IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES NO 6310 of 2015
||AB xxx XXX
|Before : HH Judge Bruno Chan in Chambers
|Dates of Hearing : 30 November, 1-2, 6-8, 13-14 December 2016, 16 March 2017.
|Date of Judgment : 8 May 2017.
1. This is the ancillary relief application of the Petitioner Wife, now aged 49, against the Respondent Husband now aged 50, upon the dissolution of their 20-year marriage essentially for an equal sharing of their matrimonial assets, of which she has put in excess of HK$150M before taking into account of what she believes to be very substantial unvested shares and benefits under the Husband’s employment package as CEO of A3, a multinational xxxxxxxxx company publicly listed in London, for the period of 2014 to 2016 which according to her would be worth as much as another HK$56M and would therefore bring the total assets for sharing to about HK$200M, and for monthly spousal maintenance pending full payment of her share of those benefits as and when they become vested by the end of 2019, as well as proper financial provisions for their 3 daughters now aged 18, 15 and 12 respectively.
2. The Husband however insists that this is a needs case instead of a sharing case, with the needs of both parties to be catered for by both of their own earning capacity and their marital assets which he puts much less at just over HK$100M excluding those unvested benefits under his employment earned after their separation, according to him in January 2013, as post-separation accruals, upon which the yardstick of equality shall apply to achieve a clean break situation, and with the interests of their children as the main ongoing priority and whom he will continue to maintain generously.
3. Clearly at the heart of the parties’ dispute is the huge gulf in their inclusion and valuation of the matrimonial assets in their respective Schedule of Assets, in particularly as noted above over the Husband’s potential remuneration and benefits under his appointment as CEO of A3 in December 2012, whether such benefits including his long term incentive plan, bonus schedule, shares options and pensions under his employment collectively called the A3 Benefits should be treated as post-separation accruals and hence according to the Husband excluded from the matrimonial assets but disputed by the Wife who insists that their marriage did not end until much later in about May 2014, or whether such benefits should all be taken into account for the purpose of sharing as proposed by the Wife, and if so in what proportion or amount and when they should be paid.
4. There are of course also many other issues such as those over the Wife’s own earning capacity and her future inheritance from her parents of which the Husband believes to be substantial, or as to various cash transactions made by the Husband prior to and after separation including more than US$1M to his parents which the Wife argues should be added back as unjustified or unaccounted for by the Husband, or the exact date of their separation which according to the Husband will be relevant to any sharing of his post-separation accruals, as well as litigation conduct raised by both sides with the Wife accusing the Husband of failure to make full and frank disclosure as to his A3 Benefits as well as his many other dealings in various investments and trusts assets, and as a result has unnecessarily and unfairly added to their legal costs, while the Husband blames her for having “lost sight of the wood for the trees” by insisting identification, auditing and then division of almost every last cent accumulated or spent during their marriage, and for being obsessed with the minutiae and an unquenchable thirst for information however unnecessary and unproductive through the court which has been unduly difficult, prolonged and expensive.
5. Expensive indeed, as their combined legal costs, I am told, have exceeded HK$42M in total, a “horrendous” amount as described by the Husband, and in my view a truly mind-boggling amount incurred in just over 2 years of litigation with no other major battle ground between the parties than their financial disputes, and staggeringly disproportionate even to the highest case that can be put forward by the Wife as to their total assets, of which the parties have included in their respective Schedule of Assets of more than 140 items which were updated and valuated constantly throughout the proceedings, and the fact that the trial bundles had totalled 19 with almost 7000 pages of financial materials and information, with almost as much materials amassed in correspondence between solicitors in their own correspondence bundles, not to mention transcripts of numerous conversations between the parties taped by the Husband during the marriage, while both parties had seen fit to retain separate legal teams in London as well including senior silks, all of which had no doubt combined to bring their legal costs to such an insane amount, of which no doubt I will have more to say later in this judgment, but meanwhile it would be necessary to first set out the relevant background of the marriage which are by and large non-controversial between the parties save for the exact date of their separation and the circumstances surrounding it.
6. Both parties were born and raised in New Zealand, with the Husband coming from a very modest background while the Wife’s family is said to own substantial assets xxxxxxxx xxxxx xxxxx xxx xxxxxxxxx in New Zealand. They met in 1992 and after dating for 2 years they married in 1994. At that time the Wife was working for a major accounting firm where she later became qualified as a Chartered Accountant, while the Husband was then with A1 Xxxxxxxx New Zealand where he later became a senior executive.
7. After the marriage the parties purchased a four-bedroom house in Wellington New Zealand for their home and continued to work until the birth of their eldest daughter D in 1998 when it was agreed that the Wife should give up work to stay home and look after the infant.
8. In 1999 the Husband accepted a promotion from A1 New Zealand to work in Hong Kong as Chief General Manager of Sales and Marketing of A1 Asia Pacific and accordingly moved to Hong Kong in July 1999, followed by the Wife with their daughter in September 1999 after selling their house in New Zealand.
9. While in Hong Kong the Wife remained as a full-time housewife and mother, and gave birth to the two younger daughters respectively in 2002 and 2005, with the family making their home in a rented 4-bedroom property in Stanley.
10. In 2003 the Husband was promoted as CEO of A1 China Region, and with increased wealth and income, he decided to set up 2 family trusts for the purpose of succession and tax planning for the benefit of his family, with the first one known as W Trust in 2005, and the second one as W Discretionary Trust in 2006 (Collectively known as the W Trusts), to hold assets by two BVI companies with his sister JS in New Zealand and GL being the husband of the Wife’s cousin who is a solicitor in Hong Kong, appointed as the trustees and directors of those two BVI companies, and with the parties and their children named as the beneficiaries.
11. Initially the assets injected into the W Trusts when they were first settled were not of significant value, but the Husband had over the years injected further funds into the Trusts, with the assets now held by the W Trust include certain hedge funds, an account with BEA Hong Kong, a Xxx Xxxxxxx Xxxxxxxx Xxxxxx Super Trust Fund and shareholding in a company known as Wxxxxx Security Group Ltd, while the W Discretionary Trust holds essentially the sale proceeds of certain Australian property and a boat. It is common ground that total value of the W Trusts now stands at more than HK$50M.
12. In 2007 the Husband joined A2 Xxxxxxxxx Hong Kong as Chief Operating Officer and was later promoted to Group CEO and President in 2009. However, following the global financial crisis his employment with A2 ended upon his resignation in July 2010 when he took garden leave. In January 2011 he received a total pay-out from A2 of more than US$12M (HK$93.65M) in cash and stock, putting his total remuneration for his 4 years of employment at A2 in excess of US$18.9M before tax.
13. In April of the same year the parties incorporated a company in New Zealand known as DXX Holdings Ltd as equal shareholders to invest in xxxxxxx quota in New Zealand.
14. For the next 2 years the Husband remained unemployed, and in July 2012 the family downsized from their Stanley home to a serviced apartment in Parkview at Tai Tam.
15. In November 2012 the Husband accepted an offer from A3 in London as Xxxxxx CEO at a basic salary of £980,000 per annum plus bonuses and various other benefits including share options and participation in the A3 Deferred Bonus Plan (“ABP”) and Long Term Incentive Plan (“LTIP”) as part of his A3 Benefits, the details of all of which no doubt I will have more to say later in this judgment, as it will become apparent that they were to be right at the heart of this litigation between the parties.
16. In January 2013 the Husband moved to London by himself to start his new job with A3 while the Wife and children remained in Hong Kong. It is the Husband’s case that by then the parties were already experiencing serious difficulty and contemplating separation, which according to him explains the reason why he had left for London alone without the Wife and children, while...