Dm v. Dk
Read the full judgment text of FCMC 10633/2022 on BabelCite. This Family Court judgment was delivered on 5 March 2026.
1. This is the Petitioner wife’s (“ W ”) application for ancillary relief against the Respondent husband (“ H ”).
Cites 10 cases
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FCMC 10633/2022 [2026] HKFC 45 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES NO. 10633 OF 2022 ----------------------------
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------------------------------------------------------------ J U D G M E N T ------------------------------------------------------------ This Application 1.This is the Petitioner wife’s (“W”) application for ancillary relief against the Respondent husband (“H”). 2.The trial took place over two days on 25th and 26th March 2025. Parties background and Litigation History 3.At the time of this hearing, W was aged 48 and H was 58. H is a business man selling jewellery packaging boxes and W is a lighting design consultant. 4.The parties met in 2006, got married in Israel in August 2008 and settled in HK in 2009. 5.The parties have a daughter (“E”), who was born on XX July 2010, and aged 14 at the time of the hearing. E has developmental problems, including dyslexia, ADHD, adjustment disorders and intellectual disability. She needs constant and on-gong therapy, learning support and medication. 6.W commenced her Petition based on ground of one year consent, or in the alternative, unreasonable behaviour, on 3 November 2022. H filed his Form 4 on 11 November 2022, then left and returned to the US in around December 2022. This was a 14-year relationship. 7.Decree Nisi was granted on 20 January 2023. 8.The parties consented to arrangement for E by their Consent Summons dated 22 August 2023, requisition was made by a Master which was never responded to. 9.The first round of Form Es from both parties were exchanged in January 2023, answers to questionnaires were filed from both parties in April 2023. 10.Thereafter, W initiated a Specific Discovery Summons on 3 May 2023; and H initiated a “Production of Documents” Summons on 7 June 2023. At a hearing on 7 November 2023, at which W was represented by counsel, and H was absent. W decided to withdraw her Summons, and H’s Summons was dismissed. 11.Also at this hearing on 7 November 2023 and in H’s absence, Order was made granting joint custody, care and control to W and defined access to H. 12.H’s solicitors filed their application to cease to act on 12 September 2023, for which an Order was made on 17 October 2023. Thereafter, H had entered no appearance with regard to the financial aspect of these proceedings; looking at the timeline, this was done after arrangement regarding E was signed. He did not resurface until 3 February 2025, a mere 7 weeks before this current trial. 13.In the meantime, H actively engaged with W where E is concerned with regard to his access to her, always to do with holiday removal, 12 Orders were made for this on: 8 June 2023, 3 July 2023, 23 November 2023, 8 April 2024, 26 June 2024, 25 September 2024, 18 December 2024, 25 March 2025, 24 June 2025, 10 October 2025, 12 December 2025 and 30 January 2026. 14.It is quite apparent that H is selective in his engagement in these proceedings, more particularly:
15.At the PTR, I made Unless Orders for H to produce his narrative affidavit and Form E on or before 3 February 2025; and directed timeline for updated schedules. 16.On 3 February 2025, H’s current solicitors filed Notice to Act, and he filed his narrative affidavit and Form E on the same day. 17.This late entry into the litigation created a flurry of discovery processes. 18.On 24 February 2025, in responses to a number of issues raised in H’s narrative affidavit, W filed her Summons for valuation of a property in NY (the “NY Property”). 19.On 27 February 2025, H filed his Summons for valuation of two companies (“S Ltd” and “G Ltd”) in which W has interests. 20.I heard these two Summons on 28 February 2025. SJE for the valuation of the NY Property was appointed, W was ordered to produce Audited Financial Statement (“AFS”) for 2024 of G Ltd. 21.Valuation reports for the valuables and a New York Property were submitted on 10 March and 18 March 2025 respectively. 22.At the two-day trial, H attended via VCF, both parties were legally represented and gave oral evidence. H’s alleged Medical Condition 23.On 30 December 2024, this Court received an email from H, with the following specific comments:
24.On the day of the PTR on 10 January 2025, H was ordered to provide certified proof of his alleged medical / cardiac issues which prevented him from flying to HK. This he did on 20 January 2025, attaching a letter from a Doctor RN of N Medical PC dated 14 January 2025 saying that H is under his care and has a medical history of “coronary artery diseases, diabetes Mellitus, hyperlipidaemia, and attention deficit disorder”, and says that H is “not able to take long flights exceeding more than 6 hours”. My observation is that maybe H had probably not informed his doctor that he was recently in Italy. 25.W’s solicitors also took issue with H’s allegation of his medical condition, in their letter of 28 January 2025, they reminded me that H’s hyperlipidaemia and ADHD were already disclosed in his first Form E in 2023, and he had since then travelled between NY and HK; furthermore, they also produced the above mentioned evidence that H was in Milan with E in August 2024. 26.By my memo of 28 January 2025, I had reluctantly granted leave for H to attend trial via VCF, but stating my dissatisfaction with his medical information and asked for further details which prevented him from flying to HK. This was eventually submitted by his solicitors on 3 March, again attaching a letter by the same Doctor RN, which only stated his stents placement operation in September 2023, diabetes diagnosis since December 2024, and hyperlipidaemia and ADHD for over 10 years. The Doctor now says due to that surgical procedure, H is “advised to avoid taking long flight exceeding more than 6 hours”. 27.H must have had a miraculous turn in his health condition as on 24 June 2025 (3 months after this trial), leave was sought for him to travel with E to Italy between 22 June to 3 August 2025. 28.It should not be disputed that travel from New York to Italy exceeds 6 hours. So, either H chose to take risk with his health because he wanted access with E other than in the US; or he used his alleged medical condition as an excuse not to attend this trial in person. On a balance of probabilities and considering the circumstances over the cause of these proceedings, I am inclined to believe the latter; and will consider the above conduct and representations in my overall assessment of the H’s case. Parties Evidence 29.The parties’ evidence before the Court are as follows:
The Applicable Law & Legal Principles Legal Principles with regard to determination of ancillary relief claims 30.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:
31.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:
32.Which are to be considered against 4 guiding principles, namely:
33.The principles are trite and will be applied to the issues in this case hereinbelow. Legal principles with regard to failure to disclose financial information 34.On this, I turn to the case of Moher v Moher [2019] EWCA Civ 1482; [2020] 2 WLR 89; [2020] 1 FLR. 225; [2019] 3 FCR. 244, which was quoted in the case of CCYL v CCSR [2022] HKFC 238 by HHJ I Wong at paragraph 86 therein:
35.It has been said where a party has been guilty of not making full disclosure, he could not complain if uncertainties were determined against him: L v C [2007] 3 HKLRD 819, at paragraph 191(2). And for completeness, in the case of NG v SG (Appeal: Non-Disclosure) 2011 EWHC 3270 (Fam), [2012] 1 FLR 1211, paragraph 16 (viii) reads as follow:
Issues 36.Following our statutory provisions and the well-trodden principles of LKW v DD; the following issues fall to be determined:
W’s Case 37.W says that during the marriage, the standard of living is relatively high, and H used to contribute $100,000 per month towards family expenses, most of which was paid by H. After the Petition, H reduced his financial support, including stopping his payment for rent, and only contributed $30,000 to $35,000 per month. From August 2023, H stopped paying for anything towards W and E except for E’s plane tickets to the US, some of her clothing in the US, E’s health insurance and her mobile phone bills. 38.It is W’s case that H has not made full and frank disclosure. She contests the H’s ownership in the NY Property (legal ownership of 50% versus his claim of 1/3); and the loan from H’s brother D since 2009. She specifically says that she disagrees with H’s company (“B I Ltd”) being of zero value, but has to accept this due to his delayed declaration that it is of no value in his latest Form E filed only on 3 February 2025 (versus US$50,000 from his first Form E in January 2023), so as not to derail the trial. W’s Open Proposal 39.Based on W’s assessment of the matrimonial pot, the net value would be $18,474,218 (with negative balance on her side), and H is to pay her $10,148,800. 40.As for E, she asks for:
H’s case 41.In brief, H’s case also alleges that W has failed to provide full and frank disclosure, in particular that of her three companies, S Ltd, G Ltd and L Ltd. He contests the values of these companies and claims that he did not comply with the previous Orders for valuation because he was a litigant in person. W says that with regard to the valuation issue, her solicitors had reached out to H on 4 occasions, but to no avail: (1) 4 January 2024, with a list of properties and assets which requires valuation (2) 1 February 2024 a chaser to the previous letter (3) 16 May 2024 when she set out her proposed valuation in an Asset and Liabilities Schedule to be agreed for the CMH on 18 June 2024 and (4) 22 December when she proposed valuation in the Asset and Liabilities Schedule which was supposed to be agree for the PTR hearing on 10 January 20254. H did not respond to any of these correspondences. 42.H maintains his 1/3 interest in the NY Property, and he says he owes his brother D the sum of $14,179,459 being rent, expenses relating to the NY Property and charges under an American Express (“AE”) Card since 2009. H’s Open Proposal 43.H’s open proposal says that it is difficult for him to give an absolute figure on how the family pot should be divided, although he agrees to a 50-50 split of the family pot. But then adds that if Court considers that W’s material non-disclosure is “so appalling so as to leave the court with no reliable figure to add back to the value of the family pot”, then Court should award a larger portion of the family pot to him. 44.Against this stance, H’s open proposal contained in his counsel’s opening submission is best quoted in full:
45.The following table is adopted from the W’s opening submission of the parties’ respective positions:
Discussion H’s Financial Position H’s brother D (“D”) 46.The analysis of the H’s cases must be considered against the role that D plays in H’s life. 47.As rightly submitted by W’s counsel, D is critical to a large part of H’s evidence. In particular, H’s percentage interest in the NY Property, and H’s allegation of debts owed to D or his company (“FS”). H had not sought to join D to these proceedings to enable D to corroborate his case nor is D appearing as H’s witness. 48.Deadline for interlocutory applications were given as early as April 2023, and Directions for interlocutory proceedings including Joinder were made on 7 November 2023; H took no action upon both Orders. 49.H says that his brother and him had fallen out, and they no longer talk to each other; he says that D indicated that he did not wish to be involved with these proceedings (this is despite D having issued a Partition Summons regarding the NY Property against H in 3 March 2023, which was issued only 4 months after the divorce petition (“D’s Partition Summons”). 50.D’s Partition Summons records his allegation of the ownership of the NY Property and the brothers’ respective contribution to it; inter alia, it asks for the sale of the property and division of net proceeds according to their “respective rights and interest therein”. However, it is quite clear in evidence that as at the date of this hearing, and for almost two years, there was no further progress in the US on D’s Partition Summons and H says that he has not been served with it. H’s US Property 51.H’s interest in the NY Property is one of the largest assets in the matrimonial pot, the agreed value for this is US$2,150,000 ($16,770,000 at 7.8). H is the co-owner of this property with D, yet he says he only has 1/3 interest which is $5,590,000; while W says that his half share is $8,385,000. 52.In his affidavit, he says that there is an understanding that D would cover all the property-related expenses while he would be responsible for one-third of the mortgage repayments; and that this understanding is “reflected in our respective contribution to the US Property”. He says he ceased contributing in 2007 and D assumed the full financial burden and fully discharged the mortgage balance of the NY Property in 2012. H went on to say in early 2023, that due to the heavy expenses associated with the NY Property, he intended to empty D’s belongings from the house and list the property in the market for rental return; but D stopped him and prevented him from doing anything further with the property with his issuance of D’s Partition Summons. 53.H’s evidence on his case was his production of some cheques which he says show that he paid US$3,000 each month for the US mortgage and is allegedly 1/3 of the mortgage payment due. The exhibit he relies on shows copies of 38 cheques of which only 5 were for the amount of US$3,000. These cheques were dated 2006 and quite illegible, and those with the amount US$3,000 show a payee’s name which appears to read “COUNTRYWIDE”, but there is no other documentary evidence that link these to mortgage payment. It is also quite strange to me when there are two owners to a real property in the US, that a mortgagee institution would accept two payments for the monthly mortgage; as said, I have no evidence to enlighten me on this. 54.H also relies on a letter from D’s US lawyers to H’s US lawyer dated 4 January 2023 (which I notice was two months after W’s Petition and prior to D’s Partition Summons) proposing to negotiate D’s rights over the NY Property and attached an excel spreadsheet of what D, and in part, H had paid for the property. It was recorded therein that H had paid for 1/3 of the mortgage payment of US$9,000 for 48 months between 1997 to 2001. While W argues that H had not produced any document to show any statement which proves the total monthly mortgage payment; and that that this does not mean that H has only 1/3 ownership. The excel spreadsheet also records that D has contributed US$1,909,605 to the equity of the NY Property and US$871,740 towards fixtures and utilities while H has contributed $144,000; a point which I will come back to below. 55.W also rightly points out that D’s Partition Summons contradicts H’s own case as follows:
56.The above-mentioned discrepancy in D’s Partition Summons and H’s case was not taken up prior to the hearing including his opening submission. But under cross examination, and for the first time since the case was brought, he mentioned something which he calls the “gentlemen’s agreement” with his brother (the “Gentlemen’s Agreement”). He says that by this apparently unwritten agreement, he would pay 1/3 of the mortgage and have 1/3 interest in the NY property, with no liability on expenses. He says that it is because D is now upset with him and therefore claims that H has ½ of the interest of the US Property in order to get him to pay ½ of the expenses:
57.It is also H’s case now that he owes D money for expenses that the latter paid for the NY Property, this will be further examined under H’s liabilities. 58.In H’s answers to W’s questionnaire, he says that he estimated his interest in the US Property is based on the amount of mortgage payments he made. W’s counsel also rightly submits that this could not be correct if there was indeed a Gentlemen’s Agreement in place as there would be no need to calculate nor estimate. 59.W adds that H never told D that he intended to move into the US Property in December 2022, then further intended to remove D’s assets from the NY Property so that he could rent it out, are not actions of someone who has a minority interest. 60.The question I need to be satisfied with is whether the payment of allegedly 1/3 of the mortgage payment is evidence to support H’s allegation that he holds only 1/3 of the NY Property interest and do I believe that the Gentlemen’s Agreement really exist? Remembering here that I am not satisfied with his cheque payments evidence as there is no link to a mortgage obligation. And that for this payment US$3000, D says H only paid 48 months (from his aforementioned lawyer letter of Jan 2023) while H says he paid 118 instalments between 1997 and 2007; the brothers’ versions of events are different. H continues to claim that he has 1/3 interest (saying it is based on his contribution to the mortgage) even when his mortgage payments towards this property had not been consistent and he stopped part way; and going back to D’s spreadsheet mentioned in paragraph 54 above, if respective contributions, in mortgage or otherwise, is to be considered, H’s interest in the NY Property could not be 1/3; I do not take the view that the payment of the mortgage amount, is synonymous with his actual beneficial interest in the property. Furthermore, hearing his oral evidence on the Gentlemen’s Agreement, I do not find his recount to be credible. 61.The principle is trite that beneficial interest follows legal interest, and the party alleging that the beneficial ownership differs from the legal one, has the onus to prove such allegation. I fail to see how H has put up sufficient or any cogent evidence to prove that, on a balance of probabilities, his beneficial interest is different from the legal title of the NY Property; ironically, the evidence he produced of D’s Partition Summons also contradicts his case. 62.In the circumstances, I am of the view that 50% of the share of the NY Property should go into the matrimonial pot. H’s Pension 63.H has a US Pension fund with Charles Schwab Corporation, from his latest updated Form E as at 29 January 2025, it was at US$1,420,399, i.e. $11,079,116. 64.The dispute on this item comes down to the amount of this US Pension to be taken into account:
Duration of the marriage 65.The portion of the pension that should be taken into account is the duration of the marriage over the period of time during which that pension was accumulated. H cites my decision in RPB nee RGP v CFB [2024] HKFC 84. 66.H submits that he established his company B I Ltd in NY in August 1992 at the age of 26, counting up to the trial is 33 years; during which he was married for 14 years from 2008 to 2022. W did not challenge this calculation in her case. 67.The portion of the pension to be attributed to the matrimonial pot is therefore $11,079,115 × 14/33 = $4,700,230 (US$602,593 at 7.8). Illiquidity discount 68.It is well established that in considering the role of pension in a matrimonial pot, an illiquidity discount could be applied if the pension will not be available to the relevant party immediately. 69.HHJ I Wong case of SSLT v SMFC [2019] HKFC 250 (para 44-48) and LWF v WST [2021] HKFC 164 (para 49-50) laid down the principles succinctly :
70.H was born on 15 April, 1966. As at the date of the writing of this judgment, H is more than 59.5 years of age. So contrary to the abovementioned cases, H actually can access his pension fund now; on this basis, there is no need for an illiquidity discount to be applied. Tax on Pension 71.W argues that there should be no discount given to the pension fund on the basis of income tax payable on withdrawal of funds and the whole amount should be taken into account in the matrimonial pot. 72.In H’s affidavit, he says he can withdraw the pension fund without incurring additional taxes after reaching the age of 59.5, and he says it is subject to income tax of around 44.2% quoting his source from an Income Tax calculator for NY called “talent.com”. It is of note that this calculation of 44.2% is produced by his inserting the amount of pension as income, not withdrawal of pension. He also says tax will be lower if funds are taken out when he turns 65 years of age. There is no information to support this contention except for what he says in his affidavit. 73.Furthermore, it is my view that the calculation in H’s opening submission is incorrect. Based on the pension amount of $11,079,115, and his allegation that the tax payable on this sum is 44.2%, H’s counsel submits that the net asset value of the pension amounts to $4,896,969. But this sum is 44.2% of the pension amount, which is the tax payable, not the net assets value of the pension sum. H then applies the marriage duration to this amount (translating 14/33 into 42%) to arrive at his $2,056,727. As H’s basis is incorrect, the number he arrived at is therefore erroneous. 74.As for the issue of applicable taxes, contrary to what H says, W says that she has sought advice from a US CPA who states that the tax payable by H on withdrawal of his pension fund ranges from 10-37% depending on his total taxable income during a financial year. She also says that the H’s quote of 44.2% is likely to be where the entire balance of his pension is withdrawn in the same year. It is of note that what W produced was an email to a CPA in February 2025, and her question relates to withdrawal from a US person’s Individual Retirement Account (IRA). 75.W submits that as H’s pension will continue to accrue until withdrawal (quoting that his pension was US$897,995 per his first Form E of January 2023 to US$1,420,399 per his updated Form E of February 2025 which represents an increase of 58% over this time), W therefore says there should be no discount on the basis of H’s income tax payable on withdrawal of his pension. 76.My information is limited to the tax rate provided by the parties, I am inclined to accept the W’s version more. As mentioned above, H’s calculation comes from a webpage called talent.com, and he inserted the total amount of pension as “income”, while clearly W’s question to a CPA pertains to taxation on withdrawal of a retirement sum. I also take the view that the H is not expected to withdraw the whole of his pension amount. As the amount to be placed into the matrimonial pot based on duration of marriage is US$602,593, and only half of that sum is likely to be shared by W and may need to be withdrawn by him ie US$301,296.5, the applicable federal income tax rate applicable should be 35% based on W’s CPA’s email. The amount to be placed into the matrimonial pot, after a notional 35% tax has been applied on the full amount, should therefore be US$602,593 × 65% × 7.8 = $3,055,146. H’s Liabilities 77.According to the joint table, the amount of H’s liability which is not in dispute is $273,731. 78.The amount of the liability which is in dispute is the amount he owes to his brother D of $14,179,458. The following was tabulated by W’s counsel from H’s evidence and set out in her closing submission annexure:
Rent and AE Card Charges 79.According to the H’s Form E, D had been paying for H’s rental in HK over the years and also providing the use of his company FS’s AE credit card for H’s use. 80.For rental, the information provided by H, with the exception of missing information between March 2013 to October 2018, shows that D had been paying the rental in the range of $31,000 to $52,000 per month for H from 2009. 81.For the AE card, H has missing information between 2011 to 2014, but from 2015 to 2022, he produced self-prepared spreadsheets of the AE card spending without any source documents. He claims that as he is not able to produce the monthly statements of the AE card because only D can request for statements as he is the primary card holder. 82.It is hard to understand how several pages of 5 years month-by-month itemized breakdown of spending could be prepared without the monthly statements. Further perusal of these numbers illustrated to me the amount paid by D on H’s behalf for various aspect of spendings for those years. A quick tally on my part shows a conservative estimate of the following total annual spending: $857,000 in 2015, $570,000 in 2016, $345,000 in 2017, $390,000 in 2018, $524,000 in 2019, and $313,306 in 2020. 83.W disputes these liabilities, calling this either an unconditional financial support / gifts from D or at best soft loans. H has never produced any loan agreement or repayment schedule, and admitted that there had not been any repayment over the years. Under cross examination, He says he would repay D when he is financially able but had no idea when this would be. 84.Neither is there any evidence that D had ever sought repayment. 85.W’s counsel submits the case of P v Q [2022] WLUK 268 with reference to soft loans, for completeness and reference, the relevant paragraphs from His Honour Judge Hess are quoted below:
86.I agree with the W’s submission. And applying the principles above, there is a lack of supporting documents of these alleged liabilities, there was never any demand for repayment from D, nor repayment of these sums from H to him. These liabilities span decades and is a clear case of D being an unwavering financial support to H over the years. These are not modest sums, if D has not chased for the last 15 years, I see no evidence that these are debts for which repayment is being or likely to be enforced; I therefore do not accept that these are actual liabilities that should be taken into account. Expenses with regard to the US Property 87.With regard to the expenses H says he owes to D who has paid for expenses with regard to the NY Property, H says he has to repay half to D. 88.I will start with saying that my acceptance of H’s ½ interest in the NY Property does not automatically mean that I accept he has to pay ½ of the expenses. 89.H takes a rather confusing position because he says that with the alleged Gentlemen’s Agreement, on which he appears to rely to assert his 1/3 interest, there is no need for him to bear any expenses. Then on his own case, he does not owe D any expenses the latter has paid on the NY Property. 90.Then he says that because he has fallen out with D, the latter is now saying he has ½ interest in order to make him pay for ½ of the expenses incurred. 91.Clearly, H cannot have the best of both arguments to support his case, that is, he only has 1/3 interest but still owes D ½ of the expenses of the NY Property. This dichotomous position is not accepted. 92.For this debt, he says he is relying on the letter from D’s lawyers and D’s Partition Summons, and some text messages in July 2022. For the letter from H’s lawyers in January 2023 which quotes gross amounts for various expense items, and invites mediation with H to discuss issues amicably as H has placed an alarm on the property and refused to provide access and code to D; there is no demand for repayment of expenses, nor supporting documents to the expenses paid. For D’s Partition Summons, as discussed above, this talks about the joint ownership of the property, there was no demand by D for ½ of the expenses he had pay, nor does it state an amount due from H to his brother, this Summons was never served on H and clearly not proceeded for two years up to the time of trial. Thirdly, with reference to the text messages, which revolved around password / code for the property, there was mention by D asking H to stop using the AE card, he also said “Start to fulfil your financial obligation toward the expenses of the house and upkeep”, but there was no mention of the past expenses incurred, nor was there any demand for repayment of such expenses, nor does it, in and of itself, prove a broken relationship between D and H. 93.I fail to see how the above could be relied upon to support that H’s case that he owes his brother D the amount of $5,382,548 for expenses relating to the NY Property. Again, D has never sought repayment of H’s share of the expenses since they acquired the property in 1997. 94.I am mindful that D is aware of these proceedings as H says D does not wish to be involved, despite that, D has not sought to recover the money he or his company FS has paid for H when he should be aware that H’s assets and liabilities would be taken into consideration in his divorce. I have also wondered why H does not seek to share his liabilities with W in his open proposal, this was never explained. In the circumstances, I will not be taking this item of liability into consideration in the calculation of the matrimonial pot. W’s Financial Position W’s Companies 95.W has three companies: S Ltd, G Ltd and L Ltd. S Ltd 96.W owns 99.9% of this company, she contends that the parties had at the Specific Discovery Summons hearing on 28 February 2025 agreed that the value of S Ltd is $20,113 being the net asset value as stated in the 2024 AFS, and her % share is $20,093. Such value appears under the agreed schedule of assets of the parties joint documents, and was not taken up as issue in the H’s submissions. This is therefore the adopted value of this company. L Ltd 97.This is a company in which W has an interest. It is not in dispute that this company has been dormant for many years, and there is cash in the bank of $424,183.75. The dispute rests with how much of this amount should go into the matrimonial pot. 98.W says the following:
99.H says that as her shareholding in L Ltd is 30%, the value attributable to her is $424,183 × 30% = $127,255. 100.H challenges are as follows:
101.For W’s case, and under cross examination, W said that she had tried to ask and “beg” DB to resolve this matter between them but to no avail. Her accountant told her that if she wound up the company, she would not have access to the funds therein. 102.In hearing her oral evidence in support of her case regarding the PDA, I accept W’s explanation of the circumstances surrounding the unsigned PDA and that an agreement did exist as to her share of the project. The agreement dated July 2013 refers to the amount of the project being US$55,000, which translates into $426,250 at an exchange rate of 7.75, and tallies with the amount appearing in the 2015 AFS as revenue received in 2014. 103.As to the nature of the cash with ICBC, I notice from L Ltd’s 2015 AFS that the company was incorporated in May 2013, and this amount of $426,250 was logged in the 2014 AFS as revenue for “Lighting consultancy and design income” and is the amount appearing as part of the “cash in bank” in 2014. 104.Drawing all the strings together, I accept that the amount with ICBC does, on a balance of probabilities, relate to the project W referenced in the PDA. I therefore accept that she is entitled to 5% of the net profit therefrom. According to the PDA, the net amount after expenses was US$40,424, her 5% amounts to US$2,021.21 (as shown on the agreement), which is $15,662 at the same exchange rate of 7.75. 105.I also accept W’s calculation of the amount due to Directors, recorded as $26,255 and $10 in share capital, and her 30% entitlement thereof is $7,880. 106.By my calculation, the value of W’s entitlement in L Ltd is $23,542 ($15,662 + $7,880). 107.While I am inclined to accept W’s evidence that the bank account requires joint signatures to access, this is not the basis of placing $0 on the value of L Ltd. Her interest in L Ltd should be taken into account regardless of whether she can access these funds. G Ltd 108.W owns 50% of G Ltd. 109.W says the value of G Ltd is not in dispute. Parties have agreed on 28 February 2025 to use the NAV on the 2024 AFS, which is $3,003,826, 50% of W’s interest is therefore $1,501,913. 110.While agreeing to the value of G Ltd, H questions the loan W has from G of $750,000 which H says lacks supporting evidence. This will be explored under W’s liabilities below. 111.W says the loan appears in the G Ltd AFS 2024, which was audited by a certified public accountant, and H has not sought a re-audit of G Ltd’s financial statements. I agree with this position and H has not put forward any evidence except for making a sweeping statement that the Court should draw adverse inference against W of this outstanding loan. W’s MPF 112.W has two local MPF accounts, one with Manulife and one with BCT, the total amount of which is $288,596. W proposes a 40% discount on this number as she is at least 16 years away from access to her MPF fund. 113.Using the same approach as above, I should look at the duration of the marriage and the time from which the two MPFs starts accumulating. I do not have information on the latter, but intends to start from 2009 which was when the parties relocated to HK, until 2022 when the petition was taken out. Applying the formula of 14 years of marriage over 16 years of accumulation of the HK MPFs, this comes to $252,521. 114.I find the W’s proposal of 40% discount to be reasonable, and therefore shall place $252,521 × 60% = $151,512 into her side of the matrimonial pot. W’s Liabilities 115.According to the joint table, the amount of W’s liability which is not in dispute is $530,364. 116.W’s liabilities which are in dispute fall into two main sums:
Loan to G Ltd 117.This amount of loan due by W to G Ltd is recorded in the company’s financial statement, $750,000 being an updated number in the 2024 AFS. W says that this was a properly audited AFS by a certified public accountant, who has prepared the AFS in accordance with the relevant standards. H has not challenged the G Ltd AFS to a re-audit. 118.H merely complains that there were no supporting documents in terms of loan agreement or a board resolution etc to this liability owes to G Ltd. 119.I accept W’s argument on this, an AFS prepared by a professional should have looked into documents in support in its preparation so there must have been basis for the $750,000 liability so documented; there is no evidence put forward by H that the AFS could not be relied upon; in the circumstances, I accept this as a credible liability on the W’s side of the balance sheet. Loans from her F 120.W says she owes money to her father for her health insurance, Jewish community club membership, living expenses, rental, E’s school fees and legal fees, for a total of $1,746,063. She has produced some promissory notes and records of payment via her solicitors by their letter of 20 March 2025:
121.W produced all transfer records of the above transactions, all except three were paid directly by F to the respective payees; and all were supported by Promissory notes that W has issued in favour of her father but for the last two. She says that some earlier loans from her father were not documented, according to the above, the difference would be $159,831. 122.Furthermore, W has pledged her shares in the above-mentioned three companies to her father for these loans, the date of the document is 24 February 2025. W also says she will not be able to borrow any further from her father as there have been objections from her siblings. 123.H’s objections are as follows:
124.I am therefore unable to agree with H’ objections as above set out. 125.My observation on the pledge document is this, relying solely on the numbers from the three companies as analysed herein, the total value of the three companies is $1,545,548, which includes the amount in L Ltd which W says she cannot access, the security given actually barely covers the amount she owes. That said, I do acknowledge W’s intention to provide security of the loan payments which she says she intends to repay from the earnings of the operating companies. 126.On this issue, I draw guidance from the principles above mentioned from P v Q and make the following observations: It is quite clear that father has advanced money on behalf of W, the documentary evidence includes the promissory notes and payments directly to third parties, in particular the latter could not be disputed. I am conscious that this is a father-daughter relationship so it is not commercial in nature; and also accept there could not be enforcement by the father as the above loans were made only within 7 months before this trial. I also consider that the loan amounts as set out in the promissory notes, and backed by the pledge document is a written form of contractually binding obligation although my decision is not fully reliant on this point. I do not have evidence except for the W’s say so that this source of assistance from her father is drying up with the protest from her siblings. However, having reviewed W’s oral testimony in this regard, I accept that she does intend to “work harder” to repay these loans when she has the means, and that she seriously considers that these loans have to be repaid. 127.P v Q also make reference to considering the sums that a creditor is likely to waive. I consider that the father’s assistance with regard to family expenses, including rental payments, and his grandchild’s school fees, and the small amount in travel are more likely to be soft loans and less likely to be enforced by F against W, hence those sums are more likely to be waived by him. However, I take the view that those paid towards legal fees are more on the side of a real / hard loan, considering the nature of those amounts and in the context of an ancillary relief trial where it is likely that some costs could be recoverable at the end of trial. I therefore consider that there would be expectation by W’s father to be repaid with regard to his payment towards legal fees from recoverable costs from the trial if an order is so made. 128.On this basis, I shall therefore place only those relating to legal fees into her liabilities, but not the whole alleged sum. This item, by my calculation from the above table, is $1,014,572. The Matrimonial Pot 129.Based on my analysis above, my calculation of the matrimonial pot is as follows:
130.The amount of the matrimonial pot is therefore $11,068,198. H’s Income & Earning Capacity 131.During the marriage, H works in his own company B I Ltd, of which he owns 100% and is a director, he continues to maintain this after he has moved to the US. His declared income according to his updated Form E comes to US$39,000 per annum, hence $25,350 per month (at 7.8), he also enjoys company benefits of US$5,000 per annum, which is $3,250 per month (at 7.8); and also monthly petty cash reimbursement of US$500. I do not have, nor was my attention brought to, any supporting documentation with regard to his declared income. 132.W also reminds me that in the SIR dated 25 August 2023 which was around one and a half year prior to trial, H says to the SWO that he was making US$60,000 per annum, this translates into $39,000 per month. With this information, and absence of evidence to the contrary, I conclude that his earning capacity could be $39,000. 133.W also says that H’s true income position is higher than what he disclosed which could be seen from his expenses, W relies on a table prepared by her lawyers on H’s spendings between January 2020 to December 2022 based on his bank accounts withdrawal and credit cards. This lengthy analysis consists of bank accounts in H’s name and of H’s company P Ltd spanning 24 months with an average spending of $54,007, bank account in name of B I Ltd with Chase bank spanning 36 months averaging $28,340 per month, and two US$ credit card over a period of 13 months averaging $173,629 per month. W says that these were his expenses before leaving HK and without the assistance from D. I also remind myself from above analysis that H also has his brother’s company’s AE card at his disposal during the relevant time and the spending in 2020 according to him was $313,306 which averaged $26,108 per month. 134.Even with his updated Form E of February 2025, H’s expenses are as follows:
135.H was unable to explain how he could afford such expenses. Furthermore, when asked where he would live if not the NY Property, he said he would rent an apartment which costs between US$2,000 to US$4,000 ($15,600 to $31,200) per month. W submits, and I agree, that does not tally at all with an income of $25,350. 136.With a declared income of $25,350 per month, and expenses more than three times his income, the uncontroverted conclusion on this is that his declared income is either not credible, or he has not fully declared his income source or he continues to have a lot of assistance from his brother D, with whom he says he is estranged. H’s other resources 137.It is very clear to me that D is H’s financial resource based on the well-established principles from our Court of Final Appeal decision of KEWS v NCHC (2013) 16 HKCFAR 1 at §§34-38:
138.H contends that his relationship with D has turned sour, this is not accepted. D has not pursed his Partition Summons, he has never enforced any of the alleged amounts he advanced to H, H continues to live rent free at the NY Property, D has not asserted his rights over this property which is a subject matter of these proceedings. H’s expenses show that he is living beyond his income, so either there are assets or income that has not been disclosed, or D has continued to provide financial assistance despite the allegation of a broken-down relationship. 139.On a balance of probabilities, I find that D has been and will continue to be a financial resource to H. This is a factor which will be considered in the context of addressing H’s future needs and his maintenance payment capacity. W’s Income and Earning Capacity 140.W works as a lighting design consultant; she has been working in this lighting business since 1999. She is shareholder of companies which have operating businesses. 141.Her declared income is $38,500 which comes from S Ltd, of which she has a 99.9% interest, and an income of $3,500 from her father’s company. This totals $42,000. In terms of supporting documentation for her income, I make reference to its AFS 2024 produced via correspondence between solicitors on 19 February 2025, there is an amount of Director’s emoluments of $455,000, which breaks down to $37,916 per month. 142.It is W’s case that she has limited earning capacity. She has little working experience outside of the lighting industry and she runs her own business as well as works for her father. She is now 48 years old, and she does not have a tertiary degree. 143.H says she is young , her business in G Ltd is doing well and will be receiving substantial dividends from the business; on this basis, he argues that she does not need spousal maintenance. 144.I accept W’s case of her income and earning capacity. As for reaping profits from the business, she still has a debt owed to G Ltd. She is not asking for a spousal maintenance so this is not an issue, it is therefore her case that she can manage her own livelihood from her earnings. Assessing Parties’ Needs W’s Financial Needs 145.W asks for a clean break in her open proposal. In the circumstances, I still need to look at her general expenses as claimed, which according to her counsel’s submission, was not challenged by H in his narrative affidavit nor at trial, except for a general statement that it was exaggerated.
146.While’s W’s counsel says that it is not challenged specifically, my initial observation is that the food item (to which I added the bottled water expenses from the “Others” column) is on the high side, particularly where there is already provision for kosher meat of $3,600; I would have, if I need to, bring this number to $20,000, making the total of general expenses $96,450. 147.I would also put on record here W’s declared personal expenses are $48,700 per month. It is recognised that she is not asking for spousal maintenance from H, and I accept that she should be able to manage her expenses with her own income and from the Order to be made herein, with some adjustments to her discretionary spending. H’s Needs 148.Reference is made to paragraph 133 above, H’s general and personal expenses total $63,260. With his rent-free accommodation at the NY Property, my assessment of his earning capacity and the financial resource from D, he appears to be perfectly able to have his needs satisfied. He says that he is close to retirement age, and his counsel submits as follows:
149.Strict reading of this submission further supports my statement above, it is my finding that H’s future needs can be and will be satisfied with his own resources. E’s Needs 150.It is a well-recognized principle that where both parents have income and earning capacity, as in the case here, there should be a proportional / equal sharing of the expenses of the children. In normal situations and in the case of one child as here, this would be a ¼ share of the general expenses of the household of the care and control parent, and ½ of the children’s expenses. W produces the following numbers for the Children’s needs, with the right-hand column showing H’s proposals.
151.H says that he himself pays a total of $20,252.93 per month for E including holidays, travel, entertainment when E visits him, lunch and pocket money and $3,482.62 of insurance premium. 152.In H’s open proposal, he has proposed to pay $3,500 as E’s maintenance. At the end of this trial, H has undertaken to provide interim maintenance to her at $12,500 per month pending the final decision of the Court. 153.H has complained that W’s numbers are exaggerated, and that there was no documentary proof. So, other than agreeing to the school fees expense (at $34,010 per his counsel’s submission), H has invited the Court to downward adjusts these numbers on a broadbrush basis. 154.In my observation of the numbers presented by W, I also take the view that some are excessive, in particular, entertainment, presents and meals out of home, these total $15,000. But even if I were to slash these items of expenses in half, this would still bring her calculation of E’s expense to $70,919. 155.Given the fact that E is a special needs child, and H does not have care and control, and H may have a somewhat limited understanding of E’s daily challenges, including those at school (as he only spends holiday time with her); I find his challenges on E’s expenses with regard to tutoring, school support, ECA, medical needs, and even personal grooming and supplements to be rather harsh. These were not challenged under cross-examination. I accept, in particular, W’s explanation of these items due to E’s condition. 156.But despite all these comments, W is only asking H to contribute $30,000 towards E’s expenses, believing that based on her case, H has the capacity to pay. 157.It is worth noting, for completeness purpose, ¼ of W’s general expenses of $96,450 (as reduced by me) is $24,112. W’s calculation of ½ of children’s expense (as reduced by me) $70,919/2 = $35,459. The total of H’s share in this calculation would be $59,571. 158.On H’s own case, ½ of his proposed children’s expenses is $41,747/2 = $20,873, adding this to his share of W’s general expenses, the total would be $44,985 ($20,873 + $24,112). While he would argue that he is already paying $20,252 per month towards E’s expenses, he has not produced any documentary proof except for the $400 phone bill. 159.All things considered I am of the view that W’s ask of H to contribute $30,000 towards E’s expenses is more than reasonable. And given the analysis above, H does have the ability to pay this amount given his income and financial resources. Other factors taken into account Parties living standard 160.W has stated that their monthly expenses was around $100,000 during the marriage, which H denies. 161.W says rent alone is around $50,000 (which accords with H’s breakdown of payment made by D on his behalf for rent in HK). H agrees to have paid $20,000 per month to W, he also paid for domestic helper directly ($8,000 per month), E’s private health insurance ($3,500 per month), and various expenses in his credit card analysed above. Despite H saying that he paid for these expenses (except for rent) only when in HK, the analysis from W’s table aforementioned shows a high standard of living closer to W’s version of events. H’s complaint about W’s disclosure 162.H complains about W’s late disclosure, including W’s allegation of promissory note signed with her father (produced 5 days before trial), unredacted bank accounts statements from October 2024 to trial (produced 5 days before trial); W’s Manulife account statements (produced 8 days before trial). 163.H’s counsel further alleges in his closing submission that W’s last-minute disclosure put him in a difficult position to verify the documents and to assess her financial condition. H quotes that W has fallen short of her ongoing duty to provide disclosure despite legally represented. 164.It must clearly be borne in mind that H had only decided to step back into the financial aspect of these proceedings less than two months before the hearing, and after a hiatus of more than 15 months during which he ignored Court orders and all the requests from W to discuss valuation of assets; and having been given chances to respond at least twice to the asset and liability schedule prepared by W’s solicitors, he has failed to comply. He then subsequently and at the last minute raises a number of objections to W’s case. 165.Having disengaged himself for so long and not provided financial information himself and therefore failing his on-going duty of disclosure (which is incumbent whether or not he is legally represented), it lies ill in his mouth to then complain of W’s late disclosure. I also notice the W’s legal team has moved quickly to provide information and arranged for valuation ahead of the hearing dates despite the tight timeframe. 166.I am also reminded that when H’s solicitors stepped in, they had even proposed that the trial be rescheduled to enable parties to value their assets properly. This suggestion means that the trial will be derailed and the milestone date be moved based on H’s own selective timetable of engagement. 167.I find the H’s whole approach and conduct to be grossly unfair and disingenuous. H’s conduct 168.Reference is to be made to the points above regarding H’s absence in these proceedings, including the physical attendance at trial; and my finding that his disclosure with regard to his income and the extent of his financial resources leaves little to be desired. Application of the Sharing Principle and departure from equality 169.The only issue that the parties are in agreement is that there should be an equal sharing of the matrimonial pot, neither party has made any submission on the need to depart from equality; appropriate adjustments to the pension and MPF have been made. Deciding the Outcome 170.Referring to paragraph 129 above, the amount of the matrimonial pot is therefore $11,068,198. 171.I agree that there should be a 50-50 split of the matrimonial assets. 50% of the matrimonial pot is $5,534,099. The equalising sum to be paid by H to W is therefore $5,827,841 on a clean break basis. H has liquidity in his pension account if he chooses to deploy funds therefrom. 172.H is to pay $30,000 per month as maintenance for E, as maintenance to her has been ceased / unilaterally reduced since August 2023, this amount shall be back dated to August 2023, with due credit to any amount H has made to W from then towards E’s maintenance. 173.H has stated in his own affidavit that he is paying for the medical insurance, phone bills and laptop, this is accepted as undertakings from him. 174.Relying on the above cited Moher v Moher, and faced with the H’s conduct and my finding of non-disclosure on his part, I am entitled to “infer that the resources are sufficient or such that the proposed award does represent a fair outcome.” I am of the view that this is a fair outcome to W for her ancillary relief claim and for E’s maintenance; and that H has the ability to pay for these amounts. Costs 175.Costs should follow the event. H has actually asked for W to transfer capital sum to him. While W has over-estimated H’s pension amount to be placed into the matrimonial pot, by and large she has proven her case, and she has been successful in her claim. 176.For the record, I have taken H’s conduct into account. 177.There shall be a Costs Order in W’s favour. Orders 178.H’s position is that he will be continuing to pay for E’s medical insurance premium, laptop and mobile phone bill, and I shall accept this as an undertaking on his part. 179.For the reasons aforesaid, I make the following Orders:
Petitioner represented by Ms Joyce H.Y. Lee instructed by Messrs Rita Ku & Ser Respondent represented by Mr Enzo WH Chow and Ms Polly Li instructed by Messrs Payne Velasco
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Cases cited in this judgment