Re also known as Me v. Popm also known as P-m Opr
Read the full judgment text of FCMC 1658/2020 on BabelCite. This Family Court judgment was delivered on 20 December 2023 before Her Honour Judge Thelma Kwan.
Divorce – Ancillary Relief – Matrimonial Assets – Non-disclosure – LKW v DD – Equal Sharing – Departure from Equality – Periodical Payment – Lump Sum – Costs – District Court – Matrimonial Proceedings and Property Ordinance s.7 – Assessment of assets where respondent fails to disclose – Court accepts petitioner's valuation due to respondent's silence and lack of evidence – Departure from 50:50 split to 60:40 in favour of petitioner due to needs and conduct – Periodical payment of $15,000/month ordered pending lump sum – Costs to petitioner.
Legal issues: Ascertainment of matrimonial assets · Departure from equal sharing · Periodical payment pending lump sum
Outcome: Ancillary relief granted in favour of Petitioner. Lump sum and periodical payment ordered. Costs awarded.
Cited by 2 cases · Cites 2 cases
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FCMC 1658/2020 [2023] HKFC 255 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 1658 OF 2020 ----------------------------
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------------------------------------------------------------ J U D G M E N T ------------------------------------------------------------ 1.This is the hearing of the Petitioner Wife’s (“W”) application for ancillary relief. H continues to be absent from these proceedings. 2.This decision should be read together with my extempore decision on 8 February 2023 with regard to maintenance for the three children of the family. Brief background 3.Parties met in 2005 when they were young, Respondent husband (“H”) was 23 and W was 20. They commenced cohabitation in Denmark from then and got married in August 2010. 4.H is French and a businessman; W is Danish, and for the most part of the marriage was a housewife taking care of home and the Children. 5.There are three children of the family, at the time of this decision, they are respectively age 14, 12 and 10 (together the “Children”). 6.The family first resided in Denmark, then moved to Hong Kong in 2016. Their relationship deteriorated from around 2019, parties went to Denmark in January 2020 during covid and according to W, had expected to return to Hong Kong shortly thereafter as the domestic helper and the dog were still in their rental apartment here. 7.While in Denmark they attempted to initiate divorce proceedings, which application was dismissed by the court there for lack of jurisdiction. H came back to Hong Kong in March 2020, allegedly to “wrap things up” in Hong Kong, he terminated the lease then and dismissed the helper. 8.On realizing that Denmark has no jurisdiction, W petitioned for divorce in Hong Kong in March 2020, she and the Children stayed in Denmark until June 2020 and returned to Hong Kong thereafter. 9.W says H left her and the Children in March 2020, she also says he has stopped maintaining the Children since then. He subsequently moved to Thailand in or around March 2021, W has no specific knowledge of when or to where. 10.W was granted custody, care and control of the children by an Order of Court dated 27 January 2022. 11.On 16 June 2022, W applied for relocation to Denmark with the Children; with the consent of the H, moved backed in July 2022. She attended this hearing via VCF from Demark. Court Proceedings Jurisdiction 12.The parties took more than a year dealing with the issue of divorce jurisdiction. 13.As mentioned above, the parties first commenced proceedings by joint application in January 2020 in Denmark. This was dismissed by the Denmark Court as the parties were not residing in Denmark when they applied for divorce. 14.W says that H has appealed this decision twice with subsequent decisions in April 2020 and then from the Denmark High Court in December 2020, both times with the same findings that there is no jurisdiction. The decision in December 2020 was attached to the W’s affidavit and cites the lack of jurisdiction based on a police report H made in March wherein he told the police that they were in Denmark temporarily, and that they resided habitually in Hong Kong. 15.Following W’s Petition in Hong Kong, H filed a Summons to stay the W’s Petition in June 2020. Affidavits were exchanged. His application was adjourned in the interim, there were no hearing; and an Order was made by HHJ Melloy dated 6 May 2021 for H’s Summons for Stay to be withdrawn. 16.W filed a re-amended Petition on 6 May 2021, and the matter moved forward in Hong Kong. Decree Nisi was pronounced on 21 December 2021. Schooling 17.W issued a Schooling Summons on 9 December 2020 for the Children to attend an international school in Hong Kong, as there was no agreement from the H. 18.This was resolved by a hearing on 25 January 2021 where the parties agreed to enrol the Children at the said international school, with an undertaking by H to apply for a bourse (financial aid for French citizens for schooling) and to pay $80,000 towards the school fees for the Children. Maintenance 19.W made an application for maintenance for herself and the Children by affidavit on 29 July 2020, then by Summons on 12 August 2020. Due to GAP, DDJ R Egerton gave written directions for the case to be set down for hearing on a date to be fixed, and exchange of affidavits and Form Es. It appears that this was not proceeded with. 20.On 9 December 2020, W made another application for maintenance, followed by an application for interim interim maintenance on 22 January 2021. On 25 January 2021, the Court made an Order that all but the 9 December 2020 Summons were to be withdrawn. 21.Affidavits were exchanged, and the Court received the only Form E and Affidavit that H submitted with regard to finance in March and April 2021 respectively. 22.The MPS decision was made in a written judgement by HHJ Melloy dated 8 June 2021 where she ordered H to pay HK$7,350 for each of the three Children, and directed him to pay for their school fees. Ancillary Relief 23.On 27 January 2022, the ancillary relief trial was set down for 20 June 2022. 24.W was prepared for trial on 20 June 2022, she submitted her submission and bundles, and evidence with regard to service on the H. 25.20 June 2022 was also the return date of W’s application for permanent relocation to Denmark with the Children, H did not appear but gave written consent, the Relocation Order was made on the same day. Due to H’s absence, I made an Unless Order for him to submit his Form E and submission for ancillary relief hearing in accordance with a previous order made in January 2022, failing which he would be debarred from filing any further evidence. Trial was adjourned to 8 February 2023 26.At the hearing before me on 8 February 2023, W appeared in person via VCF from Denmark, H was again absent; I made an Order for H to pay $13,300 for each of the Children, inclusive of school fees. 27.I further directed W to file a consolidating affidavit so that her financial relief application can be heard on 8 May 2023. This was W’s Affidavit dated 8 March 2023 (the “Affidavit”) and served per Court’s direction on H as confirmed by her affidavit of service dated 3 May 2023. 28.Decree Absolute was granted on 15 March 2023. H’s awareness of these proceedings 29.I refer to my aforementioned decision on 8 February 2023 regarding maintenance for the Children where in paragraphs 5 to 19, I cited the bases of my decision that I am satisfied that H is fully aware of the development of these proceedings. It is also clear to me that H has chosen to be involved only when he pleases, as in when he gave his written consent to W and Children leaving for Denmark, but chose not to engage with the ancillary relief hearing on the same day. 30.I was also satisfied that he was in receipt of documents and bundles that was prepared by W. 31.Further to the 8 February 2023 hearing, W has filed an affirmation of service dated 25 April 2023 of the service of her Affidavit on H. With this, she also produced an email (same as the email for service) from the H dated 9 March 2023 requesting a copy of the Affidavit:
32.This is evidential of the fact that H is fully aware of the on-going development of these proceedings, and fully aware of this adjourned hearing date which is contained in the same Order for the Affidavit. 33.Despite what he said, he did not turn up at this hearing. Nothing further was heard from him. 34.I am satisfied that H is in receipt of all up-to-date evidence and has, yet again, chosen not to appear to respond to W’s ancillary relief claim. The Applicable Law & Legal Principles 35.Section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), Cap 192 sets out the matters that the court must have regard to when making orders for ancillary relief:
36.The Court of Final Appeal in its landmark judgment of LKW v DD [2010] 13 HKCFAR 537 has laid down a 5-step approach in assessing the division of the parties’ matrimonial assets:
37.Which are to be considered against 4 guiding principles, namely:
Identifying the Matrimonial Assets 38.Under this heading, the Court is to consider the financial resources of the parties, with reference to s.7(1)(a) of the MPPO. W’s case 39.W has produced two detailed submissions for the hearing in June 2022 and this current hearing. Throughout the W’s case in these proceedings, she was only able to speak to three assets as no other information has been made available to her.
ENH Poland 40.It is W’s case that the parties met in 2005 when they were aged 23 and 20 respectively, started co-habitation in Denmark since then and got married in August 2010. H started a small business in trading agricultural machines financed by W’s father. H has continued developing in the same industry and had a successful business, he had his own company S, which he sold in 2016 (at HK$6.3M equivalent) and moved the family to Hong Kong. Here in Hong Kong, H invested S’s sale proceeds into a company in the same business called ENH Limited which was also funded in part by W’s father. 41.In the context of H’s earning capacity, W has this to say in her submission for the prior June 2022 proceedings:
42.After the commencement of the divorce proceedings, W says H has moved the ENH Limited’s inventory via himself to a company in Poland (“ENH Poland”), this was captured in an Inventory Transfer Agreement dated 28 February 2020 (“ITA”). W also says in her June 2022 submission that ENH Poland:
43.It is of note that the website quoted by W is no longer available after this was discovered by the W and mentioned in these proceedings. 44.H claims that he sold ENH Poland in March 2020 to a friend, he produced a Sales Agreement. However, W was able to produce record of the Polish National Court Register that as of April 2021 (more than one year after the alleged sale), H was still on record as 100% owner and Chairman of this company. H says in his affidavit that this was due to covid and record not being updated. Nothing was produced by him in respect of updated record of ownership. 45.W says that the amount at which H sold this company (EUR207,680 / HK$1,700,000) was even lower than the amount of the inventory (USD254,162 / HK$1,955,185) per the ITA. 46.W also says that the transaction amount did not take into account “the company as a going concern based on previous profitability and / or future cashflows. Suppliers’ and customers’ dealership agreements, employees with technical know-how, a well-functioning e-commerce platform / webshop, among other intangible assets were not taken into account.” 47.She also casts doubt on H’s motivation for selling the business as H says it was sold due to his need for liquidity, but the substantial payment was only required to be made two years after the sale. W says there has been no information as to where the amount was paid and how it was deployed. 48.W therefore proposes that at least the value of the inventory in the ITA is to be placed into the matrimonial pot. YouTube Influencer Channel / Review Channel (“YouTube Channel”) 49.W contends that H is the owner of several YouTube Influencer Channels. 50.This is what she has to say in the Affidavit:
51.At the time of the June 2022 submission, W says H has almost 200,000 subscribers. 52.H allegedly sold the channel to a friend, and put into evidence a sales agreement which was dated 11 March 2020 for the sum of HK$955,925, payments to be made over 48 months. W points out a number of issues with the sales agreement, including, not all the pages are enumerated, the agreement was undated on the signature page, and there were no witnesses to the signatures. 53.At the time of this hearing in May 2023, W drew my attention to a valuation report of the YouTube channel, this was previously produced in her documents in the bundle served on the H in June 2022. On questions by the Court, she explained that this was from a valuer that she found, but did not involve any court appointment. The report shows that the “Discounted cash flow” method was used based on annual income of approximately $662,000-778,000 over a number of years. She further says that this is based on the evidence of income found in the H’s bank statements which she says is not even complete so the valuation is underestimated. 54.The W’s valuer assesses the value of the YouTube channel to be $3,491,063. Investment Account S bank 55.The only piece of evidence W was able to produce was an email dated July 2016 which the H sent showing a transfer of USD105,000 and he told W that the investment account had $1,016,000. 56.W also says his Citibank account shows a transfer from S bank of $141,752 in December 2020; showing the account in S bank was still active then. 57.Notably, H has not made any disclosure on this account. He said in his Form E that this account was closed; then later said it was dormant. Value of the matrimonial pot 58.The W’s submission therefore brings the matrimonial pot to the following amount:
H’s Case 59.According to the H’s Form E dated 9 March 2021, he reported he has a net asset value of $1,241,288. The substantial part of which was under “Monies Owed” which are allegedly the outstanding payments from his sale of ENH Poland and the Youtube Channel, and something about an “ENH settlement”. 60.H’s Form E also declared the existence of a real property in Denmark; however no details were given, not to ownership nor to value. This real property is however not mentioned in the two Form Es submitted by W, nor part of her claim. H’s Earning capacity 61.In his March 2021 Form E, H reported his previous monthly income then as $65,000 under ENH Hong Kong’s employment, and then declared $0 as his income in Part 3.1 of his Form E. H has not produced any supporting documents for updated position on his income. H’s reasons are that he was not able to work due to covid, and his claim that he was “stranded” in Thailand. And despite an undertaking made on 7 May 2021 to the Court and W that he would inform both upon receipt of money from his employment, nothing has been filed. W has no information on what, if any, employment H is engaged in at this moment. Also interestingly, in this Form E, he repeatedly said he was due to report to work in Europe. It appeared that he never went there. W’s earning capacity 62.For the most part of her married life, W was the home maker and carer of the Children. She had on occasion helped H in his business during the marriage; and for a short while between August 2020 and April 2021 worked as a real estate agent in HK, earning about $15,000 a month. This coincides with the time after her return to Hong Kong from Denmark until the time her father’s company provided sponsorship to her for on-going stay in Hong Kong from April 2021. 63.H alleges that W has various interest in her maternal family business; but she says none of these were income producing to the W, and she is only director to some of the family-owned companies. H never came forward to challenge her position on this. 64.On moving to Denmark, she started to engage in some online business, but she claims that full time work is difficult whilst looking after the Children, and she has been trying to settle them down after this drastic change in their young lives. She says the income therefrom is inconsistent. Lack of disclosure 65.In W’s Affidavit, she cites the following missing disclosure from the H:
Disproving H’s alleged sale of business and Youtube channels 66.Furthermore, W’s Affidavit includes the analysis of the months from September to December 2020 of the H’s American Express card statements, she is able to identify some of the items of the transactions and says that despite H’s claim of the sale of the businesses beforehand, there are the following:
Legal Principles on Non-Disclosure 67.In the English Court of Appeal case of Moher v Moher [2019] EWCA Civ 1482, the court gave guidance on how to assess a case in the event of non-disclosure of a party's financial resources in an ancillary relief matter. Moylan LJ said,
68.I shall proceed to conduct my analysis based on the above principles. Discussion on the matrimonial pot 69.This is first step that this Court needs to attend to under the guidance of LKW v DD. 70.It is apparent to me that there is a serious lack of disclosure on the H’s part, which made the calculation of what is in the matrimonial pot an almost impossible task. The Court is left with only very sketchy information. 71.The general principle is that the value of the matrimonial assets should be that at the date of trial. 72.It is obvious that the asset information of this case is far removed from the general principles. We have a company valued based on price of inventory only; a valuation of the YouTube channel where the Court has no information as to the capability, experience and qualification of the valuer; and the amount in the S bank account which dates back to 2016. I am well conscious of these discrepancies, but all these were caused by the woefully inadequate disclosure on H’s part. 73.However, I remind myself the time that H has been well notified of the W’s case, not merely from all her affidavits, but also as her case was put together for the June 2022 trial, and as elucidated in her submission back then, and repeated for this trial. 74.H’s failure to provide necessary and updated information of the family assets has crippled the Court’s ability to make a fair assessment of the value of the matrimonial pot. Looking at the time line, H’s sale of both the ENH Poland and the YouTube Chanel took place in March 2020, which was shortly after he found out that Denmark has no jurisdiction on his divorce (despite his subsequent appeals), the W’s petition for divorce in Hong Kong and when he was supposedly back in Hong Kong to wrap things up; it looks like he was trying to dispose of these matrimonial assets, and as W alleges, at an undervalue. 75.W’s analysis of the H’s American Express credit cards shows that these multiple transactions appeared more than half a year after H says ENH Poland and YouTube channel have been sold and casts further doubts to his version of events. This is in addition to W’s case on these two transactions abovementioned. H could have come to this hearing to defend his case but chose not to. On a balance of probabilities, the court finds it hard to accept that these sale transactions took place as he alleges. 76.For almost a year from the first scheduled ancillary relief hearing in June 2022, H has never come forward (despite given opportunities) to challenge W’s case, in its scope, their value and the bases of her valuation of the assets she alleges are in the matrimonial pot. H’s silence speak much louder than words. I therefore accept W’s assessment of the value of the matrimonial assets as above. 77.H has been the sole breadwinner of the family. I find that with his age now at 41, he has substantial earning capacity, and on W’s words, been successful in his business. Despite his intention to represent himself as jobless (and as declared under the Income section in his Form E), I do not accept that he is not working or that he is not involved in some business ventures in some shape and form. In the clearly deliberate absence of a full and frank disclosure on his part, I shall draw negative inference against him and take the view that he has more financial resources than he represents, and certainly at least what the W says he has. Assessment of the Parties’ Financial Needs W’s needs 78.W proposal is that she gets 55% of the matrimonial pot. 79.By her calculation, she has a negative position of $450,980, this amount appears in her Affidavit. Looking at the bases of this claim, her first Form E dated 12 March 2021 shows liabilities of $563,626 made up of legal bill and personal loans; and her second Form E dated 16 June 2022 shows liabilities of $500,604 made up of two legal bills and an amount owed to the Children’s international school. The legal bills were provided in the supporting documents for her updated Form E. I enquired about these liabilities at the hearing. W says that the legal bills have been paid with a loan from her father, but she did not provide any supporting documents regarding this loan. As for the amount owed to the international school, her oral evidence is that after negotiation with the school, the outstanding amount was settled with the school debenture. 80.In her ask, she also factored a 7% increase annually of the money in S bank since 2016. I do not accept this calculation. It is unclear how this money has been spent back then, but I am not inclined to put an arbitrary percentage increase on this amount for calculation of this asset. 81.Factoring this 7% into account and taking into consideration her liabilities, she says her ask for 55% comes up to $3,952,849. 82.She also asks for maintenance payment pending the full payment of this sum which will bring a clean break between the parties. H’s needs 83.I do not have any picture as to the H’s needs at the point of this hearing. Whatever appeared in his 2021 Form E could not be reflective of his needs now; to say the least, he now lives in a different country, these numbers are therefore not up to date. He has not filed a submission nor an open proposal for Court’s consideration. 84.However, based on my assessment of the H’s earning capacity, I have every reason to believe that his earning is sufficient to support his own needs, as well as maintenance for his Children. Sharing and Departure from Equality 85.Taking into account the period of cohabitation, this is a marriage of more than 15 years. Considering the respective contributions by the parties to the marriage, and given the facts of this case, I take the position that the starting point is that the matrimonial assets are to be shared equally. 86.W asks for a departure from equal sharing under the principles of fairness and based on H’s post separation conduct and failure to discharge his duty to provide full and frank disclosure. 87.This is the 4th step that the Court has to consider. The case of LKW v DD has cited the following principles:
88.The court went on to cite 6 scenarios where departure could be considered. The relevant one in this case is financial needs. In this case, W has the care of the Children. She has not been paid maintenance for a long while until she resorted to the Court. Even then, she has experienced uncertainty with regard to H’s due performance of Court Orders. Despite her age, she has left the job market for a long time and needs to be given time to find her footing back in Denmark. She should have a higher percentage of the matrimonial assets to ensure some security for the Children. For all these reasons, I take the view that there should be a departure from equal sharing at 60% to the W and 40% to H. Other relevant s.7 factors H’s physical condition 89.H claims to be suffering from herniated disc in his Form E, and needs to go through surgery in due course which he says he is trying to put off as long as he could. 90.W says that his condition could have been easily resolved with surgery but H has used this to justify his spending on personal training, dietary supplements, gym membership, body massage packages and reason for unemployment. She also says that H has been practising Thai boxing participating in local competition as late as in 2020. 91.The Court has no updated information on his condition, and as this evidence of his is untested, I am unable to place any weight on this issue affecting his earning capacity and financial status in any way. Deciding the outcome 92.I have accepted W’s assessment of the matrimonial pot as $6,502,248. 93.Given that the amount owed to the Children’s international school has been settled, and I do not have any evidence regarding the loan from the W’s father; I have decided not to take W’s claim of her liabilities of $450,980 into consideration. 94.I have explained why I have decided to depart from equal division of the matrimonial assets at 60:40 split in favour of W. 95.W is therefore entitled to lump sum of $3,901,349. There shall be a clean break between the parties. Periodical Payment pending payment of lump sum 96.W asks for maintenance pending full payment of the Court ordered lump sum. 97.In her latest Form E, her expenses in Denmark are as follows:
98.I make reference to my decision on 8 February 2023 where I have made Orders for H to pay maintenance for the Children. Therein I worked from the above numbers, and made minor adjustments to the Children’s expenses to arrive at $29,420 for the three of them. In paragraph 30 of that judgment, I said that W will have to be responsible for her portion of general expenses (¼), her own personal expenses, ½ share of the Children’s share of the general expenses, and ½ share of the Children expenses (excluding school fees). This translates to $10,352 + $8,366 + $15,530 + $14,710 = $48,958. 99.Clearly this is a hefty sum to be borne by W currently, and I am of the view that she is entitled to some assistance from H until the lump sum I intend to order is fully paid for. I shall therefore make an Order for H to pay $15,000 per month to the W, this periodical payment to be backdated to April 2023 to be paid until and include the month H pays off the full lump sum aforementioned. Costs 100.There is no reason why costs should not follow the event, I will therefore make a Costs Order against H. The Order 101.The Order shall be as follows:
Petitioner acting in person (Attendance via VCF from Denmark) Respondent acting in person and did not appear | ||||||||||||||||||||||||||||||||||||||||||||||||
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