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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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 for litigation funding. She estimated her expenses at the time at HK$120,000 per month and said that this was more in keeping with the standard of living enjoyed by herself and C during the course of the marriage.

14.  In the husband’s summons dated the 15 March 2017 he offered the wife HK$22,075.75 per month only, as his contribution towards C’s monthly expenses. He also asked to be released from his undertakings to pay for the mortgage and management fees on the C property.

15.  It is accepted by the parties that they maintained separate finances throughout the marriage. The wife states at paragraph 44 of her second affirmation dated the 27 January 2017 that:

44. It is not disputed that before the separation, the Respondent and I had shared our household expenses equally, such as the mortgage payments, utilities, groceries, domestic helper, and C’s expenses; and the Respondent and I would each be responsible for our own expenses.

Similarly, the husband made the following comments in his affirmation dated the 14 March 2017:

14. The Petitioner and I were both financially independent before and during the marriage.  We never knew and we never bothered to ask about the amount of our individual incomes before our respective Forms E were filed in these proceedings.  We both had our own bank accounts and credit cards for our personal use.  Our salaries and rental income from our solely owned properties were deposited to our own respective accounts.  Likewise, our personal accounts were used to pay for our own expenses such as personal credit card bills and our personal taxes.

15. During the marriage, the Petitioner and I had always shared equally family expenses including food, utilities, helper’s salary and expenses for jointly owned properties including mortgages, rates and management fees.  We had also always shared C’s expenses including her education expenses equally.  For the purpose of discharging these family expenses, we set up a joint account at HSBC in 2011 and another joint account at the Bank of China in 2013 when the HSBC joint account became the Petitioner’s own bank account.  We each contributed equally of HK$100,000 into the accounts every two months and deposited funds into the joint account only when the funds were getting low.  We had a joint credit card under these joint bank accounts so payments charged on the card will be paid by joint funds.  We had never used the joint credit card and funds in our joint accounts for our own personal use save for the Petitioner’s medical treatments, some of which were charged under the joint credit card.

16.  It seems not to be disputed that this arrangement and indeed the marriage itself began to finally break down once the wife became ill and she was unable to financially contribute as she had done in the past. The husband says that the parties’ last contribution to the parties joint account was on the 11 March 2015. This is disputed by the wife, who says that she stopped contributing completely after the husband initiated the separation in January 2015 and that her last contribution was when she was still receiving a half salary of just over HK$50,000 per month. She says that there was a payment of HK$100,000 in March 2015, but that this was for the renovation of the Coastline property. Again there is some dispute over this. In any event there is no doubt that the wife had significant cash assets at her disposal at this time. The husband appears to take issue with the fact that she was not contributing financially as she had done in the past, especially given the fact that she had these cash assets available to her. It is the wife’s case that she should not have been obliged to dip into her own savings given that she was unable to work and the parties were financially sound. It is now clear that the husband was being very well remunerated at work during this period of time.

The law on Ancillary Relief

17.  The relevant law is not in dispute and is referred to by both sides in their respective submissions. The Court of Final Appeal’s decision in LKW v DD (FACV no 16 of 2008) 13 HKCFA 537 sets out the approach that the lower courts must take when determining issues relating to final ancillary relief.

18.  Mr Justice Ribeiro PJ reiterates that there are four underlying principles that must guide ancillary relief proceedings namely fairness, the absence of discrimination, the upholding of the concept of the yardstick of equality and the rejection of a need for a minute retrospective investigation of the parties’ finances. The first and last points are of particular relevance in the context of this case. At paragraph 69 of the judgment Mr Justice Ribeiro says as follows:

69.  The essence of this fourth principle is reflected in Thorpe LJ’s illuminating comment in Parra v Parra:[1]

“... the outcome of ancillary relief cases depends upon the exercise of a singularly broad judgment that obviates the need for the investigation of minute detail and equally the need to make findings on minor issues in dispute. The judicial task is very different from the task of the judge in the civil justice system whose obligation is to make findings on all issues in dispute relevant to outcome. The quasi-inquisitorial role of the judge in ancillary relief litigation obliges him to investigate issues which he considers relevant to outcome even if not advanced by either party. Equally he is not bound to adopt a conclusion upon which the parties have agreed. But this independence must be matched by an obligation to eschew over-elaboration and to endeavour to paint the canvas of his judgment with a broad brush rather than with a fine sable. Judgments in this field need to be simple in structure and simply explained.”

As will be seen this point is particularly significant in the context of this case.

19.  In addition, he identifies a five step approach to be adopted in all ancillary relief trials, which if I may I will summarize as follows:-

1)   The identification of the assets. It is of note that Mr Justice Ribeiro states that a broad brush approach is generally considered sufficient for these purposes and that the assets should be valued as close to the date of the trial as possible. 

2)   An assessment of the parties’ financial needs

3)   Whether or not the sharing principle should be adopted?

4)   Whether or not there is a good reason to depart from an equal division of the assets?

5)   Deciding the outcome

20.  The section 7 factors (s. 7 Matrimonial Property and Proceedings Ordinance, Cap 192) are largely dealt with within this general framework. They are:-

(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.

21. Reference will be made to the relevant sections when discussing each of the issues in turn.

Premarital assets

22. In addition, both sides have referred me to the relevant sections of LKW v DD, which sets out the appropriate approach to be taken when determining whether or not to depart from the yard stick of equality. Mr Justice Ribeiro PJ discusses the various alternatives when dealing with part 4 of his protocol. Reference should be made to paragraphs 86 – 98 of the judgment for a full discussion of the topic. In so far as pre-marital assets are concerned, paragraphs 90 – 93 are particularly pertinent.

E.5.a.i Assets independently acquired

90. In White v White, Lord Nicholls gave as examples of assets within this class, “property acquired during the marriage by one spouse by gift or succession or as a beneficiary under a trust” and “property acquired before the marriage”.[2]

91. He made it clear, however, that there is no hard and fast rule as to whether such property should be excluded. It is very much a matter within the judge’s discretion to be exercised taking account of all the circumstances of the particular case:

“... when present, this factor is one of the circumstances of the case. It represents a contribution made to the welfare of the family by one of the parties to the marriage. The judge should take it into account. He should decide how important it is in the particular case. The nature and value of the property, and the time when and circumstances in which the property was acquired, are among the relevant matters to be considered.”[3]

92. However, an important factor which comes into play is the duration of the marriage, the factor mentioned in section 7(1)(d). As Baroness Hale[4] pointed out, “the importance of the source of the assets will diminish over time”. Her Ladyship explained:

“As the family's personal and financial interdependence grows, it becomes harder and harder to disentangle what came from where.”[5]

93. So where it is a short marriage, the court may well be inclined to regard as excludable non-matrimonial property, assets acquired by one of the parties before the marriage or acquired in the course of the marriage from some wholly external source. But after a long marriage, those factors are likely to have much less weight. Thus, in White v White itself, Mr White had benefited from an initial cash contribution made by his father but, as Lord Nicholls commented, that could not carry much weight 33 years later.[6]

23. In this instance we are concerned with properties acquired by the parties before the marriage and further properties purchased after the marriage but arguably with pre-marital funds. It is also of note that a number of assets were acquired by the husband post separation. These points need to be considered in the context of what is, by any definition, a relatively short marriage in terms of duration.

24. The case of Miller v Miller, McFarlane v McFarlane [2006] UKHL 24 is similarly helpful. In that case Lord Nicholls of Birkenhead, when discussing the concepts of matrimonial and non-matrimonial property said as follows:

23. …A complication rears its head at this point. I have referred to the financial fruits of the marriage partnership. In some countries the law draws a sharp distinction between assets acquired during a marriage and other assets. In Scotland, for instance, one of the statutorily prescribed principles is that the parties should share the value of the "matrimonial property" equally or in such proportions as special circumstances may justify. Matrimonial property means the matrimonial home plus property acquired *634 during the marriage otherwise than by gift or inheritance: Family Law (Scotland) Act 1985, sections 9 and 10. In England and Wales the Matrimonial Causes Act 1973 draws no such distinction. By section 25(2)(a) the court is bidden to have regard, quite generally, to the property and financial resources each of the parties to the marriage has or is likely to have in the foreseeable future.

22. This does not mean that, when exercising his discretion, a judge in this country must treat all property in the same way. The statute requires the court to have regard to all the circumstances of the case. One of the circumstances is that there is a real difference, a difference of source, between (1) property acquired during the marriage otherwise than by inheritance or gift, sometimes called the marital acquest but more usually the matrimonial property, and (2) other property. The former is the financial product of the parties' common endeavour, the latter is not. The parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose. As already noted, in principle the entitlement of each party to a share of the matrimonial property is the same however long or short the marriage may have been.

23. The matter stands differently regarding property ("non-matrimonial property") the parties bring with them into the marriage or acquire by inheritance or gift during the marriage. Then the duration of the marriage will be highly relevant. The position regarding non-matrimonial property was summarised in the White case [2001] 1 AC 596 , 610:

"Plainly, when present, this factor is one of the circumstances of the case. It represents a contribution made to the welfare of the family by one of the parties to the marriage. The judge should take it into account. He should decide how important it is in the particular case. The nature and value of the property, and the time when and circumstances in which the property was acquired, are among the relevant matters to be considered. However, in the ordinary course, this factor can be expected to carry little weight, if any, in a case where the claimant's financial needs cannot be met without recourse to this property."

24. In the case of a short marriage fairness may well require that the claimant should not be entitled to a share of the other's non-matrimonial property. The source of the asset may be a good reason for departing from equality. This reflects the instinctive feeling that parties will generally have less call upon each other on the breakdown of a short marriage.

25. With longer marriages the position is not so straightforward. Non-matrimonial property represents a contribution made to the marriage by one of the parties. Sometimes, as the years pass, the weight fairly to be attributed to this contribution will diminish, sometimes it will not. After many years of marriage the continuing weight to be attributed to modest savings introduced by one party at the outset of the marriage may well be different from the weight attributable to a valuable heirloom intended to be retained in specie. Some of the matters to be taken into account in this regard were mentioned in the above citation from the White case. To this non-exhaustive list should be added, as a relevant matter, the way the parties organised their financial affairs.

25. Another important case on this issue, from a Hong Kong perspective, is a more recent decision from our own Court of Appeal in PW v PPTW (Ancillary relief; non-matrimonial property) [2015] HKFLR 213. In that case the husband appealed against the judgment of The Hon Madam Justice Bebe Chu who had divided the matrimonial pot on a 45%:55% basis, notwithstanding the fact that it was acknowledged that nearly all of the assets in the so called matrimonial pot (HK$292 million) had been acquired by the husband prior to the marriage. In this instance however it was acknowledged that this was a longer marriage of some 14 years. The appeal was dismissed and it was held inter alia as follows:

Held, in favour of W:

(1) The starting point is the guidance given by LKW v DD [2010] 6 HKC 528, [2011] HKFLR 106, (2010) 13 HKCFAR 537. The Court does not favour the approach of quarantining non-matrimonial assets which fall into Step 1. At Step 4, the Court will consider if there is justification for a shift from equality. Here, the judge at first instance had clearly considered LKW: the implicit objective of section 7 Matrimonial Proceedings and Property Ordinance (Cap 192) is to find a fair distribution and that a finding that one or more factors in section 7 are engaged, does not necessarily means a departure must occur. The weight which was to be given was within the court’s discretion. Therefore the sharing principle was not ‘mechanistically applied’ in this case. LKW v DD [2010] 6 HKC 528, [2011] HKLR 106, (2010) 13 HKCFAR 537, White v White [2000] 2 FLR 981, [2000] HKHL54, [2001] 1 AC 596 and Kan Lai Kwan v Otto Poon Lok To [2014] 6 HKC 111, [2014] HKFLR 329, (2014) 17 HKCFAR 414 applied (paras 46-49).

(2) Counsel should be careful not to elevate non-matrimonial property into the status of a golden rule which must be ‘automatically’ excluded from sharing when it is just one of the factors which may give rise to a departure from equality (para 50).

(3) As part of the Step 4 exercise, assets independently acquired, as here, were a class of assets which could justify a departure but also warned that effort and expense should not be wasted in trying to establish a sharp dividing line between matrimonial and non-matrimonial property. Miller referred to (para 54).

…

(5) It was noted that there was disagreement in the approach to sharing pre-marital assets in English cases: the ‘telescope approach’ – simply adjusting the percentage from 50% to take into account non-matrimonial assets: Charman v Charman (No 4) [2007] 1 FLR 1246, Robson, AR v AR (Anciliar Relief; Inheritance) [2012] 2 FLR 1 versus the ‘Two stage approach’ – where the court would identify the scale of the non-matrimonial property to be excluded, leaving the matrimonial property alone to be divided in accordance with the equal sharing principle. Jones v Jones; FZ v SZ (ancillary relief: conduct) [2010] EWHC 1630, [2010] Fam Law 1259, [2011] 1 FLR 64; N v F (Financial Orders: Pre-Acquired Wealth) [2011] EWHC 586 (Fam), [2011] Fam Law 686, [2011] 2 FLR 533, [2012] 1 FCR 139; S v AG (financial remedy; lottery prize) [2011] EWHC 2637 (Fam), [2012] 1 FLR 651, [2011] 1 FLR 651, [2011] 3 FCR 523; JL v SL (Financial Orders: Property inherited during marriage) [2014] EWHC 3658 (Fam) were referred to (paras 59-67).

(6) Hong Kong follows the dicta of the court of Final Appeal in WLK v TMC [2010] 6 HKC 571, (2010) 13 HKCFAR 618: ‘the better approach is to regard the sharing principle as always applicable when there are assets surplus to needs but accepting that, as part and parcel of that principle, an equal division should indeed be departed from if good reason exists for doing so’. Whatever approach the court chooses to adopt, the same relevant factors apply. Even with the two-stage approach, questions of duration of the marriage and intermingling are relevant in determining how much of the pre-marital property should be excluded. The court will look at the extent of intermingling, springboard effect and passive economic growth in the same way as the telescoped approach. WLK and TCWF v LKKs [2014] HKFLR 311 referred to (paras 69-71).

26. With respect I agree. In this instance it is accepted by the parties that I should consider the issue of pre marital assets under step 4 of the protocol. I will first discuss that matter by reference to the “Two stage approach” favoured by the line of cases beginning with Jones v Jones, before I look at the matter overall and consider whether nevertheless some sort of additional adjustment is necessary in order to achieve a just result given the circumstances in this particular case.

Each party’s case and the open offers

27. Prior to the trial the parties made very detailed open offers, which also set out their case on some of the issues in dispute. I do not intend to repeat them both in full here, but reference will be made to the most relevant sections as set out below.

The wife’s case

28. In essence it is the wife’s case that it is easy to determine the pre-marital assets that she brought to the marriage because she has always kept those assets separate and apart from the matrimonial assets. She says that the two have not been mingled and given the shortness of the marriage that fairness dictates that she should receive those assets over and above her share of the marital acquest.

29. In addition, she seeks generous maintenance for C and a capitalized sum in lieu of any claim that she might have for maintenance for herself.

30. In so far as the husband’s argument on his own pre-marital assets are concerned, the wife says that notwithstanding the fact that it is not always possible to trace what the husband says are his own pre-marital assets to the current schedule of matrimonial assets, nevertheless she has been prepared to accept that certain assets can be notionally attributed to the husband as belonging to him prior to the marriage. She has asked the husband to produce evidence in support of what he says and she has accepted some assets as being pre-marital where he has been able to do so. It is of note that the husband has concentrated on providing evidence to show his asset base as at the date of the marriage. He has not then traced those assets and told the court what he has done with them since.

The wife’s open offer

31. The wife’s open offer states inter alia as follows:

10. The parties married at a relatively later age after working for some time, and there were pre-marital assets. W has explained that the assets acquired and brought by her into the marriage, i.e. Her pre-marital assets, comprised the following:

Beijing property	HK$14,500,000 (Sept 2017)
Net proceeds of Belchers	HK$12,111,472
China Merchant Bank account	HK$2,661,882 (Sept 2017)
JP Morgan account	HK$3,868,295 (Sept 2017)
Caribbean property	HK$5,422,140 (net equity) (Sept 2017)
MPF as at date of marriage	Around HK$500,000
HSBC Advance account	HK$1,573,668 (Sept 2017)
Total	HK$40,637,457

11. H argues that his pre-marital assets amount to around HK$35 million. However, W only accepts the following of H’s assets to be pre-marital provided that documentary proof is provided:

Balance in H’s DBS account	HK$4,505,547.16 (30/9/2010)
Balance in H’s Bank of America account	HK$38,195.65 (19/9/2010)
Balance in H’s Bank of America IRA account	HK$187,208.99(19/9/2010)
Balance in H’s AIA MPF account	HK$694,362.24(19/9/2010)
Balance in H’s A One Investment account	HK$1,347,789.92 (20/9/2010)
Part of the sale proceeds of H’s Singapore flats	HK$1,963,590.40
Sale proceeds of H’s Robinson Heights	HK$10,300,000
Total	HK$18,036,691

Expenses

12. According to W’s latest form E, W’s and C’s monthly expenses amount to around HK$81,854, excluding the Coastline mortgage (HK$38,051) and management fees (HK$2,463). HK$37,786 is attributed to W and HK$44,067 is attributed to C. This is based on their residing in the Coastline property and Seahorse rental being sufficient to cover its monthly mortgage repayments.

13. However, if W were to move back into Seahorse as she wishes, W will have to pay for the increased monthly mortgage repayment of around HK$60,000, increased rates of around HK$6,000 and management fees of around HK$2,000. In other words, the household expenses will be around HK$25,000 more than if W continues to reside in Coastline. W’s and C monthly expenses will be increased to HK$50,286 and HK$56,567 respectively.

14. According to the previous Duxbury calculation based on W’s monthly expenses at HK$80,000, W will require a lump sum of around HK$50 million to meet her personal monthly expenses, excluding housing provision. If W’s monthly expenses are now reduced to HK$50,000, she should require a lump sum of around HK$40 million, a similar sum to her pre-marital assets.

Approach

15. This is a case where assets are sufficient for a clean break and it will not be necessary to have recourse to periodical payments. But the question is how the parties should distribute the assets in a fair manner, including whether the parties’ respective pre-marital assets should be excluded from the matrimonial pot before distribution of the post-marital assets.

16. The third and final strand to be considered is compensation which is explained as a redressing of an economic disadvantage generated by the relationship.

Proposals for capital split

17. In the best interest of the child, W wishes to move to the Seahorse property with the child for the foreseeable future, given the better space in the property and its garden.

18. Given the matrimonial pot is substantially made up of pre-marital assets brought by the parties into the marriage (with W’s assets attribution to around 35% of the pot), W believes it is only fair that the pre-marital assets be excluded from the pot before distribution of the post-marital assets.

19. In other words, W proposed that the parties’ pre-marital assets worth HK$58,674,148 be taken off the pot, leaving HK$55,233,251 to be split between the parties as follows:

(1) H to transfer his 50% interest in the Seahorse property free of mortgage to W;

(2) H to transfer his 50% interest in the Coastline property with mortgage to W, in exchange for W’s transfer of her 50% interest in the 1XXXX property with mortgage to H;

(3) H to transfer his 50% interest in the Sienna property with mortgage to W – this is intended to pay for C’s tertiary education costs and expenses;

(4) Save for the above, each party shall keep their respective assets currently in their names and ownership.

Proposals for the Child

20. W seeks the following orders in respect of C:

(1) H do pay maintenance for C in the sum of HK$35,000 per month to be inflation linked from 1^st January 2018 and on the 1^st day of each calendar year thereafter to be paid by standing instruction into W’s nominated bank account on the 1^st day of each calendar month;

(2) H do pay the children’s school fees and school related expenses (excluding uniform and school bus but including all school trips and activities).

The husband’s case

32. The husband’s case does not fit so neatly into a traditional argument on pre-marital assets. His position seems to be that as he can show that he held certain assets in his sole name as at the date of the marriage and that notwithstanding the fact that in some cases those assets no longer exist, he nevertheless maintains that credit be given to him for those sums and they be attributable to him in the same way as the wife’s pre-marital assets will arguably be attributable to her. The difficulty with this, apart from the fact that the wife appears to have accepted this line of argument in part, is that it does not fit in with established authority which is generally concerned with the extent to which a pre-marital asset has been mingled with other assets acquired post marriage. Mr Coleman S.C for the wife, explained it thus in his closing:

126. H takes a wholly incorrect approach to his bank accounts, as he wishes to include the account balances of five bank accounts as of 19 September 2010, that it as of the day before marriage. But the relevant exercise looks at what assets existed pre-marriage and what has happened to them since. If they have been mingled with marital assets, or used to purchase joint assets, the fact that once they had a different character is irrelevant. That is the difference between H’s claims and W’s claims, as it is clear that whatever assets H might have had before marriage were intermingled with marital assets and/or were used to acquire joint assets.

127. It is also impermissible for H to seek to ‘double-count’, ie. to argue that a certain amount of money was a pre-marital asset; and when this amount of money was used to purchase joint property, to claim ownership over those properties; W#3[1/298].

With respect I agree. However, as will be seen, it also seems to me that fairness may dictate that there may be other reasons to depart from the yard stick of equality, which although similar to the approach taken to pre- marital assets, may not exactly the same.

Husband’s open offer

33. The husband made the following open proposal:

9. The wife claims in her 2^nd Affirmation filed on 27 January 2017 that she has accumulated pre-marital assets in the region of about HK$32.9 million [P1/240]. This is not accepted by the Husband as explained extensively in his 1^st Affirmation filed on 14 March 2017 [P1/256-257]. The Husband’s primary position is that all assets are to be included in the pot for division including his premarital assets. However, if the Wife insists on arguing that her pre-marital assets are to be considered differently, then the Husband’s pre-marital assets which amount to about HK$35 million will also have to be treated differently.

10. For the purpose of this Open Proposal, given that the amount of the parties’ pre-marital assets are more or less the same (HK$32.9 mil v HK$35 mil) and without prejudice to the Husband’s argument in the Trial of the treatment of the pre-marital assets, the Husband is of the view that they should all be included as part and parcel of the matrimonial assets for division.

Husband’s Open Proposal

11. This is a short marriage of approximately 5 years only and should warrant a clean break settlement. The Wife, being a former founding partner of the equity fund team at the ABC Bank and now aged only 42 years old and having fully recovered from her illness, should be more than capable for resuming employment and earning a respectable income. Her decision not to work at all now and/or in the future is purely her lifestyle choice and should not form any basis to depart from equality in the division of assets or to order any ongoing maintenance in her favour.

12. The Husband proposes that the total assets should be divided on a 50/50 basis in full and final settlement of all the parties’ financial claims against each other on the basis of a clean break in the following manner:

(1) The Husband shall transfer his interest and title in the Seahorse property (net value of HK$17,902,998) and the Coastline property (net value of HK$9,312,622) to the Wife’s sole name within 30 days from the date of Decree Absolute, with the cost of transfer to be borne by the Wife;

(2) The Wife shall transfer her interest and title in the US 1XXXX property (net value of HK$10,765,389) and the Sienna property (net value of HK$5,007,634) to the Husband’s sole name within 30 days from the date of Decree Absolute, with the cost of transfer to be borne by the Husband;

(3) In order to achieve a 50/50 asset split, the Wife shall pay the Husband a balancing lump sum of HK$12,700,956.66 within 30 days from the date of the Decree Absolute; (This was amended to HK$12,176,810.28 in the husband’s closing submission)

(4) Save for the above, both parties will keep their respective assets currently in their names and ownership; and

(5) The parties shall close the existing joint bank accounts within 14 days from the date of the Decree Absolute with the balance to split equally between the parties.

13. Based on the above proposal, each of the parties will be receiving HK$56,953,699.90 (being 50% of HK$113,907,399.85) worth of assets. (This was amended to HK$57,477,846.29 – being 50% of HK$114,955,629.60, in the husband’s closing submission).

14. According to the Agreed Assets Schedule, the Wife currently has liquid assets in the total sum of approximately HK$21,114,801.68, which include her bank account balance in the total of HK$17,246,506.68 and investments of HK$3,868,295. There will be no difficulty for her to pay off the balancing lump sum of HK$12.7 million to the Husband.

15. According to the Wife’s updated Form E filed on 19 October 2017 [P1/355], the Wife currently receives total income amounting to HK$150,435.84 per month (HK$146,300 rental income per month plus HK$49,630.06 dividends from insurance policies per year).

16. Based on the current proposal, if she continues to live in the Coastline property with C, she will receive net rental income, after deducting the mortgages, totalling HK$119,500 from her rented properties, namely HK$85,000 per month from the Seahorse property, HK$19,500 per month from the Caribbean Coast property and HK$24,300 per month from her Beijing property. Together with her dividends from her insurance policies, she will receive about HK$54,845.94 per month, a breakdown of which is provided in Attachment B.

17. The Wife first sought to argue that her purported monthly expenses amount to HK$80,000 per month as per the Wife’s 2^nd Form E dated 2 November 2015 [P1/84-86]. As explained in Paragraph 36 of his 1^st Affirmation [P1/254] and Paragraphs 23 to 24 of his 2^nd Affirmation [P1/275-280], the Husband does not accept the inflated monthly expenses of the Wife. After challenges, the Wife has adjusted her purported expenses in Paragraph 38 of her 2^nd Affirmation to reduce it to a total sum of HK$37,184.50 per month [P1/311-319], which is about half of the previously inflated expenses, and a breakdown of which is as follows: -

General: HK$21,185*/2 = HK$10,592.50

Personal: HK$26,592

(* Note that Coastline property monthly mortgage as HK$9,299 has not be deducted from the total general expenses of HK$30,484.21. Once deducted, the total general expenses amount to HK$21,185)

18. Taking into account of the net income of the Wife, i.e. HK$54,484.21 as set out in paragraph 16 above, there is an excess of HK$17,661.44 after meeting the Wife’s purported needs.

Child maintenance

19. According to the Wife’s updated Form E filed on 17 October 2017, the purported expenses of C amount to HK$44,067.50 per month (being half of C’s monthly general expenses of HK$21,185, i.e. HK$10,592.50 and C’s monthly personal expenses of HK$33,475) [P1/356-357].

20. The Husband does not accept the Wife’s alleged expenses as he believes they are, again, largely inflated as explained in paragraph 28 of his 3^rd Affirmation filed on 13 July 2017 [P1/329-333]. He has adjusted C’s expenses and is of the view that her reasonable monthly expenses amount to HK$31,468.35 instead (being half of C’s adjusted monthly household expenses HK$17,585.21, i.e. HK$8,792.61 and C’s monthly personal expenses of HK$22,675.75).

21. The Husband therefore proposes to pay HK$15,735 per month to the Wife for the maintenance of C, with the Wife paying the remaining 50% for C. The wife is able to meet this payment even if she continues to choose not to work, as she has access to over HK$50 million of assets, and income of HK$17,661.44 (after deducting her own expenses).

34. In addition, in the husband’s closing submission he reiterates that he seeks a reimbursement of at least HK$1,813,835 for overpayment of interim maintenance.

The issues

35. The issues then are as follows:

Stage 1 – an identification of the assets

What are they assets? And what value should be attributed to those assets?

Stage 2 – an assessment of the parties’ financial needs

Stage 3 – whether or not the sharing principle should be adopted?

In the event that this is a sharing case how should the assets be notionally divided at this stage?

Stage 4 – whether or not there is a good reason to depart from an equal division of the assets?

Stage 5 – Deciding the outcome

How much maintenance should the husband pay for C going forward?

How should the court regard the applications for variation of the interim maintenance order; should that be taken into account when considering the matter overall?

What order should be made for costs?

What should be the final order?

Discussion

36. I must now turn to consider the issues, the law and the parties evidence as set out in their affirmations and as given orally by them during the hearing. For the avoidance of doubt, in so far as the matters set out in this judgment differ from the evidence of the husband or wife, that is because I have preferred the evidence of one or other of them or because I do not find the evidence given credible, or because I consider that the documents produced confirmed my findings of fact.

Stage 1 – an identification of the assets

What are they assets? And what value should be attributed to those assets?

37. The schedule of assets is largely agreed. There are only two issues to be determined namely – a) what is the value of the Seahorse property and b) what is the updated value of the OA business.

a) The Seahorse property

38. The Seahorse property is the former matrimonial home and the property in which the parties lived with C until separation. The wife wishes to return to live in this property with C. The wife attached a valuation report from Landscope Christie’s dated the 10 November 2017 to her closing submission and asks that the court accept this valuation over and above the valuation provided by the Single Joint Expert. She says that the value of the Seahorse property should be HK$22.9 million. It is of note that the wife did not seek to call anyone to challenge the Single Joint Expert’s report at trial and it is with respect completely inappropriate to attempt to challenge the report now, after the event, and without the husband having the ability to fully respond. Although Counsel for the wife did mention the fact that the wife did not accept the Single Joint Expert’s valuation during his opening, this point was not subsequently pursued. The Single Joint Expert was Midland Surveyors and they provided a report dated the 30 September 2017 valuing the property at HK$24 million. This is the value accepted by the court. It is interesting to note that this is the value attributable to the property in the wife’s first and second Form E’s.

b) The value of the OA business

39. This point is a little more difficult to determine. The husband purchased a self-storage business in the US with his brother holding a minority interest of 15%, post separation. This is referred to in the papers as the OA business. There is now a dispute over the value of that business, although this did not appear to be the case previously. Consequently, there is no Single Joint Experts report to assist the court in this respect. It is trite but worth repeating that the wife should have identified this as a potential issue far earlier and the court should then have been properly assisted with respect to the value of OA.

40. In his closing submission the husband says that it had been agreed that the value of the OA business should be adjusted to US$964,857 as follows:

There should be no dispute as to the Asset Schedule, this was agreed between the parties one week before the trial commenced. There is one agreed amendment to the value of the OA property, H has accepted that this can be adjusted to reflect the latest mortgage payments. This should now be $964,857 taking into account tax calculated as follows:

	US$
2016 asset total	2,539,740
Less outstanding mortgage as at 20/8/2017	1,473,165
Add extra principle paid	6,731
SUBTOTAL:	1,073,306
H’s 85% interest:	912,310
Add Jan-Sep 2017 retained earnings after tax	52,547*
TOTAL:	964,857

* After applying 39.6% tax to retained earnings of US$86,999

41. Unfortunately, this valuation was not accepted at trial. The wife maintained in her closing submission that a more appropriate value was US$1,125,853. The reasoning for this is summarized in her counsel’s closing submission as follows:

F.9 True Updated Value of OA

143. The tax return of OA for 2016 [A13/4103] has a legible copy [C2/624].

144. as in oral evidence, one can trace through the document (with individual page references in square brackets): Total Assets (NG. book value) US$2,539,740 [624]; how calculated [627]; Depreciation [629], [635] showing clearly nothing to do with real property value (as opposed to book value); H share on income [630]’ left in company with brother’s income, except some distribution not dividends [628], of which H’s share was US $43,205 [630] apparently tax free [631].

145. The mortgage detail [637] shows regular payment of US$12,000 of which say is US$6,731 payment of principal. The current outstanding mortgage balance as at August 2017 was $1,473, 165, so there is a need to update figures in asset schedule to the end of September valuation date.

146. The following table shows the necessary updates:

	US$	HK$
2016 assets total	2,539,740
Less outstanding mortgage as at 20/8/14	1,473,165
	1,066,575
Add extra principle paid	6,731
Add Jan-Sep 2017 retained earnings	52,547
	US$1,125,853	HK$8,781,653
Difference between asset schedule and this amount		2,303,702

147. H said he accepted the above approach, once the tax incidence on the earnings had been take into account as he suggested: see fn4.

148. But the court can safely assume that even that corrected figure must be rather conservative.

42. This valuation is also challenged in part on the basis that the wife had not excluded the husband’s brother’s 15% share in the business. If one were to accept this argument the wife’s valuation would necessarily come down.

43. In any event, even though it is said that the husband may have been persuaded by counsel’s argument during the trial, in the absence of a valuation report I am less inclined to be so persuaded. It seems to me that the parties should be bound by the valuation of US$964,857 previously agreed to by them prior to trial. I repeat – had the wife wished to challenge this, then she should have done so far earlier and through proper channels.

The Schedule of assets

44. Consequently, I accept that there is HK$114,955,692.60 – or say just under HK$115 million in the matrimonial pot. Both parties have been using a similar and very detailed schedule of assets as a basis for discussion and reference has been made to a number of schedules both at the trial and since. Consequently, instead of attempting to reproduce one of these documents in the body of this judgment I have decided instead to attach a suitably redacted copy at attachment “A”. Given that I am in agreement with the valuations proposed by the husband as set out above, I have used the schedule of assets produced by his lawyers and as updated on the 8 January 2018. Reference should be made to that document as appropriate.

Stage 2 – an assessment of the parties’ financial needs

45. In this section the court is asked to evaluate the financial needs of the parties. In doing so I will consider some of the other section 7 factors in addition to b), which specifically focuses on those “needs”. This will include an assessment of each party’s earning capacity and the effect that the wife’s illness may have longer term plus the potential financial resources open to each of them going forward. In addition, reference will be made to the standard of living enjoyed by the parties before the breakdown of the marriage. Each parties’ contribution to the marriage will also be considered – financial or otherwise.

The income, earning capacity and other financial resources of the parties

46. There was a great deal of argument on the papers and during the trial concerning the wife’s earning capacity going forward. The husband described the wife’s decision not to return to work as a ‘lifestyle choice”. I accept that this was an unfortunate choice of words given the circumstances. Generally speaking, I accept that the wife was advised not to return to her very pressurized lifestyle of old and that she has, for very good reason, decided to make her health her first priority instead. This is not least because she is the primary carer of C, who is still very young. Reference can be made to a letter from one of her treating Dr’s, Dr L, dated the 13 May 2016, which states inter alia as follows:

In view of her cancer disease nature, psychological status and the side effects of chemotherapy, radiotherapy and hormonal treatment, I recommended her to adopt a more relaxing life style with family support which will be favourable for her recovery and rehabilitation. Therefore, she is not recommended to rejoin the workforce, at least in the near future, as it is too stressful for her to work. A stressful job with long working hours and frequent travelling is not suitable for her health now. She is also recommended to be under close monitoring by me and the oncologist at least every 3-4 months for her subsequent disease progress and possible recurrence of cancer.

47. I accept therefore that it would not be reasonable, nor indeed most likely possible, to expect the wife to return to work as an investment banker or to return to the field of private equity. However, I do not accept that the wife has no earning capacity at all. She is clearly a very bright and resourceful woman and I expect that she will wish to return to the workforce in some capacity in due course, despite her protestations to the contrary or perhaps to investigate other ways to make money in addition to the sorts of safe investments that she currently favours. Indeed, it is of note that she has looked into various options, although to date she has not found anything that would be a good “fit”. I am though proceeding on the premise that she will have sufficient resources available to her to maintain herself going forward. For the avoidance of doubt and as referred to above, I accept that the wife did not engineer her own unemployment for the purposes of these proceedings or otherwise. It is also of note that the wife’s medical prognosis going forward is good.

48. The order that I ultimately intend to make will mean that the wife will retain her income producing assets and that these will also be financial resources that she may choose to rely upon in the future.

49. The husband for his part tried to underplay his own employment prospects, maintaining that there were difficulties at work with some of his colleagues moving as a team to a new company. He also emphasized his age and his inability to work in the brokering industry longer term. There was also a lot of debate concerning his actual income at present and his anticipated income going forward. Consequently, I asked to see the husband’s most recent tax return. This was sent to the court after the trial and confirmed that the husband’s income for last year (2016/17) was HK$4,231,962 or over HK$350,000 per month. It is the wife’s case that the husband’s earnt income has historically been higher at just under HK$440,000 per month. In addition, he receives a rental income on some of his properties in the sum of HK$115,880 per month, although it would be fair to state that that income is generally used to pay for the mortgages on the properties and other outgoings. In addition, it is anticipated that longer term he will receive an income from the OA business. At present it is the husband’s case that he and his brother have agreed that any income from this business will be retained by the company in order to pay for the mortgage and other outgoings related to it. At present the husband receives a notional income from this source of HK$769,072 per annum or HK$64,089 per month. Longer term therefore it is anticipated that this will be a good source of income for the husband.

50. I am therefore proceeding on the basis that the husband has a significant earning capacity. He will also have other financial resources at his disposal which will provide him with a passive income in due course, including the OA business. The husband, by his own admission, has always had an interest in real estate and is seemingly very good and buying and selling for profit. I would also expect that to continue.

The financial needs, obligations and responsibilities which each of the parties has or is likely to have in the foreseeable future

The standard of living enjoyed by the parties before the breakdown of the marriage

51. Turning next to the needs of the parties. In general terms I accept that each party will need a home in which to live and sufficient money to live on. I accept that the parties enjoyed a fairly typical, but not overly lavish, middle class life style as one might expect given that they were both initially earning a very good income. I accept that the wife bought good quality clothes and shoes and some designer products when she was working, but this lessened during the period of her illness and since. I also accept that the husband tended to buy good quality suits and shoes on line from the United States. They also travelled reasonably regularly, using their points for flights and hotels where possible. They both have their own hobbies which they seem to enjoy – the wife is keen on photography and the husband is a cyclist. They also had a domestic helper and C attends an international school and enjoys various extra-curricular activities.

52. It is the wife’s case that she would like to return to live in the Seahorse property. This will certainly be an option for her, although I am concerned about the mortgage and whether or not it will be possible for the wife to take out a mortgage in her sole name given that she is currently not working. It may though be possible for her to pay off the mortgage from her cash savings. Another option might be for her to remain in the current Coastline property. In either event the wife will have the resources available to provide a home for both herself and C. Similarly, it will be open to the husband to liquidate some of his assets in order to purchase a home for himself either in Hong Kong – or overseas, presumably in the States.

The contribution 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.

53. I accept that both parties made a full contribution to the marriage financially. I also accept that the mother has been the primary caretaking parent and that this is likely to continue.

Stage 3 – whether or not the sharing principle should be adopted?

In the event that this is a sharing case how should the assets be notionally divided at this stage?

54. It is accepted that this is a case where prima facie there are assets surplus to needs and therefore the sharing principle should apply. Consideration then needs to be given to whether or not, on either parties’ case, there is a good reason “capable of articulation” of departing from the yardstick of equality. In this instance a 50:50 division of the assets would mean that notionally each party would have assets in the region of HK$57,477,846 or say approximately HK$57,500,000 (rounded up).

Stage 4 – whether or not there is a good reason to depart from an equal division of the assets?

The Two Stage Approach

Pre-marital assets

The agreed pre-marital assets

The wife’s “pre-marital” assets

55. It is agreed that the wife’s Beijing property, which is unencumbered, is worth HK$14.5 million and that according to the updated schedule of assets her MPF fund is currently worth HK$232,034 and that both of these items can properly be regarded as being pre-marital. The wife stated that her MPF fund was worth approximately HK$500,000 as at the date of the marriage. I am though proceeding on the premise that it is currently estimated to be worth HK$232,034 as set out in the schedule of assets. Thus the wife has agreed pre-marital assets of HK$12,732,034.

56. Similarly, it is accepted that the husband’s MPF may also be regarded as a pre-marital asset. It seems to me that logic dictates that the husband’s IRA account should be regarded in the same way. Thus it appears to be accepted that the husband has pre-marital assets worth HK$3,578,545 (MPF fund – HK$3,094,040 + IRA account - HK$484,505 = HK$3,578,545).

The disputed pre-marital assets

The wife’s other claimed pre-marital assets

57. In addition, the wife claims the following as pre-marital assets. I will discuss each of these in turn.

Net proceeds of Belchers	HK$12,111,472
China Merchant Bank account	HK$2,661,882 (Sept 2017)
JP Morgan account	HK$3,868,295 (Sept 2017)
Caribbean property	HK$5,422,140 (net equity) (Sept 2017)
HSBC Advance account	HK$1,573,668 (Sept 2017)

Net proceeds of Belchers

When is a matrimonial home not a matrimonial home?

58. The parties lived in the Seahorse property prior to separation. This is a jointly held property purchased by them as the matrimonial home in June 2011. Prior to that they lived in a property owned by the wife namely The Belchers. The Belchers was not sold in order to purchase the Seahorse property. The wife claims the net proceeds of sale of this property as pre-marital, given that it was purchased by her in her sole name in October 2009 whilst she was in a relationship with the husband, but about a month or so before they began to cohabit. The parties also lived there as man and wife after they got married in September 2010 and it is clear that at this stage it became their first matrimonial home. It was also C’s first home. I accept that the wife is able to show that she paid for the initial deposits on this property and that the net proceeds of sale were subsequently paid into her own account. It is also clear that although the husband contributed HK$15,000 per month towards the household expenses at that time he did not ever specifically contribute towards the mortgage. There does not appear to have ever been any intention that the husband should be regarded as a co-owner of that property. In such circumstances it seems to me that this property cannot be regarded as being the party’s matrimonial home as at the date of their separation and thus the normal proviso in Miller v Miller, McFarlane v McFarlane should not apply. (See paragraph 25 above). The wife kept the proceeds of sale in a separate account. I accept that these funds should be regarded as belonging to the wife. There has also been little if any mingling from this account, although it is accepted that funds from this account were used to purchase both sole and jointly held assets, the remaining funds were nevertheless kept entirely separate.

China Merchant Bank account

59. This account was the subject of a fair bit of cross examination during the trial. However, I accept that the wife was able to show that the monies in this account came from savings accumulated by her prior to the marriage, whilst she was living in China and that she has also received income from her Beijing property into this account. In addition, she made “safe” investments, so money left the account and returned to it from time to time. This included China Merchant Bank products including some deposits for certain specified periods of time that attracted a higher rate of interest. She also paid for some of her own credit card expenses from this account and occasionally she withdrew money from it for her own expenses, when in China, as this was a convenient way to access funds. I accept however that notwithstanding this, that this was a stand-alone account and that it was not mingled in any other way with matrimonial assets. I accept that these funds can also be regarded as belonging to the wife. It is suggested by the husband that the value of this account can only be ring fenced as at September 2010. This is not accepted.

JP Morgan Securities Account

60. Similarly, I also accept that this account was set up by the wife in 2009, prior to marriage, from monies generated from her own employment and that the monies in that account are regarded by the wife as being purely for investment. The wife confirmed that she has a Customer Manager for this account and that she meets with her regularly, now 3 or 4 times per year, in order to discuss investment options. Investments are therefore made from time to time from this account and monies are subsequently returned to it. Again there has been no mingling with other matrimonial assets. Consequently, I accept that this fund can also be properly regarded as belonging to the wife. Again it is not accepted that the appropriate date for the value of this account is September 2010.

Caribbean property

61. It seems that both parties invested in small units in the same development in Discovery Bay. Each used their own funds to purchase the said properties acquired prior to marriage. But whereas the husband sold his property and then reinvested the net proceeds of sale into a number of other properties, the wife has simply retained hers. The property in question was purchased in April 2010 (see the Wife’s Form E’s) prior to marriage and has generally, but not always been rented out. It is the wife’s case that this should be regarded as a pre-marital asset. The husband suggests that this should not be so regarded given that the wife was not earning a salary from September 2014 and therefore it is likely that he made some sort of financial contribution towards the property – either directly or indirectly.

62. Although there is some force in this argument I nonetheless accept, as explained by the wife in the witness box, that this was a standalone investment and that it should be regarded as belonging to her. The property was purchased prior to marriage and it has always been rented out for an amount in excess of the mortgage. Thus there were funds available to pay for the mortgage in the periods of time when it remained empty (notwithstanding what the wife said in support of her maintenance pending suit application). It was acknowledged that it was empty from May – September 2016. Likewise, small repairs and other miscellaneous items were paid for by the tenant and deducted from the rental payments. All in all, I accept that there was no “mingling” and that this property can be clearly identified as belonging to the wife.

HSBC Advance account

63. The wife states that HK$1,573,688 in this account can be quarantined as this account only contained rental from the Caribbean property. The difficulty was that Ms Rattigan was able to show that this account must have held other funds, as even if all of the rent had been saved, the amount in that account would still have been far less than the sum claimed. By way of example the wife was taken to the HSBC Advance account statement for July 2013 which showed a balance in the savings account (xxx xxx 833) of over HK$1 million (HK$1,036,979). The Caribbean property was purchased in April 2010 – a period of just over 3 years to the date of the statement. The wife confirmed that it was originally rented out for about HK$14,000 per month. Thus, even if all of the rental was saved, the maximum amount in that account could still only have been just over HK$500,000. (HK$14,000 x 36 months = HK$504,000). Even if this was stretched to a period of 40 months the figure would still only be HK$560,000 (HK$14,000 x 40 months = HK$560,000).

64. When faced with this the wife conceded that the account must also have held the rental from the Belcher’s property after the parties moved out and prior to its sale. This point was not included in the wife’s written evidence. I accept however that it is more likely than not that the monies in this account belong solely to the wife and should therefore be regarded as prima facie belonging to her.

Conclusion

65. In conclusion then I accept that the wife’s disputed pre-marital assets namely the net proceeds of Belchers, the monies in the China Merchant Bank, the monies in the JP Morgan account, the monies in the HSBC Advance account and the Caribbean property in the sum of HK$25,637,457 can properly be regarded as being pre-marital and as belonging solely to the wife. In addition, the agreed pre-marital assets in the sum of HK$12,732,034 should also be regarded as belonging to the wife. In total then the wife has pre-marital assets in the sum of HK$38,369,491.

The husband’s case on his own pre-marital assets

66. In the husband’s closing submission, he summarized his position on what should be regarded as his own pre-marital assets as follows:

Pre-Marital Assets: H

31. H’s case is that his pre-marital assets

are valued at HK$36,599,079.91 as follows:

(i)	Kirkland Property	HK$5,767,369.20 [P/258]
(ii)	85% Interest in OA business	HK$7,525,884.60 [see attached Asset Schedule for revised value]
(iii)	Century Link Property	HK$2,228,991.64 [P/258]
(iv)	DBS Bank account balance at date of marriage	HK$3,505,547.16 [A11/3477]
(v)	HSBC Bank account balance at date of marriage	HK$3,040,140.10 [A11/3482]
(vi)	Bank of America account balance at date of marriage	HK$38,195.65 [A11/3486]
(vii)	Bank of America IRA account balance at date of marriage	HK$187,208.99 [A11/3488]
(viii)	AIA MPF account balance at date of marriage	HK$694,362.24[P/260]
(ix)	A One Investment account balance at date of marriage	HK$1,347,789.92[A11/3491]
(x)	Sale proceeds of Singapore properties	HK$1,963,590.40[A11/3498]
(xi)	Sale proceeds of Robinson Heights property	HK$10.3 million [P/262]

32. H explains in paragraph 47 of his Narrative Affirmation [P/258] how each of these assets can be regarded as pre-marital. He has presented clear evidence of the amounts in his bank accounts, investment accounts and MPF at the time that the parties were married, the references to these statements in the bundles are given above.

Kirkland Property

33. The sum of HK$5,767,369.20 is the agreed market value of HK$8,540,649 less the outstanding mortgage of HK$2,773,279.80. The downpayment for the purchase of this property was from the sale proceeds of XXXXXNE, XX^th Street, Kirkland WA, USA, a property purchased by H before marriage and solely owned by him. The mortgage repayments thereafter were funded by the property itself which has been rented out. The property has at all times remained separate from marital assets and should be regarded as non-matrimonial.

Orchard Arrowwood

34. H’s 85% interest in this company was purchased using the sale proceeds of his solely owned Caribbean Coast property which was purchased before the marriage and sold on 6^th October 2015. The Caribbean Coast property had remained separate from other marital assets and it was rented out paying for the mortgage. As H describes in his Affirmation the Caribbean Coast property was self-supporting. It follows that this property and the sale proceeds therefrom was pre-marital and non-matrimonial. Orchard Arrowwood should also therefore, be regarded as an asset of H’s to which W has made no contribution and is also non-matrimonial being purchased with the proceeds of sale of Caribbean coast.

Century Link Property

35. Like H’s interest in OA the funds for the purchase of this property also came from the sale proceeds of H’s Caribbean Coast property which should be regarded as pre-marital and non-matrimonial as set out above. As this asset has remained a separated asset, it should not be regarded as matrimonial property.

Proceeds of sale of Singapore Properties & Robinson Heights Property

36. H’s case on these assets is set out at [P/261-262].

67. I do not accept the husband’s case with respect to items (iv), (v), (vi), (ix), (x) or (xi). I have already dealt with items (vii) and (viii) in paragraph 56 above. I accept that I am charged with looking at the assets in the matrimonial pot now and analysing it to see if any of the existing assets can be regarded as being pre-marital or if they can otherwise be regarded as belonging to the husband, having taken into account what has happened to them since inception, how they were regarded by the parties both before and during the marriage and whether they have been mingled with the so called marital acquest post marriage. As indicated above I accept that in undertaking this exercise the length of the marriage is an important consideration for all of the reasons set out in above. Clearly it is not open to me to regard as pre-marital any assets which no longer exist. I accept that the approach taken by the husband is fundamentally wrong in this respect and is likely to lead to a “minute retrospective investigation of the parties’ finances”, which I am attempting (perhaps not altogether successfully) to avoid! I am also conscious of the fact that there is a very real danger of double accounting if one were to accept the husband’s approach.

68. When considering the remainder of the assets in the husband’s sole name I am conscious of the fact that the parties by agreement had maintained completely separate finances throughout their marriage. The only difference between the wife’s position and the husband’s position is that the husband sold some of his solely owned properties during the course of the marriage and he then reinvested the net proceeds of sale from these into other properties or assets held either in his sole name or jointly with the wife. As with the wife these assets were largely self-financing, with the rentals covering the mortgage repayments, in much the same way as with the wife’s Caribbean property. The only clearly discernible difference is that the husband may have used some of the salary earnt by him during the course of the marriage to pay for some of the expenses attributable to these properties. I will now consider each of the other assets in turn.

Kirkland Property

69. It is the husband’s case that he sold a property previously owned by him in Kirkland in or around May 2014 and that he then reinvested the net proceeds of sale into the second Kirkland property referred to in his Form E and that in doing so he took advantage of the US Tax 1031 exchange in order to defer the payment of capital gains tax. The wife queries how the husband could have afforded to buy the second property without recourse to matrimonial assets. According to the husband’s Form E there was a down payment on this property of HK$3,317,000 or approximately US$425,000. In his first affirmation of the 14 March 2017 he states that he made a net profit on the sale of the first property of only US$100,000. Later he clarifies this and confirms that he had paid off the mortgage in or about 2007 and therefore received a net profit of about US$370,000. However, it was put to the husband in the witness box that he still did not have sufficient funds from the proceeds of sale to pay for the deposit on the 2^nd Kirkland property as claimed. In answer he said that the balance must have come from the Singapore monies, which he had subsequently transferred into US dollars. Although this was not stated in his written evidence I nevertheless accept that this was highly probable given that the husband kept his own investments entirely separate from the wife’s investments and their jointly held investments.

70. As with the wife’s investment properties the husband maintains that the mortgage repayments were funded largely from the rental income. According to the husband’s latest Form E he has a monthly deficit on this property of HK$7,276 per month. Generally, I accept that this property was regarded as being the husband’s and that given the way in which the parties finances were organised that it is unlikely that joint funds were used to pay for either the down payment or any of the mortgage repayments. It is suggested that the mortgage may have been paid from “matrimonial income” – i.e. the husband’s income during the marriage – given that he bought this property after the wife became ill in August 2014. Although that may have been the case, it does not seem to me that that of itself is sufficient to deem this property as being in the “pot”. As indicated above it is of note that the husband had other funds available to him from time to time from the sale of other investments including the proceeds of sale from a Singaporean property and the proceeds of sale from a property in Midlevel’s. Thus I accept that this property should be regarded as belonging to the husband.

The X Lake B property

71. This property is also held in the husband’s sole name. It was purchased on the 29 May 2015, post separation. I accept that it should also be regarded as belonging to the husband.

Century Link Property and the 85% interest in OA business

72. As indicated above, both parties invested in a small unit each in the same development in Discovery Bay – the Caribbean properties. The purchases were made prior to marriage. The wife has retained hers, but in October 2015 the husband sold his property and received a net profit of approximately HK$7 million. I accept, that as with the wife’s property, the husband’s original Caribbean property was pre-marital. It was purchased prior to marriage in April 2010 with his own funds and the property was always kept separate from the parties’ joint assets. There was no “mingling”. As with the wife’s property the rental income was used to pay for the mortgage.

73. It is the husband’s case that he subsequently reinvested the net proceeds of sale from the Caribbean property into the Century Link property which is a property that has been purchased “off plan”. Consequently, the payment made have been by way of stage payments. In addition, the husband has made a significant investment into the OA business, which is a self-storage unit purchased with his brother, of nearly US$900,000 (i.e. over HK$7 million). When it was put to the husband that he must have had recourse to either matrimonial or mingled funds in order to make all of these investments, he denied that to be the case. As a general point I accept, as stated above, that the husband did have recourse to other funds of his own and that it is likely that he used those funds for these investments. I am not persuaded that these funds have been “mingled” or indeed that there were other jointly held capital funds that he could have used for this purpose. Again the only matrimonial element here is the income that he was earning at the time.

Conclusion

74. In conclusion then I accept that the purchase of the Kirkland property took place during the course of the marriage, and that the purchase of the X Lake B property and Century Link together with the acquisition of the OA business took place post separation. I also accept that they were funded from assets that were originally pre-marital. In the context of this case – i.e. where there is a short marriage and the parties maintained completely separate finances historically, it seems to me that it is only fair and reasonable for these four assets to be regarded as belonging to the husband, even though arguably they may not necessarily be regarded as being pre-marital in the classic sense of that term. Nevertheless, it seems to me that this is a reason, capable of articulation, for prima facie departing from the yardstick of equality.

75. Consequently, then I accept that the husband’s disputed sole named assets namely the Kirkland property (net value HK$6,761,329), The X Lake B property (value HK$5,089,730), the Century Link property (net value HK$3,018,117) plus the OA business (estimated value HK$7,525,885) in the total sum of HK$22,395,061 shall be regarded as belonging to the husband. In addition, the agreed pre-marital assets in the sum of HK$3,578,545 should also be regarded as belonging to the husband. In total then the husband has assets that should prima facie be regarded as belonging to him in the sum of HK$25,973,606.

The parties’ joint assets

76. In addition, the parties also hold the following properties jointly:

The Seahorse property	HK$17,902,998 (net)
The Coastline property	HK$ 9,312,622 (net)
The 1XXXX property (USA)	HK$10,765,389 (net)
The Sienna Property	HK$ 5,007,634
Total	HK$42,988,643

77. I accept that notionally these properties shall be divided between the parties equally. Thus each party shall receive an additional sum of HK$21,494,321.50. Both parties have proposed that the Seahorse property and the Coastline property be transferred to the wife, although the wife asks that the Seahorse property be transferred to her free of mortgage. This is not accepted. I do though agree that both of these properties may prima facie be transferred to the wife subject to the mortgages. It is a matter for the wife whether she chooses to live in the Seahorse property or the Coastline property. As indicated above in either event she may need to pay off the mortgages if she is unable to secure a mortgage in her sole name. Thus I shall make an order that

(1)The Husband shall transfer his interest and title in the Seahorse property (net value of HK$17,902,998) and the Coastline property (net value of HK$9,312,622), both subject to mortgage, into the Wife’s sole name within 30 days from the date of Decree Absolute, with the cost of transfer to be borne by the Wife;

(2)The Wife shall transfer her interest and title in the US 1XXXX property (net value of HK$10,765,389) and the Sienna property, (net value of HK$5,007,634) both subject to mortgage, into the Husband’s sole name within 30 days from the date of Decree Absolute, with the cost of transfer to be borne by the Husband;

78. This means that the wife will receive properties worth HK$27,215,620 net and the husband will receive properties worth HK$15,773,023 net. There is a difference of HK$11,442,597. In order to balance this part of the exercise the wife will pay the husband a lump sum of HK$5,721,300 (rounded up).

The remaining matrimonial assets

79. The remaining assets include the bank account held in the name of HJI in the sum of HK$91,504 and the husband’s cash assets in the sum of approximately HK$2,763,780 plus his remaining shares and other investments worth approximately HK$1,366,970. The husband also has liabilities of approximately HK$1,114,342 and the wife has liabilities of HK$56,771. The wife currently has cash assets of just over HK$17 million.

80. In such circumstances I accept that the husband should retain his cash assets and remaining securities in the total sum of approximately HK$4,130,750. Both parties will otherwise keep their respective assets currently held in their sole names. The parties shall also close any existing joint bank accounts within 30 days from the date of the Decree Absolute with the balance to split equally between the parties. They shall each be responsible for their own liabilities.

Stage 4 Conclusion

81. In total then the wife’s share of the assets will amount to just under HK$64 million and the husband’s share of the assets will amount to just over HK$51 million as follows:

Amount to be received by Husband		Net Value HK$
	1XXXX US	10,765,389.00
	Siena	5,007,634.00
	Kirkland	6,761,329.00
	X Lake US	5,089,730.00
	Century Link	3,018,117.00
		30,642,199.00
Add:	Joint account (HJI)	45,752.00
	Personal account	2,763,780.00
	Investment	1,366,970.00
	Business (OA)	7,525,885.00
	Valuables	500,000.00
	Monies owed	38,000.00
		12,240,387.00
Minus:	Liabilities	1,114,342.00
		1,114,342.00
Add:	Pensions	3,578,545.00
	Lump sum	5,721,300.00
		9,299,845.00
	Total:	51,068,089.00

Amount to be received by Wife		Net Value HK$
	Seahorse	17,902,998.00
	Coastline	9,312,622.00
	Caribbean	5,422,140.00
	Beijing	14,500,000.00
		47,137,760.00
Add:	Joint account (HJI)	45,752.00
	Personal account	17,246,506.00
	Investment (JP Morgan)	3,868,295.00
	Valuables	350,000.00
		21,510,553.00
Minus:	Liabilities	56,771.00
		56,772.00
Add:	Pensions and Insurance	1,108,865.00
		1,108,865.00
Minus:	Lump sum	5,721,300.00
	Total:	63,979,106

82. Thus in broad terms the wife will receive 55.6% of the asset base and the husband 44.4%. Given the shortness of the marriage and the fact that both parties did bring some assets into the marriage, this seems to me to be a fair and reasonable division of the “matrimonial pot”. One of my main concerns in this case was that it did not seem fair for the wife to retain all of her pre-marital assets, whilst at the same time making claim to some of the assets held in the husband’s sole name. I was not convinced by her arguments with respect to “mingling” and often it seemed to me that the only possibility of “mingling” was that the husband may have paid for some of the expenses on the properties from his own income during the marriage, given that towards the end he was working and the wife was not. There does not appear to have been much “mingling” otherwise. Unfortunately, the wife’s approach appears to have been one of “what is mine is mine and what is yours is also mine”. As pointed out by Ms Rattigan in her closing, the proposal put forward by the wife would have meant that the wife would have retained between 72.6% - 80.7% of the asset base depending on whether the premarital assets on her calculation were included or not. On the face of it this does not appear to have been either fair or reasonable.

83. One of my difficulties however, was that conversely I did not accept the alternative approach put forward by the husband. He argued prima facie that all of the assets should be regarded as being in the pot, notwithstanding the fact that at trial he accepted that the wife’s Beijing property and the MPF fund that she brought into the marriage could be regarded as being pre-marital. Alternatively, he put forward a convoluted argument that was based on the assets that he says he brought into the marriage, a sum of HK$35 million, notwithstanding the fact that many of these assets had been either sold or otherwise disposed of and did not form part of the current asset base. My view in that respect remains as set out in paragraph 32 above.

A capitalized lump sum

84. Although the wife originally advanced an argument for a capitalized lump sum she did not seek one specifically in her open proposal. She simply sought a division of assets in excess of a 50:50 split. In her Duxbury calculation she said that she would need a lump sum of HK$50.83 million to generate an income of HK$80,000 per month. In any event I accept that the wife’s own needs can be met from her share of the assets and that it would not be appropriate in the circumstances to include a capitalized lump sum in addition to this.

How much maintenance should the husband pay for C going forward?

85. The husband is approaching the issue of C’s maintenance on the premise that each side should be responsible for 50% of her expenses. However, there is no principle to that effect. Sometimes a child’s expenses, including her share of the general household expenses, might be split between the parties on a 50:50 basis. This is often the case where the parties are earning a similar amount or where they have other financial resources at their disposal which makes such an order fair and reasonable in the circumstances. On other occasions a court may split the costs according to the respective amounts earned by each of the parties. So for example, if the husband is earning double what the wife is earning then prima facie he should be responsible for 2/3 of the child’s expenses and the child’s share of the general household expenses. Although this is not an exact science it does provide a useful guide when considering the issue of a child or children’s maintenance overall.

86. At present the wife is not working and although she may return to the workforce in due course, I have accepted that it is unreasonable to expect her to return to work as an investment banker or to work in a similar high pressured environment (see paragraph 47 below). Although the wife will have some income from her investments, it seems to me that nonetheless the husband should be responsible for the majority of C’s expenses. This is especially given the fact that he is currently earning a very good salary despite his “doom and gloom” predictions.

87. The wife seeks an order that the husband contribute HK$35,000 per month for C’s expenses and that in addition he pay for her school fees and other school related expenses. The husband for his part offers just under HK$15,735 per month based on his analysis of a 50:50 split of C’s expenses.

88. According to the wife’s latest Form E her reduced monthly expenses are as follows:

Part 4 current Monthly Expenses

4.1 General

Item	Amount
Rent	N/A
Mortgage instalments - Coastline - Caribbean Coast	38,051.00 (paid by Respondent) 9,299.00 (paid by Petitioner out of her own savings)
Utilities (electricity, gas rates, telephone & water)	6,400.00
Management fees - Coastline	2,463.00 (paid by Respondent)
Food	6,000.00
Household expenses	1,000.00
Car expenses	N/A
Insurance premia	519.72
Domestic helper(s)	5,905.49
Other: discovery Bay Club House fees	1,360.00
Total monthly household expenses	HK$21,185 (excluding Coastline mortgage and management fees, and Caribbean Coast mortgage)

Attach copies of the latest rental receipt.

4.2 Personal

Item	Amount
Meals out of home	2,305.00 (credit card + cash)
Transport	2,300.00
Clothing / Shoes	7,000.00 (credit card)
Personal grooming (including haircut and cosmetics)
Entertainment / presents	1,000.00 (credit card)
Holiday	7,000.00 (credit card)
Medical / Dental	3,210.00 (credit card)
Tax	1,833.00 (paid by Petitioner out of her own savings)
Insurance premia	1,054.00 (being Respondent’s contribution towards Petitioner’s medical insurance)
Interim maintenance	N/A
Contribution to parents	N/A
Dependent family members	N/A
Others (specify) Gym Yoga Running class	165.00 1,960.00 1,200.00 (paid by Petitioner out of her own savings)
Total monthly personal expenses	HK$27,194 (excluding tax, gym, yoga and running class expenses)

4.3 Children

Item	Amount
School fees	10,170.00
School Non-Refundable Building Levy	590.00
School activity/PTA payment	300.00
Extra tuition fees	1,300.00
School books and stationery	1,095.58
Transport to school (including school bus)	770.00
Medical / Dental	833.00
Extra Curricular Activities	5,700.00
Entertainment / presents	750.00
Holidays	5,000.00
Clothing / Shoes	830.00
Insurance premia	597.17
Lunches and pocket money	2,500.00
Other Transport	600.00
Child-minding fees	N/A
Uniform	640.00
Others (specify)	1,800.00
Total monthly expenses for children	HK$33,475
Total Monthly Expenses (4.1 + 4.2 + 4.3)	HK$81,854.00

89. The husband for his part has produced an adjusted list of what he says should be C’s monthly expenses as follows:

C’s Adjusted Monthly Expenses

1/2 of General household expenses (excluding the Coastline mortgage and management fees

Expenditure	Adjusted Amount (HK$)
Utilities	4,800.00
Food	4,000.00
Household expenses	1,000.00
Insurance premia	519.72
Domestic helper	5,905.49
Discovery Bay club house fees	1,360.00
Mobile phone	0.00
TOTAL	17,585.21
50% allocation to Chloe:	8,792.60

Chloe’s personal expenses

Expenditure	Adjusted Amount (HK$)
School fees	10,170.00
School non-refundable building levy	590.00
Extra tuition fees	0.00
School books and stationery	1,095.58
Transport to school	770.00
Medical/dental	833.00
Extra-curricular activities	3,000.00
Entertainment/presents	750.00
Holidays	2,500.00
Clothing/shoes	830.00
Insurance premia	597.17
Lunches and pocket money	0.00
Other transport	400.00
Uniform	640.00
Others (language therapy)	500.00
TOTAL	22,675.75

C TOTAL MONTHLY EXPENSES

31,468.35

90. I should say at the outset that I do not accept many of the husband’s estimates which appear to be very low when one considers that this relates to a child who has been brought up in a middle classed environment in Hong Kong and that she attends an international school.

91. The mother estimates C’s direct expenses including the school fees to be HK$33,475 per month. I accept most of these estimates, save that it seems to me that the figure of HK$5,700 per month for extra-curricular activities plus a further HK$1,300 for extra tuition fees may be a little on the high side. The father proposes HK$3,000 per month. I will allow HK$5,000 in total. The allowance for holidays likewise seems to be on the high side. I will allow HK$4,000 per month. The remaining expense for C as set out by the wife are accepted. Thus it seems to me that C’s actual expenses amount to approximately HK$30,500 per month, including the school fees. In addition, her share of the household expenses amounts to approximately an additional HK$10,500 per month. In total then I accept that C’s costs account for about HK$41,000 per month all in. In such circumstances it seems to me that the husband shall continue to pay maintenance for C in the sum of HK$40,000 per month inclusive of school fees and other related expenses. Although the wife will have a passive income of sorts this will be very limited when compared to the husband’s current income. The husband says he cannot afford to pay this sum. I do not accept that argument. He has a very good income and a sizeable property portfolio. He can certainly reorganize his affairs so that he is able to pay for the majority of his daughter’s expenses.

How should the court regard the applications for variation of the interim interim maintenance order and how should that be taken into account when considering the matter overall?

92. The husband seeks to claw back HK$1,813,834.96 and he provides justification for this in his closing as follows:

Interim interim maintenance overpayment by Husband

A. Current MPS paid by Husband pursuant to the Order dated 12 October 2015		HK$
Interim maintenance for Wife and C		40,000.00
Mortgage instalments of Coastline property		38,051.00
Management fees		2,463.00
TOTAL:		80,514.00
B. Adjusted MPS that should have been paid by Husband per month		HK$
Interim maintenance for C (being 50% of C monthly expenses) [P/332-333/§28 & 29]		15,734.18
		HK$
C. Overpayment each month from October 2015 to January 2018 (C = A - B)		64,779.82
TOTAL AMOUNT OVERPAID BY HUSBAND (C x 28months)		1,813,834.96
	PLUS HK$64,779.82 x N months until dated of transfer to property

In so far as the interim maintenance figure of HK$40,000 per month is concerned, there will be no alteration to that given the final order.

93. The husband has a better argument in relation to clawing back some of the mortgage repayments for the Coastline property given that this is a jointly held property. Notwithstanding that he seeks to claw back the whole sum of HK$38,051 per month for the mortgage and a further HK$2,463 per month for the management fee. Prima facie it does not seem to me that this is reasonable. At most he might be entitled to claw back 50% - or say HK$20,257 per month (HK$38,051 + HK$2,463 = HK$40,514 divided 2 = HK$20,257). This remains of some concern however given that the wife was not working at the time and although she had some income it was not enough to sustain her and C in the short term pending either the outcome of this trial or earlier agreement. I also do not think it reasonable to have expected her to rely wholly on her assets. In such circumstances I have therefore decided on balance that there will be no claw back.

What order should be made for costs?

94. Given that I have not come down in favour of either side and that I did not fully agree with the approach taken by either the husband or the wife, I will make an order nisi to be made absolute in 28 day’s time that there be no order as to costs. There shall be certificate for counsel. It is of note that according to the wife’s Form H, her estimated costs up to and including the trial amount to just over HK$2.6 million and the husband’s costs were slightly lower at just over HK$2.3 million. I do not know what percentage of those costs have been paid.

Final order

95. Therefore I shall make a final order as follows:

1) The Husband shall transfer his interest and title in the Seahorse property and the Coastline property, both subject to mortgage, into the Wife’s sole name within 30 days from the date of Decree Absolute, with the cost of transfer to be borne by the Wife;

2) The Wife shall transfer her interest and title in the US 1XXXX property and the Sienna property, both subject to mortgage, into the Husband’s sole name within 30 days from the date of Decree Absolute, with the cost of transfer to be borne by the Husband;

3) The wife shall pay the husband a lump sum of HK$5,721,300 within 30 days from the date of the decree absolute;

4) All joint bank accounts shall be closed within 30 days from the date of the decree absolute and the balances shall be divided between the parties on a 50:50 basis;

5) Upon the transfer of the properties referred to in paragraphs 1) and 2) and the lump sum payment in paragraph 3) each parties claims against the other for all forms of ancillary relief shall stand dismissed and the interim maintenance order dated the 12 October 2015 shall also be discharged;

6) The Respondent do pay to the Petitioner periodical payments for the child of the family in the sum of HK$40,000 per month on the 15^th day of each month to take effect in the month immediately following the discharge of the interim maintenance order until the child reaches the age of 18 years or ceases full time education whichever is the later or until further order;

7) There shall be an order nisi to be made absolute at the expiration of 28 days that there shall be no order as to costs. There shall be a certificate for counsel.