B,Mc v. B,Gc Formerly Known As W,Cy
Read the full judgment text of FCMC 10501/2021 on BabelCite. This Family Court judgment was delivered on 27 November 2024 before Deputy District Judge Jacqueline Lee.
Matrimonial Proceedings and Property Ordinance – Ancillary Relief – Asset Division – Child Maintenance – Full and Frank Disclosure – Lump Sum – Backdated Maintenance – District Court – Short Marriage – Earning Capacity – Illiquid Assets – QL Shares – College Savings – Wife’s Loans – Husband’s Pension – MPF – Dispute over valuation – Court found Wife failed full disclosure – Assets reduced by backdated maintenance – Lump sum ordered for adjustment period – No order as to costs.
Legal issues: Valuation of disputed matrimonial assets · Earning capacity and needs of the parties · Needs of the Daughter and maintenance order · Division of assets · Backdated child maintenance
Outcome: Husband ordered to pay Wife lump sum HK$142,320; retrospective child maintenance HK$691,315; monthly child maintenance HK$26,950. No order as to costs.
Cited by 1 case · Cites 10 cases
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FCMC 10501/2021 [2024] HKFC 199 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NUMBER 10501 OF 2021 ________________________
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________________________ J U D G M E N T ________________________ Background 1.The parties were married on 22 January 2017 and separated on 27 August 2019. Decree nisi was granted on 23 June 2022. 2.The petitioner husband (“Husband”) is 51 years old and is a sales director. The respondent wife (“Wife”) is 42 years old, worked as a part-time operations support staff. They have a daughter (“Daughter”), now aged 7. 3.On 7 October 2022, His Honour Judge K.K. Pang ordered that the Husband shall pay HK$20,000 as the Daughter’s interim interim maintenance on the 7th day of each month until further order of the court. 4.On 22 December 2023, by consent of the parties, Deputy District Judge J. Chow ordered that the parties shall have joint custody of the Daughter, with care and control to the Wife and defined access to the Husband. 5.The parties are before me for ancillary relief matters, in particular the Wife claimed maintenance for herself and the Daughter. Parties’ Open Offer 6.The Husband proposed that:
7.The Wife proposed that:
The Law 8.The governing principles in relation to the distribution of the family assets in the dissolution of marriage are set out in section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), Cap. 192 and the Court of Final Appeal’s decision in LKW v DD (2010) 13 HKCFAR 537. The Court of Final Appeal laid down ‘4 Principles’ and ‘5 Steps’ as “guidelines” as to how section 7 shall be approached. 9.His Honour Judge Ivan Wong had succinctly summarized the relevant law and legal principles in respect of the jurisdiction of the court in the judgment of LNE formerly known as LKPBB v. CKLM [2024] HKFC 73 at [64] – [67]. 10.Her Honour Judge Grace Chan in LSL v WYF [2023] HKFC 76 at [74] – [87] had set out the legal principles regarding short marriage, spousal payments and clean break. The pool of matrimonial assets and liabilities 11.I had made clear to both parties that the joint schedule of assets and liabilities lodged on 11 July 2024 (“Joint Schedule”) would represent their final positions on all the issues, and any departures, corrections and clarification should be made at the trial. 12.Upon reviewing the closing submissions of the parties, it turned out that some of the items appeared as non-disputed in the Joint Schedule were actually disputed. The Husband did not agree that the amount of college savings plan and the value of the shares of QL be included in the matrimonial pot. 13.The parties agreed on the following matrimonial assets and liabilities, as well as their values, as tabulated:
Issues 14.Based on the parties’ case, the trial turns on the following issues:
How should the disputed matrimonial assets and liabilities be valued? Disputed matrimonial assets and liabilities The Husband’s shares in QL 15.According to the Joint Schedule, the Husband said his shares in QL amounts to HK$97,012.62. The Wife disagreed with the Husband’s valuation and said the Husband had failed to make full and frank disclosure about the value of the shares. 16.The Husband had produced an email from the global vice president of QL dated 24 June 2024 at 7:39 pm regarding share valuation. From the email, it was noted that the shares were granted to the Husband as part of his employment’s package and he did not receive any payment from any shares unless and until there is an initial public offering or other leveraged buyout event. 17.The Wife said the Husband had underestimated the value of his shareholdings of QL, and his earnings made from this company. 18.While the Wife refused to accept the Husband’s explanation and valuation, she had no real basis to dispute it nor put forward any evidence to suggest what the “real” value of shares is. In the circumstances, I would take HK$97,012.62 as the value of the Husband’s shares in QL. 19.The Husband submitted that the QL shares should not be included in the matrimonial pot as the Husband could not liquidate his shares at his will. QL is a private company and there is no open market for the shares. 20.In §§52-53 of Lawrence v Gallagher [2012] EWCA Civ 394, Thorpe LJ removed entirely from the divisible pool certain earned but unvested deferred bonuses. He stated:
21.The QL shares were allocated as part of the Husband’s employment scheme, they were however not yet vested in the Husband as at the date of trial. It was shown that the Husband had signed a blank Instrument of Transfer, which gave the company’s CEO the power to sell the Husband’s shares in the event there is an initial public offering or other leveraged buyout. 22.From the evidence before me, there was no certainty that the shares will eventually be vested in him and I found that the making of the supposition at this juncture would be premature. 23.In the circumstances, I considered that QL shares should be excluded from the matrimonial pot. Citibank College Savings Investment Account (HK$227,931.93) 24.The Husband submitted that this is a college plan which could only be withdrawn for specified education purposes in or after 2035 when the Daughter turns 18. 25.While it is true that the college savings account was established to help pay the future education expenses of the Daughter, the account holder was the Husband. The funds contained in the education savings plan belong to the Husband. The Husband as the account owner has the power to change the beneficiary, withdraw funds and manage investment. In the circumstances, the funds in this account should be treated as the Husband’s property. Costs on account HK$70,843.06 26.The Husband said he already paid HK$216,215.26 to his legal representatives as costs on account for the trial and as at the date of the Joint Schedule, the balance was HK$70,843.06. The amount had been reduced to zero after the trial. I accepted that further costs had been incurred as a result of the trial, hence this sum should not be included in the matrimonial pot. The Wife’s loans 27.The Wife alleged that she owed one Mr. Cheng HK$120,000 and her father HK$560,000. 28.The Husband argued that the two loans should not be included when determining the value of the matrimonial assets as these liabilities were incurred without proper proof and proper explanation. Alternatively, if the court accepted that these loans did exist, then these loans should be considered as soft loans and should be taken out from the computation of the matrimonial pot. 29.The Wife argued that these loans should be considered and deducted from the pool of matrimonial assets. She said these loans were taken out to support herself and the Daughter’s living expenses. Loan from a friend 30.In relation to the loan from Mr. Cheng, according to the Wife’s counsel opening submission and the Joint Schedule, the lender was one Ms. Cheng. It was for the first time at the trial we learnt that the lender was a male, Mr. Cheng. 31.The Wife tendered a loan agreement with the full name of the lender redacted. In this loan agreement, the lender was one Ms. Cheung. The Wife explained that it was only a typographical error and confirmed that the lender should be Mr. Cheng. 32.However, no supporting affirmation was made by the purported lender Mr. Cheng. The Wife said Mr. Cheng did not want to attend trial to give evidence as he was afraid the Husband “might cause him trouble”. 33.I found the Wife’s explanation a rather glib and unbelievable explanation. Glib because those were empty words and the Wife had chosen to display documents which contradicted her oral evidence. 34.Unbelievable because while the loan was alleged to be taken out between the period from 27 January 2024 to 1 July 2024, the loan agreement as between “Cheung” was dated 1 July 2024 which was after the alleged sum of HK$120,000 had been lent to the Wife. 35.In my view, when the whole context of this loan between Mr. Cheng was looked at, it appeared to me to be rather flimsy. It was illogical for the loan interest rate to be agreed after the principal sum was lent to the Wife. It was also strange that the full name of the lender, with the surname wrongly spelled, was being redacted. 36.Further, this loan agreement was only produced with the Wife’s narrative affirmation filed on 5 July 2024. Before the narrative affirmation was filed, the Wife had never mentioned anywhere, included her updated Form E filed on 16 April 2024, that she borrowed money from one Ms. Cheng or Ms. Cheung or Mr. Cheng. Loan from parents 37.The Wife also claimed that she had borrowed a sum of HK$560,000 from her father. The Wife admitted that her mother was a housewife, while her father was retired before the Daughter was born. 38.Again, no supporting affidavit was made by the Wife’s father. 39.The Wife tried to identify some transactions as the transfer of the alleged loans from her father. There were bank transfers in the total sum of HK$210,000 from July 2021 to May 2022 being identified by the Wife as loan from her parents. Only 3 of the identified transactions were shown to be transferred by the Wife’s father from July 2021 to December 2021. 40.As to the remaining alleged sum of HK$350,000, the Wife was not able to produce any documentary evidence on the receipt and use of these monies. 41.The Husband submitted that the Wife failed to disclose this purported loan in her Form Es and she failed to provide any proof of such purported loan. The Husband raised the point that according to his knowledge, the Wife’s parents were retired already and he used to be asked by the Wife to pay HK$5,000 per month to support her parents. 42.According to paragraph 80 of the Wife’s affirmation filed on 5 July 2024, she did not dispute that the Husband used to make contribution to her parents. 43.The Wife confirmed that her father was retired. When she came back to Hong Kong in August 2019 and resided in her parents’ property, she did pay HK$5,000 to her father. She said she stopped paying HK$5,000 when the Husband commenced Hague Convention proceedings against her in December 2019. Pausing here, it is necessary for me to emphasise that I suspected the Wife had not disclosed her true financial position, which will be discussed in subsequent paragraphs. 44.Under cross-examination, the Wife said the alleged loans were actually money which she had paid to her parents before she stopped working. 45.When being asked what was the repayment terms of the alleged loans, the Wife became evasive. It appeared that she had no good answer to the repayment terms of the alleged loans. 46.In my view, it was unlikely that the Wife’s father would be able to lend her a sum of HK$560,000. If her father had the ability to lend her a sum of HK$560,000, he would not be asking the Husband to pay him HK$5,000 as monthly financial support during the marriage. 47.Even if, the alleged sum of HK$560,000 were given to the Wife by her father, I considered the transfers should be treated as gift or return of money from the Wife’s parents. In my view, the evidence was not sufficiently clear to show that the sums transferred were intended as loans. 48.First, the only contemporaneous evidence was bank transfer or ATM deposits. However, there was no evidence of any loan arrangement or agreement. 49.Second, on the Wife’s evidence the alleged loans were not for any specific purpose. The Wife had not repaid any sum to her parents and there was no fixed time for repayment. It was the Wife’s evidence that before she stopped working, she used to give money to her parents, there is a possibility that her parents simply return those money she used to give them as monthly contribution. This did not inspire confidence that there was a loan arrangement from the outset. 50.In my assessment, these alleged loans from the Wife’s friend and her parents were simply an attempt by the Wife to inflate her liabilities, and thereby decrease the net pool of her assets. The alleged loans should be taken out from the computation of the matrimonial pot. The MPF or Pension of the parties 51.The illiquidity nature of pension or MPF was discussed in SSLT v SMFC, [2019] HKFC 250 at [44] to [48], LWF v WST, [2021] HKFC 164 at [48] to [50], WSW v CSLPC, [2022] HKFC 155 and RPB nee RGP v CFB, [2024] HKFC 84. 52.In my view, there should be a discount for illiquidity of the pension or MPF. Bearing in mind Riberio PJ’s advice in adopting a broad brush approach at this stage, and the fact that part of the MPF and pension were accumulated by the parties before marriage and after separation, I give a discount of 60% on the face value of their pension and MPF. 53.Based on the findings set out above, I come to the conclusion that the parties’ assets and liabilities come up to about HK$1,511,627.99 as follows:
What are the earning capacity and needs of the parties? The Wife’s financial means & reasonable needs 54.The Wife is now 42 years old and she worked as a part-time operations support staff since November 2022. The Wife had a bachelor’s degree in computer science and a master’s degree in finance. 55.After giving birth to the Daughter, and when the Daughter was aged 2, the Wife returned to workforce in October 2019. She worked as a Senior Performance Analyst at an insurance company earning a monthly salary of HK$50,000. The Wife said she resigned in December 2019. 56.The Wife returned to part-time employment since November 2022 and she claimed that her average income was HK$6,800 per month as at 16 April 2024. 57.According to the Wife’s latest Form E filed on 16 April 2024 and her revised claim as stated in the Joint Schedule, her monthly expenses should be HK$38,160. The Husband commented the Wife’s expenses were unreasonable and excessive.
58.I am not persuaded by the Husband that the Wife should remain in a studio flat with the Daughter, while he stayed in a 2 rooms apartment. It would be manifestly unfair for two parents to live in totally different standard, in particular the Wife is the primary carer of the Daughter, hence I allowed HK$17,500 as the rental. 59.Having considered the standard of living that the family enjoyed during the marriage was one of the middle-class, I reduced the amount of some of the items claimed by the Wife as I considered the amount claimed were unreasonable. 60.The Wife’s counsel had made lengthy submissions in his opening submission to persuade the court that ancillary relief should be provided for her. 61.The Husband on the other hand submitted that the Wife had in the past withdrawn money from his HSBC Bank account over the years which amounted to USD 100,000. Further, a sum of HK$33,000 had been withdrawn from the Husband’s HSBC Bank account in September 2019 without his prior approval, plus HK$5,000 that the Husband had paid to the Wife’s parents in September 2019 should be taken into account. The Husband said if there should be any money to be paid to the Wife, the above sum of money should be deducted from the payment. 62.The Wife contended that the Husband had not adduce any evidence to quantify the alleged USD 100,000 were being withdrawn by the Wife over the years. 63.The Husband had voluntarily allowed the Wife to use his ATM card to withdraw money from his HSBC Bank account during marriage and gave HK$5,000 to the Wife’s parents. According to the Husband, he had been doing this even before the marriage. The Husband had no issue with these withdrawals before divorce. 64.These allegations put forward by the Husband was neither here nor there. It did not in any way impact the court’s assessment in the appropriate ancillary relief order to be granted. 65.As for the withdrawal HK$33,000 by the Wife in September 2019, I accepted that the said sum was withdrawn for the purpose of supporting the Daughter after they came back to Hong Kong from the United States. 66.We live in a time when the society is rapidly evolving, the traditional concept of husband being the sole breadwinner has undergone significant transformations. The law of maintenance does not seek to create situations of life-long dependency by former spouses (whether husband or wife). The former dependants are expected to regain some level of financial self-sufficiency. 67.The Wife is highly educated and had experience in working for multinational insurance companies and fund houses. Despite the Wife claimed that she performed badly when she worked for fund houses and was being fired by her pervious employer, she still managed to receive an offer in the position of senior performance analyst from HSBC Bank shortly before she gave birth to the Daughter. 68.While the Wife also claimed that her full-time job in October 2019 was a short-term employment only, but her assertions were not supported by the contemporaneous evidence. The Wife did not produce termination letter or tax return to prove that she was terminated by her employer in December 2019. 69.The terms of the employment contract were for a term of one year, bonus, annual leave and medical insurance were being provided to the Wife. If the contract was supposed to be for a few months, it would be illogical for an international insurance company to have stated these terms in the employment contract. 70.Even if the employment was only a short-term full time job, it was the Wife’s case that she made use of her time to work while the Daughter attended school when she was in the age of 2. In the circumstances, it does not make sense for the Wife to now suggest at one stage at the trial that she needed to wait until the Daughter reaches the age of 16 before she could resume full time employment. 71.Before pregnancy, the Wife earned a monthly income of HK$40,000. When the Wife returned to Hong Kong in August 2019, and she applied for a job and got an offer in about a month’s time. The monthly salary of that job was HK$50,000. 72.She resided with the Daughter in the same estate wherein her extended family and the Husband reside. The Wife’s extended family and the Husband could serve as a support network for the Wife and the Daughter. 73.Both parties referred the court to the updated social investigation report dated 6 April 2023, whereby the Husband said he had quite flexible hours and he went to the office for around 3 to 4 days by his choice. In the circumstances, the Husband would also be in the position to provide assistance to take care of the Daughter. 74.The Wife said that the Daughter now has special emotion needs, as the Daughter felt stressful because of the parents’ divorce. As I have said the parties have gone through extraordinarily contentious litigation proceedings over the past 4 years, a continuation of unresolved conflicts between parties would inevitably affected the well-being of the Daughter. However, this is not a valid reason for the Wife to suggest that she could only return to full time employment after the Daughter reached the age of 16 in 9 years’ time. 75.I agreed with the Husband’s submission that the Wife must exert herself to secure gainful employment, and earn as much as would be reasonably possible, in order to help out with her financial obligations to maintain the Daughter and herself too. 76.It should not be forgotten that the Wife is 9 years younger than the Husband. As such, if she is going to retire at the age of 65 (that is the same as that of the Husband), she still has a working life of 23 years. 77.I am mindful of the precarious nature of the current economic environment. I have considered the “Average monthly salaries, average number of normal working hours per day and average number of standard working days per month of supervisory, technical, clerical, service and miscellaneous non-production workers by industry by occupation by sex” prepared by the Census and Statistics Department at 28 June 2024. On the evidence before me, and bearing in mind the Wife’s level of education and work experiences, doing the best I can, I found that she has an earning capacity of at least HK$30,000 per month. 78.I found that the Wife has at least an earning capacity of HK$30,000 and her monthly expenses are HK$18,660, she has sufficient means to meet her own needs and expenses. The main dispute here is about the quantum of the Daughter’s expenses. 79.In my judgment, the Wife should also contribute to the Daughter’s expenses. The relevant consideration is one’s earning capacity. Between the two, the Husband earned a monthly income of HK$100,290 while the Wife would have an earning capacity of at least HK$30,000 per month. 80.Having considered all the circumstances of the case including the parties’ respective earning capacity, and the fact that a large portion of the value of the matrimonial pot was locked into illiquid assets, I ordered that the Wife contribute to 23% for the daughter’s maintenance to be ordered. The Husband’s financial means & reasonable needs 81.The Husband is now 51 and worked as a sales director. His income was HK$100,290 plus commission averaging around HK$8,000 per month as at 16 April 2024. 82.The Husband says that upon deduction of MPF, US and Hong Kong tax, his take-home pay was around HK$60,000 per month. 83.The Husband further submits that as the economy has been in a prolonged downturn over the past few years, employment becomes more precarious. In the past 2 years, he had changed roles within the same organization for twice. Each switch resulted in reduction of his compensation package. 84.According to the Husband’s latest Form E filed on 16 April 2024, the Joint Schedule and at the trial he claimed that a sum of USD500 (equivalent to HK$3,900) per month being the contribution he made to the Daughter’s college savings account, his monthly expenses were HK$66,900. The breakdown of which is as follows:
85.Given that the Husband’s work at director grade and has a high income I have allowed an allowance for his meal out of home higher than that of the Wife’s. I also allowed HK$5,000 as food for the Husband bearing in mind that the Daughter would also spend time at the Husband’s place. 86.The Husband’s case was that he needed HK$27,000 per month for tax payment in the United States and Hong Kong. Whilst the Wife acknowledged that the Husband would be liable to pay some tax, but she did not agree that the sum would be HK$27,000 per month. The Wife contended that the Husband had failed to adduce proper evidence to prove the alleged amount of both US tax and she proposed that sum should be HK$8,100. 87.The sum of HK$8,100 as proposed by the Wife was not even sufficient to cover the Hong Kong salaries tax to be payable by the Husband. I accepted the Husband’s submission that for the 2023/2024 tax year he would need to pay around $161,000 tax. 88.In ST otherwise SST v MFP [2022] HKFC 168, Her Honour Judge Sharon Melloy had made the following observations in respect of US tax issue:
89.The Husband did not produce any expert opinion in support of his US tax claims. The court is not a US tax expert and I accepted that the tax rate in the US would be significantly higher than in Hong Kong. I concur with the observations of Her Honour Judge Melloy that there are many legal ways for those who are subject to the US tax regime to legitimately reduce their tax liability. It was the Husband’s case that he had engaged professionals to file his US tax returns for him. 90.Doing the best I can on the available evidence, I would allow a total sum of HK$20,000 per month as tax payment. This amount would cover both US and Hong Kong tax payment. What are the needs of the Daughter? What order should be made to take care of the Daughter’s needs? 91.Maintenance is ordered on the ground to provide for the child’s reasonable financial needs, instead of indulging the child with luxuries. Furthermore, maintenance is also not a company reimbursement scheme where every item of expenditure is proved and claimed by the parent who has care and control of the child against the other parent. 92.The following items were listed by the parties:
93.I am mindful that the Daughter attended a private kindergarten and she lived in a studio flat when the Wife’s updated Form E was filed. However, a child’s needs and expenses may fluctuate from month to month, by setting out regular expenses in Form E enables the court to assess broadly whether the expenses are reasonable. 94.In my judgment, the Wife’s calculation of some of the Daughter’s expenses were over-estimated. For example, lunches and pocket money, other expenses such as computer and digital products, skin allergy care products and masks. It is unnecessary to purchase or upgrade computer products and eye-glasses on a monthly basis. In view of the age of the Daughter and the previous living standard of the family, I lowered the amount of some of the items as claimed by the Wife to reflect the reasonable amount. The Daughter’s reasonable monthly expenses would be HK$34,130, I round it up to HK$35,000. 95.The Husband earned an income of HK$100,290 plus commission averaging around HK$8,000. With a monthly need of HK$66,900 for himself, he would have HK$41,390 to spare. As for the Wife, she would earn an income of at least HK$30,000, with her monthly needs of HK$18,660 she would have HK$11,340 to spare before tax. The total sum available for the Daughter is thus HK$52,730 (HK$41,390 + HK$11,340). 96.The Daughter’s monthly needs as assessed above are HK$35,000. The Husband should be responsible for about 77% of it, hence a monthly sum of HK$26,950 for his maintenance. The remaining HK$8,050 is to be borne by the Wife. Whether there should be backdated child maintenance order? 97.Under cross-examination, the Wife confirmed that she stayed with her parents before February 2022 and there was no need for her to pay rental. She paid HK$5,000 per month to her parents which did not include the costs of food. The Wife claimed that she purchased household products and food separately. 98.The Husband submitted that there should be no retrospective order, as he was willing to provide financial support for the Daughter over the years and it was the Wife who had either ignored or refused to accept. Further, given his financial situation, he was not able to afford backdated payments. 99.The Husband said the Wife admitted under cross-examination that the Daughter had attended two kindergarten at the same time from September 2019 to January 2020. The Wife then said in September 2020, the Daughter started to attend K1 at TLK (Caine Road) until at least January 2021. The school fee for TLK Caine Road was HK$10,000 per month. This was also the time when the Wife claimed to be unemployed. 100.The Husband submitted that the Wife’s pattern of spending was clearly not the acts of a person who was in financial difficulties. Conversely, the Wife’s act suggested that she had sufficient financial means to support the Daughter and herself when she claimed to be unemployed. 101.Suffice it for me to say that I found that it was the joint responsibility of the parties to care and provide for their Daughter. This responsibility arises regardless of any application made by the Wife for maintenance for the Daughter. 102.According to the Husband’s opening submissions, the Husband knew and was willing to fulfil his obligation to pay child maintenance, but he blamed the Wife had acted unreasonably, hence there was no effective communication between the two. 103.It was not a question of whether the Wife refused to accept the Husband’s offer or whether she could afford to pay the expenses in the interim. After all, if the Husband could afford to pay, there is no reason why the Wife should bear the burden alone before the interim interim maintenance order was made. It is also unfair to the Wife to deny the claim for maintenance before the interim interim maintenance order was made. 104.I am aware that an order for maintenance which applies retrospectively does appear to impose a sudden and onerous burden on the Husband. However, it is unwise to overemphasise the sudden burden arising from a retrospective maintenance order and overlook his savings in the past. 105.At the trial, I raised the issue of class suspension during the COVID period, and as a result of which a joint kindergarten suspension schedule was submitted to the court after trial. 106.It was the Wife’s case that from September 2019, the Daughter attended nursery in the morning and a kindergarten in the afternoon. The school fees for the nursery was roughly HK$4,000 per month, while the kindergarten was around $3,900 per month. For the school year 2020/21, the Daughter had attended a kindergarten at various campuses. Around January 2021, she was attending the Caine Road campus of a kindergarten and the school fees were roughly HK$10,000 per month. Later, the Daughter transferred to another campus (“New Campus”) but the Wife could not recalled the exact period of time. The school fees for the New Campus was around HK$4,000 per month. 107.The Wife acknowledged that there were 11.5 months of school suspension during the period from March 2020 to May 2022. However, when the Daughter attended school at the New Campus, full school fees were payable even during the suspended period. 108.The Wife made reference to the expenses which she claimed in her first Form E filed in 2022 and she agreed that items such as transport to school, ECA, holiday and other transport should be deducted or reduced during the suspended period. 109.It is not disputed that the Husband had stopped paying any child maintenance from September 2019 to 6 October 2022. 110.According to the Form E filed by the Wife on 5 July 2022, the Daughter’s expenses were as follows:
111.I took the commencement date of the backdated order from September 2019. The fair and appropriate backdated sum for the period from September 2019 up to April 2024 (56 months) would be as follows:
112.Both parties have been involved in ongoing litigation for over 4 years (including the Hague Convention proceedings). The proceedings have been extraordinarily contentious. 113.While both parents have responsibility to care and provide for their Daughter, their precise obligations may differ depending on their means and capacities at the material time. 114.There was no evidence suggesting that the Wife had income after December 2019, it would be undesirable to assume the Wife had the financial means as she did from now onwards to contribute to the Daughter’s maintenance. 115.I found that the Husband should be solely responsible to provide financial support to the Daughter for the period from September 2019 up to April 2024. 116.I am mindful that it was the Wife’s case that she was in full time employment for 1.5 months during the period from October to December 2019. During this period the Wife received monthly income of HK$50,000. Taking into consideration of the Wife’s income for the period and taking a broad brush approach, the Wife should share 1/3 of the Daughter’s expenses for the period from October to December 2019, i.e. HK$23,654 x 1/3 x 1.5 equals to HK$11,826.9. 117.In the circumstances, a sum of HK$11,827 should be deducted from HK$703,142. The amount of backdated Daughter’s maintenance would be HK$691,315. 118.Upon the deduction of the backdated Daughter’s interim maintenance, the parties’ assets and liabilities would be reduced to HK$820,313 as follows:
119.Given my assessment on the Husband’s needs and expenses, the Husband should have the financial means to pay retrospective child maintenance. How should the assets be divided bearing in mind the principles identified in the Court of Final Appeal’s decision in LKW v DD? 120.It is agreed that the Husband’s pension is not accessible for a number of years. The question here is how to achieve an outcome in a way as fair as possible to both sides, and most importantly the Daughter who relied on the support of her parents. 121.I bear in mind that this is a short marriage, the Wife is expected to regain financial self-sufficiency. 122.It is clear from the above analysis that both parties are able to meet their own needs and their Daughter’s daily needs from their income/earning capacity and assets; and accordingly where prima facie there are assets surplus to needs, I need to examine whether there can be some degree of sharing of assets. 123.Both parties referred the court to a number of authorities, yet it is beyond dispute that the assets in the case are by no means large, which is incommensurable with those authorities cited by the parties. 124.Thorpe LJ in North v North [2007] EWCA Civ 760 at [32] said:
125.In B v B (Ancillary Relief) [2008] EWCA Civ 284, Lord Justice Wall (as he then was) commented at [50], [54] and [60]:
126.The difficulty with this case is the court is tasked with creating two households from limited assets. In considering whether the Wife should have a share in the limited surplus of the matrimonial pot, I bear in mind the following two questions:
The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future 127.In general terms both parties need sufficient money to house, feed and clothe both themselves and the Daughter. They will also need to provide for the Daughter’s future education. Standard of Living Previously Enjoyed 128.This was a family that enjoyed a comfortable quality of life. Duration of the Marriage 129.The parties were married in January 2017. In August 2019, the Wife and the Daughter lived separately from the Husband. 130.On 12 December 2019, the Husband took out child abduction proceedings against the Wife in Hong Kong. See: [2020] HKCFI 222 and [2020] HKCA 317. 131.The Wife filed petition for divorce in Hong Kong in May 2020, while the Husband filed petition for divorce in California in November 2020. 132.The Husband said this was a short marriage of 2.5 years, while the Wife said it was a marriage of 4 years by including their cohabitation since 2016. 133.It is not necessary for me to go into any more detail about the allegations and counter-allegations of the parties. 134.The Wife was asked to explain the difference in the mode of cohabitation and marriage and she said during marriage the parties spent most of the time together. 135.I accepted the Husband case that the cohabitation was on a trial basis rather than moving seamlessly from cohabitation to marriage, as it was the Wife’s evidence that there was a difference between the two. 136.In the present case, the Husband’s petition for divorce based on 2 years’ separation. The Wife filed her Form 4 on 19 November 2021, and stated that she did not intend to defend the main suit. In the Wife’s first Form E, she stated that the date of separation was 27 August 2019. At the trial, the Wife confirmed that the contents of her Form Es were true and correct. 137.The Wife explained at the trial that because she acted in person when she filed those documents, so she did not pay much attention to this issue. 138.The Wife brought the Daughter back to Hong Kong and landed on 28 August 2019 without notifying the Husband in advance. In my view, it was reasonable for the Husband to state that the date of separation was the date the Wife left the US, i.e. on 27 August 2019. Since then, parties’ lived separately and ended up with Hague Convention Proceedings in December 2019. It was hard to accept the Wife’s case that the parties’ marriage still subsisted until 12 May 2020, i.e. when she filed her petition for divorce. 139.Therefore, I accepted the Husband’s case that the duration of the marriage was 2.5 years. 140.Even if the Wife’s case of 4 years were to be accepted, I still would have considered this as a “short” marriage. In any event, the label of “short” marriage should not be unduly given weight as the court needs to take a holistic approach and consider all circumstances of the case. Contribution to the Family 141.Considering the overall contribution to the welfare of the family during the marriage, I accept that both parties made a valid contribution towards the family. The parties’ non-disclosure 142.The law on disclosure is well known. Each party has a duty to make full and frank disclosure of their financial resources and income. This duty is absolute and continuing. 143.Both parties asserted the other side had failed to make full and frank disclosure of their finances. 144.It is not disputed that the parties incurred substantial costs for the Hague Convention proceedings from December 2019 to May 2020. The Wife claimed that she was out of full time employment since December 2019 and was under financial hardship since September 2019, but nevertheless she decided to:
145.The Wife’s financial position was very suspicious at the material time. Based on the above observations, I found that the Wife had not made full and frank disclosure of her true financial position. 146.On the other hand, I do not find that the Wife had proved the Husband had failed to make full and frank disclosure of his financial positions. Supporting evidence were not furnished and only bare assertions were put forward by the Wife. 147.Given the above analysis, I draw adverse inference against the Wife. Deciding the overall outcome 148.It is beyond dispute that the Husband was almost wholly responsible for the family asset base, and a substantial portion of the matrimonial pot came from illiquidity assets, i.e. the Husband’s pension. If both parties’ pension or MPF are taken out from the matrimonial pot, there is only HK$60,528.47 left. 149.I consider it would be unfair to apply the sharing principle in this case since this would mean to squeeze the last penny out of the Husband’s assets. By doing so, the Husband was left with nearly all liabilities. 150.After considering all circumstances of the case, including all of the section 7 factors, the Wife’s conduct in failing to give full and frank disclosure and the limited assets available, it is appropriate to order lump sum payment only for a term that would be sufficient to enable the Wife to adjust without undue financial hardship to the termination of financial dependence on the paying party. See: LKW v DD at §74. 151.In light of all the circumstances of the case, I have considered possible difficulties the Wife may have in re-entering the labour market. In my view, the Wife should have adjusted within 12 months. I found that the Wife’s expenses is HK$18,660 and she earned a monthly income of HK$6,800. In the circumstances, I order that the Husband do pay HK$142,320 lump sum. Final Order 152.I make an order as follows:
Costs 153.In terms of the awards given neither party can be considered as successful in his or her application. I consider that the appropriate costs order should be no order as to costs. 154.I make an order nisi that there be no order as to costs of the ancillary relief proceedings (including all costs reserved). 155.The Wife’s own costs be taxed in accordance with Legal Aid Regulations.
Petitioner : Ms. Joyce H.Y. Lee instructed by Messrs Rita Ku & Ser Respondent : Mr. Eugene Yim instructed by Messrs Chaine, Chow & Barbara Hung | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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