Read the full judgment text of CACV 281/2022 on BabelCite. This Court of Appeal judgment was delivered on 30 April 2024 before Chu VP, Au JA, B Chu J.
Family law – ancillary relief – divorce – financial remedies – add-back of gambling loss – matrimonial pot – notional reattribution – wanton dissipation – conduct threshold – section 7(1) Matrimonial Proceedings and Property Ordinance (Cap 192) – LKW v DD – 30-year marriage between H, a wealthy businessman in cold storage, frozen meat and restaurant businesses, and W, a full-time housewife – H's indulgent gambling in Macau and elsewhere – post-separation shareholder's loans from SEHL used to pay gambling debts – 2014 WhatsApp Message and 2017 Promise not to borrow more – Whether gambling loss of HKD 96,590,486 should be notionally added back to matrimonial pot – Whether gambling stakes increased considerably post-separation – Whether Judge failed to cross-check for equality and hardship – Whether HKD 96,590,486 was the right figure – Whether parties' living expenses were sufficiently reckoned – Whether Judge's payment timetable was realistic – Whether W's undertaking as to share transfer was over-protection – Whether Judge omitted to take into account W's own assets – The court reviews the add-back jurisprudence from Martin v Martin, Norris v Norris, Vaughan v Vaughan, ARAV v VP, MKKWH v RKSH, GS v L, BJ v MJ, Evans v Evans, MAP v MFP, OG v AG, ARQ v YAQ, Tsvetkov and Khayrova, O v O, A v A, C v C and Morgan v Morgan – The court adopts a Two Stage Approach: Stage (1) requires party asserting conduct to prove facts, that those facts meet the high or exceptional conduct threshold, and an identifiable negative financial impact with causative link; Stage (2) requires the court to consider how the misconduct should impact the outcome, balancing all section 7 factors – The threshold is high/exceptional and inequitable to disregard – Notional add-back must be conducted very cautiously, by clear evidence of dissipation with a wanton element – Add-back is in truth a process of penalisation, creating fictional money – H's gambling was not solely post-separation conduct; the Gambling Schedule was only a snap-shot of one bank account over 4 years and 3 months and did not establish a net loss or wanton dissipation – The court sets aside the notional add-back of HKD 96,590,486 – Total matrimonial assets reduced to HKD 546,402,203 – The 1% departure from equality is upheld – W's assets of HKD 4,204,990 deducted – Lump sum payable by H to W is varied to HKD 266,264,000 with revised payment timetable extending to 31 December 2024 – W to give undertaking to transfer shares upon H's request – W to pay H's costs of appeal on party and party basis with certificate for two counsel; H to pay 80% of W's costs below – Appeal allowed in part.
Legal issues: Whether gambling loss should be notionally added back to matrimonial pot · Whether gambling stake increased considerably post-separation · Whether Judge failed to reckon parties' living expenses when computing Gambling Loss · Whether the Judge's omission to take into account W's assets was plain error · Whether the payment timetable was unrealistically tight · Whether W's undertaking as to share transfer was over-protection · Costs of the appeal and below
Outcome: Appeal allowed in part; the notional add-back of HKD 96,590,486 is set aside; the lump sum payable by H to W is varied to HKD 266,264,000; a revised payment timetable is ordered; W to pay H's costs of the appeal on party and party basis with certificate for two counsel; H to pay 80% of W's costs of the ancillary relief claim below.
Cited by 17 cases · Cites 4 cases