gesture of goodwill.”

103.During cross-examination, Mr Yim put to W that if what she alleged was true, i.e, the correspondence between the two legal firms showed clearly that the withdrawals from H was agreed to be from his share, W’s lawyers would not have phrased the letter in the above way.

104.W disagreed that certain facts had been agreed and are no longer in issue. She insisted in her oral testimony that it was just a matter of presentation. She said that they were simply先後次序, 交個offer畀對方接唔接受 i.e., before setting out the offer and 為了達致和解.

105.I do not believe her evidence as she has had legal advice throughout.

106.It is my finding that there has been no agreement by H to be solely responsible for these withdrawals.

107.As I am in favour of H’s case, I will adopt the table used by Mr Yim in his Closing Submissions.

Total value of matrimonial assets

108.The net value of the parties’ matrimonial assets (with Hang Seng Bank accounts and H’s credit card balances updated as at 2 November 2020) should therefore be computed as follows:

HK$ Bundle Reference

Flat 43A 38,616,667 A3/698

Forfeited deposit on Flat 43A 1,920,000 A3/698-699

Flat 8A – 50% 7,790,000 A3/704

Main Account (HSB 360-337349-888) Balance as at 2 Nov 2020 992,324 C2/3964

H’s Expenses Account (HSB 395-293418-888) Balance as at 2 Nov 2020 245,645 C2/3964

H’s and W’s Share of USD Account (HSB 395-324973-888) Balance as at 2 Nov 2020 24,295,001 C2/3964; 3975
(Total bank balance of US$3,698,435 – 3^rd party interests of US$564,405 [B13/151/3830] = US$3,134,030, translated at 7.752)

H’s sole Name Account (HSB 270-048812-888) Balance as at 2 Nov 2020 11,210 C2/3964

W’s Sole Name Account Balance (HSBC 611-311267-888) 33,887 A3/701

PRC Remittance Account Balance (BOC 012-553-1-013476-5) 133 A3/701

Securities Account 0 A3/702

Valuables owned by W 233,440 A3/702

W’s MPF 221,779 A3/702

H’s MPF 300,000 A3/702

H’s UK Pension 130,910 A3/702

Total Assets 74,790,996

Hang Seng Muji Visa Platinum Card No. 4548-8920-2362-1551 owed by W 25,713 A3/703

Hang Seng Prestige World Master Card No. 5522-6820-0568-8034 owed by W 66,684 A3/703

Hang Seng Visa Platinum Card No. 4548-8901-6059-8723 owed by H as at 2 Nov 2020 1,770 C2/3964

Hang Seng Prestige World Master Card No. 5522-6820-0213-6268 owed by H as at 2 Nov 2020 21,308 C2/3964

Total Liabilities 115,475

Net matrimonial Assets 74,675,521

W’s Open Proposal

(i)     To carve out a sum of HK$27,126,645.28 of the approximately HK$79,050,641.04 matrimonial pot for the children for up until they cease full time education or until further order;

(ii)     A division of the remaining assets between H and W in a 31.96% to 69.04% distribution. The calculation is based on W’s life expectancy of 89 years (W to have another 46 years) and H’s life expectancy of 84 years (H to have another 27 years)

(iii)    Nominal maintenance of HK$1.00 per annum from H to W, in view of the fact that W will have 3 young children to look after in the coming 10 -15 years.

H’s Open Proposal

(i)     Flat 8A to remain in the joint names of H and H’s mother;

(ii)     Flat 43A be sold and the net sale proceeds be split between W and H on an equal basis;

(iii)    Of the proceeds from the sale of stocks and cash balance in the Securities Account of US$4.08 million, which was deposited into the USD Account on 29 May 2020, US$564,405, or 15.3% of the balance of US$3,698,435 of the USD Account as at 2 November 2020, be returned to their beneficial owners, namely H’s mother, H’s brother and H’s aunt;

(iv)    The remaining funds in the Joint Bank Accounts being the sum of a) 100% of the cash balance in the Main Account (HK$992,324 as at 2 November 2020; b) 100% of the cash balance in H’s Expense Account (HK$245,645 as at 2 November 2020; and c) 84.7% of the cash balance in the USD Account (percentage calculated on the basis of the total bank balance of US$3,698,435 as at 2 November 2020, which will change with time) be split between W and H on an equal basis;

(v)     Bank balances in W’s and H’s respective sole name bank accounts and those in the joint names of W and each of the children disclosed in the parties’ respective Forms E dated 24 August 2020 remain with the respective parties;

(vi)    Pensions, MPF and valuable personal items disclosed in the parties’ respective Form E dated 24 August 2020 remain with the respective parties;

(vii)   H is to pay W children’s maintenance at the rate of HK$80,000 per month into a designated bank account of W at the beginning of each month, commencing from the month after the proceeds of the sale of Flat 43A in (i) above and the parties’ entitlement to the funds in (iv) above have been split equally between the parties, until all the children reach 18 years of age or complete their respective first degree full-time tertiary education, whichever is later; and

(viii) Costs in the ancillary proceedings (including all costs reserved) be to H.

Issues

(1)     What are the parties’ respective financial resources and earning capacities?

(2)     Are there sufficient resources to meet the reasonable financial needs of H, W and the children?

a) Needs/Sharing

b) Should there be lump sum payments to the children?

c) Should maintenance to W be life-long?

(3)     What are the reasonable financial needs of H, W and the children?

(4)     Should 8A be excluded from distribution?

(5)     Should there be nominal maintenance paid to M?

(6)     What are the extent and the respective percentages of the children’s expenses to be borne by W and H?

W’s earning capacity

109.In the Open Letter, FCLK for W stated,

“7(3) Given that our client has been out of the job market and the finance field for more than 10 years, despite her willingness, our client would need time to find suitable employment. Further, the following should be taken into account.

(4) First, due to her academic commitment in the Master’s degree in Psychology (which your client is well aware), our client will not be able to commence work until after completing the same. Her studies will complete in late 2020 at the earliest.

(5) Second, our client has to consider her duties to the children. Our client believes it is reasonable to at least wait until they reach secondary school before she re-enters fully into full-time work. All three children will complete their primary school education by 2025. They certainly require daily supervision and close emotional support from our client on all fronts, whether for academic or personal development. Engaging in full-time work before then will be impractical and not be in the best interest of the children. Our client therefore proposes that she tries to obtain part-time work until 2025. This will impact on her income.”

110.In W’s 1^st Affirmation dated 19 September 2019 (“W’s 1^st Affirmation”), W said that,

“49….I originally foresaw that at the earliest I could re-enter the job market after 2025, when the twins commence their secondary school (in the year of 2025). I will by then be 48 years old, and been out of the job market or any relevant work experience for 17 years. As I will remain the primary caretaker for the three children, I anticipate that I can do at most do part-time work. I could conceivably do full-time work when the twins reach 18 years old in 2031. I will by then be 54 years old, and be out of job market for 23 years.

51……we engaged Dr I Chau, PhD (“Dr Chau”), a registered psychologist specialized in children’s development. On 20 July 2019, Dr Chau assessed A (the eldest twin) and diagnosed that he suffered from Autistic Spectrum Disorder (“ASD”). Later, on 27 July 2019, Dr Chau also assessed D (the younger twin) and diagnosed that he was suspected of having ASD. On 21 August 2019, Dr Chau assessed L (the eldest boy), and although he did not have ASD, he was identified as suppressing and denying his negative emotions, which was physically unhealthy.[23]”

W exhibited 3 reports prepared by Dr Chau, a registered psychologist on all three children in her Affirmation filed on 19 September 2019. On the front page of the reports, it has 7 paragraphs dealing with personality, expressions of emotion, self-image, adjustment, problem solving skills, perception of family and interpersonal skills. At the end of the page of A’s report dated 29 July 2019, it states, “I believe that he is a child of Autism Spectrum Disorder”.

111.On the next two pages, Dr Chau sets out the autism spectrum disorder features. Underneath there is a table. On the left hand corner of the table, it states the diagnostic criteria and on the right hand corner, it states the clinical observation and mothers’ report. After the table, there are recommendations made by Dr Chau including social skills training group. At the end of the report, it states, “* This is only for client’s reference and should not be treated as a formal psychological report.[24]”

112.The second report was for D dated 27 July 2019 and at the end of the first page, it states, “Suspected Autism Spectrum Disorder[25]”.

113.The third report was for the eldest son L prepared on 21 August 2019[26].

114.W said in her oral testimony that she would not consider part-time work now despite what was said in the Open Letter because the twins have been diagnosed with ASD. W said that although the school hours for the children are only 7 hours from 8:15 – 15:15, if she takes a one-hour lunch, there is only 6 hours left and there may be travelling time too. She said it is not worth it. She prefers to go to the supermarket, a coffee shop, etc.

115.In Court, H denied that his children have ASD but admitted that they might have EQ problems. He agreed for them to attend EQ小精靈, EQ博士.

116.In H’s Closing Submissions, Mr Yim submitted that,

“134. W has also raised the twin’s ASD condition as the reason which prevents her from returning to the workforce until the children complete secondary school. In particular, she relies on one sentence from Dr Chau’s reports to justify her alleged lack of earning capacity: “It will be beneficial if the mother (primary caretaker) to be a full time mother.[27]”

135. Insofar as W seeks to rely on Dr Chau’s reports, which are matter of expert opinion, it is important to note that W did not seek leave to admit such evidence nor called Dr Chau as a witness to testify to the hearsay evidence contained in her reports.[28]”

117.In the H’s 2^nd Affirmation dated 13 February 2020 (“H’s 2^nd Affirmation”), he said,

“24. I am deeply disappointed by the way in which the Petitioner has sought to adduce Dr Chau’s assessment by exhibiting the same in her Affirmation without seeking leave of the Court.

26. It is stated at the last page of each of the assessments of the 3 children of the family that “This is only for client’s reference and should not be treated as a formal psychological report.”

27. When my solicitors raised their concern with the Petitioner’s solicitors, the Petitioner’s solicitors maintained their position on the inclusion of Dr Chau’s Reports stating that;

(a) the Petitioner does not intend to adduce Dr Chau’s Reports as expert evidence;

(b) Dr Chau’s assessment relates to the needs of the family children. The medical expenses actually and to be incurred, and real and continual impact on (the Petitioner) as the primary care giver; and

(c) it is a matter for the trial judge to determine how much weight to be put thereon for the purpose of ancillary relief.”

118.Mr Yim in his Closing Submissions submitted that,

“136…..W’s Counsel confirmed at the PTR that W would not call Dr Chau as an expert witness because she would rely on the reports only to the extent of matters relevant to ancillary relief, such as costs of the treatment etc., and would not rely on the opinion or recommendations stated therein [B12/3700/J-P]”

119.As a matter of fact, the PTR mentioned above was conducted before HH Judge C K Chan. Because of the Covid-19, the PTR which was initially scheduled before the substantive hearing was done by me by way of paper disposal. Therefore, I was not aware of any of these disputes.

120.However, I note that H has been raising his concern about the so-called medical evidence as early as in March last year, yet W still chose not to call Dr Chau as an expert witness.

121.In W’s oral testimony, she explained that she did not call Dr Chau as a witness because it was Dr Chau’s view that if she came to Court, her evidence would be challenged by H, and it would be likely that he would call another expert to challenge her evidence.

122.For my part, I do not understand W’s evidence at all. What W seemed to worry was that Dr Chau’s expert opinion would not be accepted by this Court. Otherwise, what would be wrong for Dr Chau’s evidence to be challenged by another expert? This Court needs experts to assist, in particular in relation to children-related matters.

123.I agree with Mr Yim when he pointed out in his Closing Submissions that,

“141… W is required to make good her own case but choose not to produce any expert evidence. The inference must be that any such expert evidence is unlikely to be helpful to W’s case.”

124.In light of my finding, I will not allow the so-called reports to stand as expert evidence.

125.It therefore goes without saying that there are no formal assessments that say the twins have ASD.

126.Mr Yim in his Closing Submissions also submitted that other than W’s own oral testimony, there is no other evidence to suggest that the twins require social skills training, play therapy or W’s full-time attention beyond primary school. Even Dr Chau’s reports (if I am minded to attach any weight to it) simply recommend the twins “to enroll in social skills training group for at least 2 years or all through primary school.[29]”

127.In W’s oral testimony, she admitted that there are 3 parts to ASD: academic wise, she said the children encountered no problems, but emotional wise they might have problems with behaviour and their social development.

128.W in her oral testimony said that there is no playgroup at Dr Chau’s Centre for Secondary Schools, therefore it lies with the parents to teach the children, and that is why she cannot return to work. W however admitted that since the Chinese New Year 2020 up to August 2020, the School and the Centre were closed due to Covid-19.

129.In W’s 3^rd Affirmation dated 28 September 2020 (“W’s 3^rd Affirmation”), she said,

“66. First of all, I agreed with H that there were improvements in the children’s social skills….That is exactly why these treatments of social skills trainings were necessary and should continue. Their psychologists and I all worked very hard to guiding the children and coaching them emotionally. I attended classes to learn play therapy at Dr Chau’s centre. I quitted my Master degree in Psychology at HKU to free up all my time and energy to provide for the special needs of my children.”

130.Mr Yim submitted that,

“It is implausible that the twins would still require W’s play therapy and full-time attention even after they enter secondary school, especially when they will likely spend time on after-school activities such as participation in school teams or external tutorials to meet the pressures of school and public exams.[30]”

131.Mr Yim further submitted W is not the only one responsible for supervising the children’s homework and H has also testified that prior to the change of access arrangements, he was the one who supervised the children’s homework and that the only reason he could no longer do so was because H was not allowed into the children’s residence at Stanley. Mr Yim submitted that H could only work with the children at the nearby playground, coffee shop or library, places where the children would naturally get distracted and have difficulty focusing on their tasks at hand.

132.I agree that H is a very hands-on father. In the H’s 1^st Affirmation dated 20 September 2019 (“H’s 1^st Affirmation”), H said,

“(41) During the weekday access, I need to leave my home at 2 pm to travel and pick up the children in the afternoon three times a week, namely, on Mondays, Tuesdays and Wednesdays at 3:15pm, and then stay with the children until 5:15pm. I usually get back to my home at around 6:30pm. Hence, every week, I spend 3 half-days on access to the children during the term time. This would make up approximately 111 days of half-day for term-time access out of about 243 working days per year (i.e. about 46%), as explained in the tables below. In addition, I have undertaken to accompany and guide the children in completing their homework during this two-hour access, beginning September 2019, so that they get adequate time to bathe, dine and get ready for bed after my 5:15pm drop-off. I have always attended the children personally since this interim access arrangement has been in place in around July 2016.

Calculation of number of weeks for school term per year

Total weeks per year 52 weeks

Minus mid-term holidays 1 week

MinusChristmas holiday 2 weeks

MinusCNY holidays 1 week

MinusEaster holidays 2 weeks

Minussummer holidays 9 weeks

Total weeks for school term per year: 37 weeks

Calculation of number of half-day access by me per year

Total weeks for school term per year 37 weeks

Half-day access per week on Monday,

Tuesday and Wednesday 3 days

Total number of half-day access by 111 days

me per year: (i.e. 37 weeks × 3 days)

(42) As to the staying access every weekend (one night), school holidays (half the holiday) and summer holiday (several weeks)， I would always make preparation in advance. I would handpick various books，movie DVDs， clothes，tickets for movies and other performances etc. for the children based on their needs and interests. I would buy grocery and personally cook for the children，and I have been learning to do more dishes for the children. Over the past year，I made them Christmas cards，a Christmas tree of 4 feet tall and Mid-Autumn lanterns with recycled materials in order to teach them about the environment. At bedtime，I would always read and talk to them. When I take them out, the outing is always for them. I have never once taken them along on my personal engagements because I treasure my time with them. Below is a table showing the number of nights which the Petitioner and I spend with the children respectively: -

Comparison of nights spent with the children per year

Number of nights which the children spend with me during staying access Remaining night which the children spend with the Petitioner

Saturdays:
52

Mid-term:
3

Christmas:
6

CNY:
3

Easter:
6

Summer (excluding Saturdays):
24

Total days per year:
94
Total days per year:
271

Average days per month:
8
Average days per month:
23

(43) In addition to the 111 half-day term-time access and 94 full-day staying access each year, the children also come to stay with me when the Petitioner makes overseas trips or go on religious retreats outside the agreed staying access dates. When a child is hospitalised, I take turn with the Petitioner to make daytime visits and overnight stay at the ward.

133.During cross-examination, W agreed that H is also a career and he has the potential to improve his caring skills (有潛力去進步).

134.I also noticed that in the Open Letter, it states,

“Our client has already used her best efforts in putting forward this open offer, which is her final offer. If your client still refuses to accept our client’s offer and appreciate her repeated concessions, apart from preparing for trial, our client shall seriously consider making an application to this Court for varying the order to allow your client (in place of our client) to have sole care and control of the three family children, so that she may have time and availability to look for full-time job right after her completion of the Master Degree.[31]” (my emphasis added)

135.Bearing in mind that the Open Letter was sent in May 2019, i.e., two years ago when the children were much smaller, it is my view that when W made that offer, she had full confidence that H was capable of looking after the children.

136.I am therefore of the view that H can at least assist in taking care of the children’s homework whereas W can obtain gainful employment to contribute to the family expenses.

137.During her cross-examination, W attempted to downplay her work capabilities by attributing her work capabilities by attributing her redundancy in 2008 to her last employer’s restructuring and cost-cutting exercise but the timing coincided with the global financial crisis[32], which W also stated “due to downturn of economy[33]” as the reason for her redundancy in her Form E.

138.Mr Yim submitted that W possesses the intellectual ability and thus a high potential of returning to the labour market[34]:-

(i)     She graduated from LSE with a 1st Class Honours BSc degree in Business Mathematics and Statistics;

(ii)     She earned a monthly salary of HK$180,000 (including bonus) in her last job as a financial analyst with a hedge fund firm;

(iii)    She enrolled a Master of Art in Philosophy program at the Chinese University of Hong Kong shortly after being made redundant;

(iv)    She completed a Master of Social Science in Psychology program at HKU in 2017;

(v)     She initially planned on returning to part-time work from 2021 to 2025 and then transition into full-time work when all three children complete their primary school education in 2025.

139.Mr Yim also submitted that,

“122. In addition to the extensive financial experience that W gained during her 9 year of employment as outlined above, she has demonstrated history of successful personal wealth management and gains from her past investments:

(i) She was able to accumulate sufficient savings in a matter of 6-7 years (from 1999 to 2006) to purchase the Smithfield at HK$1,050,000 without the need of a mortgage in 2006;

(ii) The Smithfield was sold in 2015 at a gain of HK$3.1 million ($4,150,000 - $1,050,000);

(iv) She decided to invest her savings in RMB via online banking using a RMB account in the Shenzhen branch of HSBC rather than leave it in HKD because of RMB’s higher interest rates;

(v) By the time the parties married in 2009, in addition to a fully paid-off property, W had accumulated savings of approximately HK$1 million and RMB savings of approximately HK$1 million and RMB savings of approximately another HK$2 million.

140.Mr Ah-Weng in his Reply Submissions disagreed and submitted that,

“62.1 For Smithfield, W saved HK$1.05 million over 6-7 years. This meant that W saved HK$12,500/month (7 Years) or HK$14,583.33/month (6 years). This does not require investment skills.

62.2 Smithfield was where W lived. It was all along W’s residence prior to marriage.

62.3 The sale (timing and need) was decided by H, not W. The proceeds were applied in the family. The increase in property value over 8 years is not due to any skill. It simply followed the rise in property values in general, driven by supply and demand.

62.4 Buying RMB at that time does not require any skill. There is no guarantee as to returns.

62.5 W started working since 1999. HK$3 million odd dollars’ savings equate to W’s savings of HK$25,000/month over 10 years. As W earned a respectable salary, this was not an inconceivable sum to accumulate over 10 years. This does not require investment skill.”

141.I disagree with that.

142.In W’s 1^st Affirmation, she said,

“8….My first job after graduation was with AMI (a market research and consulting company) for a salary of $14,000. In November 2000, I moved on to the HSBC as a research assistant for a salary of $20,000…..By end of 2002, my monthly salary was increased to $28,000.

9. My career then progressed steadily. In mid-2004, I joined Deutsche Bank. My salary was $58,000 and I received a one-month bonus in December 2004. In June 2005, I worked as a financial analyst in a hedge fund firm called LIM Advisors. By end of 2005, my salary increased to $78,000, with a twelve-month bonus. In 2006, I bought Smithfield for $1.050,000. I paid for it entirely from my savings.

10. On 26.11.2008, I was made redundant from LIM Advisors. My last salary was about $180,000 including bonus….”

143.As can be seen from her affirmation, Smithfield was bought in 2006 soon after her salary was increased to $78,000 and with no disrespect, before the increment, I would not say that her salary was respectable.

144.As for the other investment, as rightly pointed out by Mr Ah-Weng, there was no guarantee of returns. The fact that W managed to gain from her investment clearly demonstrated that she had some skill or talent for that.

145.Mr Yim in his Closing Submissions submitted that,

“117. The nature of work in which W was involved prior to the marriage was explored in the afternoon on day 4 of the trial:

(i) As a researcher of AMI, she performed market research.

(ii) As a research assistant at HSBC, she analysed certain listed companies by examining their source of income and costs in order to determine the market value of their shares.

(iii) As an analyst at Deutshe Bank, she was responsible for researching on two or three specified small caps stocks and analysed these companies’ performance.

(iv) As an analyst at LIM Advisors, she was responsible for monitoring two specified indices in order to ensure that the performance of the funds that she managed closely tracked that of the underlying indices.

119. Given (i) W has both the ability and the potential to return to the workforce; and (ii) fairness dictates that she should utilize this earning capacity to contribute to the needs of herself and the children, W should be able to return to full-time work when the twins begin secondary school in 2025 when she will be aged 48, if not earlier.”

146.I share his views.

147.In the Open Letter, W initially proposed to bear 33.3% of the children’s maintenance of HK$120,000 from 2026 onwards[35]. On that basis, Mr Yim submitted in his Closing Submissions that W’s earning capacity after she returns to full-time employment would be at least HK$40,000 per month[36].

148.I agree and W’s only reason of her not working until the children completes secondary education is because of the twins’ ASD condition. As I have already ruled that there is no expert evidence to support that, that excuse does not stand.

149.H gave a detailed explanation as to his planning and how and why he had made the open offer in his 1st Affirmation[37]. In gist, he said that if both parties were to receive 50% of the matrimonial assets being around HK$35 million, W needs only to generate 3.4% from her share of HK$35 million to meet all her expenses including her contribution of 33.33% to children expenses.

150.H said if W is unable to generate 3.4% p.a. income from HK$35 million, with her much younger age and high education qualification, he said that, “it will not require too demanding a job for her to at least lessen the shortfall thereby reducing the rate of depletion, if she decides to go back into the job market.[38]”

151.Mr Yim also submitted in his Closing Submissions that,

“125. Given W’s highly educated background, her financial analytical skills and experience and her demonstrated history of successful personal wealth management, it is totally unreasonable to suggest that all W can do with more than HK$33 million of assets is to put the funds in fixed deposit…

126. Even if W puts the funds of HK$33 million into HKD or RMB fixed deposits or other foreign currencies which generate higher interest rates, this must generate a certain level of interest income. A 1% interest rate would generate HK$330,000 per annum and a 2% interest rate would generate HK$660,000 per annum.

127. W would only need to generate income of approximately 3.27% per annum from assets of HK$33 million to meet all her expenses (including her contribution of HK$43,082 to the children’s expenses and HK$46,945 of her own expenses).

159. As such, after receipt of her allocation of the matrimonial assets, W will have immediate earning capacity from generating returns on investing the same. If W would like to reduce the risks of depletion of assets which arise from the uncertainty of her investment income, she may enhance her earning capacity by returning to full-time employment when she can, which would produce additional income of at least HK$40,000 per month.”

152.I agree in its entirety.

153.Mr Ah-Weng in his Reply Submissions submitted that,

67. H’s comments that W only has to work whilst the children are at home is devoid of realism. It shows a lack of insight into the work required in daily care of children of schooling age, whether they are at home or not. It also fails to consider W’s predicament post-divorce.

67.1 Substantial work is conducted in the children’s absence. All household related matters (whether housework, groceries shopping, cooking, cleaning, pets, plants or maintenance) have to be done daily. For the children, preparation of all their extracurricular and home activities, including play therapy and selection of toys, DVDs, books, arts and crafts and stationery will also be done in their absence…..

67.2 It goes without saying that during school closures in the pandemic, simultaneous organization of children of zoom classes, breaks and activities would add to the above workload.

67.3 It must be emphasised (and not disputed by H) that W has always been very hands on and attentive to the children’s needs. As explained in her evidence, W’s role is not easily replaced by helpers and/or tutors, and certainly not without vast additional costs.

67.4 Finally, it would not be unreasonable to allow some time, in the absence of the children, for W to exercise/rest. H may not appreciate the reality that, with only one helper for now (and even with two), being a care giver for three boys (all close in age, two exhibiting special needs) is draining and exhausting.

68. It is hence unrealistic and not in the children’s best interest to expect W to be able to go to work whilst the children are of schooling age.”

154.I disagree.

155.In W’s 1^st Affirmation, she said,

“47 having been out of the finance industry since November 2008, my analytical skills and market knowledge are rusty and unreliable. I would be no longer competitive compared to a fresh graduate. I have not kept in touch with ties and contacts in the industry. I will face tremendous difficulties looking for work, let alone work whose salary justifies my absence from my three young children and the additional cost that would incur, such as more domestic helpers and extra tuition fees, etc.

48. Finally, I was enrolled on a part-time degree of Master of Social Sciences in Psychology at the University of Hong Kong (“MSS(HKU)”) which I would complete around late 2020 at the earliest.

49. Given the above considerations, I originally foresaw that at the earliest I could re-enter the job market after 2025, when the twins commence their secondary school (in the year of 2025). I will by then be 48 years old, and been out of the job market or any relevant work experience for 17 years. As I will remain in the primary caretaker for the three children, I anticipate that I can do at most do part-time work. I could conceivably do full time work when the twins reach 18 years old in 2031. I will by then be 54 years old, and be out of job market for 23 years.

50. However, a more recent diagnosis of the children affects my above plans and ability to return to work.”

156.Looking at the content of W’s affirmation which was prepared more than 1½ years ago when the children were even younger, W had already taken into account of the difficulties of returning to the job market and yet she still considered she could do part-time work but for the diagnosis. As I have already ruled that there is no evidence to support ASD, I find that W will be able to enter the job market.

157.Furthermore, the fact that W managed to find time to pursue further studies whilst she was looking after the three children, coupled with the fact that she also managed to find time to exercise and to take stress-relief lessons[39] meaning that she could handle the situation without any difficulties as she portrayed.

158.Mr Ah-Weng in his Closing Submissions argues that,

“188.2 Prior to the children’s ASD assessment, W studied psychology, with a view to a career change. This shows that realistically W had little chance of returning to her previous field.”

159.In my view, the fact that W took initiative to find a career change means that she is prepared to face the challenge and she should be able to secure some sort of employment.

H’s earning capacity

160.In W’s 2nd Affirmation, she said,

“92. H can easily obtain a simple, non-demanding job such as an accounting clerk or assistant, and make at the very least $15,000, if not more, not to mention that H is particularly competitive in the field of accounting, given his professional experience and qualification as an accountant and analyst which could allow him to make more than $30,000 a month. H’s chances of getting a better job and securing better income than the said figure is promising.”

161.H agreed in his oral testimony that he could find a job with basic salary of HK45,000. Although he had surrendered his certified accountancy qualification, H admitted that he could have it back by taking some exams. In his oral testimony, H said his eyesight in particular astigmatism (散光) is getting worse. Before he said he could read a very thick prospectus within half one hour.

162.H also said in his oral testimony that the reason why he would not return to the workforce was that if he were to earn HK$45,000, that would mean at most he would be earning HK$500,000 after deduction of tax. However, after the conclusion of the present proceedings, he estimated that he would get HK$30 million. Even with 1% turnover, he would have HK$300,000 but he is confident that he would do much better. Otherwise, he would not have offered to pay periodical payment of HK$80,000 to W for the children’s maintenance.

163.When Mr Ah-Weng put to H that he had lost money before, H said that only in the years of 2013-2015, but he earned all the losses back soon. Therefore, it was not worthy for him to return to the workforce because he was confident that he would earn more by being self-employed and he could also keep up the relationship with his sons.

164.I believe that and I would borrow what Mr Yim has submitted in his Closing Submissions that,

“173…..The Securities Account balance as at January 2016 was HK$29,791,113 whereas the balance as at November 2017 was HK$43,511,389[40]. The difference between the January 2016 and the November 2017 balances represents a gain of more than HK$13 million in 22 months.”

165.In his oral testimony, H was proud to tell the Court that not many people could recover the loss of HK$13 million from the decrease in the value of his investment portfolio from 2013 to 2016, when it fell from HK$43,377,380 in January 2013 to HK$29,791,113 in January 2016[41], but he managed to do so in 22 months from January 2016 to November 2017.

166.I trust that he could do so. As can be seen from paragraphs 63-64 of my judgment, the email between H and Aunt clearly showed that he had two years down in a row because he did not have the time to do research and a lack of patience with three toddlers in the family. Once he had more time, as shown in the email between H and Aunt in paragraph 65 of my judgment above, he did better.

167.In H’s 1^st Affirmation, he said,

“95 (g) Irrespective of the divorce, when the family expenses have all along been funded by the matrimonial assets during the entire marriage, the family has always been subjected to the risks of depletion in the matrimonial assets. All these were exemplified by the facts that before and after the separation, there were (i) the selling of the Petitioner’s renminbi in around 2014; (ii) the selling of the Smithfield Property on 11 December 2015; (iii) the eventual drying up of the money in the Joint Bank Accounts, inclusive of my savings of about HK$12M-15M; and (iv) the withdrawals from the Joint Securities Account after the drying up of the money in the Joint Bank Account since about December 2017 up support of the family expenses.[42]”

168.Mr Yim submitted in his Closing Submissions that,

“175. For the years during which the portfolio generated a loss of did not produce sufficient returns to cover family expenses, the parties had to deplete a certain amount of assets. This has been and will be inevitable in a family which relies on income generated from private investments, but this does not in any way jeopardise the best interests of the children because of H’s proven track record of long term gains on his investments.

177. As explained by H in H’s 1^st Affirmation, even if he could not generate the expected returns during periods of uncertainty, he could and would have to resort to depletion of his capital assets to cover his and the children’s needs. He also explained that even in the worst case scenario where he was unable to generate any returns on his assets (which, of course, is highly unlikely), his and the children’s needs, which had been over-estimated by the use of a straight-line calculation without an appropriate discount rate, would be adequately covered from now until 2035 when the children graduate from university.”

169.I agree. Even in those years when the family suffered downturn, there has been no evidence suggesting that the children’s standard of living had gone down save and except the depletion of matrimonial assets.

170.I therefore find in favour of Mr Yim when he submitted in his Closing Submissions that,

“178….the children’s needs between now and the completion of their university education will not be jeopardized no matter how uncertain or volatile H’s investment income may turn out to be in the future.”

171.Because of the unique nature of this family’s source of income, i.e. throughout it has been relying on H’s investment, I make no finding as to how much H could earn. Nevertheless, I find that H could honour his promise to pay the children’s maintenance at the rate of HK$80,000 per month.

Are there sufficient resources to meet the reasonable financial needs of H, W and the children?

172.W’s case is that this is a “needs” case whereas Mr Yim submitted that “In spite of a relatively short marriage…the “sharing principle”, which already intrinsically accounts for the parties’ contribution to the marriage and compensation for any relationship-generated disadvantage is to be adopted.”

173.Mr Ah-Weng on the other hand submitted that Mr Yim’s submission is putting a cart before the horse. He pointed out that according to LKW v DD,

“74. The next step is for the court to assess the parties’ financial needs. As has been noted, [80] the section 7 exercise often stops at this point since the total resources may be insufficient to go beyond or even to meet both parties’ needs. If so, no room is left for the application of any sharing principle. Addressing the needs of say, the wife and children may immediately absorb more than half of the total assets. If so, “needs” are, for want of any alternative, determinative.

79. Baroness Hale stressed that the parties’ needs should be “generously interpreted”.[88] Accordingly, in trying 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, those needs should not be assessed according to some perceived lowest common denominator, but with flexibility in the light of all the relevant circumstances.[89]

80. 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 (as pointed out by Sir Mark Potter P in Charman v Charman (No 4)[90] cited above). In other words, the court should not make an immediate allocation but should return to “needs” for them to be dealt with alongside all other material factors in the processes described below as Steps 4 and 5.”

174.Mr Ah-Weng submitted that W’s needs are to be assessed on a life-long basis. He submitted that W relies on life expectancy tables from the Census and Statistics Department.

175.When asked why no expert evidence was called, Mr Ah-Weng submitted in his Closing Submissions that,

“112. ….judges regularly adopt CSD statistics for assumptions of life expectancy. This is particularly evident whenever Duxbury calculations are used because Duxbury calculations are based on various actuarial assumptions, such as life expectancy.”

176.Mr Ah-Weng cited the case of F v F [2003] 1 HKLRD 836:

“197. The Duxbury calculations, as mathematical models, are founded on a great many assumptions as to life expectancy, rates of inflation (or deflation), return on investment, incidence of tax and the like. In respect of a spouse in his or her middle years, such assumptions have to reach out over thirty or forty years. But a study of the past thirty or forty years teaches us that nothing can be predicted with certainty, not in the field of economics. As Ward J commented in B v. B [1990] 1 FLR 20 (at 24), when himself considering the limited usefulness of Duxbury calculations and warning against its unblinkered application: 'the only certainty [as to the future] is that it will not happen as we have predicted'. Ward J himself cited the observations of Lord Oliver in Hodgson v. Trapp [1988] 3 WLR 1281 (at 1298) which I can do no better than repeat :

"... the exercise upon which the court has to embark is one which is inherently unscientific and in which expert evidence can be of only the most limited assistance. Average life expectations can be actuarially ascertained, but to assess the probabilities of future political, economic and fiscal policies requires not the services of an actuary or an accountant but those of a prophet."

177.Mr Ah-Weng also submitted that W never contemplated a clean break, and Duxbury is a calculation for a capitalised sum that depletes in the course of a person’s life according to her investment and expenditure. In his Closing Submissions, he submitted that,

“114. The Duxbury calculation refers to the use of a computer program or calculation that can calculate the lump-sum which, if invested, will produce enough income to meet the recipient’s income needs for her life to cover her expenses, by taking into account such factors on life expectancy, rates of inflation, growth of capital, taxation and return on investment…

The idea is that a lump sum should be paid that will yield sufficient income for the wife for the rest of her life and that will be entirely exhausted on her death…” [Family Law $ Practice in Hong Kong (3rd Edn.)

178.Mr Yim, on the other hand, submitted that given W’s age, earning capacity and the short duration of the marriage, it is unreasonable for W to rely on H to meet her financial needs for the rest of her life.

179.He drew my attention to the following cases:

(a) G v G [2012] 2 FLR 48, after referring to Miller/McFarlane, Charles J said,

[134] To these citations, I add my application of the guidance given in Miller v Miller; McFarlane v McFarlane in H v H [2007] EWHC 459 (Fam), [2007] 2 FLR 548, I said:

'[96] In this context it seems to me important to remember that a non-discriminatory, equal and fair approach is two sided and an approach that has to be assessed and applied against the background and nature of a marital partnership. Therefore it seems to me important to ensure that the pendulum does not swing too far from

(i) a discriminatory and unfair award based on “reasonable requirements” and a Duxbury capital sum giving the ex-wife enough to meet those requirements until the date of her death based on an actuarial basis and nothing more; to

(ii) an award that is unfair and discriminates against the party that has made the main direct financial contribution because it fails to recognise that:

(a) the marital partnership is terminable at any time and there is not a legitimate expectation of long-term economic parity by reference to what the position of the lower earner would have been if the marriage had not broken down,

(b) …

(c) the aim is self-sufficiency and to give each party an equal start (my emphasis) on the road to independent living (see Baroness Hale of Richmond at para [144] having regard to their own talents and attributes, and their obligations and economic disadvantages flowing from the marriage (eg the wife continuing to be the primary caretaker of the children),

(d) in general the assumption is that the marital partnership does not stay alive for the purpose of sharing future resources unless that is justified by needs or compensation and that if a capital division is enough to provide me in compensation then there should be no further financial revision (see Baroness Hale of Richmond, at paras [144] and [154], and

(e) the provision awarded should enable a gentle transition for the party who made the domestic contribution from the standard of living enjoyed during the marriage to the standard that she should expect as a self-sufficient woman (see Baroness Hale of Richmond at para [158], in the context of the Miller case) and in my view the length of the marriage and the role of an ex-wife as the primary caretaker of the children of the marriage would be factors to be taken into account in determining the amount of the provision to meet that transition.'

(b) In Juffali v Juffali [2016] EWHC 1684 (Fam), which was a Part III case, Mrs Justice Roberts conducted an exhaustive analysis of authority, and summarized it in relation to needs;

“79. Thus, what I collect from these decisions are the following principles:-

(i) The first consideration in any assessment of needs must be the welfare of any minor child or children of the family.

(ii) After that, the principal factors which are likely to impact on the court's assessment of needs are: (i) the length of the marriage; (ii) the length of the period, following the end of the marriage, during which the applicant spouse will be making contributions to the welfare of the family; (iii) the standard of living during the marriage; (iv) the age of the applicant; and (v) the available resources as defined by section 25(2)(a).

(iii) There is an inter-relationship between the level at which future needs will be assessed and the period during which a court finds those needs should be met by the paying former spouse. The longer that period, the more likely it is that a court will not assess those needs on the basis throughout of a standard of living which replicates that enjoyed during the currency of the marriage.

(iv) In this context, it is entirely principled in terms of approach for the court to assess its award on the basis that needs, both in relation to housing and income, will reduce in future in an appropriate case.”

180.Mr Yim also drew my attention to the case of Purba v Purba [2000] 1 FLR 444 whereby Thorpe LJ said,

“In this field of litigation budgets prepared by the parties often have a high degree of unreality – usually the applicant wife's budget is much inflated. Most unusually, in this case the wife's budget seems to have been rather understated in many respects. It is true that one of the major items on the budget was substantial monthly expenditure for rent or mortgage. It is true that that could be said to be a superfluous item once the substantial lump sum was ordered. But the essential task of the judge is not to go through these budgets item by item but stand back and ask, what is the appropriate proportion of the husband's available income that should go to the support of the wife?”

Discussion

181.It is not in dispute that even without the issues of add-back and the third parties’ interests in the securities account, the total family assets are around HK$75 million.

182.Mr Ah-Weng in his submissions accused H of not gaining full-time employment, thereby putting himself in a risky position. The words that Mr Ah-Weng used was,

“H insisted on investing (and no employment for H and W), and sustained a middle-class lifestyle with 3 boys in international school.”

183.Because of the risk and in view of the financial needs, the middle class standard of living and the twins’ special needs, Mr Ah-Weng submitted that W’s proposal of carving out is eminently sensible and practical so that W and the children are protected from H’s choice in generating income[43]. In his Closing Submissions, Mr Ah-Weng seemed to rely on s5(2) of the MPPO i.e. secured periodical payment by way of lump sum with regard to the children’s maintenance.

184.Mr Ah-Weng submitted that because of the risk, HK$24.32 million be paid into W’s new bank account and the benefit is immediate certainty and security, such that the parties do not have to be concerned as to providing for the children. In his Closing Submissions, it states that W proposes that the children’s expenses be provided for under a secured periodic payment because of the features of this family (sole income being H’s investment which is subject to serious uncertainties from inevitable market volatilities and H’s performance)[44]:

“198.1 the monthly periodic payments of HK$178,000 be paid for the children’s expenses up to the conclusion of their secondary education of until further order;

198.2 such sums as estimated to be in the sum of HK$24.32 million (estimated to include up to secondary education only i.e. 2032) be secured by deposit into a new bank account opened for this purpose.”

185.What Mr Ah-Weng seemed to be saying is that the family has been relying on H’s investment and they had been enjoying middle-class lifestyle. However, H’s investment is so risky that there needs to be ring-fencing of the fund to protect the children.

186.I find the arguments contradictory. Whilst Mr Ah-Weng in his submissions criticised H of giving up his career at the age of 40 in 2006 and insisted on investing, he submitted that the standard of living was middle-class lifestyle with the 3 boys studying in international schools.

187.With the greatest respect, my view is that when W married H, he was already retired and she said in Court that her understanding was that he had sufficient savings to provide for his retirement life (足夠佢做佢退休嘅生活). Since the marriage, H managed to support W and the 3 children with a middle-class lifestyle as submitted by Mr Ah-Weng by way of the so-called risky investment. This type of investment might be risky to some people but it had been this family’s major source of income throughout. The mere fact that W considered H’s job nature is risky is not the ground for asking secured periodical payments.

188.Mr Ah-Weng in his Reply Submissions submitted that,

“66.1 Even with all of H’s experience, and W managing largely the household/children for him, H has consistently failed to make a sustainable return (and even suffered losses) from 2010 onwards.”

189.I disagree with that. Mr Yim submitted in his Closing Submissions that,

“176. There is and will always be uncertainty in life which one simply cannot control. This uncertainty does not only apply to those who rely on private investments as their source of income. As H testified during trial, even those who are employed may be made redundant and lose their so-called “stable” source of income.”

190.I agree.

191.In the case of Wells v Wells [2002] EWCA Civ 476; [2002] 2 FLR 97, the court found that the judge at first instance had erred in awarding the wife the bulk of the assets that were readily saleable at stable prices, leaving the husband with those assets which were substantially more illiquid and risk laden. Thorpe LJ said at Paragraph 24:

"Having read the skeleton arguments and the judgment we were at once struck by the security of the result that the wife had achieved in contrast to the risks confronting the husband's economy. The family's standard of living has throughout been dependent upon the fortunes of the husband's business. Had the marriage survived the family would undoubtedly have shared adversity as it had shared prosperity…"

192.I am of the view that the fact that H had lost money before was just ordinary risk that people face in life and in any event, H had already explained that was because he did not have time to do the research.

193.In W’s 1^st Affirmation, she said,

“57. H has substantial and sophisticated investment experience. H is a qualified Chartered Accountant and a successful fund manager with over 22 years work experience. A fund manager specializes in selecting investment tools and strategies and in his case his specialty is in stocks.

58. H was the sole bread winner for the family (of 5 members, 7 if his mother and brother are included, and 9 if my parents are also included), and our monthly expenses were and are substantial. Given his financial support to our family over the past decade, he has proven track records from both his past employment and running the family’s portfolio. In effect, he remains a fund manager even after he stopped full time work.”

194.In W’s 2^nd Affirmation, under the heading of H’s earning capacity, she said,

“87. (1) As for his drive, choosing not to work full time is different from not being able to calculate and invest, which H clearly is still an expert at. H never lost his ability to analyse and invest.

(2) To the contrary, H had always been disciplined, determined and mathematically gifted. This was always the case in spite of his supposed eye condition. Further, the fact that H no longer worked full time meant that he was wholly reliant on his investment analysis skills.”

195.If it is W’s case, coupled with the fact that there has been no history of non-payment for the children’s maintenance, I simply disagree that the children’s maintenance should be safeguarded by way of a secured periodical payment by way of lump sum payment.

196.As rightly pointed out in Mr Yim’s Closing Submissions,

“247. As stated in paragraph 5.057 of Family Law and Practice, 3^rd Edn [PLOA#18], “It is generally accepted that this order will only be made if the fear of the party seeking the order was justified. Orders for secured periodical payments are rare.”

197.As to providing maintenance to W indefinitely, Mr Ah-Weng drew my attention to the case of Murphy v Murphy [2014] EWHC 2263 (Fam), through which he said Holman J in fact endorsed the correctness in principle:

[34] Again and again Mr Webster impressed upon me the relatively short duration of this marriage. He said, correctly, that I must take into account the duration of the marriage in making a judgment as to "undue hardship". He stressed how this wife had always worked until shortly before the children were born. He said I should bear in mind the ages of the parties now. That actually, in my view, cuts both ways in this particular case. It is in part the fact that this wife is already aged 42 and that her children are only aged 3 that makes her future financial position so relatively precarious.

[35] What, frankly, the arguments by the husband overlook is that the having of children changes everything. Of course this wife could never have expected a "meal ticket for life" on the basis of six years of marriage and two years of cohabitation if there had been no children. Far from it, she would no doubt have continued to work at Selfridges, or in similar employment, and at the point of the breakdown of their marriage and divorce there would have been a fair capital division and a clean break and each would have gone their own way. But the fact of having children, and their obvious dependence in this particular case on their mother for their care, changes everything, as I have said. The economic impact on this wife is likely to endure not only until they leave school but, indeed, for the rest of her life.

[36] I do not know, nor do the parties know, what the future will bring. It may be that this wife will find another partner with whom she chooses to share her life and the maintenance will all end. It may be that she will be able later, if not sooner, to obtain well remunerated employment, carrying with it a good pension, and any dependence will end. But at the moment this lady is in a precarious position. She is very largely dependent on her husband, and it is frankly impossible for me to form the opinion that section 25A(2) requires as the trigger to then making a term order.”

198.Mr Yim however submitted in his Further Submissions that W’s reliance on Murphy is unhelpful and misconceived because the case was highly fact-sensitive and did not seek to lay down any principle of law that “having children changes everything” – which W’s submissions in reply seem to suggest.

199.Mr Yim drew my attention to the following paragraphs of the judgment:

[1] The situation with which I am faced today is a somewhat unusual one.

[2] The parties were able to agree final capital apportionment between them, including the making of a pension sharing order. They were able to agree the rates of periodical payments for their two children and the proposition and basis that the husband would pay current nursery school fees. They were also able to agree current levels of periodical payments to be paid by the husband to the wife.

[6] The reason why I say that the situation is a somewhat unusual one is that issues around the duration of periodical payments and potential cessation of periodical payments are not normally completely separated out from issues with regard to capital. It does, for instance, commonly happen that as part of a negotiated outcome (or even a court imposed outcome) there is some further capital adjustment or capital provision from a payer to a payee spouse to reflect or compensate for subsequent cessation or reduction in levels of maintenance. But in this particular case the parties have completely and finally resolved all capital issues and I am, in fact, left in the somewhat unusual and not entirely comfortable situation of having to adjudicate on the two issues that were identified in paragraph 10 as a somewhat abstract exercise, when no power has been left to me to make any further or alternative capital adjustment at all.”

200.Mr Yim submitted that “the unusual facts of Murphy that can be distinguished from the present case are (a) the capital division between the parties had been agreed and could no longer be adjusted by the court and apart from the equity in her home, the wife’s only available capital was about GBP28,0100, which is a far cry from the present case, where W will be financially self-sufficient immediately upon allocation of the marital assets should the Court accept H’s Open Proposal as she will be able to draw upon assets of HK$33 million and to earn investment income on those assets to meet her needs as well as her share of the children’s needs; (b) the parties had already agreed that the periodical payment for the wife was to be reduced by an amount equal to 50% of the wife’s earned income at the end of her first year of paid employment and (c) the husband, only 35 years of age at the time of the hearing was 7 years younger than the wife and thus had a much longer working horizon than the wife, which is again markedly different from the present case.[45]”

201.Mr Yim then submitted that, “there is nothing in Murphy to suggest that in circumstances of that case the wife should receive (or should have received) more than half of the capital assets by reason of her needs on a life-long basis upon the dissolution of a 6-year marriage.[46]”

202.I agree in its entirety. It is my finding that W’s maintenance will not be life-long but only half of the matrimonial assets as proposed by H.

Assessment of the parties’ needs

W’s needs

203.Both Mr Ah-Weng and Mr Yim have helpfully submitted the following tables and I am grateful for their assistance.

W’s CASE: CHILDREN’S EXPENSES

A. L’s monthly expenses (eldest son, 9 years old as at date of trial)

Item Amount W’s Opening

¼ W’s General Expenses (4.1) $24,450.00 p. 23-24, §99

⅓ W’s Children Expenses (4.3)
(without ASD) $28,037.33 p. 27-28, §111

⅓ H’s Children Expenses (4.3) $5,283.33 p. 28, §112

MONTHLY TOTAL $57,770.66 p. 29, §115

B. A’s and D’s monthly expenses (twins, 7 years old as at date of trial)

1.     The original ASD figure [A2/482/W2 §38] comprises monthly expenses of (i) $2,266.64 (Axel) + (ii) $1,680.00 (Darian) + (iii) $2,533.33 (W’s filial therapy training) = $6,479.97/month.

2.     The item of W’s filial therapy training is now reduced to $633.33/ month.

3.     Therefore, the reduced total is (i) $2,266.64(Axel) + (ii) $1,680.00 (Darian) + (iii) $633.33 (W’s filial therapy training) = $4,579.97/month.

4.     The average monthly ASD expenses for one child is therefore $4,579.97/2 = $2,289.98.

Item Amount W’s Opening

ASD $2,289.98

¼ W’s General Expenses (4.1) $24,450.00 p. 23-24, §99

⅓ W’s Children Expenses (4.3) $28,037.33 p. 27-28, §111

⅓ H’s Children Expenses (4.3) $5,283.33 p. 28, §112

MONTHLY TOTAL $60,060.64

C. Total monthly expenses for all 3 children

Child Amount

L $57,770.66

A $60,060.64

D $60,060.64

MONTHLY TOTAL (All 3 children) $177,891.94

W’s EXPENSES

A. W’s monthly expenses per month (4.1)

Item Amount Bundle Ref

Rent
$52,000.00
[A1/213]

Utilities
$3,000.00
[A2/343-345]

Food
$16,000.00
[A2/345-346]

Household expenses
$6,300.00
[A2/346-348]

Helpers
$18,000.00
[A2/486-488]

Others(pets)
$2,500.00
[A2/351-352]

Sub-total (4.1)
$97,800.00

Sub-total (4.1)/4 persons
$24,450.00

B. W’s personal expenses per month (4.2)

Item Amount Bundle Ref

Meals outside
$3,100.00
[A2/353-355]

Transport
$2,000.00
[A2/355-356]

Clothing / shoes
$4,850.00
[A2/356-358]

Personal grooming
$4,550.00
[A2/358-360]

Entertainment / presents
$12,000.00
[A2/360-363]

Holidays
$7,476.00
[A1/277]

Medical
$1,020.00
[A2/488-490]

Insurance
$1,500.00
[A2/370-371]

Others
$8,500.00
[A2/366-369]

Contribution to parents
$8,800.00
[A2/366]

Sub-total (4.2)
$53,796.00

C. W’s total expenses per month (4.1+4.2)

¼ of W’s General Expenses (4.1) $24,450.00

W’s Personal Expenses (4.2) $53,796.00

W’s Monthly Total $78,246.00

204.Mr Yim submitted that W’s expenses are substantially inflated as compared to the standard of living that she used to enjoy during marriage and he submitted the following table to show H’s stance.

W’s Expenses

4.1- General
W’s Open Proposal

H’s Stance

Rent
$52,000

$52,000

Utilities
$3,000

$2,000

Food
$16,000

$10,000

Household expenses
$6.300

$2,100

Domestic helpers
$18,000

$5,300

Pets
$2,500

$1,500

Sub-total
$97,800

$72,900

4.2 - Personal

Meals out of home
$3,100

$2,000

Transport
$2,000

$1,000

Clothing / shoes
$4,850

$2,500

Personal grooming
$4,550

$4,000

Entertainment / presents
$12,000

$2,200

Holiday (solo)
$4,988

O

Holiday (w children)
$2,488

O

Medical / Dental
$1,020

$1,020

Insurance
$1,500

$1,500

Contribution to parents
$8,800

$8,800

Others
$8,500

$5,700

Sub-total
$53,796

$28,720

4.3 - Children

School fees
$44,196

$43,667

Medical / dental
$4,840

$4,080

ECA
$9,563

$4,900

Entertainment / presents
$1,800

$970

Holiday
$7,463

0

Clothing / shoes
$4,500

$2,250

Insurance
$3,000

$3,000

Other transport
$450

$450

Uniform
$900

$900

Others – toys, books, etc
$6,500

$5,000

Pocket money
$900

$900

Dr. Chau
$4,580

$2,290

Sub-total
$88,692

$68,407

Children’s share of general expenses
$73,350

$54,675

Children’ s expenses
$88,692

$68,407

Total children’s maintenance
$162,042

$123,082

Discussion

(i) Utilities

205.H’s stance is HK$2,000 instead of W’s estimate of HK$3,000. However, I note from W’s 1^st Affirmation that she set out in detail in paragraphs 64-68[47] how she arrived at the figure of HK$3,000, I will not make any adjustment on this item.

(ii) Helpers

206.Mr Yim criticized W’s reasoning for keeping 2 helpers to look after pets and to care for the children during emergencies or when she is away from home.

207.Mr Yim also submitted that given W had testified during re-examination that she took all three children to Taipei for holidays purpose by herself in October 2019 without the help of any domestic helper, W therefore should be able to maintain the household with one helper only[48].

208.W however explained in her oral testimony that the reason why she needs 2 helpers is because the children are growing up, they want to do different things.

209.In paragraph 74 of W’s 2^nd Affirmation[49], she also said,

“a) At our 1500 sq ft home, we have 2 cats, 1 puddle, 2 hamsters, 4 fish, 1 bird and numerous adult rhino beetles and larvae. We also foster rabbits and hamsters for the SPCA from time to time. We kept tadpoles and silk worms in the past too. Many of these were requested by the children. They love them and help take care of them.

b) As for plants, we have a 6.5 ft tall avocado tree that we grew from the seed, three 4 ft tall Polyscias plants. We also have basil, strawberries, cotton tree, tangerine, kiwi, orchids, cactus, and Tillandsia. We have over 30 plants at home.”

210.W admitted in her oral testimony that they only had cats and dogs before but upon the request of the children and also after the diagnosis of ASD, they acquired more animals because she said common sense dictates that for children with ASD, plants and animals help.

211.W disagreed that the domestic helper was only for cleaning. In her oral testimony, W said she would teach them how to cook and look after the children and pets in cases like W needed to attend Court or when she was sick, etc.

212.For my part, since I have already ruled that W should find a job to make contribution to her own and the children’s expenses, I will allow 2 domestic helpers to assist in the household chores.

213.Mr Yim also commented on the extra expenditure on the domestic helpers.

214.In W’s 2^nd Affirmation, she said,

“…..I neglected to include the cash bonus and to factor in the increased statutory minimum wage.

a) The new total for one helper is (i) salary and food allowance ($4,630 + $1,075, (ii) agency fee ($11,000.00/24 months), (iii) insurance ($750.00/12 months), (iv) 14-day paid leave about $2,626.00 and (v) air ticket and transportation (3,500.00/24 months).

b) The monthly expenses for two helpers will therefore be $8,998.00 x 2 = $17,996.00. For ease of calculation, I round the figure up to $18,000.00[50].”

215.Mr Yim submitted that the 14 days’ annual leave should be included in the monthly salary and if that is not the case, the sum of HK$2,626 should be divided by 24 months because it is a one-off item within a 24-month contract. Mr Yim also submitted that it is not necessary to give food allowance to the helper.

216.As for the annual leave, I disagree with Mr Yim’s submission. Under the Employment Ordinance (Cap 57), annual leave is an employee benefit and for foreign domestic helpers, it is to be taken upon completion of a 2-year contract, or pro-rata thereof, if the contract is finished early. It therefore follows that there will be an extra payment of HK$2,626 but I agree that it has to be divided by 24 months.

217.As to the food allowance, I note that W said in her 1^st Affirmation,

“82. An additional average monthly expenses of $7,246 is needed for another helper based on (i) salary ($4,520), (ii) agency fee ($11,000/24/, (iii) insurance ($750/12 months), (iv) 14-day paid leave $2,109, and (v) air ticket and transportation ($3,500/24 months. The new monthly total for two helpers….”

218.If W had all along been paying food allowance to her domestic helper, she would not have missed out that item in the affirmation. I therefore do not believe that she has been paying the food allowance and I will not allow that.

219.In light of my finding, I will allow: (i) salary of $4,630; (ii) agency fee $11,000/24 =$458; (iii) insurance $750/12 =$62.5; (iv) 14 days’ paid leave $2,626/24= $110 and (iv) air ticket and transportation $3,500/24 =$146 totalling $5406.50 per domestic helper.

(iii) Food

220.Mr Yim submitted that W’s claim to the food budget of HK$16,000 per month is much higher than the amount reported in her 2^nd Form E dated 12 September 2018 of HK$9,335. Even though W claimed the social movement, the pandemic and ASD for general increase in her expenses from May 2019, Mr Yim submitted that they represented an increase of 71% in one year, from September 2018 to September 2019. It is therefore submitted that W’s claim under this item is inflated and H proposed food expense of HK$10,000 is sufficient to satisfy W and the children’s needs[51].

221.I agree but I will add back HK$2,000, being the two domestic helpers’ food expenditure.

(iv) Household expenses

222.H’s stance is HK$2,100 as opposed to W’s estimate of HK$6,300.

223.In paragraphs 72-75 of W’s 1^st Affirmation[52], she set out how she arrived at the figure of HK$5,709.36 plus some of the items she paid by cash, making an estimate of HK$6,256.03.

224.In her oral testimony, W said that the household expenses have gone up because the children have grown up. There is extra expenditure such as the labour cost for clearing the blocked toilet, the cost of changing the domestic helper because every time there is a change of helper, the lock to the main door also needs to be changed.

225.In paragraphs 72-75 of W’s 1^st Affirmation, she set out how she calculated the average sum from June 2018 to May 2019[53]. However, it is noted that in September 2018, W spent HK$9,336 on a desktop. In October 2018, she spent HK$7,422 and HK$12,900 respectively on Wing On alone and on repair and maintenance. In November 2018, she spent HK$11,604 on mobile phone and in December 2018, she spent HK$4,236.50 on Muji furniture and HK$4,420 on an IP Cam. In March 2019, W spent HK$4,665 on a fridge.

226.In my view, some of the items are definitely not ongoing items such as the desktop, mobile phone, furniture, IP Cam and fridge.

227.Although W said in her 3^rd Affirmation that[54],

“90(1) In terms of broadband, this is an expense that can be recurring, though at a longer interval. I would change the broadband service provider if there is a better alternative, or if we move.

(2) The expenses for durable items (electronic equipment or furniture) occur less regularly, but they are not one-off. Due to changes in circumstances they would occur again.”

228.I disagree. At least those items should not fall into the category of regular monthly expenses.

229.After taking out those items, the annual figure would be HK$34,250.82/12 = HK$2,854.24.

230.I will therefore allow HK$3,000 as her household expenditure.

(v) Pets

231.H’s stance is HK$1,500 whereas W claims HK$2,500.

232.For my part, W has already set out the details of the calculation in paragraphs 83-86 in her 1^st Affirmation[55] and I will not disturb the figure she claims.

W’s personal expenses

233.H also has different views in relation to some of the items.

(vi) Meals out-of-home and transport

234.W is claiming HK$3,100 and HK$2,000 respectively on the above two items whereas H says that they should be HK$2,000 and HK$1,000.

235.Again, I note that W has already given detailed explanation in paragraphs 87-95 in her 1^st Affirmation[56] and I will not disturb those figures.

(vii) Clothing/shoes

236.Mr Yim put to W that for 4 consecutive months starting from December 2018, she had been buying bags and that seemed to be over spending. In Court, Mr Yim submitted the following table to illustrate:

Month

Recorded expenses ($)

Category/Item of expenditure

June 2018 159.92 Accessories

July 2018 - -

August 2018 10,098.00 Accessories: 198.00
Pashmina: 9,900.00

September 2018 1,011.00 Accessories: 112.00
Clothes: 613.00 + 286.00

October 2018 7,262.00 Accessories: 93.00
Clothes: 243.00 + 926.00
Cashmere scarves: 6,000.00

November 2018 6,891.50 Clothes: 1,191.50 + 2,000.00 + 3,700.00

December 2018 34,733.68 Bag: 1,847.50
Clothes: 1,598.00 + 711.50
Accessories: 2,305.12 + 1,624.47 – 1,549.91 (refunded)
Handbag: 12,672.00
Shoes: 15,525.00

January 2019 5,452.65 Bag: 1,312.72 + 1,675.97 + 1,372.34 + 1,136.62

February 2019 5,059.07 Bag

March 2019 12,228.26 Bags 4,996.05 + 2,943.86 + 4,288.35

April 2019 - -

May 2019 4,728.79 Clothes: 808
Accessories 3,920.79

Average per month: 7,052.07

237.Looking at the table, I agree with Mr Yim. Since it is W’s case that she cannot return to work because of the children, it is grossly excessive for W to spend HK$34,259.48 (being HK$14,519.50 for December 2018, HK$5452.65 for January 2019, HK$2,059.07 for February 2019 and HK$12,228.26 for March 2019) solely for the bags. I do not agree that because of Parents’ Day, accessories and clothes in that amount needed to be purchased.

238.I will adopt the sum of HK$2,500 proposed by H.

(viii) Personal Grooming

239.H’s stance is HK$4,000 whereas W claims HK$4,550.

240.Again, W has given a detailed explanation in paragraphs 100-104 in her 1^st Affirmation[57], and I accept that.

(iii) Entertainment/Presents

241.Mr Yim submitted in his Closing Submissions that W claims HK$12,000 under this item which is grossly excessive. He submitted that from W’s 1^st Affirmation, the most significant items were multiple pieces of jewellery that she bought from King Fook Jewellery, and she claimed those were gifts to myself[58].

242.Mr Yim then submitted that W has already confirmed in her oral evidence that H leads a “generally frugal lifestyle and it is inconceivable that H would frequently buy W jewellery as gifts for various occasions as alleged by W during cross-examination”[59].

243.I agree. In W’s 1^st Form E dated 18 January 2017[60], she set out her valuable personal items, being 3 diamonds with the purchase price of HK$177,000, HK$122,000 and HK$168,000 respectively and a Rolex of HK$233,320. The estimated current value of the 4 items are HK$233,439.

244.In my view, if H had only purchased 4 items that were of value throughout the marriage, the amount claimed under entertainment/presents appears to be excessive.

245.I will only allow the sum of HK$2,200 proposed by H.

(ix) Holiday (solo/with children)

246.Mr Yim submitted that H’s stance regarding holiday travel expenses is that the parties never took the children aboard during marriage. However, if W is claiming holiday travelling expenses for herself and the children on the expectation that she will take them on holiday in the future, H should equally be entitled to do so.

247.I agree.

248.With regard to the amounts claimed by W on her solo travel, I will not allow anything, given that the children are still very young and W should not be able to travel alone.

(x) Others

249.Mr Yim submitted in his Closing Submissions that,

“214. W claims HK$8,500 as other personal expenses, in which the most significant item represents driving lessons. Her calculation also includes Tao meditation of HK$7,000, an activity that she confirmed had stopped (along with swimming lessons) In fact, W has revised this category of expenses from HK$8,500 to HK$8,000 W’s 2^nd Affirmation, but she did not offer any explanation for reverting back to her initial estimate.

215. In any event, it is unreasonable for W to be taking driving lessons for the rest of her life as a method of “stress relief” when she can achieve the same goal through her other activities, such as watching movies, counselling, badminton and yoga.”

250.In W’s 1^st Affirmation[61], she said,

“123. In order to look after the children as best as I can, I needed to maintain optimum physical and mental health. Physically, I tried to exercise in my free time. Mentally, as the divorce was most difficult, I required long term counselling. Exercise coupled with yoga and meditation was of course avenues to distress. I therefore attend the following”

(1)      Gym – I used to go….weekly for a monthly fee of about $800. The membership has expired but I intend to continue when condition allows.

(2)      Swimming – about 2-4 lessons per month at $500 each excluding entrance fees and costs of equipment.

(3)      Counselling – about 2 sessions per month at $2,700 per visit ($2,400 before March 2019)

(4)      Badminton - %57 booking fee at government facilities per hour. I try to play once a week.

(5)      Tao meditation - $7,000 for a 3-month weekly course which is a small group privately taught by the teacher from CUSCS courses.

(6)      Yoga – I used to go….weekly. Each 90-minute session costs $200. I have not been able to continue but I intend to resume when condition allows. The $398 incurred in September 2018 was the costs of 1 session plus costs of yoga apparels.

(7)      Driving – I take driving lessons every other week and I drive in a manual car in rural areas as stress relief. However, I do not wish to own a car and incur the related expenses such as parking, petrol, license fees, insurance, repairs and maintenance. I therefor take these ad hoc lessons with a driving instructor, so that I am safe. I hope to improve my driving and be able to drive the children abroad, e.g. on holidays.”

251.Looking at the content of her Affirmation, I agree that at least the driving and swimming lessons should not be life-long.

252.In W’s 2^nd Affirmation[62], she said,

“69….. I used to attend swimming lessons and Tao meditation as well, but I have stopped these activities since about September 2019.

70. As of December 2019, I joined Pure Fitness, and the membership included yoga classes. The monthly fee is about $1,138.00…

71. Therefore, my new estimation of the expenses on the category of “Others” will be about $8,000.00 per month. The breakdown of the “Others” expenses is as follows:-

Category /Item of expenditure Estimated expenses per month ($)

Pure Fitness
1,138.00

Counselling
($2,700 per sessions, 2 sessions per month)
5,400.00

Badminton
($51 per booking, 4 times per month)
204.00

Driving Training
($1,500+$13,500)/12
1,250.00
(average monthly costs of the whole course)

Total:
7,992.00

253.I agree that HK$8,500 as claimed by W is grossly too much, and I will allow HK$5,700 as proposed by H.

Children’s Expenses

(i) School fees

254.Although W claims HK$44,196 and H’s stance is HK$43,667, W said in her oral testimony that all children are in lower elementary and the school fees are HK$17,400 x 10 months x 3/12 = HK$43,500. I will therefore allow HK$43,500.

(ii) Medical/Dental

255.In W’s 1^st Affirmation, the figure she put under this item is HK$3,625.83[63].

256.In paragraphs 62-68 of W’s 2^nd Affirmation[64], she added children’s ophthalmic medical expenses in the additional sum of HK$1,066.67 per month.

257.She also said that as the family dentist recommended that the children should have more frequent dental check-ups, such as once every 4 months and each check-up costs about HK$560, making an additional HK$560 x 3/12 = $140. The revised figure is therefore HK$3,625.83 + HK$1066.67 + HK$ 140 = HK$4,832.50 rounding up to HK$4,840[65].

258.As W could explain the revision, I allow the figure under this item.

(iii) Extra-Curricular activities

259.W in her 1^st Affirmation estimated that to be HK$4,897.50, which included swimming lessons and drum lessons at Parkland Music[66]. She also said that because the children have become older, they need additional extra-curricular activities on Fridays.

260.In her 4^th Form E dated 24 August 2020[67], W put down the figure of HK$9,563 as she claimed that the increase was in the form of private lessons at home due to social unrest and the Covid-19 pandemic. However, no such receipts have been attached.

261.In her oral testimony, W said because of the pandemic, the drum teacher has to go to their home to teach but as he has the heart and is very good, so even when life goes back to normal, W will still consider extending the service of the drum teacher rather than go to琴行.

262.Again, I see no receipts that show the expenditure has doubled, and I will therefore only allow HK$4,900.

(iv) a) Entertainment/presents; b) holidays; c) Clothing/shoes; d) Others – toys, books etc

263.W is claiming HK$1,800 on entertainment, HK$7,463 on holidays, HK$4,500 on clothing and HK$6,500 on toys and books.

264.On entertainment, although W claims HK$800 per month, she says that as the children grow older, each of them will be engaging in more social events, such as concerts and musicals. She estimated that there would be an additional HK$600 per month[68].

265.H criticised W of spending too much on those items and he has prepared the following table to illustrate:

P’s Form B expenses – Chart Petitioner’s 1^st Form E (dated 18 January 2017) Petitioner’s 2^nd Form E (dated 12 December 2018) Petitioner’s 3^rd Form E (dated 28 June 2019; filed on 12 July 2019) Petitioner’s Affirmation (filed on 20 September 2019)

Part 4.3 School fees $35,750 $39,453 $40,033.33 $40,100

Pocket money N/A $300

Medical / Dental $4,750 $3,434 $5,194.00 $3,200

Extra-curricular Activities $0 $4,866 $4,897.50 $8,050

Entertainment / presents $4,350 $0 $1,050.93 $1,800

Holidays $0 $1,296 $1,982.43 $3,400

Clothing / shoes $1,625 $3,528 $4,026.43 $4,500

Insurance premia $0 $2,851 $3,242.22 $3,000

Other transport $600 $300 $398.33 $450

Uniform $1,625 $500 $901.63 $900

Others : Toys, Books, stationary, art supplies contributions to class, contribution to school staff $3,475 $5,037 $6,265.88 $6,500

Sub-total $52,175 $61,265 $67,992.68 $72,200

Total (Parts 4.1 + 4.2 + 4.3) Inclusive of legal costs $209,606 $213,888 $282,069 N/A

Exclusive of legal costs $194,606 $178,706 $205,097 $220,700

Add Play therapy training groups for children recommended by Dr Chau (Para 180of P’s 1^st Affirmation N/A N/A +$7,250
(Part 4.4) +$6,560
(Para 180)

Total inclusive of Dr Chau’s play groups (Para 59 of P’s 1^st Affirmation) Inclusive of legal costs N/A N/A $289,319 N/A

Exclusive of legal costs N/A N/A $212,347 $227,260

Children maintenance Para 4.1 × ¾ + Part 4.3    $118,589
(i.e. $88,553 × ¾ + $52,175) $118,877
(i.e. $76,816 × ¾ + $61,265) $130,939
(i.e. $83,929 × ¾ + $67,993) $144,000
(i.e. $96,000 × ¾ + $72,000)

Part 4.4 Anticipated future expenses for children (× ¾)    $46,950
($9,100 + $18,000 + $32,500 + $1,000 + $2,000 × ¾) $2,829 $14,378 (Dr Chau’s expenses and other future expenses are inclusive above)

Total    $165,539 $121,706
(rounded up to $120,000 as stated in para 12(2) of the P’s Open Offer (CTYT-16) $145,316
(an increase of 19.4% from P’s 2nd Form E within 10 months, when the rent of Stanley flat has remained unchanged and the school fees have increased by 1.5%) $144,000
(an increase of 18.3% from P’s 2nd Form E in 12 months, when the rent of Stanley flat has remained unchanged and the school fees have increased by 1.5%)

266.H said in his 2^nd Affirmation that,

“46. As to the Petitioner’s inconsistencies and fluctuation of the children’s expenses in her 1^st, 2^nd and 3^rd Form Es and the Petitioner’s Affirmation as shown in the table above:

(a) It illustrates that the children expenses can, in fact, be flexible;

(b) It reflects a lack of prudent consideration in making spending decisions, particularly when the children’s expenses will be financed by investment returns, which are by nature unpredictable and uncertain; and

(c) This is incompatible with the simple lifestyle of the family including the boys has all along been modest…[69]”

267.In reply to that, W said in her 3^rd Affirmation that[70],

“84. Although we live a “simpler” lifestyle, it is by no means low cost. We are a middle-class household. The children go to international schools, which better cater for their ASD. H noted that the children ate healthy food at home and playing educational and non-electronic toys. However, the healthy foods are largely imported vegetables, fruits, eggs, meat and seafood. Some of these are organic, grain-fed, free-range, free from added hormones or antibiotics, or caught in the wild. They drink fresh milk and 100% orange juice. These are by no means low costs. Not to mention the three boys are growing fast. The amount of food they eat are also growing fast.

86. I devoted much time to select suitable educational toys and activities for the three children to their respective needs and interest. They come from more reliable stores and sources, and are durable and well-made. Also, they are replaced due to breakage, wear and tear. Books for example we need to keep buying as the children grow in age.

87. The children wear good quality mid-market clothing and shoes. Though these are not expensive individually, there are three fast growing young children. We need many sets of clothes. They change their clothes several times a day, typically after meal times and once at shower and bath.

97(1) H neglected the fact that the children were growing fast. Their needs change periodically, sometimes unpredictable. Furthermore, their conditions with ASD cause more expenses to be incurred, whether from frequency of replacement of items, due to lost, or wear and tear on items.”

268.I agree that children are growing fast and their needs change. However, for the expenditure under those items, it can vary depending on the standard of living of the family.

269.In W’s 3^rd Affirmation, she said[71],

“52. H was also persistent with his complaints over rental and other expenses.

(1) H gave me only $25,000 a month for household and my personal expenses. The amount was the same despite the number of children increased from 0 to 3, and the number of foreign domestic helpers increased from 0 to 2. This was clearly insufficient.

(2) All along, H had an unrealistic view over and underestimated the family expenses after we began to have children. Generally, H is very successful with the financial markets, but not apt in running a household. During our first pregnancy, he got upset with my buying maternity clothes and said that I should only buy a total of 8 pieces of maternity clothes. He was well aware that a pregnancy lasted for about 40 weeks and in Hong Kong these would spread across seasons.

(3) On occasions H gave me large lump sum to cover the household and my personal expenses. However, when he often got upset, it was futile to communicate with him on this, so I had to use my own savings to cover expenses related to the household, the children and myself.”

270.If this is W’s case, I agree that H is frugal. I will not accept the figures claimed by W under those items but those proposed by H.

(v) Dr Chau

271.As I have already ruled that there is no evidence in support of the twins’ ASD, I will not accept the figures claimed by W but adopt H’s instead.

272.In light of my ruling, I set out the Court’s stance on the expenditure of the partner that on the children.

W’s Expenses

4.1- General W’s Open Proposal H’s Stance Court’s Stance

Rent $52,000 $52,000 $52,000

Utilities $3,000 $2,000 $3,000

Food $16,000 $10,000 $12,000

Household expenses $6.300 $2,100 $3,000

Domestic helpers $18,000 $5,300 $10,813

Pets $2,500 $1,500 $1,500

Sub-total $97,800 $72,900 $82,313

4.2 - Personal

Meals out-of-home $3,100 $2,000 $3,100

Transport $2,000 $1,000 $2,000

Clothing / shoes $4,850 $2,500 $2,500

Personal grooming $4,550 $4,000 $4,550

Entertainment / presents $12,000 $2,200 $2,200

Holiday (solo) $4,988 0 0

Holiday (w children) $2,488 0 $2,488

Medical / Dental $1,020 $1,020 $1,020

Insurance $1,500 $1,500 $1,500

Contribution to parents $8,800 $8,800 $8,800

Others $8,500 $5,700 $5,700

Sub-total $53,796 $28,720 $33,858

4.3 - Children

School fees $44,196 $43,667 $43,500

Medical / dental $4,840 $4,080 $4,800

ECA $9,563 $4,900 $4,900

Entertainment / presents $1,800 $970 $970

Holiday $7,463 0 0

Clothing / shoes $4,500 $2,250 $2,250

Insurance $3,000 $3,000 $3,000

Other transport $450 $450 $450

Uniforms $900 $900 $900

Others – toys, books, etc $6,500 $5,000 $5,000

Pocket money $900 $900 $900

Dr. Chau $4,580 $2,290 $2,290

Sub-total $88,692 $68,407 $68,960

Children’s share of general expenses $73,350 $54,675 $61,734.75

Children’ s expenses $88,692 $68,407 $68,960

Total children’s maintenance $162,042 $123,082 130,694.75 round up to 131,000

H’s needs

273.Mr Yim reproduced below H’s general and personal expenses based on the latter’s 4^th Form E and 1^st Affirmation (excluding expenses of HK$7,971 relating to Flat 43A):

Item
Amount (HK$)
Bundle Reference

General expenses

Rent
30,800
A1/307

Utilities
1,500
A1/307

Food
3,500
$4,000 [A1/307] - $500 spent on children [A2/455]

Household expenses
500
A1/307

Domestic helper
1,200
A1/307

Contingencies
1,000
A1/307

Sub-total
38,500

Less: Rent attributable to Children
5,000
A2/454

Less: Utilities attributable to Children
200
A2/454

H’s share of general expenses [C]
33,300

Personal expenses

Meals out-of-home
4,400
$6,800 [A1/307] - $2,400 spent on children [A2/454]

Transport
4,800
$6,000 [A1/307] - $3,200 spent on children [A2/455]

Clothing / shoes
500
$750 [A1/307] - $250 spent on children [A2/455]

Personal grooming
200
A1/307

Entertainment / presents
1,000
$2,000 [A1/307] - $1,000 spent on children [A2/455]

Medical / dental
1,000
$1,700 [A1/307] - $700 spent on children [A2/455]

Insurance
2,625
A1/307

Contribution to mother
4,000
A1/307

Contribution to brother
1,000
A1/307

Donations
1,420
A1/307

Foreign Correspondents’ Club membership
1,100
A1/307

Health club
800
A1/308

Family counselling
12,800
A1/308

Mother’s health insurance
6,280
A1/308

Brother’s health insurance
2,625
A1/308

Mother’s uninsured medical expense
6,000
A1/308

Flat 8A management fees & rates
4,028
A1/308 ($2,428 + $1,600)

Mother’s dental
200
A1/308

Brother’s eye exam
110
A1/308

Brother’s dental
100
A1/308

Contingencies
2,000
A1/308

Sub-total [D]
54,988

H’s total monthly expenses [C] + [D]
88,288

274.H agreed that there are no receipts for most of the items he claimed but he said that he has a method of calculating them[72] and unlike W, who could produce receipts but she suddenly raised the monthly expenditure by purchasing expensive clothing and bags.

275.Mr Ah-Weng in his Closing Submissions submitted that under cross-examination, it was put to H that his estimates were not supported by the actual bills he produced[73]. Furthermore, he submitted that H certainly did not need to spend HK$12,800 on counselling, i.e., HK$3,200 per week, as pleaded in H’s answer.

276.Mr Yim submitted that at §61 of W’s Closing Submissions, she challenges H’s expenses on the basis that they are not supported by independent evidence. However, H had already provided supporting documents for many of the significant items listed above when he filed his Answer to W’s Questionnaire:

•     Tenancy agreement [B5/1742-1752];

•     Copies of credit card statements which list many food and out-of-home meals related expenses, as well as Octopus card top-ups which related to transport expenses [B5/1798-1811];

•     Copies of utilities bills [B5/1816/1820];

•     Copy of letters from Dr Hung confirming his session rates from 2015 to 2020 [B11/3455];

•     Copies of Foreign Correspondents’ Club statements [B5/1821-1832];

•     Copies of health insurance premium notices [B5/1833-1834] (copies of health insurance premium notices for the years 2010 to 2018 have also been provided in B11/3452 -3520).

277.I agree. As for counselling, since H could produce Dr Hung’s letters, I accept this item of H’s expenditure.

278.Mr Ah-Weng in his Closing Submissions also submitted that H did not need to live in the Taikooshing flat. H could have lived in a smaller flat, or at a more affordable location, either closer to Flat 8A or in neighbouring districts such as Sai Wan Ho or Chai Wan.

279.In Court, Mr Yim drew W’s attention to the fact that there are 10 weeks’ summer holidays, 2 weeks for Christmas, 1 week for Chinese New Year, the mid-term break and the Easter holidays respectively, making a total of 15 weeks. H therefore would have 7 ½ weeks plus weekly staying access making a total of 100 days. Mr Yim then went on and said that H’s rental flat could create a stable environment since W agreed that they had to maintain the relationship.

280.In H’s oral testimony, he said that the access arrangement now is H will pick up all the children on Saturday at 8 a.m. and then at the appropriate time he will take A to North Point and then he will carry on access with the two children. W will fetch A later and have lunch with him and when D finishes treatment, she will take A to reunite with H. On Sunday morning there will be drum lessons and swimming lessons in the afternoon.

281.I find nothing wrong with H renting a flat in Taikooshing, which is near the children and can also accommodate them during their staying access with H.

282.Mr Ah-Weng also submitted that H nominated components in “contingencies”. He submitted that in his 2^nd Form E, H said this included medical/dental for H’s Brother and H’s Mother. However, in his 3^rd Form E and his 4^th Form E, “contingencies” became “furniture and fittings”. Furthermore, under cross-examination, it was put to H that in H2E, there was double counting. “Medical/dental expenses” for H’s Brother and H’s Mother in both “contingencies”.

283.Mr Yim, however, submitted that H admitted during cross-examination that some items such as contingencies were estimates but cited examples that would fit into this category, such as purchase of ink cartridges and hiring of pest control to exterminate bed bugs.

284.I accept that for the sum of HK$2,000 under this item is not excessive.

285.Mr Ah-Weng also commented on transport expenses. He said under cross-examination, it was put to H that in his 1^st Form E and his 2^nd Form E, H only claimed HK$3,000. In his 3^rd Form E and his 4^th Form E, H suddenly increased to HK$6,000. No explanation was offered to H’s affirmation[74].

286.H said in his oral testimony that for transport and solely for access, there are altogether 37 weekend access, the taxi fare from Taikooshing is around HK$200+ per journey. It would be 37 x $500 = HK$18,500. Long holidays are HK$250 x Weekday access is 111 x HK$100 =HK$11,100. Those are taxi fares excluding others which he took bus for himself for example.

287.I agree that the sum of $4,800 claimed by H under this item is not excessive.

288.Mr Ah-Weng also submitted that for the item under Others, it includes many items for H’s Mother and H’s Brother. He also submitted that there is no evidence as to the assets held by H’s Mother and H’s Brother, and the need to provide for such expenses. In any event, as submitted before, the needs of H’s Mother and H’s Brother are not the needs of this household. These should all be excluded.

289.As I have already ruled that the expenses spent on H’s Brother and H’s Mother are family expenses, those will be allowed.

290.H also gave oral evidence to explain other items of monthly expenditure.

291.As to electricity, H said that he did not exaggerate the amount even though the HK electric bill that he exhibited[75] showed that the bill was only HK$553 as he was only stating the average (拉上補下). As air-conditioners and heaters would be on during the summer and the winter respectively, H said HK$1,000 would not be excessive.

292.I agree. The bill payment that he exhibited was for the period from 5 September 2018 to 3 October 2018. It was the period that air-conditioners and/or heaters were usually not required.

293.For meals out-of-home, H said in his oral testimony that he would have 97 times x HK$400 = HK$38,800. He also has meals with H’s Brother and H’s Mother once a week and as they eat only Chinese food, there is therefore an additional 52 weeks x HK$500 = HK$26,000, making a total of HK$64,800. Divided by twelve months, the monthly amount is HK$5,400 and the remaining HK$1,400 is for personal meals out-of-home.

294.H said in his oral testimony that he would take the children for holidays. For a long trip, he would take them to London Zoo and the museum. For a short one, he planned to take them to Japan to see the snow. He believed that spending the different holidays with the father and the mother respectively, the sons will have different perspectives. He proposed that whoever takes the children for a holiday, he/she would bear the expenses.

295.I accept H’s stance in relation to his expenses. In any event, given that he has promised to pay 2/3 of the children’s expenses and if he could not, he said that he would resort to depletion of his capital assets, I need not worry that he will over-spend.

8A

296.Before or shortly after their marriage, W already knew that 43A and 8A were there and H paid for everything and that they were held by H jointly with H’s Mother.

297.Mr Ah-Weng, however, submitted that the parties had made an agreement to co-own all their assets.

298.W said that when they were still in courtship, H mentioned that he knew a couple who got married after they graduated. They soon put their assets together and H thought that arrangement would help with the relationship.

299.In W’s 3^rd Affirmation,[76]

“11. H often talked about how much he admired a couple, his undergraduate peers, who pooled all their wealth together after getting married He became fixed at the idea that a couple should pool all their assets together and this strengthened their unity (“Couple’s Ideal”).”

300.W said that H was keen on the Couple’s Ideal because he believed that it would improve the relationship as it would bring unity (有助關係發展). W said that it was not a promise (應承) but H suggested the idea and persuaded her to follow the same.

301.After that and before their marriage, H took her to Hang Seng Bank to add her names, which surprised both herself and the staff thereat who knew H well. Shortly after they were married, H soon added her name to the securities/investment account.

302.In paragraph 21 of W’s 1^st Affirmation, she said,

“19. A rather unusual feature of our marriage is that we agreed to hold all our assets jointly. It was H’s suggestion, and eventually I agreed (“Agreement”). Pursuant to this Agreement, we added each other’s names to our assets. This was done so on the basis of trust, so no lawyers were involved. It was a mutual commitment to being together….”

“21. To honour the Agreement, to my recollection we did the following including:

(1) H added my name to all of H’s bank accounts and securities accounts before and shortly after marriage respectively;

(2) Following the above, over the following year, I gave all my cash savings (in HKD and RMB), totally over HK$3 million to H’s joint account (Hang Seng Bank (“HSB”)

(3) After the birth of our first son L, H removed H’s Mother’s name and added my name to 43A, so that H and I were the joint owners;

(4) At the same time, I added H to the Smithfield Terrace Property;

(5) I only kept minimal balance in my HSBC account to maintain the safe deposit box in HSBC. I also added H’s name to my safe deposit box.”

303.W said as she has done all her parts (我完成我部分) but not H who had left out 8A.

304.W said in her 1st Affirmation[77],

“When I queried H about it, he said he was well aware of the inconsistency and he did feel guilty for it. Despite his filial piety, he believes that H’s Mother would be upset and fearful so much so that she might become hysterical.”

305.In her oral testimony, she said H apologized and said he did not want to trouble H’s Mother (唔想打攪佢阿媽).

306.H, on the other hand, said in his oral testimony that his father died in 1990 at the age of 60 when H’s Mother was 57, and H was only 27. His brother has been suffering autism and that his eyesight has less than 5% impairment and therefore he has difficulty to move around himself.

307.H said that 8A was purchased in 2000 and 43A was purchased in 2003, both in the joint names of H’s Mother and H. H said in his oral testimony that his mother and him did not care much about figures (彼此沒有計算, 冇計嘅). But if it were to be put into figures, he had studied in England for 6 years and therefore H’s Mother would have spent HK$3-4 million on him and 8A was purchased for HK$4.9 million. The return (if any) would be more or less the same.

308.H agreed that he did mention to W a romantic story, which was about his Malaysian friend who met her husband at university and soon they had a joint account. H said in his oral testimony that the Couple’s Ideal is inspirational and not a commitment to hunt down each other’s assets under their respective names and then make them 50-50. He specifically denied that he had ever put forward the idea of forming each other’s assets in the ratio of 50:50.

309.H admitted that after marriage, the other party’s name was added to most of their own respective assets so that those assets were held in joint names, such as H’s own securities account and the cash and RMB which W was holding. H, however, disagreed that by doing so, it was meant to perform the Agreement.

310.As to 43A, however, he was reluctant to transfer to W for several reasons: it involved stamp duty and legal costs; further, he would have to take time to explain to his mother who, H admitted in reality, only held the property nominally and had no say in it. In his own words, he said that his mother would have a share of the financial outcome no matter the property was sold or let.

311.H said in his 2^nd Affirmation[78],

“(6)…..W’s name was only added to Flat 43A in April 2012, some two years after I transferred my liquid assets to a joint account. Prior to that, Flat 43A was held in the joint names of my mother and I.

(7) Nevertheless, upon W’s persistent requests, I eventually spoke to my mother about transferring her legal title of Flat 43A to W, in recognition of the symbolic meaning that W saw in the ownership of our matrimonial home, namely (a) that W’s position as the mistress of the house should be reflected in its ownership, and (b) that it would help my mother to recognize W’s aforesaid position, in order to reset their future relationship on a more harmonious basis.” (W覺得她才是43A的女主人, 應該有title媽媽嘅title唔啱確認她的地位還她的尊嚴第一我尊重她媽媽也尊重她等她有個尊嚴).”

312.H admitted in his oral testimony that he could not handle W’s temper but she had her point about being respected. Therefore, W transferred Smithfield and H transferred 43A around the same time.

313.In his oral testimony, he said H’s Mother has nothing to do with Flat 43A; be it a rental or sale, the Mother would not gain anything. H said therefore when he had made the decision to do the transfer, apart from the need to talk to H’s Mother, he also had to think seriously about the issue of costs in relation to the transfer. H said just for stamp duty, he had to pay HK$375,000. However, because of his love to W, he made the transfer.

314.With regard to 8A, he denied that he had ever apologized.

315.He denied that the Mother has influenced him a lot. In his oral testimony, he gave the example that H’s Mother didn’t like his early retirement but he still went ahead. He also said H’s Mother is a Christian and she wanted him to return to Hong Kong after 6 years of studies, but he went his own way by learning Buddhism and worked in England for a further 7 years.

316.H admitted that he owned 50% of 8A, but as it was intended for his Brother to live there for life, he considered his Brother the beneficial owner though he agreed in his oral testimony that his brother has no legal interests (法律上冇實際擁有權).

317.Mr Yim submitted that there are departing factors to justify an exclusion of H’s 50% ownership of Flat 8A from the distribution, or alternatively, an adjustment in the overall distribution of assets to the parties.

318.H in his 1^st Affirmation[79],

“62. ….I have strong and meritorious reasons to invite the Court to exclude Flat 8A from the distribution of matrimonial assets in the matrimonial proceedings and shall remain in the joint names of my mother, brother and I for the following reasons:

(a) Flat 8A was purchased solely with my funds on 27 March 2000 in the joint names of my mother and I;

(b) Flat 8A was purchased by me over 9 years before marriage;

(c) Flat 8A was bought for the specific purpose of settling my mother and my autistic younger brother;

(d) My mother and brother have always been residing in Flat 8A since its purchase over 19 years old;

(e) I have never resided in Flat 8A at all since its purchase over 19 years old;

(f) It has always been my intention since the purchase of the property that my brother will continue to live there after my mother’s eventual passing. Hence my brother is the sole ultimate beneficiary of this property;

(g) My father passed away about 30 years ago and I have since assumed the responsibility to take care of my mother and brother;

(h) My conduct supports the intention that my brother is to be the sole ultimate beneficiary of Flat 8A, namely (i) since the purchase of Flat 8A, my mother and younger brother have all along been living there for 18 years continuously and still live there; and (ii) I have never lived in Flat 8A since its purchase; and

(i) This intention was well understood by the Petitioner and I. In the early year of the marriage between the parties, both parties have changed the title of their respective assets from their sole name into their joint names, including: (i) matrimonial home (ii) the securities account; (iii) the bank accounts; (iv) the Smithfield Property….”

Discussion

319.W when cross-examined by Mr Yim that if there was an Agreement, it should be legal jargon. W said that it 代表嗰件事. W also agreed that she and H talked in Cantonese when discussing the Agreement during the marriage.

320.When cross-examined by Mr Yim that there was no mention of 8A in the so-called Agreement, W said that they were not in a business relationship and there was no completion date. She said it was H’s proposal and W emphasized that the proposal was to put all assets together (將自己擁有嘅嘢擺曬出嚟).

321.I do not believe W’s evidence. I believe that there had been a discussion about the Couple’s Ideal but it did not go so far as to put everything together.

322.From W’s Answer to H’s Questionnaire dated 21 November 2018[80]:

“(4) For avoidance of doubt, on the Respondent’s suggestion, the parties voluntarily proceeded to change to hold assets in joint names. This was based on mutual trust and affection during marriage and conduced entirely without supervision of cross-checking. Neither party queried nor demanded the other to conduct full disclosure of each other’s assets and there was therefore no demand that each party should follow through on each and every asset they separately held……In any event, for ancillary relief purpose, the Petitioner accepts the Respondent’s asserted position on his two Form Es that he only holds 50% beneficial interest in Flat 8A Property.”

323.In W’s Answer to H’s Questionnaire dated 11 November 2018, W said,

(3) At the material time, the Petitioner’s only assets were her savings (approximately HK$1 million, and RMB savings converted to about another HK$2 million) and the Smithfield Terrace Property. In accordance with the Respondent’s suggestion, she deposited all her savings, then amounting to about HK$3 million into Hang Seng Bank account, and downgraded her own HSBC account to a basic account of minimal balance. Further, in May 2012, she transferred Smithfield Terrace Property into joint names with the Respondent. When the Smithfield Terrace Property was sold in 2015, the net sale proceeds were also paid into the joint account of the parties.

(4) To the best of the Petitioner’s knowledge, the Respondent voluntarily added the Petitioner’s name to:-

(i) His bank accounts since before marriage, and since then there had been changes to bank accounts and they were all along managed by the Respondent. To the best of the Petitioner’s knowledge, the bank accounts were held in their joint names;

(ii) An equity account from which the Respondent conducted his investments. The Respondent had moved the assets from one securities firm to another. The current one is Yuanta Securities, …

(iii) The Matrimonial Home (at 43^rd and 45^th Floor, Island Harbourview), this was previously held in joint names between the Respondent and his mother.”

324.In W’s own words, she used ‘voluntarily’ to mean that was not a binding agreement. Even if I was wrong, H never voluntarily took steps to transfer 8A to W.

325.In the oral testimony, H insisted that 8A was purchased by him as residence for his Mother and Brother. He would not let them pay for any of the utilities as they had no income and he said that it would not have made any sense to buy a flat for them and then ask the elderly mother and the mentally handicapped sibling to pay for anything.

326.For my part, I believe that there was a discussion about the Couple’s Ideal. However, I do not believe that there was an Agreement as alleged by W. I hold that the parties voluntarily transferred their own assets into the joint names of the parties. As for 43A, I accept H’s explanation and the reason why he subsequently chose to transfer the property into the joint names of the parties.

327.As to 8A, I will exclude that from the distribution of the family assets because (i) it was purchased by H long before marriage; (ii) H had never lived there and I believe that it was his firm intention that it was meant to be the residence for his Mother and his Brother.

HK$1 nominal maintenance

328.Mr Ah-Weng drew my attention to the following passages under paragraph 95 of the Family Law & Practice in Hong Kong (3^rd Edn),[81]

“[5.048] There is a clean break when a party’s claims for periodical payments and secured periodical payments are dismissed by the court. Following a clean break, a party is not at liberty to make an application for maintenance at all. Under Hong Kong legislation there is no provision, unlike under s 25A of the MCA, for the court to consider whether a clean break is appropriate, but this tends to be how the court will look at a case if appropriate. It is generally considered to be beneficial to parties to be able to finalise their dealings with each other if they can and to proceed independently into the future unburdened by their past. This is of course not always appropriate as one spouse may be dependent on the other financially and in these cases periodical payment orders will normally be made.

[5.050] A court may also make a nominal maintenance order of HK$1 per annum which, clearly without putting a financial burden on the payer, allows the more vulnerable party to make an application for periodical payments in the future if need be.

[5.052] In most cases, a clean break will be considered if there is a possibility of self-sufficiency. In "no money” cases the rationale for the immediate clean break has been that there never was and never would be any prospect of the husband paying periodical payments and so, for the achievement of certainty and the avoidance of further unnecessary litigation, an immediate clean break was the only sensible answer.

[5.053] In "big money” cases there is usually sufficient capital to enable both parties to live comfortably on income derived from the capital. …Generally the periodical payment element is dealt with by making a capitalised assessment using the Duxbury model as a base.

5.054

Clearly therefore the "intermediate” cases are more problematic and there are many cases that demonstrate the use of judicial discretion in this area. In the case of S v S (Ancillary Relief), a capital sum of 60 per cent was awarded to the wife after a four-year marriage and nominal maintenance provided to the wife on the basis of her continued care of a young child, thus clean break was not considered appropriate. In contrast, in B v B (Mesher Order), there was no presumption of a term order in a short marriage.”

329.Mr Ah-Weng submitted in his Closing Submissions that;

(a)      W’s earning capacity is low or impaired because W is unable to return to former field;

(b)      W’s insecure accommodation because the Stanley flat is rented;

(c)      There are 3 dependent children and two being affected by ASD; and

(d)      Future uncertainties facing W.

330.Mr Ah-Weng drew my attention to 2 cases:

(i) CSY v CPK [2019] HKFLR172

331.Apart from awarding the wife a lump sum of HK$1.75 million, Deputy Judge D To also ordered HK$1 nominal maintenance. She said,

“133. W is young and has healthy earning capacity; she is able to maintain herself. However, since the 3 daughters are still very young, W’s financial situation may vary with the changing needs of the 3 daughters. Therefore, it is necessary to preserve W’s right to seek relief in future (if necessary) by awarding a nominal maintenance of $1 per annum in her favor.”

(ii) TCP v KLS [2020] HKFC 67

332.HH Judge I Wong said,

“240. A clean break is to be encouraged wherever possible: VP v JP [2008] EWHC 112 (Fam), [2008] 1 FLR 742, at [59]. At the same time, I do bear in mind the remarks made by Baroness Hale in Miller v Miller and McFarlane v McFarlane [2006] 2 AC 618 that too strict an adherence to equal sharing and the clean break can lead to a rapid decrease in the primary carer's standard of living and a rapid increase in the breadwinner's: [142].

241. With the husband taking up a substantial portion of the children’s financial needs, in times, the wife should be able to attain financial independence. That said, for the reasons that the wife has not been working since 2012 and that in reality it is a relationship lasting for 14 years, I think it is fair to give her a nominal maintenance in case of any substantial change in the circumstances in the future.”

333.Mr Yim in his Closing Submissions submitted that the nominal maintenance order made in CSY v CPK was in light of the fact that the lump sum award of HK$1.75 million was not sufficient to sustain the wife and the 3 daughters and in TCP v KLS, not only the marriage was longer, in that it lasted 14 years, and the financial resources in those cases were far less than it is available in the present case.

334.I have to distinguish the cases cited by Mr Ah-Weng with the present one in that the marriage between the parties herein only lasted slightly more than 6 years. H has agreed to equal sharing of the matrimonial assets (with the exception of 8A) despite the not-so-long marriage relationship. Furthermore, W is 14 years younger than H and W would soon get back to gainful employment. A clean break should be more appropriate in this case.

335.Furthermore, in Family Law & Practice in Hong Kong (3^rd Edn.), to which Mr Ah-Weng drew my attention above, there is also another paragraph:

5.051

The question as to whether there should be a clean break or nominal maintenance was debated in the case of MGB v GCB (ancillary relief) 54 . In this case the wife sought a nominal maintenance order, in addition to a lump sum and capitalised maintenance for 5 years, due to her limited earning capacity and her health problems. It was noted in that case that it had been the prevalent view in England, prior to the enactment of the provision in England for the duty of the court to consider the clean break, that a party was entitled to a nominal award and that this could not be dismissed without the consent of that party. It was submitted for the wife that, as Hong Kong had not adopted the requirement to consider a clean break, that the court should also not allow a clean break without the consent of the party effected. However, HHJ Bruno Chan cited the Court of Appeal in Ngao Tang Yau-lin v Ngao Kai-suen 55 which established that the court had power to dismiss claims for periodical payments without consent. In this case the court found: "that with the financial award she is to receive from her equal share of the matrimonial assets and the capitalised maintenance proposed by the Husband, and given the huge costs not just financially but more significantly emotionally and psychologically of their disputes on both parties, it is in my judgment that it will be in the best interest in particularly to the Wife that there be a final closure to their litigation by way of a clean break between them without any order for nominal maintenance, conditional or otherwise.” (my emphasis added)

What are the extent and the respective percentages of the children’s expenses to be borne by M and F?

336.I have ruled that the children’s total expenses are HK$131,000. In accordance with the Open Letter, W proposed to bear 33.3%. I am therefore of the view that H should bear 66.6%, being HK$87,377, and I will round it up to HK$88,000. I will, however, allow the commencement of payment in accordance with H’s Open Proposal.

Costs

337.As I am in favour of H’s case on all issues except the amount of monthly payment to the children, I cannot see why costs should not follow the event.

Others

338.One further point I wish to raise is that Mr Yim has made criticisms in his Closing Submissions that a lot of time was wasted during the trial to explore issues such as the upbringing and background of H’s Mother, H’s previous failed marriage, and whether or not H had walked the children to school. I entirely share Mr Yim’s view.

339.I would also like to add that a lot of points have been made in Mr Ah-Weng’s Closing Submissions and Reply Submissions as to H’s 1^st marriage, this marriage and H’s Mother influence over H’s personal life, which are totally irrelevant to the present proceedings.

Order

340.In light of my findings,

(1)     8A do remain in the joint names of H and H’s Mother;

(2)     43A be sold and the net sale proceeds be split between W and H on an equal basis;

(3)     US$564,405 of the total balance of the USD Account be returned to H’s Mother, H’s Brother and H’s Aunt;

(4)     Latest credit card liabilities of W and H be paid out of the Main Account immediately;

(5)     Remaining funds in the Joint Bank Accounts, i.e. the Main Account, H’s Expense Account and the USD Account be split between W and H on an equal basis;

(6)     Bank balances in W’s and H’s respective sole name accounts and those in the joint names of W and each of the children’s disclosed in the parties’ respective Form Es dated 24 August 2020 [82], both in paragraph 2.3, remain with the respective parties;

(7)     Pensions, MPF and valuable personal items disclosed in the parties’ respective Form Es dated 24 August 2020[83] in paragraph 2.10[84] and in paragraph 2.12[85] remain with the respective parties;

(8)     H to pay W children’s maintenance at the rate of HK$88,000 per month into a designated bank account of W on the 10^th day of each month, commencing from the month after the proceeds of the sale of 43A in (2) above and the parties’ entitlement to the funds in (5) above have been split equally between the parties, until the children reach the age of 18 or complete full time education, whichever is the later; and

(9)     Costs including all costs reserved in the ancillary relief matter to H.