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Wt v Ylc

Judgment Cited authorities 11 Cited in Precedent Map Related
Vincent
Judgment Date23 March 2018
Neutral Citation[2018] HKFC 38
Year2018
Judgement NumberFCMC9820/2015
Subject MatterMatrimonial Causes
CourtFamily Court (Hong Kong)
FCMC9820/2015 WT v. YLC

FCMC 9820/ 2015

[2018] HKFC 38

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 9820 OF 2015

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BETWEEN
WT Petitioner
and
YLC Respondent

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Coram: Her Honour Judge Sharon D. Melloy in Chambers (Not open to public)
Dates of Hearing 21 – 24 November 2017
Closing arguments submitted: 8 January 2018
Replies submitted: 17 January 2018
Date of Judgment: 23 March 2018

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J U D G M E N T
(Ancillary relief: Premarital assets)

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Introduction

1. This is an application by a Petitioner wife for final ancillary relief for herself and for the only child of the family, C who is now 7 years of age. In addition, both parties have issued summonses with respect to an interim interim order for maintenance made by Deputy Judge S Wong on the 12 October 2015. On the 7 July 2016 the wife issued a summons seeking inter alia to vary the maintenance up. She also sought an order for litigation funding. The husband for his part filed a summons dated the 15 March 2017, seeking to vary the interim maintenance order down and to be released from his undertakings to pay for the mortgage and management fees on the jointly held property in which the wife and C currently live. Although arguably somewhat moot these applications have nevertheless been adjourned for determination at this trial. It is the wife’s position that the issue of interim maintenance is no longer relevant and that the court need not address it further. The husband does not agree and asks that I “add back” a sum of at least HK$1,813,835, being the amount that he says that he has overpaid by virtue of the interim maintenance order.

2. There are a number of issues to be determined, but it would be fair to state that the central point concerns the correct approach to be taken to so called “pre-marital assets”. The wife argues that the assets accumulated by her prior to marriage should be quarantined and retained by her and that the remaining assets or the so called “marital acquest” should be divided on a 50:50 basis. She accepts that likewise a sum of money representing funds brought to the marriage by the husband may be similarly quarantined. The husband for his part puts forward two alternative proposals either a) that all of the parties’ assets shall be regarded as matrimonial assets, regardless of source and that they shall all be divided on a 50:50 basis or b) that some attempt be made to quarantine all of those assets which he says he brought to the marriage and that those assets be ring fenced in a similar way to the wife with the remainder of the assets being divided on a 50:50 basis. He says that the net result will be much the same. The husband also maintains that it would be very unfair to quarantine the wife’s assets without at the same time making some accommodation for the assets that he brought to the marriage. As will be seen some of the difficulty in this case lies in the fact that although some of the wife’s assets are easily identifiable as being arguably “pre-marital” the husbands are less so, which in turn has led to arguments concerning the “mingling” of each party’s individual funds with joint assets post marriage. Although on the face of the documents there is also a potential issue concerning post separation accruals, given that a number of the husband’s properties and one other significant asset were purchased after the parties separated in April 2015, this was not an issue that was pursued at trial.

3. There is however a further issue concerning each party’s earning capacity going forward. The wife argues that that she no longer has a significant earning capacity and that consequently she should receive a capitalized lump sum presumably in addition to her pre-marital assets and her share of the marital acquest in order to “reflect her diminished earning capacity”. This is not accepted by the husband, who says that his earning capacity will also likely decrease significantly given his age and recent changes in the foreign currency options industry generally. He also does not accept in principle that it would be fair or reasonable for the wife to receive such a capitalized lump sum or that she is otherwise entitled to maintenance for herself, given that she has a significant earning capacity and is now “well”. His position is that the parties should contribute equally towards C’s expenses.

Background to the marriage

4. This was a short marriage of approximately 4½ years between two successful professionals, who married later in life. They started to live together in November 2009, when the wife was about 35 and the husband 40 years of age. They married less than a year later on the XX September 2010, a month or so before C was born on the XX October 2010. C is now 7 years of age and she attends an international school in Discovery Bay. Unfortunately, she was born with a cleft lip and it is acknowledged by both parents that she will most likely need further corrective surgery in due course, most probably at ages 10 and 18 years.

5. The wife, who is now 43 years of age, is from the Mainland originally and she has an undergraduate degree in Economics, majoring in financial accounting. She also studied Japanese and began, but was unable to complete an MBA programme. She has held a number of senior positions in the financial sector and was a successful investment banker for a period of time. Her last position was as the Team Head and Founding partner of a private Equity Fund for a well-known banking group. The wife acquired permanent Hong Kong residency in 2012 and she now lives in Hong Kong with C on a full time basis.

6. Very unfortunately the wife was diagnosed with stage 2b breast cancer in December 2013. She ceased working in January 2014, initially taking sick leave and then unpaid leave, whilst she had treatment, including radiotherapy, chemo therapy and surgery. This was broken down into four months paid leave from 1 January 2014 – 30 April 2014, four months on half pay from the 1 May 2014 – 31 August 2014 and one-year unpaid leave. Her employment contract came to an end on the 31 August 2015. It was suggested during the trial that the wife had engineered her own resignation. For the avoidance of doubt this is not accepted. As will be seen this and related matters concerning her earning capacity are a matter of some considerable dispute between the parties.

7. The wife has sole custody and care and control of C with defined access to the husband by virtue of a consent order dated the 11 January 2016. It is therefore her case that she is now primarily a full time mother and housewife with little earning capacity. She does though own two properties, plus a half share in four others, which provide her with a passive income, in addition to the interim interim maintenance order and her own savings and other investments.

8. The husband for his part was born in South Korea and raised in the United States after his family emigrated there when he was about 8 years of age. He is also well educated and has a number of degrees. It is also of note that he is a US qualified lawyer. However, although he worked as a lawyer for a short period of time, he later changed course and he has since forged a career as a Foreign Currency Options Broker. The husband is now 48 years old.

9. Consequently, both parties had accumulated some assets prior to the marriage and each had commanded a significant salary in their respective fields. The husband’s salary was also a matter of some considerable dispute during the trial.

10. By all accounts the marriage was not an easy one and in April 2015 the parties separated. The husband moved out from the matrimonial home i.e. the Seahorse property in Discovery Bay to a rented flat in Pokfulam and the wife and C moved to a smaller flat in Discovery Bay i.e. the jointly owned Coastline property. The parties had decided that it made commercial sense in the circumstances to rent out the Seahorse property and it has been leased out since that time, with the rental amount covering the mortgage repayments and providing a net income of over HK$20,000. The wife now wishes to return to live in the Seahorse property with C and says that this more closely resembles the standard of living enjoyed by the parties during the marriage.

11. The wife issued divorce proceedings based on the husband’s unreasonable behaviour on the 31 July 2015. The proceedings were initially contested. Thankfully common sense intervened and a decree nisi was pronounced on the 29 December 2016 following amendment of the particulars on the 30 May 2016.

12. On the 12 October 2015 Deputy Judge S Wong made the interim interim order, which has become the subject of much complaint, with the husband arguing inter alia that it was made on the basis of inaccurate financial information provided by the wife in her Form E. It is also of note that the wife had not made any application for maintenance pending suit and/or interim maintenance at that time. The order states that the husband do pay interim interim maintenance in the sum of HK$40,000 per month (presumably for C, although that is not stated) and that he also undertake to pay for the mortgage and management fees on the jointly owned Coastline property in which the wife and C were then living. In total this amounted to a maintenance sum of HK$80,514 per month.

13. In the wife’s subsequent summons to vary the maintenance up, dated the 7 July 2016 she sought HK$70,000 per month for herself and C, plus a continuation of the husband’s undertakings to pay for the mortgage and management fees on the Coastline property plus a further sum of HK$30,000 per month...

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