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Lkw v Dd

Judgment Cited authorities 28 Cited in Precedent Map Related
Vincent
Judgment Date12 November 2010
Year2010
Citation(2010) 13 HKCFAR 537
Judgement NumberFACV16/2008
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV16/2008 LKW v. DD

FACV No. 16 of 2008

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 16 OF 2008 (CIVIL)

(ON APPEAL FROM CACV NO. 91 OF 2007)

Between:

LKW Appellant
- and -
DD Respondent
_____________________
Court : Mr Justice Bokhary PJ, Mr Justice Chan PJ,
Mr Justice Ribeiro PJ, Mr Justice Hartmann NPJ and Lord Neuberger of Abbotsbury NPJ
Date of Hearing: 18 October 2010
Date of Judgment: 12 November 2010

________________________

J U D G M E N T

________________________

Mr Justice Bokhary PJ :

1. I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Chan PJ :

2. I agree with the judgment of Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

3. In this appeal, the proper approach to making financial provision orders on and after dissolution of a marriage falls to be considered. The appeal in WLK v TMC[1]was heard at the same time. The judgments in both appeals are to be handed down simultaneously and are intended to be read together.

4. In ancillary relief proceedings, after an examination of the parties’ financial situation (to which I shall return), Deputy District Judge Kot[2] found that the total assets of the present appellant (the husband) came to HK$4,650,000 and ordered him to pay HK$1,550,000, being one-third of that amount, to the wife (the present respondent).

5. On the wife’s appeal to the Court of Appeal,[3] the Court rejected challenges to certain findings and held that the only issue before it was ‘whether as a matter of law the Judge was correct to award only one third of the husband’s assets to the wife’.[4] It took the parties’ joint assets to be HK$5,365,000, and, invoking principles laid down in recent House of Lords decisions, awarded the wife HK$2,682,500, being half that sum.

A. The issues on this appeal

A.1 The Court of Appeal’s question

6. The Court of Appeal[5] granted the husband leave to appeal under section 22(1)(b) of the Court’s statute[6] framing the following question as having the requisite importance, namely:

“When the law courts of Hong Kong are dealing with applications made under section 7 of the Matrimonial Proceedings and Property Ordinance, Cap 192 of the Laws of Hong Kong, whether it is necessary to adopt the principle of ‘reasonable requirements’ laid down in the case of C v C [1990] 2 HKLR 183; and if it is not necessary to do so, whether the courts should adopt the ‘equal sharing’ principle laid down in a line of English cases, starting from the case of White v White [2001] 1 AC 1996.”

Identification of the issues arising calls for some elaboration.

A.2 Section 7

7. Section 7 of the Matrimonial Proceedings and Property Ordinance[7] (“MPPO”) lays down what the court must have regard to when making orders for ancillary relief:

(1) It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

8. The court’s powers under sections 4, 6 and 6A referred to are powers to make orders for financial provision (by way of periodical payments and lump sums) and for property adjustment upon and after granting inter alia a decree of divorce.

9. Enacted in Hong Kong in 1972, section 7 closely followed the wording of section 5 of the English Matrimonial Proceedings and Property Act 1970. However, there has always been omitted from the Ordinance the provision (sometimes referred to as the “target” or “tailpiece” provision) in the 1970 Act which required the court:

“So to exercise those powers as to place the parties, so far as it is practical and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other.”

10. The target provision was deleted from the English statute book by the Matrimonial and Family Proceedings Act 1984 and the parallel provision in England is now section 25 of the Matrimonial Causes Act 1973 (“MCA 1973”) which, as amended, relevantly states:

(1) It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24, 24A or 24B above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

(2) As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24, 24A or 24B above in relation to a party to the marriage, the court shall in particular have regard to the following matters –

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;

(g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

A.3 The Court of Appeal’s decision in C v C

11. It is self-evident that section 7 of the MPPO (“section 7”) and section 25 of the MCA 1973 (“section 25”) are closely related in content and structure. It is therefore unsurprising that the Hong Kong courts have consistently looked to the English case-law for persuasive guidance as to the interpretation and application of section 7.

12. That this should be so was affirmed by the Court of Appeal in C v C, the 1990 decision referred to in the question framed. It was the first “big money case” to reach the Court of Appeal.[8] Hunter JA (with whom Fuad VP and Clough JA agreed) sought to distil the applicable principles from the English authorities then current. He relied especially on Preston v Preston[9] where (after reviewing the authorities) Ormrod LJ stated:

“...the word ‘needs’ in section 25 (1) (b) in relation to the other provisions in the subsection is equivalent to ‘reasonable requirements,’ having regard to the other factors and the objective set by the concluding words of the subsection.”[10]

13. Adopting that approach, Hunter JA held that the court should first evaluate the financial resources of both parties and then turn to an assessment of “the wife’s ‘reasonable requirements’”. He observed that where a lump sum was to be awarded with a view to providing income, it should be computed “on the basis not of the return on the capital sum, but upon the basis that the capital would be exhausted during the wife’s lifetime”,[11] in other words, employing a Duxbury calculation.[12]

14. Applying C v C,wives who were full-time homemakers and child-carers could only expect awards designed to meet their reasonable requirements. If there were surplus assets, they might qualify for a larger award if they had “earned” it by contributing financially to the family assets. Hunter JA adopted what Ormrod LJ said in Preston v Preston to such effect:

“...active participation by the wife either by working in the business or by providing finance, will greatly enhance her contribution to the welfare of the family under paragraph (f), and may lead to a substantial increase in the lump sum over and above her ‘reasonable requirements.’ This, in effect, recognises that she has ‘earned’ a share in the total assets, and should be able to realise it and use it as she chooses.”[13]

15. Hunter JA[14] also endorsed the proposition advanced in Preston[15]that “there does come a point, in cases where the available resources are very large, ... when the amount...

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