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A v B

Judgment Cited authorities 31 Cited in Precedent Map Related
Vincent
Judgment Date05 August 2016
Year2016
Citation[2017] 1 HKLRD 187
Judgement NumberFCMC10937/2013
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC10937/2013 A v. B

FCMC No. 10937 of 2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 10937 OF 2013

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BETWEEN
A Petitioner
and
B Respondent

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Before: HH Judge Bruno Chan in Chambers.
Date of Hearing: 1 & 5 April, 27 May 2016.
Date of Decision : 5 August 2016.

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JUDGEMENT
(Ancillary Relief)

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1. This is the parties’ ancillary relief application upon the dissolution of their 14-odd years marriage, essentially over division of their marital assets with a total net value of no more than HK$15 million, the bulk of which is typically represented by the former matrimonial home consisting of 2 adjoining flats with one valued at HK$5.5 million held in the Petitioner Husband’s name, and the other at HK$5.3 million in the Respondent Wife’s, with the remaining balance made up of personal bank balances, insurance policies and pensions.

2. There is of course also the relatively straightforward issue over the Husband’s maintenance by way of periodical payments for their 2 daughters both now in secondary school and whose custody has been granted to the Wife, but as will be apparent from the parties’ respective Open Proposal, at the heart of the dispute is whether the Husband’s prospects of advancements to his professional career as a practicing barrister in the foreseeable future should be taken into account, and if so how they can be quantified as part of the assets for consideration as to whether the entire former matrimonial home should be given to the Wife so as to achieve a clean-break situation, which according to the Husband would mean that she would exit the marriage with a net effect of almost all of the marital assets, which has thus become the major stumbling block to what could have been an early straightforward settlement of an otherwise uncomplicated divorce, as pointed out in the commencing paragraph of the Opening Submission of his counsel Mr Richard Todd QC & Mr Robert Pang SC leading Mr Jeffrey Chau:

“1. This is a case which should have been capable of early resolution but it has become mired in the intellectually interesting but financially disastrous (for these parties) debate about whether a work capacity is an asset which is capable of sharing...”

3. Indeed financial disastrous would appear to be the result when that kind of seniority, calibre and expertise are involved as the Wife is no less well represented by Mr Bernard Man SC leading Mr Raymond Chu and with legal costs from both sides totalling more than HK$3.2 million, but she insists that early resolution could have been achieved by the Husband acknowledging and accepting her request for his flat of approximately HK$5.5 million as both fair and justified taking into account of her entitlement to share in his enhanced earning capacity and post-separation profits, his various cash gifts to his girlfriend including a sum of HK$1 million made right before he walked out of their marriage, as well as his long-term responsibility to provide appropriate accommodation for her and their daughters by allowing them to continue to reside in the former matrimonial home intact with the 2 adjoining units. But first some relevant factual background of both the marriage and the proceedings should shed some light on how the parties eventually arrived at their present entrenched position.

Background

4. Both the Husband, now aged 4 , and the Wife, now aged 4 , grew up in Hong Kong where they met while attending University of Hong Kong (then known as ) in 1991 with him for the Bachelor of Laws and her for Business Administration. Upon graduation the Wife in 1993 started her employment with XY (Hong Kong) Ltd, a power and automation technology company where she now holds the position as a Contract and Risk Manager, while the Husband was called to the Hong Kong Bar in the same year, went on to obtain his LLM from the X College in London before returning to Hong Kong where he commenced his practice in 199 .

5. On 1997 the parties registered their marriage and made their home in Tsuen Wan, and on 1999 the Wife gave birth to the elder daughter, D1 now aged 17, and 3 years later the younger daughter D2, on 2002 who is now aged 14.

6. In 2003 the parties purchased 2 adjoining flats in x xx Terrace, Tsuen Wan for their matrimonial home with as noted above Flat C registered in the Wife’s name and Flat D in the Husband’s, with which they knocked down the adjoining walls and turned into a single home with 3 bedrooms to accommodate their family of 4 plus a domestic helper.

7. The parties continued to work to support the family and in 2008 the Wife obtained her master degree, but notwithstanding their relatively good income it is common ground that they had lived frugally during the marriage which sadly became unravel one day on 28th June 2011 when the Wife learned from their banker that the Husband had just withdrawn HK$1 million from his account, of which he admitted gifting to a female friend C who was subsequently to become his present girlfriend. On the following day the Husband packed his belongings and moved out of the matrimonial home to some rented accommodation, and eventually to his present rented apartment in Bel-Air Residence, Pokfulam, Hong Kong in September 2012 where he has been cohabiting with C.

8. On 1st August 2013 the Husband commenced these proceedings for divorce based on the ground of the parties’ separation for 2 years since 29th June 2011 upon which the decree nisi was granted on 3rd October 2013, and at the 1st Appointment Hearing on 21st October 2013, the parties were also able to agree for the custody care and control of both daughters to be granted to the Wife and reasonable access to the Husband, and for the parties to exchange their Form E.

9. In his Form E filed on 18th November 2013 the Husband disclosed a total income from his practice for the year of 2012/2013 of just over HK$3.2 million but more than double the year before at only HK$1.35 million, and thus a monthly average of about HK$273,000 at the time of his Form E. He also worked as a part-time university lecturer but the total income from that source is negligible at about HK$4,000 for the whole year.

10. Apart from his joint interests with the Wife in Flats C and D X x Terrace that made up the former matrimonial home and which he gave a total net value at HK$6.8 million, the Husband also disclosed bank savings of just over HK$1 million, some insurance policies worth about HK$368,000, and a MPF accumulated at just over HK$180,000, but he also claimed to have substantial debts and liabilities of more than HK$2.5 million including the outstanding mortgage of the former matrimonial home, thus giving him a total net worth of just over HK$2.5 million.

11. For his monthly expenditure, the Husband put the total amount at just over HK$340,000, of which HK$67,140 were for his general household including HK$11,200 for the mortgage payment of the former matrimonial home, HK$269,370 for his personal expenses including almost HK$100,000 for his legal practice and HK$64,000 for his profit tax liability, and HK$6,450 for the daughters’ expenses but of which as will be apparent later that he has not been paying since July 2011. It is not in dispute that his post-separation spending reflects a much higher standard of living than that during the marriage, including HK$32,000 for renting his apartment, HK$10,000 for meals out of home, HK$16,000 for clothing and shoes, HK$35,000 for entertainment/presents, HK$18,000 for holidays, as well as a regular payment of HK$20,000 - $30,000 as pocket money for C, an item which he somehow did not include in his Form E but admitted later in his evidence that he has been doing so since C became his girlfriend in late 2011.

12. As for her Form E filed on the same date, the Wife disclosed an average income of about HK54,000 per month including double pay and bonuses, and in addition to her interest in Flat C of Terrace she also disclosed about HK$1.68 million in bank savings and HK$1.3 million in MPF, and with no declared debts or liabilities, she revealed a higher net worth in excess of HK$6.3 million.

13. For her monthly expenditure, the Wife claimed just over HK$20,000 on general household mainly on food and domestic helper as the mortgage payments and utilities for the matrimonial home were being directly paid for by the Husband, about HK$24,300 on her personal expenses and HK$15,300 on the daughters including their school fees, making her total expenditure for herself and the daughters at just under HK$60,000 per month.

14. After the usual rounds of questionnaires and further disclosure, and after an unsuccessful FDR hearing before Judge Melloy on 13th March 2015, the matter eventually came before me for trial upon the parties filing their narrative affirmation and setting out their respective Open Proposal revealing those major issues first mentioned at the beginning of this judgment with the following details, starting with the Husband’s which came first in time.

Husband’s Open Proposal

15. The Husband’s Open Proposal was first made in his affidavit of 21st January 2015 [B/133] as set out in the exhibited draft consent summons [C2/295] and his subsequent letter of 18th February 2015 [C2/398] which can be summarised as follows:

(a) the Wife and 2 daughters to reside in the former matrimonial home for free until the younger daughter reaches the age of 21;

(b) the Husband to continue to pay the outstanding mortgages of both flats until their discharge;

(c) the Husband to pay the Wife nominal maintenance of HK$1.00 per annum until she dies or remarries whichever is earlier;

(d) each party to...

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