MDN v. MAP

FCMC 8383/2022

[2026] HKFC51

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 8383 OF 2022

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J U D G M E N T

(Ancillary Relief / Child Maintenance: Secured Periodical Payment)

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Introduction

1.  This is the trial on the ancillary relief application of the parties by the Form A of the Petitioner wife (“the Wife”) filed on 6 September 2022 and the Form A of the Respondent husband (“the Husband”) filed on 4 November 2022. At the last hearing dated 31 March 2025, the parties jointly agreed to sell the only one substantial asset, namely a landed property in the US specifically located in Davis, California (“Davis Property”) as soon as possible and jointly undertook to have the net sale proceeds paid into Court within 7 days of the receipt of the sale proceeds, as well as to file a joint statement of account and record of currency exchange for this payment-in amount.[1]  As at the commencement of this trial, these were not done and the parties jointly informed me that the sale recently took place and the net sale proceeds of HK$8,815,918 is expected to be paid into Court on the following week. (“Net Sale Proceeds”)

2.  It was made clear to the parties before trial commenced that, owing to their respective financial difficulties as claimed, they had persuaded the Court on 31 March 2025 to have the financial disputes of the divorce heard expeditiously. The Husband at that time had a relocation application afoot. The parties, each for their own reasons, asked for this AR trial to take place soonest. Coupled with their agreement and promise that they could sell the Davis Property within a short time and hopefully to utilise the Net Sale Proceeds to alleviate their respective financial stress, this trial was fixed and the Husband agreed to have his relocation application adjourned.

3.  For the Wife, her imminent financial pressure included alleged non-payment from the Husband on interim maintenance ordered as well as non-compliance with his financial undertakings given to the Court in these proceedings, leaving her and the children (a daughter born in January 2008, aged 17 at trial (“A”) and a son born in September 2009, aged 15 at trial (“B”) (collectively “the Children”) struggling with basic needs including facing an eviction notice being served on the Wife against their rented premise in Discovery Bay as well as suspension from the respective schools of the Children by reason of no school fees received.

4.  The above is notwithstanding that the Court on 5 August 2024 having ordered the Husband to pay HK$20,000 per month as interim maintenance in addition to the Husband’s undertaking to pay various items including school fees and rent for the Children. It is the Wife’s case that the Husband has failed to fully comply with these orders since September 2024. At trial, she produced a summary regarding outstanding payments arising from the 5 August 2024 Order, totalling HK$522,172.[2]

5.  For the Husband, he claims he urgently needed to repay some debts before he could be accepted for a new post which would attract a monthly income of USD10,000 or HK$78,000. The Husband later gave evidence to confirm that he has already secured the new post, and by a signed consultancy agreement he produced at trial, he had started in May 2025 and already received the first month of payment of USD10,000.

6.  It was explained to the parties that unless there is an agreement, in part or in whole, regarding some payment-out from the Court to alleviate their respective financial needs as alleged, the Court cannot deal with the matter in a piecemeal manner in this respect, which may result in further delay, not to mention as at the date of trial, the orders regarding payment-in have not been complied with. To this end, and owing to the credit of the parties, they were able to jointly submit to the Court on Day 2 a set of financial mechanism which would alleviate immediate Children financial needs on the items of school fees and rent, at least for the upcoming 12 months or so. I accepted their application and made an order by consent dated 22 May 2025 to the effect that out of the Net Sale Proceeds, a monthly sum of HK$23,000 and HK$13,000 be paid out as secured periodical payment for the school fees of A and B respectively until completion of their secondary schools (it is agreed that A will finish in 2026 and B will finish in 2028); and a monthly sum of HK33,000 be paid out as secured periodical payment for the rent of the children for a period of 12 months commencing in July 2025. Further the parties agreed to two lump-sums being paid out to the Wife to reflect backdated school fees of the Children for the months of April to June 2025, namely HK$63,438 and HK$38,184. (“Consent Order”)

7.  In other words, by the above, the Wife would have received from the Net Sale Proceeds (i) an aggregate one-off sum of HK$101,622; (ii) rental of HK$33,000 per month (for 12 months); and (iii) school fees of HK$36,000 per month for 11 months, and thereafter HK$13,000 for a further 22 months. The aggregate amount required and agreed to be paid out under the Consent Order amounts to HK$1,179,622[3]. In my view, these financial provisions would have at least alleviated the imminent needs of the Children. Needless to say that it is plainly wrong for the Children to have suffered the predicament of being suspended from school, as well as threats of eviction from home, by simple reason of the lack of payment.

Background

8.  The Wife is 49 years old. She was born in Sri Lanka and moved to Hong Kong in 1996 to work as a flight attendant. A was born in the same year as the parties married, in 2008. B was born in 2009. The Wife was on extended maternity leave since 2007 and eventually quit her job in 2010 to become a full-time housewife. She is educated up to secondary level in Sri Lanka and save that she is suffering from back pain which will require surgery in future, the Wife is in good health.

9.  The Husband is 59 years old. He was born in the US and is a US citizen. He moved to Asia about 30 years ago. He works in the sports marketing business and is a member of the US track and field board. It is not disputed that during the marriage he has been the sole breadwinner of the family. The Husband speaks fluent mandarin. As stated above, at the time of trial, he has just secured a sports consultancy contract which earns him US$10,000 or HK$78,000 per month. He accepts that while his job is performance-based thus not stable, he could be entering into more consultancy agreements with others at the same time if and when opportunities arise. The Husband has already made up his mind to relocate to the US in 2025 after this trial.

10.  A, the elder child, is a girl currently in her last year of secondary school in Hong Kong. Both parties support A’s preference to further her studies at fashion design in New York as her tertiary education and will support her education to the best of her abilities.

11.  B, the younger child, is a boy in his secondary school in Hong Kong and it is envisaged that his secondary education will complete in 2028, i.e. in three years’ time. The Husband wishes B to join him in the US in the future. Relevant to this trial is the potentially different expenses if B remains in Hong Kong, or to relocate to the US. The parties accepted that insofar as the above agreed school fees are concerned, if B is to relocate before completion of secondary school in Hong Kong, the same amount will be paid to the Husband instead. The parties also accepted as far as this trial is concerned, it will be proceeded on the basis that B remains in Hong Kong.

Applicable Legal Principles

12.  There is no dispute that in deciding on ancillary relief claims between the parties to the marriage, the court is required by section 7(1) of Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”) to have regard to the conduct and all the circumstances of the case. I shall not repeat the s.7 MPPO factors as well as the trite law enunciated in LKW v DD [2010] 13 HKCFAR 537 , save that to list out below the 4 guiding principles: -

(a)  The objective of section 7 exercise is to arrive at a distribution of assets which is fair between the parties.

(b)  The concept of fairness requires the refutation of any gender or role discrimination.

(c)  In order to eliminate insidious discrimination and promote fairness, judges should check their tentative views of distribution against a “yardstick of equal division” which should be departed from only for good, articulated reasons.

(d)  The court should not countenance any attempt to engage in costly and often futile retrospective investigations of the failed marriage which tend to deplete the parties’ (and the courts’) resources and to increase antagonism and discourage settlement.

13.  Then, the Court of Final Appeal laid down 5 steps in determining ancillary relief applications: -

Step 1:  identification of the assets and to ascertain the financial resources of each of the parties calculated as at the date of the hearing;

Step 2:  assessment of the parties’ financial needs;

Step 3:  if surplus assets would remain after the parties’ needs have been catered for, the next step in the exercise should generally be for the court to apply the sharing principle to the parties’ total assets, leaving the “needs” question previously considered to be dealt with under that principle;

Step 4:  considering whether there are good reasons to depart from equal division; and

Step 5:  when deciding the outcome, the court is not bound to depart from equality in the division of the parties’ assets even if one or more of the factors considered are engaged on the facts. The weight to be given to such considerations is a matter of discretion for the court.

14.  I am guided by the same and shall adopt the principles to the present matter. In particular, Riberio PJ states in LKW (supra) that s.7 MPPO confers a wide discretion on the Court that deal with financial provisions and they must consider the circumstances of each case and must be flexible, and emphasises that the s.7 provisions and past cases are guidelines rather than rules.

Law on Children Maintenance

15.  As to secured periodical payments, the Court is empowered by section 5(2) MPPO to make, inter alia, such orders. It is generally accepted that such orders will only be made if the fear of the party seeking the order was justified in addition to a history of non-payment from the payer. See for example: NWSA v CTYT [2021] HKFC 119 (at §195-§196) and CWP v K,TF [2023] HKFLR 562 (at §136).

Open Proposals

16.  Both parties acknowledge that the Davis Property, or rather, the Net Sale Proceeds, is the only divisible asset[4]. On the part of the Wife, while she acknowledges the principle of equal division, she proposes 100% of the Net Sale Proceeds to be awarded to her by reason of the Husband’s negative financial conduct as well as his future earning capacity. The Wife also seeks to add-back various items to, and/or asks the Court to draw adverse inference on, the Husband’s finance. At trial, the Wife confirms that she no longer seeks any spousal periodical payment and wishes to focus on splitting the Net Sales Proceeds on a spousal clean break basis. She has also agreed in principle to secure future children maintenance by utilising the Net Sales Proceeds. The Wife has repeatedly expressed her loss of trust in the Husband in complying with any periodical payment court orders in future. As the parent currently with care and control, the Wife emphasised her love and parental responsibility towards the Children and she wants to achieve a good financial outcome for their sake.

17.  The Husband in his opening proposal asks for an equal 50:50 split of the Net Sale Proceeds after deducting certain liabilities which he sees as joint family liabilities, such as his aggregate US tax liability in relation to income he earned during marriage in the sum of about HK$2,900,000. According to his calculation, after paying off his various debts, he would be left with about HK$1,850,000 as his award. In his closing submission, he has made similar proposals except that he then proposed to clear off all alleged debts of the parties with no evidential basis on some items as well as attempting to file new evidence as attachments for other items[5]. This is when I have specifically warned both parties against submitting any further new evidence when preparing their closing submissions, when both of them had, without leave, already filed voluminous documents shortly prior to the beginning of this trial. Leave was given by me for those documents to be used at trial eventually, with a clear explanation that it cannot happen again at closing submissions stage. Suffice to say, I will not read nor consider any evidence and submissions made in that regard. I will only say that the Husband’s proposal in his closing not only failed to take into account of the secured periodical payment mechanism discussed and acknowledged at trial, he has also made his children maintenance proposals conditional upon him being able to continue to generate HK$78,000 per month. He viewed that he should receive about HK$1.65 million from the Net Sale Proceeds.

18.  The Husband confirms at trial that, in additional to securing some children expenses by utilising the Net Sale Proceeds, he proposes children maintenance of HK$15,000 per child per month until they respectively reach the age of 23.

Discussion

19.  At the outset, this is in my view a ‘needs caps all’ case where the Net Sale Proceeds placed in Court is not sufficient to cater for the respective needs of the parties and the Children. While the Husband does have a strong earning capacity, his past conduct in non-compliance with court orders, especially those concerning children maintenance, is appalling. This in turn has a bearing on how this matter is best resolved in the best interest of the Children.

20.  The Wife has positively asserted that she will utilise her earning capacity after A attends university next year. She has plans to study a diploma as well as engaging in some teaching jobs. Her lower back issue requiring surgery in future renders her not suitable for hard labour jobs. When asked about her current partner supporting her financially, the Wife denied any financial dependency and described her partner as someone who ‘would be happy to pay for a meal with me’.

21.  Given the circumstances of this particular case, I have invited discussion with the parties at trial on the possibility of secured periodical payment as a workable mechanism to better arrange current and future finances of the Children. The parties agreed to such an approach in principle. I stress again here that the Children in this case had been, quite unnecessarily in my view, put under various pressure over being suspended from their schools and losing a roof over their heads. These are totally unwarranted and absolutely not the type of matters which should come to trouble A, and/or B, at their given ages.

22.  The partial agreement reached concerning school fees and rent of the Children, as reflected in the Consent Order, is to essentially avoid a repetition of what must have been a humiliating situation for the Children[6]. On the other hand, it is clear that those agreed figures do not cater for the full range of children expenses. As such, and to begin with, I will turn to consider whether or not to make further children financial orders in the form of secured periodical payment order.

23.  By the approach here, I have fully considered the circumstances surrounding the various non-compliance of children maintenance orders and undertakings on the part of the Husband in these proceedings. In short, the Wife says the Husband has been in continuous breach of his undertakings concerning children expenses recorded in the Order dated 22 September 2022, then in further breach of interim maintenance order and undertakings by the Order dated 5 August 2024, up till this trial. The Husband agrees at trial that under the 5 August 2024 Order, the relevant Children expenses payable by him would amount to about HK$105,000 per month. According to the Wife, the Husband instead began transferring to her small random amounts at various times, in total defiance of the said Court Order[7]. To this, the Husband admitted that at all material times he has tried his best to pay Children related fees but he was facing huge financial difficulties. He said he has made numerous divorce settlement proposals for the Wife to accept, concerning liquidating funds or securing loans for the children but the Wife refused all[8]. When asked at trial why did he not make any applications to vary and/or discharge his legal obligations in these proceedings, the Husband confirmed he had not done so and said he did not know it can be done. With respect, I cannot accept this explanation.

24.  In my view, the Husband is a seasoned businessman and highly educated with language fluency in Mandarin and with good business connections both in the US and in the PRC. During the times he was defaulting payments, he was on various overseas trips, including departure to the Paris Olympics in August 2024 on the next day immediately after the 5 August 2024 Order became effective. While he claimed all trips out of Hong Kong between August 2024 and May 2025 were business related, the fact remained that he was knowingly disobeying Court Orders. I find it questionable that he was not earning any income despite investing his time in these working trips. Further, he knew full well that the Wife as well as the Children were financially solely dependent on him; he agreed such was the position during marriage. Together with the fact that the Husband himself has made arrangements to relocate to the US after this trial, I am satisfied on the balance that the Wife’s concerns regarding the risk of future non-payment of children maintenance by the Husband is real and justified. Considering the matter carefully on the whole, I decide to exercise my discretion to create a pot for the Children.

Children Maintenance

25.  For A, in addition to the agreed items in the Consent Order, her maintenance would include (i) her monthly expenses for this remaining year in Hong Kong, and then (ii) her tertiary education and living expenses.

Up to June 2026

26.  Adopting the parties’ figure of HK$105,000 monthly expenses, when one deducts rent (HK$33,000) and school fees (HK$36,000), it leaves a figure of HK$36,000 per month, i.e. HK$18,000 per month per child. I compare this to (i) the Husband’s evidence, where he reported Children expenses in Hong Kong to be at around HK$51,000[9], i.e. HK$25,500 per child; and (ii) the Husband’s various open proposals at trial when he has offered figures between HK$15,000 to HK$20,000 per month per child; I further bear in mind that A has been subject to emotional therapy treatments totalling at about HK$5,800 per month, as well as extra tuition and ECA amounting to about HK$5,000; these are not disputed[10]. It seems to me that, on the evidence, HK$18,000 per month is a reasonable figure for A in going forward insofar as she resides in Hong Kong for another 12 months up to July of 2026, i.e. a total sum of HK$216,000.

From July 2026

27.  A will be 18 by then and is reasonably expected to study fashion design in New York and both parties have identified the same two choices of institutes as potential choices; with one about three times more expensive than the other. I accept A’s tertiary education in the circumstances is reasonably foreseeable and that the same ought to be secured. Doing the best I can here, I shall adopt a figure of HK$150,000 per year[11], or HK$12,500 per month, to reflect A’s education fees, lasting for four years.

28.  According to the Husband, living expenses in the US will be lower than Hong Kong. In my view, this remains uncertain insofar as A’s university living expenses are concerned. Given she will likely go to New York, living costs may not be much lower than Hong Kong, if at all, in this respect. Again, doing my best here, I view a reasonable monthly figure would be HK$20,000 per month inclusive of accommodation, but excluding those ongoing therapies, tuition and ECAs where I would expect them to cease when A leaves Hong Kong.

29.  Thus, it is my view that A’s ongoing monthly expenses starting from July 2026 would be HK$12,500 + HK$20,000 = HK$32,500 per month. For four years, it will mean a total of HK$1,560,000. This means that, if one is to consider a secured periodical payment order for A, the total sum to be secured will be HK216,000 + HK$1,560,000 = HK$1,776,000.

30.  For B, the situation is different since it is my view that his future arrangement is less clear by comparison. As much as the parties also reasonably expect B to enter university in time, the figures proposed by the Wife is no more than speculative at this stage. As said earlier, this trial proceeded on the confirmed basis that the relocation application of B to the US was and remained adjourned. Therefore, I am obliged to work on the basis that B will continue with his current studies in Hong Kong until completion of secondary school.

31.  By the Consent Order, the parties only agreed on accommodation costs for the next 12 months. Having considered the evidence, I view that B’s maintenance for the upcoming 12 months would be more or less the same as A, namely HK$18,000 per month, or HK$216,000 in total.

32.  Afterwards, B’s maintenance would need to include the element of accommodation in Hong Kong. By then, B should have a further two years left in secondary education; I accept the Husband’s position that in going forward, the Wife can downsize her residence after A goes overseas. For this, I accept a readjustment figure from the current HK$33,000 to HK$22,000 to be reasonable. This means that B’s share will be HK$11,000 per month.

33.  I bear in mind that currently B regularly attends speech therapy twice a month at around HK$2,000. He also has ju-jitsu class (HK$1,200) as well as extra tuition (HK$2,100). These are expected to continue while he is at school and included within the HK$18,000 budget. Having viewed the evidence in the round, I accept that B’s monthly maintenance between July 2026 and June 2028 would be HK$29,000 (HK$18,000 + HK$11,000) per month, or HK$696,000 in total.

34.  It is my view that commencing from July 2028 onwards, it is more appropriate for B’s maintenance to be ordered in the usual manner, namely by a periodical payment order until completion of his full-time studies. I also take into account that by then, the Wife would have re-entered employment and ought to contribute a share of B’s university expenses. Again, doing one’s best here, I can only reasonably assume B to incur a similar set and standard of expenses to A, i.e. HK$32,500 per month. There is no dispute that there exists a disparity in the earning capacities of the parties. I shall adopt a 20:80 ratio for the Wife and the Husband’s respective contribution here. This means that the Wife will contribute HK$6,500 and the Husband HK$26,000 respectively.

35.  Since I am working on the premise that the Wife remains having care and control of B for the purpose of this trial, the periodical payment order I will make here will be for the Husband to pay a monthly sum of HK$26,000 for B’s maintenance commencing on July 2028 until B reaches 23 or completes full-time education, whichever is the earlier. I am empowered by s.10(3) MPPO which allows the Court to order an extension of the payments that are to be made or secured to or for the benefit of a child beyond 18.

36.  To summarise, I accept that in the circumstances of this matter, it is appropriate to secure the above sums, namely HK$1,776,000 for A and HK$216,000 + HK$696,000 = HK$912,000 for B, totalling HK$2,688,000; with the payment-out mechanism as follows:

(i)  July 2025 to March 2026: backdated payment of HK$324,000 (HK$18,000 per month × 2 × 9 months) to be paid out from the Net Sale Proceeds to the Wife for the benefit of the Children;

(ii)  April to June 2026: HK$18,000 per month per child (total HK$36,000 per month) to be paid out from the Net Sale Proceeds to the Wife for the benefit of the Children;

(iii)  July 2026 to June 2028: HK$32,500 per month for A and HK$29,000 per month for B (total HK$61,500) to be paid out from the Net Sale Proceeds to the Wife for the benefit of the Children;

(iv)  July 2028 to June 2030: HK$32,500 to be paid out from the Net Sale Proceeds to the Wife for the benefit of A.

37.  I see no reason why the above secured sum should not be accounted for from the Husband’s assets, with him being the sole breadwinner of the family throughout marriage and if one were to make periodical orders for children maintenance, he accepts that it would be coming from his own assets and income. But for the circumstances of this case, including his various repeated non-compliance with existing court orders, these monies would not have been secured in the present manner. I will therefore make the necessary numerical adjustments to his award later in this Judgment.

Wife’s Needs

38.  It is the Wife’s case that she will continue to reside in Hong Kong. The Wife admits to being in a relationship with her partner, who also resides in Hong Kong and by her own admission she would sometimes spend weekends with her partner when the Children have been well arranged on other activities. To this, the Husband challenges that the Wife would spend up to about 50% of her time with her partner and therefore it is reasonable to assume that he would financially provide for her accommodation and other financial needs in going forward.

39.  While I do see some force in the Husband’s logic, I must remind myself that the parties had lived in rental abodes throughout their marriage[12]; the Husband says the Davies Property was purchased back then in 2021 using the various financial windfalls he gained in 2020-2021, with a view that the family will all relocate to the US and therefore it was an intended matrimonial home. To this, the Wife denied and said she was never familiar with the local area and knew little about Davies and did not want to move to the US, she treated the purchase as an investment only. For my part, I find it difficult to be persuaded that the parties, at that particular time, would choose this purchase for pure investment purposes. I am prepared to accept that the Husband was intending to move the family back to the US by then and had purchased this house as the family home.

40.  I bear in mind the above, in addition to all the other relevant factors in considering the reasonable accommodation needs of the Wife. I take the view that it may not be so unreasonable for her to have a small-sized property in Hong Kong for her own future use. Whether or not in the immediate upcoming few years she would want an apartment with more space to cater for the Children is one matter; when I am to investigate the parties’ own needs I am encouraged to consider the long-term and generously interpreted[13].

41.  I am prepared to accept that a lump sum for the Wife is reasonable so that she can preserve the same and, through her own industry in gaining employment in future, she will have the option of housing herself in Hong Kong in the future if and when an appropriate opportunity to purchase a flat arise.

42.  Other than housing needs, the Wife puts her general expenses at around HK$40,000 for a household of three, and personal expenses at around HK$32,500.[14]  Neither party took the time to challenge one another on these items at trial, and I will not be going through each one of them here. Suffice for me to accept that these expenses reported are on the high side and are all rounded-up figures with no documentary proof. On the other hand, it is the Wife’s case that throughout marriage she was given a monthly cash of HK$20,000 for expenses, in addition to having access to a supplemental credit card.

43.  From the Wife’s evidence, the type of jobs she envisages would earn at least about HK$15,000 per month. I am satisfied that in the long run, the Wife will be financially self-sufficient.

44.  Since this is a needs-caps-all case, one has to ensure there is a fair distribution from what is left of the Net Sale Proceeds. I have considered the matter as a whole and would state my views here regarding the Wife’s allegations on the Husband’s various assets.

Value of the Husband’s interest in TEV Ltd

45.  This is the new company the Husband has ventured into in relation to his new job. Having heard the evidence, I accept the Husband has no interest in the company itself, but rather, earns income through consultancy agreements.

Sale Proceeds of PSA - HK$826,621

46.  The Wife alleges the Husband sold his old company interests with the use of the sale proceeds unknown. The Husband explained that the old company business was not performing well and he managed to ask his partner to buyout his shares for HK$826,621. The Husband said he received this sum in about the second quarter of 2024 and had used the same to pay off various debts including school fees and maintenance, as well as US tax of some US$25,000. What I noticed was that the first interim maintenance order dated 15 November 2022 was only effective up to 31 March 2023; then the second interim maintenance order was made on 5 August 2024. This means that as at the time when this sum of money was received, there were no ongoing interim maintenance order in place. Further, the outstanding maintenance arrears the Wife has produced at trial[15] only concerns the 5 August 2024 Court Order, whereas her earlier judgment summons regarding the 2021 Order was dismissed for technical reasons. On the balance, I accept the Husband’s evidence and believed that he did use these funds to repay family debts.

Value of Husband’s MPF taken out in 2024 - HK$694,509.39

47.  The Wife makes similar allegation to this sum, suggesting the Husband received this sum in September 2024. The Husband explained that as he was planning to relocate back to the US and agreed this sum was paid to him on 29 September 2024 and stated that he had used all of this sum to pay off various living expenses in Hong Kong. Neither party adduced evidence at trial to further demonstrate their respective version of event. By looking at the Wife’s exhibit P1, I cannot be certain to say that the Husband had not been paying some living expenses at that material times. As far as I can see, for instance, the rent stopped in around January 2025. On the balance, I am ready to accept that the Husband had not hidden this money elsewhere; at most he had been opaque about how he had used it. I accept the Husband was in financial difficulties by 2024 and that his relocation to the US, thus the arrangement of receiving his MPF, was not an act driven by litigation intending to cause unfairness to the Wife and/or the Children’s AR claims.

Add-back

48.  Although add-back is a technique available to the Court, but the reality is that it will be a notional exercise in cases where the amount to be added back far exceeds what is actually available in the pot. In LCC v LTLA [2024] HKCA 406 , the Court of Appeal has delved into the history of such mechanism and has set a threshold to guard against any abuse in advancing this line of argument in family litigation. See full discussion in LLC (supra) at §27-61 therein.

49.  For the reasons I have given and in applying LLC[16], I do not view the Wife has proved that the Husband has met the requisite level of negative intent for his various financial conduct to be seen as wanton. As such, no add backs will be ordered.

50.  For the Wife’s other challenges in relation to the valuation of the Husband’s certain assets, I have already made it very clear at trial that issues such as valuation is an important issue and often requires professional experts if no agreement can be reached. It is simply not desirable for a party to raise such challenges at trial without proper basis. Further and in any event, the Wife accepts that the Net Sale Proceeds is the only divisible asset at trial. I have considered the Wife’s submissions in this regard and opted against dealing with them for the reasons above.

51.  The Wife also challenged the Husband’s financial non-disclosure about his handsome incomes since 2020, and put to him that he had failed to provide supporting documents. The Wife, based on his Answer to her Questionnaire, questioned the Husband that he had earned some HK$11.9 million in 2020/2021 and HK$13.1 million in year 2022/2023.[17]  However, upon further review, the Wife’s requisition was found to be premised on a wholly incorrect basis. Firstly, while the Husband always agreed to the 2020/2021 figure, it was his explanation all along that it was a one-off fruitful year. He had never earned anywhere near HK$13.1 million, be it in 2021/2022, or 2022/2023. As it turned out during oral evidence at trial, the Wife merely adopted the provisional figure in the Husband’s 2020/2021 tax return and formed her basis of the allegation, when she at all times was well aware of the actual tax returns of 2021/2022 showed a completely different final figure of HK$2,897,648, and with this exact same figure adopted as the provisional income for 2022/2023. On this, and to put it mildly, I find the challenge of the Wife being far from credible.

52.  In relation to the Wife’s claim of legal fees incurred, it is the Wife’s contention that at an earlier stage of the proceedings when she had engaged Messrs. Gall, the Husband then agreed to share half of these expenses. As to the Wife’s subsequent consultation with Messrs. Hugill & Ip, the Husband said he had no knowledge of the same and would not agree to share these expenses. Based on the above, I find that insofar as the debt of HK$114,212 owed to Messrs. Gall, the Husband will bear half of the same, namely HK$57,106; as to the debt owed to Messrs. Hugill & Ip I accept that is a debt of the Wife only and will be considered below when the issue of costs arise at the end of this Judgment.

Husband’s Needs

53.  By the above, I am satisfied that the Husband has a very high earning capacity, and that by his own admission he could take up multiple consultancy agreements at the same time. I accept his evidence where he described his business went through a tough period from around 2012 to 2015, and only started picking up momentum again in around 2018. His various tax returns[18] show that during the 2020/2021 period his annual income was almost HK$12 million with tax payable that year at around HK$2 million. This is hard evidence of a very strong earning capacity with a monthly income of about HK$1 million; however, in the next year 2021/2022, his annual income was reported to be about HK$2.9 million, with tax payable at around HK$465,000. In my view, an annual income of almost HK$3 million is also reflective of a very high earning capacity. Albeit at the age of 59, as shown in his own evidence, he has successfully ventured into related new businesses, and I accept the Husband will be able to work for at least another 10 to 15 years with high income. He is generally in good health. He puts his expenses at around HK$100,000 if living in the US, which is what he has told the Court he would do. By the secured periodical payment mechanism to be ordered in this Judgment, he has been released from children maintenance obligations for over 3 years. Only in July 2028 would he be asked to resume paying 80% of B’s university expenses. I view in the circumstances that the Husband’s income and earning capacity, with more emphasis put on the latter, will provide financial self-sufficiency to his needs, which is also generously interpreted, including the option to save up for an accommodation purchase if he so chooses in future.

Liabilities of the Husband

Maintenance Arrears under the 5 August 2024 Order

54.  As stated earlier, I do not accept the Husband’s explanation regarding his non-compliance of the said maintenance order. Accordingly, I accept the Wife’s figure of HK$522,172 in her exhibit P1, with the deduction of HK$63,438 and HK$38,184 (§§3 and 5 of the Consent Order) to avoid double-counting, totalling HK$420,550. This should be a sum to be deducted from the Husband’s award payable to the Wife for obvious reasons and I shall so do in the calculation below.

US Tax

55.  The US tax owed to the US government is USD373,703, or HK$2,914,883[19]. The Husband explained in his testimony that by reason of his then businesses got involved in some litigation with the authorities in the 2010’s, it only started to pick up from around 2018 and it was not until the incomes he earned in Hong Kong between 2019 and 2021 that he became subject to US tax. H then engaged an accountancy in 2022 to deal with his US tax matters and admitted in evidence that it was his mistake that he was late in filing his (2018 onwards) US taxes only in 2022. He further stated that while his accountant was able to avoid penalties, he had to pay extra interests as a result.[20]  He argued that the ups and downs of his businesses during marriage were marital acquest and therefore the US tax now payable ought to be a family liability shared by the parties. To this, the Wife disagreed. She viewed that the Husband is and was at all times a US citizen and ought to have been paying US taxes regularly in any event. She took issue of the timing of these tax demands and suspected it was litigation driven.

56.  In my view, I agree with the Husband that the Wife and the Children had been through the good and bad times in relation to the Husband’s work and since they were at all material times financially dependant on the Husband, their standard of living was also dependent on the level of success of the Husband’s businesses. Accordingly, I do not see why the US taxes owed since 2018 ought to be solely responsible by one party in the circumstances. Taking into account of the Husband’s own admission on his mistakes in late filing, I find that for this liability of HK$2,914,883, 70% of which is a family liability, i.e. HK$2,040,418 ought to be equally shared between the parties, namely HK$1,020,209 each; while the remaining 30%, namely HK$874,465, to be accounted for as the Husband’s own liability to be deducted from his award.

57.  In other words, the Husband’s share of this liability is HK$1,020,209 + HK$874,465 = HK$1,894,674.

Monies owed to the siblings of the Wife

58.  The Husband agreed in evidence that he had borrowed from the brother and the sister of the Wife, each at US$10,000 or HK$78,000. The Wife alleged that her sister was owed US$60,000 and her brother was owed US$40,000 respectively. Having considered the evidence, I am prepared to accept that the monies owed by the Wife’s siblings were HK$78,000 each, totalling HK$156,000 and that this amount can be deducted from the Husband’s award with the understanding that the Wife would then set-off the same by repaying these to her family members.

59.  For the reasons above, and I have taken into consideration of the relevant arguments on the respective parties’ other assets and liabilities not specifically mentioned here, I find on the balance of probability that other than the Net Sale Proceeds, there are no positive assets to be included in the calculation of the family pot, nor are there any notional add backs to the pot. This, again, is consistent with the parties’ understanding of the Net Sale Proceeds being the only divisible asset in any event.

Outcome – the division

60.  The parties are in agreement that there ought to be a 50/50 distribution in principle, except that for the Wife, for the various reasons she has set out and considered by the Court, she takes the view that the Husband should be left with nothing in the pot to be awarded to him. In any event, for the reasons I have considered, I do not find that any adverse inference ought to be drawn against either party.

61.  My calculation on the division of the Net Sale Proceeds is as follows:

(i)  The pot is the payment into Court, namely the Net Sale Proceeds of HK$8,815,918. This is not disputed;

(ii)  As stated above, in numerical terms, the Consent Order requires HK$1,179,622 to be preserved for payment-out purposes. This leaves the pot to be at $7,636,296, and this is the figure which, in principle, is to be split evenly, namely notionally leaving each party to walk away with HK$3,818,148;

(iii)  I have found that due to the special features of this case, the financial obligations of the Husband towards the Children ought to be further secured. Thus, the secured periodical payment of A (§29 above) of HK1,776,000 ought to be deducted from Husband’s award; similarly, secured periodical payment of B (§36 above) of HK$912,000 also ought to be deducted from the same;

(iv)  This leaves the Husband’s share to be HK$3,818,148 – HK$1,776,000 – HK$912,000 = HK$1,130,148;

(v)  For the Wife’s legal fees under Messrs. Gall, the Husband shall bear HK$57,106. Deducting the same from the above leaves the Husband with HK$1,073,042;

(vi)  For the maintenance arrears under 5 August 2024 Order (§54 above), the Husband ought to bear $420,550. Deducting the same from the above leaves the Husband with HK$652,492;

(vii)  For the US tax, which the Husband will be responsible for paying the US authorities, the Wife’s share (§56 above) is found to be $1,020,209 and therefore this sum is to added to the Husband’s share, leaving him with HK$1,672,701;

(viii)  For the debts owed to the Wife’s siblings, the Husband ought to bear HK$156,000. Deducting the same from the above leaves the Husband with HK$1,516,701;

(ix)  Accordingly, the Husband is entitled to HK$1,516,701;

(x)  The Wife’s share is calculated as follows. The pot of HK$7,636,346 - children’s secured maintenance (HK$1,776,000 + HK$912,000) - Husband’s share = HK$7,636,346 - $2,688,000 – HK$1,516,701 = HK$3,431,645.

62.  To cross-check, the above represents HK$2,688,000 + HK$1,179,622 = HK$3,867,622 secured for the Children. This means that, holistically speaking, for this particular case, the split of the pot is about 44% for the Children, 39% for the Wife, and 17% for the Husband.

Orders

63.  I hereby order that:

(i)  There be a payment out from the Court in the sum of HK$3,431,645 to the Petitioner Wife within 28 days of this Order;

(ii)  There be a payment out from the Court on the sum of HK$1,516,701 to the Respondent Husband within 28 days of this Order;

(iii)  The above payments represent a clean break between the parties and that save from the above, each party do retain his or her own assets and liabilities and shall be indemnified from the other on the same;

(iv)  The remaining sums in the Court are all secured and to be preserved for the benefit of the Children, with payment out mechanism as per the Consent Order dated 22 May 2025 in addition to the following:

(a)  From July 2025 to March 2026: backdated lump sum payment of HK$324,000 (HK$18,000 per month × 2 × 9 months) to be paid out from the Court to the Petitioner Wife for the benefit of the Children within 28 days of this Order;

(b)  From 1 April to 30 June 2026: periodical payment of HK$18,000 per month per child (total HK$36,000 per month) to be paid out from the Court on the 1^st day of each month to the Petitioner Wife for the benefit of the Children;

(c)  From 1 July 2026 to 30 June 2028: periodical payment of HK$32,500 per month for A and HK$29,000 per month for B (total HK$61,500) to be paid out from the Court on the 1^st day of each month to the Petitioner Wife for the benefit of the Children;

(d)  From 1 July 2028 to 30 June 2030: periodical payment of HK$32,500 to be paid out from the Court on the 1^st day of each month to the Petitioner Wife for the benefit of A.

(v)  The Respondent Husband is to pay for the benefit of B monthly periodical payment of HK$26,000 commencing on 1 July 2028 and thereafter on the 1^st day of each month until B reaches 23 or completes full-time education, whichever is the earlier;

(vi)  There be a s.18 declaration.

Costs

64.  Both parties are not legally represented at trial. I have heard evidence regarding some legal fees incurred on the part of the Wife in earlier parts of the proceedings. By looking at the result against their respective open offers at trial, it is difficult to say who is the winner. In fact, by looking at how the pot is eventually divided, I would like to think that the Children, not the parties, are the winners of this trial. I note from the closing submissions of the Husband that he seeks no order as to costs[21]. I make an order of no order as to costs including all costs previously reserved.