MGB aka MAG v. GCB

FCMC No. 5376/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 5376 OF 2015

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JUDGEMENT
(Ancillary Relief)

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1.  This is the application for ancillary relief by the Petitioner Wife, now aged 58, against the Respondent Husband, aged 55, upon the dissolution of their 26-year marriage, essentially for equal division of their matrimonial assets, and for initially substantive periodical payment but by the close of the trial she had come down to only nominal maintenance during their joint lives as a safe guard due to her health conditions.

2.  Whilst it is common ground of the parties that the equal sharing principle shall apply to division of their matrimonial assets, there is apparently significant difference between them as to what they claim to be their total value, with the Wife putting it at just over HK$77 million while the Husband’s figure is significantly less at about HK$65 million, hence a difference of some HK$12 million separating the parties.

3.  This difference can essentially be explained by the Wife’s case that by reason of the Husband’s marital and financial conducts during the marriage with deliberate or reckless dissipation or waste of marital assets, that his such marital conduct has adversely affected her earning capacity and increased her needs in particularly her medical expenses, and that his litigation conduct in failing to comply with court orders or to provide proper disclosure all of which justify substantial “add back” to the matrimonial assets for equal division.   

4.  The Husband of course denies that he has been guilty of any such conducts, insisting that many of the so-called dissipations were either unsuccessful investments or loans made to his friends in needs, and that whilst some may not be recoverable, he proposes to pay the Wife 50% of those that are as and when they are paid back, which is however not acceptable to her or unless they could be secured against his assets.

5.  As for the Wife’s claim for nominal maintenance, the Husband insists that there should be a clean break instead as he is terrified by the prospect of recurrence of their litigation given what he claims to be the Wife’s unreasonable stance and vexatious litigation conduct in these proceedings, hence for both parties the issue of conduct, be it marital, financial or litigation, is clearly at the heart of their disputes, and the fact that their combined legal costs are in excess of HK$10 million, a staggering sum by any standard and disproportionate to either assets or issues but which is sadly fast becoming the norm in family litigations, which speaks volume of the parties’ uncompromising and difficult stance in the proceedings, or at least of one according to the other.

6.  There is fortunately no children issue as their son is now almost 25 and working while staying with the Wife in Hong Kong, while their daughter, aged almost 22 is in university in UK and wholly supported by the Husband.    

Background

7.  The Wife was born in the USA and raised in Massachusetts/Rhode Island area with her extended family still living there. After graduating from university with a degree in economics, she went on to business school in London for MBA where she met the Husband, a British and a fellow student.

8.  In 1980 the parties married in UK and later also held a Catholic ceremony in the US with the Wife’s family. After the marriage both worked in the finance industry in London until about 1991 when the Wife moved with the Husband’s job in Baring Securities to Tokyo where their elder child A, a son was born in the following year in 1992 with the Wife then became a full-time housewife and mother save for some summer part-time jobs editing English translated documents for some Japanese companies.     

9.  In 1995 Baring Securities ceased trading and the Husband moved his team of research people to another company eventually taken over by Merrill Lynch when the Husband then moved to Schroders. In the same year their daughter C was born also in Tokyo.

10.  In 1996 the family moved with the Husband’s job in Schroders to Hong Kong which he then lost in the 1997 Asian Financial Crisis. In 1998 he joined Dresdner Kleinwort Benson until 2000 when he changed to working for HSBC as Chief Asia Economist. It was around this time when the Wife started a book club business teaching their daughter and her friends.

11.  In 2004 the Husband left HSBC to join BIA where he ran certain hedge fund but for the next 3 years he had no income and the parties had had to cut down on their expenses. In 2008 his hedge fund rose substantially and as a result the Husband earned US$8 million in that year and consolidated his reputation as a successful fund manager. For the next several years the Husband was able to earn a yearly income in excess of US$1 million and that the family enjoyed a high standard of living including luxurious apartments and expensive overseas holidays, while their children attended boarding schools.

12.  In the following year in 2009 the parties purchased a 5-bedrooms property in the Wife’s home town of Rhode Island at Rumstick Road, Barrington (“Rumstick House”) for US$1.875 million which came also with a separate guest cottage and a large garden as a family home, and for which the parties also paid US$43,000 for the audio and video equipment existed in the property, and US$17,500 for the nearby Rhode Island Country Club membership.   

13.  During about the same period the Wife came down with severe bladder pain and has since been diagnosed with Interstitial Cystitis, or painful bladder syndrome with chronic bladder and pelvic pain, which has since necessitated constant medical attentions and treatments including high dosages of pain killers, and as a result also reduced her intimacy with the Husband which by late 2010 had ceased altogether and led to the parties attending marriage counselling.    

14.  In 2013 the Husband left BIA to set up his own company GCB as the sole director and shareholder by injecting US$1 million from his savings into the company as a shareholder’s loan to provide the initial working capital and from which he was to draw a salary of HK$175,050 per month to meet his family’s expenses. 

15.  On 2^nd December 2013 GCB entered into a joint venture agreement with CFIC (Hong Kong) Ltd (“CFIC”), an institution in asset management registered with the Securities & Future Commission (“SFC”), to provide consultancy service, under which the Husband was made a non-remunerated director of CFIC together with 4 other directors, and in March 2014 GCB launched a new hedge fund known as CP Fund and paid HK$145,600 per month for a new apartment for the Husband and his family at La Hacienda on the Peak.

16.  In February 2015 the parties and their daughter spent 3 days in what the Wife claims to be an unusually lavish holiday in Venice where the Husband was said to have spent HK$67,000 during their stay at the luxurious Hotel Gritti Palace, but afterwards he went to London where he spent a weekend with a woman whom the Wife later discovered and suspected to be his mistress and on whom she believes he had spent more than HK$68,000 on that weekend which eventually led to the breakdown of the marriage.

17.  By April 2015 the Wife had become so suspicious of the Husband’s activities that she hired a private investigator to look into his affairs, and when she received reports of his extra-marital activities including with prostitutes which may have gone on for several years, she confronted him with the same and demanded that he left their matrimonial home at La Hacienda, which he subsequently did and eventually moved to his present apartment in August 2015 on Stubbs Road at a rental cost of HK$55,000 per month.

18.  On 5^th May 2015 the Wife instituted these proceedings by issuing a petition for divorce based on what seems to me a fairly mild version of the Husband’s unreasonable behaviour and for general ancillary relief. On 8^th May 2015 the Husband returned his Form 4 through his former solicitors indicating that he would not contest the petition, and as a result the decree nisi was granted to the Wife on 26^th August 2015.  

19.  Meanwhile the parties had exchanged their Form E in June 2015, where the Husband disclosed total net assets in excess of HK$86 million, with an income of more than HK$4.1 million for the year which averaged out to about HK$350,000 per month, but had a monthly expenditure of more than HK$510,000 including rent for his new apartment and interim maintenance of HK$269,600 for the Wife. It is note-worthy that he had also disclosed being owed HK$2,360,000 in loans which he had earlier made to two of his friends namely BB and MH, and that he would be seeking the court to make a clean break settlement with the Wife [B2(1)/1-36].

20.  The Wife as expected disclosed in her Form E much less income at HK$20,000 per month and assets worth no more than HK$7.7 million made up essentially of her interest in Rumstick House and her savings, but claimed to have an expenditure of more than HK$448,000 per month [B2(1)/37-64].

21.  Shortly thereafter the parties were able to enter into a mediation agreement on 11^th July 2015 whereby the Husband agreed to pay the Wife US$500,000 as an advance distribution of their capital asset to be set off against her final award and to transfer Rumstick House to her, as well as a monthly sum of HK$80,000 for her interim maintenance and to continue to pay for the rent of the former matrimonial home up to 15^th November 2015 when the Wife was to move to a new accommodation for which he was to contribute HK$90,000 per month towards her rental expenses for the new apartment pending the final resolution of their financial dispute. These terms of the mediation agreement were subsequently made an order of the court on 3^rd August 2015 [B1(1)/4].  

22.  However, eight months later in February 2016 the Husband updated his Form E to reveal a serious drop in his income to only HK$55,000 per month as he claimed to have been forced to cut his salary due to serious losses incurred by GCB and to avoid having to re-capitalize his company, whilst the net total value of his assets also came down significantly to HK$55.8 million, partly because he had since transferred some such as his interest in the Rumstick House to the Wife, and partly due to the ongoing substantial legal costs incurred in the proceedings.

23.  It was also at this stage when the Husband’s answers to the Wife’s several questionnaires revealed his many more loans made to his friends without her prior knowledge or consent, and in particularly that his extra-marital activities had in fact started as early as 2012 during the marriage that the Wife claims to have been so traumatised emotionally and so exacerbated her health problems that have indeed further deepened their entrenchment.   

24.  So it was no surprise when the parties came away without any settlement at their FDR hearing before Deputy Judge Ching on 1^st March 2016, and as a result the ancillary relief matter therefore came before me on 27^th May 2016 for PTR when the parties were directed to file their narrative affidavit setting out respectively their case only on the issues for trial which were as noted above essentially over the quantum of their matrimonial assets for equal division and whether or not there should be a clean break between the parties or that there should be periodical payment/nominal maintenance in favour of the Wife after the divorce. In other words, issues which were fairly limited and straight forward.

25.  Or so it seemed, until when one came to read the parties’ narrative affidavit, especially that of the Wife known as her 4^th affidavit filed on 18^th August 2016 [2(1)/196] which turned out to be a massive 88 pages 268 paragraphs plus a further 120 pages of exhibits of what appears to be her autobiography with staggering amount of retrospective information and material of her family background and history dating back to her ‘great-great-great grandfather’ with details of her upbringing and schooling as well as her early professional career, followed by how she came to meet the Husband whilst still in a serious relationship with a boyfriend, and then every minutiae of her 26 years marriage, with some 70 paragraphs devoted to what she claimed to be the Husband’s marital conduct which led to the eventual breakdown of their marriage, and a further 100 paragraphs of his litigation misconduct in these divorce proceedings, many of which in particularly her historical background are either irrelevant or unhelpful to the determination and resolution of the few and fairly straightforward issues referred to above, and are clearly within the contexts of which the Court of Final Appeal in LKW v DD [2010] 13 HKCFAR 537 has taken pain to warn that the court should not countenance any attempt to engage in costly and futile retrospective investigations which tend to deplete the parties’ resources and to increase their antagonism.

26.  This was so despite my direction given to the parties at the PTR hearing specifically warning against such improper indulgences in their narrative affidavit, in particularly in view of the impact of the litigation apparently already on the Wife’s health problems and the substantial legal costs already incurred by both parties, and when such warning was clearly at the forefront of the parties’ mind and those representing them when their affidavit was being prepared, as evidenced at the beginning of their affidavit of both parties, starting with the Wife’s in paragraph 3 [2(1)/197]:

“After the directions hearing on 27^th May 2016, I was advised that my narrative affidavit would be my evidence in chief for the trial set down in November 2016. The original document which covers more than 100 pages. Following advice from my Solicitors and Senior Counsel, I have attempted to reduce the length. It has not been easy to prepare or edit this affidavit as a result of the stress of these divorce proceedings and this is evident in my medical reports …”

27.  Likewise in paragraph 3 of the Husband’s affidavit of 18^th August 2016 [2(1)/154]:

“In preparing this 2^nd Affidavit, I have considered the remarks made by His Honour Judge Bruno Chan during the Pre-Trial Review hearing on 27^th May 2016 that the narrative Affidavit on Ancillary Relief should focus on the issues. The Judge made it clear during the hearing that the Affidavit should not be full of angry words and huge amounts of details on the background/history of the marriage given that the sharing principle applies. I have borne this in mind when preparing my Affidavit and have tried to stick to the issues as best that I can.”

28.  It appears that the Husband did try to do just that but his affidavit still came in 42 pages and 119 paragraphs albeit less than half in length of the Wife’s and did focus as he so claimed mainly on the issues over the extent of the matrimonial assets and his financial situation including his various investments and loans involving his friends. It is however clear from their affidavit that both parties had intended to raise the issue of the litigation conduct of the other as the basis for their claim for costs of the ancillary relief proceedings in the event that their Open Proposal was not acceptable to the other, and the way they presented their narrative affidavit will no doubt be a factor to be taken into consideration when I come to deal with their litigation conduct and/or costs later in this judgment, but meanwhile it would be relevant to first go to their Open Proposal.      

29.  To which the parties have each also attached a Schedule of Assets [1(1)/120-121, 152-159], and as noted above it is apparent that there was then a significant difference between them as to the size and quantum of the matrimonial assets of between HK$13 million – 16 million, depending on whose Schedule one is looking at, but it is clear that the major issue centres around what, if any, assets or value should be added back into the matrimonial pot for division between the parties, and therefore before setting out their respective proposal and to have a proper understanding thereof, it would be useful to first look at their respective Schedule of Assets which I have combined together and summarised as follows so as to identify their major differences:     

Wife’s Assets & Liabilities

W’s Position

H’s Position

	Value (HK$)
Rumstick House	9,750,000	9,687,500
Bank Accounts	11,341,567	11,733,056
Rental Deposit	246,360	246,360
Harbourside Inn Timeshare	15,000	116,250
RFM Ltd	526,000	526,000
Stocks	165,351	165,351
Jewellery	612,500	1,720,000
Rumstick’s Chattels	76,360	585,000
Chattels at Wife’s Residence	570,662	685,000
Rhode Island Country Club	0	135,625
MPF/Pension/Annuity	395,297	395,297
Credit Card Liabilities	(61,723)	(61,723)
Future Rental Liabilities to 12/2017	(1,170,000)	0
Wife’s Total Net Assets :	22,467,383	25,933,716

Husband’s Assets & Liabilities

Bank accounts	910,800	889,229
CP Fund	28,749,971	28,749,971
Other Investment Funds	5,834,482	4,925,459
CA Ltd	585,000	581,250
SR Capital	1,560,000	0
Macau Golf Club (Bocabec)	2,100,000	907,400
Insurance	478,160	451,085
Personal Items & Chattels	721,000	643,580
MPF	245,983	245,983
Credit Card Liabilities	(71,246)	(71,246)
Monies owed & Add Backs	13,484,846	3,131,465
Husband’s Total Net Assets :	54,598,996	40,454,176
Total Matrimonial Assets :	77,066,379	66,387,892

30.  As noted above, it is essentially the last item of the Husband’s Assets as assessed by the Wife at about HK$13.5 million being monies owed to him from various loans made to his friends and other unsuccessful investments and spending of his which the Wife argues as losses from the marital asset pool which would otherwise have been available for division but for his ‘reckless and cavalier financial misconduct’ contrary to her objections or without her knowledge or consent, and for which she has sought to add back to the marital pool for division in her following Open Proposal.

The Wife’s Open Proposal

31.  The Wife’s Open Proposal was set out in her solicitors’ letter dated 30^th September 2016 [C4/2653] on the basis of equal sharing of the matrimonial assets which she put at about HK$77 million including all the add backs on the following terms:

(a) She was to retain the Rumpstick House and her other assets totalling HK$22.3 million;

(b) The Husband was to pay her a lump sum of HK$17 million by 2 instalments being HK$10 million within 3 months of decree absolute and HK$7 million within 6 years secured by either a life insurance or a charge against his assets;

(c) The Husband was to pay her periodical payments at the rate of HK$76,000 per month during their joint lives or until further order;

(d) Each party to retain their personal effects and she was to retain the contents of Rumsticks House and chattels from the former matrimonial home in storage as well as those of her residence at Old Peak Road;

(e) The Harbourside Inn Timeshare to be transferred to her within 14 days of decree absolute;

(f) She was to have the use of the In and Out Club for the duration of the Husband’s membership with consumption at her own expenses;

(g) The Husband was to reinstate her supplementary Black American Express Card and she was to pay her expenses in advance of payment by the Husband;

(h) The Husband to continue to pay for the daughter’s education and maintenance until she finishes full time education;

(i) On the basis of the above terms, there be no order as to costs.   

32.  Essentially the Wife was seeking a lump sum and transfer of assets totalling HK$17 million to bring her half share of the total matrimonial assets to HK$39 million plus substantive ongoing maintenance of HK$76,000 per month for life.

The Husband’s Open Proposal

33.  The Husband responded to the Wife’s offer through his solicitors’ letter dated 14^th October 2016 [B4(12)/2800 in which he pointed out what he claims to be errors in the Wife’s calculation of the assets and on the basis of his own calculation of the assets at about HK$66.4 million, his Open Proposal was to effect a clean break settlement on a 50/50 division of the assets which would give the Wife about HK$33.2 million plus capitalized maintenance for 5 years and 50% of his loans as and when they are repaid, which can be summarised as follows:

(a) The Wife was to retain Rumsticks House valued at US$1,250,000 and the assets under her name, as well as the Rhode Island Country Club Membership which follows the ownership of Rumsticks House and to be counted as an asset to be transferred to the Wife;

(b) He was to transfer his shareholding in RFM Ltd to her together with the Harbourside Timeshare;

(c) He was to pay her a lump sum of HK$5,399,076 and transfer to her 50% of the shares in CA Ltd to make up her half-share of the matrimonial assets;

(d) He was to pay her a further lump sum of HK$352,283 for her half-share of the add back of his extra-marital activities expenses;

(e) To avoid US tax on monthly maintenance he was to make 5 further payments to her at HK$912,000 each annually commencing from end of 2017 regardless of his outcome;

(f) He was to pay her 50% of all out-standing loans as and when they are repaid in the future;

(g) The Wife was to let him have certain items of painting and carpet in exchange for her retaining certain of his personal belongings including his books in Rumsticks House;

(h) He was to allow her to use the In and Out Club in London at her expense for as long as their daughter remains at university in England, and thereafter if the Wife so wishes, he will propose membership for her.  

34.  This offer of the Husband was as expected rejected by the Wife but has remained his Open Offer for trial.   

Agreed Terms

35.  Notwithstanding the apparent significant gulf between the parties essentially over the quantum of the lump sum payable to the Wife and that whether there should be a clean break between them, the parties have nevertheless been able to agree on the transfer of Rumpsticks House and other less controversial items as follows: 

(a) the Husband to pay the Wife monthly maintenance of HK$76,000 for 5 years to be capitalized at HK$4,560,000 by 5 equal instalments of HK$912,000 each annually in advance from 31^st December 2017 up to 31^st December 2021 pursuit to Term (e) of his Open Proposal above;

(b) the Rumstick House agreed at US$1,250,000 (HK$9,750,000) to be retained by the Wife;

(c) the Husband to transfer his shareholding in RFM Ltd to the Wife within 14 days of decree absolute and resign as director;

(d) the Wife to transfer to the Husband certain agreed painting and books at Rumstick House by 31^st July 2017 or within 3 months of decree absolute;

(e) various interim or temporary arrangements relating to the use of certain credit cards and club memberships as set out in the Wife’s Closing Submission;

(f) the Husband to continue to pay for their daughter’s education and maintenance until she finishes full time education.   

36.  As the matter inevitably proceeded to trial, with Mr. David Pilbrow SC and Mr. Robin Egerton representing the Wife, and Ms Mairéad Rattigan representing the Husband, which was originally scheduled for 4 days in early November 2016 but had to be broken off on the 4^th day on 8^th November 2016 when the Wife was unable to continue with her evidence due to a physical and emotional relapse, specifically a panic attack during cross-examination according to the medical reports subsequently produced [C4(13)/3214, 3216], and the second part of the trial had to be rescheduled for additional days in February 2017.

37.  It was after this episode that the Wife revised her Open Offer as set out in Mr Pilbrow’s Closing Submission dated 13^th April 2017, and it would be in my view relevant to cite in full as follows:

“106. In summary, it is submitted that this is a case for a lump sum payment with ongoing nominal maintenance. W has taken into account H’s concern of ongoing litigation which was H’s reason at trial to refuse W’s nominal maintenance claim. W has therefore provided in her offer an undertaking that she will not seek an increase for herself within the 5 year period, save that she can do so if she is suffering from severe illness or disability.

107. Apart from what has been agreed … W is essentially seeking a lump sum of HK$15,560,000 to be paid by H which comprises the following:-

a. HK$8,500,000 within 14 days of Decree Absolute, being the equalization of the total liquid assets (total liquid assets being HK$56m, 50% being HK$28m minus W’s assets of HK$10.2m);

b. HK$2,500,000 on or before 31^st December 2020 (being 50% of the 5 personal loans at total of HK$5.1m plus extra-marital activities of HK$704,565) to be secured by way of legal charge against the respondent’s assets and failure to pay any instalment due makes any balance due and payable forthwith.

c. HK$4,560,000 to be paid by 5 equal instalments of HK$912,000 payable annually in advance from 31^st December 2017 to 31^st December 2021 inclusive and to be secured by way of life insurance and legal charge against H’s assets and failure to pay any instalment due makes the remaining balance payable forthwith.

d. Nominal maintenance to start after W receives the lump sum of HK$8.5m above.”   

38.  Whilst the Wife has accordingly adjusted her position, and if I may add not insignificantly, it is clear that the remaining issues were still too entrenched between the parties that the trial had to run its full course, with those remaining issues specifically set out in the Wife’s Opening Submission for the court’s determination as follows:

(a) What are the matrimonial assets;

(b) The value of the assets which the parties have failed to agree;

(c) What constitutes the appropriate division of assets;

(d) What is the appropriate figure of spousal maintenance;

(e) It is the Wife’s case that by reason of the Husband’s marital conduct during marriage, financial misconduct and deliberate or reckless dissipation or waste of marital assets and the Husband’s litigation conduct failing to comply with orders or provide disclosure to the court, there should be “add backs” to the marital assets.

39.  Whilst the Husband has not so specifically stated in his Opening Submission, he did in his narrative affidavit set out what he believed to be the key issues for the trial [2(1)/155-157] which are essentially the same as those of the Wife, except that he insists that there be a clean break between them upon her receipt of her half share of their marital assets, and that he also intends to raise the issue of excessive legal costs due to the Wife’s litigation conduct in the proceedings. Hence it would be helpful for me to first set out the relevant principles to be applied towards those issues for determination.   

Applicable Legal Principles

40.  In deciding on ancillary relief application the court is required by section 7(1) of Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”) to have regard to the conduct of the parties and all the circumstances of the case including the following matters:

(a) the income, earning capacity, property and other financial resources which each of the parties 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 benefits (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

41.  As to how the court should undertake this section 7 discretionary exercise, the Court of Final Appeal in LKW v DD supra laid down comprehensive guidance including the 4 underpinning principles which are by now well known to all but worth repeating here as they are always to be borne well in mind when embarking on the exercise:

-   Objective of Fairness

-   Rejection of Discrimination

-   Yardstick of Equal Division

-   Rejection of Minute Retrospective Investigation

42.  It is not necessary for me to go into the reasoning articulated by Ribeiro PJ in his judgment for the court behind all four of these principles, since there seems to be no controversy between the parties in respect of the first three of them, but given the fact that the Wife has raised various issues of conduct against the Husband who also seeks to argue litigation conduct against her in the way she has prosecuted her claims in the proceedings, I find it relevant to remind myself again of what His Lordship said about the fourth principle:

“[62] The fourth principle is that 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 court’s) resources and to increase antagonism and discourage settlement.

[63] Such attempts have been encountered in various contexts, including disputes over the extent of a party’s assets; over the contribution made to the welfare of the family; over the parties’ conduct; over claims to be compensated for having suffered some disadvantage, and so forth.

[64] The English courts’ response to allegations of “special contributions” by parties seeking to justify departure from an equal division is instructive. Referring in 2002 to the then growing practice of examining minutely the respective contributions of the parties, Coleridge J stated:

“The effect is not at all dissimilar to the ‘conduct’ debates of the 1970s. In those days ‘conduct’ was similarly raised against wives to try and limit their claims. However, the court, recognising the undesirable consequences inherent in those arguments and further the impossibility of fairly adjudicating upon them introduced the concept of ‘obvious and gross’ very effectively to limit their application. It is suggested by some that these current ‘special contribution’ debates are reintroducing conduct by the backdoor. I would say by the front door.”

His Lordship added:

“ … the parties are not assisted to achieve compromise when they are encouraged by the law to indulge in a detailed and lengthy retrospective involving a general rummage through the attic of the marriage to discover relics from the past to enhance their role or diminish their spouses.”

[65] The courts’ disquiet was noted by Lord Nicholls in Miller/McFarlane:

“Apparently, in this post-White era there is a growing tendency for parties and their advisers to enter into the minute detail of the parties’ married life, with a view to lauding their own contribution and denigrating that of the other party. In the words of Thorpe LJ, the excesses formerly seen in the litigation concerning the claimant’s reasonable requirements have now been ‘transposed into disputed, and often futile, evaluation of the contributions of both of the parties’: Lambert v Lambert [2003] Fam 103, 117, para 27.”

[66] Heeding Coleridge J’s “powerful observations” in G v G, Lord Nicholls held that:

“Parties should not seek to promote a case of ‘special contribution’ unless the contribution is so marked that to disregard it would be inequitable. A good reason for departing from equality is not to be found in the minutiae of married life.”

43.  His Lordship then referred to a statement made by Thorpe LJ in Parra v Parra [2003] 1 FLR 942 at para 22 as illuminating and reflecting the essence of the fourth principle:

“ … 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 a fine sable. Judgments in this field need to be simple in structure and simply explained.”

44.  It is therefore with these principles in mind that I shall now proceed to undertake the first step of the process in identifying the matrimonial assets and their value for the purpose of division between the parties which they have agreed to be in equal share.

Identification of Assets

45.  Given the parties’ wealth it is inevitable that their matrimonial assets comprise of quite a long list including real property, companies, bank savings and investments as well as personal belongings and chattels either in joint names or sole name between the parties, and while there is no real controversy with some of them either in terms of what they are or of their value, and as noted above those disputed items have since the trial dwindled down to a handful, what remain at issue are still quite substantial in terms of their value as will be apparent below, which for easy reference I propose to set them out under the name or possession of the Wife and the Husband separately but with their differences which I am able to identify between them in a summary form, starting with the Wife’s list of her assets.

Wife’s Disputed Assets

46.  In leaving aside those loans owed to the Husband which the Wife argues should be added back which I propose to discuss separately under the item of “Add Back” below, what remain still at issue over the value of the Wife’s assets are quite straight forward, such as her jewellery and household chattels of which and in the absence of any formal SJE valuation, l propose to adopt a broad brush approach by accepting the Husband’s suggestion to use the average of their respective figures as follows:

Item	W’s figure	H’s figure	Average
Jewellery	$612,500	$1,720,000	$1,166,250
Rumstick’s Chattels	$ 76,360	$ 585,000	$ 330,680
Chattels Wife’s Residence	$570,662	$ 685,000	$627,831

47.  As for the value of her Harbourside Inn Timeshare, I accept the Husband’s explanation that when he first put its value at $15,000, he meant for it to be in US Dollar instead of HK Dollar, which should therefore be converted to HK$116,250 for the present purpose.

48.  For the Husband’s value for the Rhode Island Country Club at HK$135,625, it was simply based on his purchase price of US$17,500 then in 2009 but again in the absence of any formal valuation, I propose to accept it as more realistic rather than the Wife’s suggested no value as there is simply no evidence to indicate that it is now worth nothing and if so why.

49.  I also accept the Husband’s value for the Wife’s bank account balance at HK$11,733,056 after taken into account of the funds transferred from 50% redemption of the Panab, Bonsai and Akamatsu funds.

50.  The remaining difference in valuation over the Rumstick House appears to me is simply due to the different exchange rate adopted by each party, as both have accepted its formal valuation of US$1.25 million, and since it has already been by agreement transferred to the Wife as part of her award, I therefore propose to adopt her figure of HK$9,750,000 for the present purpose.  

51.  As for the last of her disputed item, which is her rental expenses at La Hacienda up to December 2017 which she claims should be included as part of her liabilities in assessing the total value of her assets, I agree with the Husband that it is in principle wrong to do so for that purpose, as otherwise he should also be allowed to include his. I would therefore exclude it from her net assets for the purpose of division.     

52.  In the premises and in exerting these valuation as I have found into the Wife’s list of assets, I have arrived at a total net value at HK$25,130,977 for her assets which is only about HK$800,000 short of the Husband’s suggested figure.

Husband’s Disputed Assets

53.  As for the disputed items of the Husband’s list of assets, they are essentially as follows:

Item	W’s figure	H’s figure
Other Investment Funds	$5,834,482	$4,925,459
SR Capital	$1,560,000	0
Macau Golf Club (Bocabee)	$2,100,000	$907,400
Insurance	$ 478,160	$ 451,085
Personal & Chattels	$ 721,000	$ 643,580
Monies owed & Add Backs	$13,484,846	$ 3,131,465

54.  For the value of the Macau Golf Club and the Husband’s personal items and chattels, I propose to similarly adopt a broad brush and use their average figure at HK$1.5 million and HK$760,000 respectively.

55.  As for his various investment funds and insurance which could otherwise have been easily verified by their statements, I believe the relatively insignificant difference between the parties probably lies at the different timing the figures were picked from the statements and also due to various dealings made by the Husband with his accounts, and hence he should probably be more accurate with their correct value. In any event the differences between the parties appear to be insignificant, and I therefore propose to adopt the Husband’s figures for these 2 items at HK$4,925,459 and HK$451,085 respectively.

56.  Regarding the value of SR Capital, I also accept the Husband’s evidence that it has been folded and is not his asset, hence leaving only his various loans and unsuccessful investments which remain at the heart of the parties’ dispute and the subjects of the Wife argument for ‘Add Back” and which I shall now turn to.

Add Back

57.  As noted at the beginning of the judgment, it is the Wife’s case that she has been deeply upset by the Husband’s conduct in relation to:

(a) marital misconduct which he has conceded by his admission of the Wife’s behaviour petition and his own expenditure of at least HK$704,565 on extra-marital activities;

(b) financial misconduct in that apart from extravagant and unnecessary living expenses, it has during the last three years of the marriage resulted in a depletion of at least HK$24 million by his loans and investments made recklessly or dishonestly and either without her prior knowledge or against her wishes;

(c) litigation misconduct in failing to provide full or frank disclosure of his financial resources, or to comply with various court orders as to his such disclosure.    

58.  For the last item which is the Husband’s litigation misconduct, Mr Pilbrow submits that in view of the Court of Appeal’s guidance given in LSY v THE [2013] HKLRD 1233 that it is best sanctioned by an order of costs, it would accordingly be more appropriately dealt with when this court considers the question of costs of the ancillary relief proceedings between the parties.   

59.  As for the Husband’s marital and financial conduct in support of her argument for the add backs to the matrimonial pot for division, it is the Wife‘s case that in the three years prior to her divorce petition, the Husband behaved recklessly and irresponsibly, first and foremost financially, significantly dissipating the matrimonial pool which according to the parties’ First Form E was about HK$90 million, but more than HK$16 million vanished to investments, both equity and loans made to relatives, friends and colleagues within 3 years prior to the petition, both behind the Wife’s back and/or despite her objections, and in 2 cases despite her own strongly worded objections. Theses ‘investments’, she argues, were made without the due diligence or investment discipline which the husband had applied in decisions for his own hedge fund or other funds he invested in their marital assets.

60.  Regarding the 8 personal loans that were granted by the Husband, the Wife argues that only 3 were declared in his two Form E and only 2 had any documentation, whilst all 8 loans, totalling HK$6.6 million, were made without interest, or security, and without repayment terms, and in fact most are very unlikely to ever be repaid, and that all equity investments are now worthless save one which remains at initial investment value.

61.  In addition, the Wife argues that the Husband’s company GCB & Partners which was established in 2013 in connection with his new hedge fund CP Fund, was funded with US$1 million of their marital assets, but GCB was wound down in 2016 with the entire sum of US$1 million written off, which was according to her entirely avoidable given the Husband’s managerial skills, but was exacerbated by its travel and entertainment expenditure which she believes was way out of line at the time.

62.  Furthermore, she argues that at the time of her divorce petition, she was unaware of the 3 years of the Husband’s adultery which dated back to June 2012, and while she had already been suffering ill health prior to the 3 years of extra-marital activity, it was the revelation of the extent, variety and duration of his adultery that so severely affected her ability to cope that the court should have regard of such conduct of the Husband and its impact on the Wife when considering her financial claims.   

63.  As noted above, by the close of evidence the Wife has come down substantially from her original position and in her Closing Submission she seeks the add back of only the following 5 personal loans made by the Husband as well as his extra-marital activities:

(a) BB	HK$1,311,500
(b) MH	HK$1,190,000
(c) JM	HK$ 585,000
(d) DG(half-brother)	HK$ 172,000
(e) AL(former secretary)	HK$1,200,000
(f) Extra-marital activities	HK$ 704,565
	Total : HK$5,163,065

64.  Mr Pilbrow submits on her behalf that there are two ways which the court may approach these loans of the Husband and his spending in his extra-marital activities either by departing from equal division of the marital assets in the Wife’s favour, as per ARAV v VP [2011] 3 HKLRD 759, Mimi Kar Kee Wong Hung v Raymond Kin Sang Hung [2014] 17 HKCFFAR 585; or by adding back these sums to the matrimonial pot for distribution as per Norris v Norris [2003] 1 FLR 1142, Vaughan v Vaughan [2008] 1 FLR 1108. 

65.  Whatever is the right approach, it is however for the Wife to show that those loans and spending are the result of such conduct of the Husband that the court shall have regard under section 7 of MPPO, but only if the conduct is such that it is inequitable to disregard, as held by the Court of Final Appeal in LKW supra, where Ribeiro PJ first examined the rationale behind why costly and time-wasting investigations regarding conduct in ancillary relief proceedings should be avoided and the case law developed over the years of its relevancy to such proceedings:

“[99] Section 7(1) makes it the court’s duty to have regard to the conduct of the parties in exercising its discretionary jurisdiction. It is therefore in principle a factor which may, alone or in combination with others, result in a departure from an equal division.

[100] However, the courts have recoiled from permitting the parties to indulge in a post mortem of their marriage in order to find fault with each other or to air “their mutual recriminations and go into their petty squabbles for days on end”. As Sir George Baker P stated in Campbell v Campbell, “ … everything should be done by the court to avoid costly, indecent and time-wasting investigations” regarding conduct in relation to ancillary relief proceedings. Otherwise the court will be faced with “ … a lengthy, costly and, most likely, pointless investigation stretching over days, when allegations and counter-allegations are made by the ex-spouses or spouses, one against the other.” These sentiments are just as pertinent today and are reflected in the fourth underpinning principle referred to above.

[101] In Wachtel v Wachtel, Ormrod J devised a means to counteract such objectionable practices which was endorsed by Lord Denning MR in the Court of Appeal. It was made clear that “conduct” was only relevant to financial provision if it was:

“ … both ‘obvious and gross’ so much so that to order one party to support another whose conduct falls into this category is repugnant to anyone’s sense of justice.”

His Lordship added:

“In such a case the court remains free to decline to afford financial support or to reduce the support which it would otherwise have ordered. But, short of cases falling into this category, the court should not reduce its order for financial provision merely because of what was formerly regarded as guilt or blame. To do so would be to impose s fine for supposed misbehaviour in the course of an unhappy married life.”

[102] As Sir Mark Potter P stated in Charman v Charman (No 4):

“ … the case of Wachtel was seen at the time, and is still seen to be, fundamentally important. It established, amongst other things, that the acrimonious disputes as to the causes of the breakdown of marriage, which had characterised the law of divorce prior to the 1969 Act, were not to be born again in the arena of financial disputes.”

[103] In England and Wales, section 25 was amended in 1984 so that section 25(2)(g) now states that conduct is to be taken into account only “if that conduct is such that it would in the opinion of the court be inequitable to disregard it”. It therefore differs from section 7 which does not contain that express qualification. However, in my view, that amendment makes no material difference. Section 25(2)(g) puts into statutory language what is essentially the “obvious and gross” test used before 1984. This is indicated in the passage from the learned President’s judgment cited in the preceding paragraph and made clear by Baroness Hale:

“ … once the assets are seen as a pool, and the couple as equal partners, then it is only equitable to take their conduct into account if one has been very much more to blame than the other, in the famous words of Ormrod J in Wachtel v Wachtel [1973] Fam 72, 80, the conduct had been ‘both obvious and gross’. This approach is not only just, it is also the only practicable one. It is simply not possible for any outsider to pick over the events of a marriage and decide who was the more to blame for what went wrong, save in the most obvious and gross cases.”  

66.  His Lordship then concluded as to what conduct is to be regarded as material or relevant at §104:

“Conduct, or more accurately, negative conduct, is therefore only to be regarded as a material factor if it is “obvious and gross” in the sense explained in Wachtel v Wachtel or, which comes to the same thing, if it is such that it would in the opinion of the court be inequitable to disregard it.”

67.  Whilst it is clearly the Wife’s case that her psychological distress after the breakdown of the marriage was exacerbated by the extent of the Husband’s infidelity with prostitutes over a 3-year period, in respect of which the Husband has admitted spending more than HK$700,000 including HK$400,000 sent to his mistress in London, Mr Pilbrow accepts that infidelity may not usually be considered as gross and obvious conduct in a marriage, but he argues that the extent of the infidelity in this case was particularly distressing to the Wife, as the Husband knew full well that she was a devout Catholic, as was himself an active Christian for most of the marriage, and the fact that the parties underwent a second Catholic wedding ceremony in 1990 in England and celebrated a 20^th anniversary party in 2009 when vows were renewed and the husband presented the Wife with a diamond eternity ring in front of guests that she was traumatised when she learnt of his chronic infidelity of which she was unaware until it only became apparent from his answers to her questionnaires.  

68.  Mr Pilbrow submits that the Wife only came to learn that whilst the Husband had been talking about reconciliation and a future together and was ostensibly working with the Wife in an effort to improve their marriage, in reality he was spending substantial time and funds on his infidelity and was committed elsewhere.

69.  As regard her dispute over the remaining 5 loans and/or failed investments made by the Husband, it is the Wife’s argument that none of those loans were made with interest, security or any repayment terms, and most in fact are unlikely to ever be repaid, while all the equity investments are now worthless save for one which remains at initial value.

70.  Furthermore, the Wife argues that the Husband’s company GCB established in 2013 in connection with his new hedge fund CP and was funded with US$1 million of the marital assets was wound down in 2016 with the injected capital of US$1 million had to be written off entirely, but it is her view that the failure of GCB was avoidable given the Husband’s managerial skills, while its travel and entertainment expenditure was way out of line with what a fledging company should have been spending on those items.

71.  Whilst the Wife does not dispute that she knew about those loans and investments as contended by the Husband, she argues that if she had known about his infidelity, she would have filed for divorce 3 years prior to them being made and would have been entitled to 50% of all the matrimonial assets before any unauthorized expenditure of any nature had been made, and that although the Husband did discuss those loans and investments with her, he either went ahead and made them despite her objections and/or mentioned them to her only after they had been made, thereby depriving her of any input into the use of the asset pool.

72.  The Wife therefore submits that such recklessness and dishonesty of the Husband, who was carrying on a double life for at least three years, is relevant to the issue of financial misconduct, of which she argues also includes his own high spending in all realms, be it personal, family, extra-marital, or business travel or entertainment which contradicts his expressed concern about the family expenditure.  

73.  The Husband disputes that there were any elements of recklessness or dishonesty in any of those loans made to his friends or in his investments, and that he, and for that matter the Wife as well, have been generous to their families and friends in view of their own financial success, as he illustrated in his narrative affidavit [2(1)/163]:

“28. Throughout our marriage, we have been very generous to both our families and close friends given that we have been successful financially.

29. I supported my half-sister MA throughout our marriage by making transfers to my stepmother G, as MA suffered from depression, I bought a home for MA and her husband in Sri Lanka which cost less than US$10,000 and I paid for MA’s husband S to visit the UK. Sadly, MA has now passed away.

30. We purchased a print by Andy Warhol (HKS101,000) for my sister LJ as a charity lunch which the Petitioner and I gave to her for her 50^th birthday.

31. Prior to his recent death, I paid for my father’s care in a BUPA Home in the UK. I also contributed money to my sister LJ, who herself is unwell and unable to work full-time, as she would visit our father frequently and take him out for day trips and meals which I could not do given that I live and work in Hong Kong.

32. We have throughout the years paid for our family members to holiday with us. For example, we paid for numerous holidays for the petitioner’s mother and other relatives including trips to Hawaii and Italy, which we thoroughly enjoyed as a family. We also paid for her visits to Hong Kong and for other trips throughout Asia and the US when we were visiting. The Petitioner’s extended family would also spend long periods of time with us in the Rumstick House at our expense.

33. We were both supportive of each other’s families during our marriage and we had a good relationship with our respective in-laws. We frequently had family and friends stay with us and we would pay for entertainment of our family and friends.”  

74.  As to his failed investment in GCB, the Husband also gave detailed explanation in his narrative affidavit [2(1)/164-167] after having produced all the relevant financial documents and information in his answers to the Wife’s earlier questionnaires, all of which have also been examined and reviewed by the SJE in the valuation of the company.  

75.  None of these were challenged or disputed by the Wife at the trial, and as noted above it has always been the Husband’s case that the Wife shall receive her half-share of those loans as when they are repaid, whereas for his extra-marital expenses he has agreed to be added back in full into the marital pool for equal division with the Wife. Is there then still justification for the Wife in the circumstances to insist that the Husband had been reckless with those loans and investments and that they should all be added back for division for the present purpose regardless whether they are recoverable?

76.  Ms Rattigan argues that these loans were made by the Husband because he is a kind and generous man and that there is a pattern of his generosity to family members and lending money to help others throughout the marriage, which was in fact known to the Wife who herself comments on his kindness as being a reason she was attracted to him.

77.  Ms Rattigan further submits that the loan made to AL, the Husband’s long term secretary was to help her when she was in severe financial difficulty and facing possible bankruptcy, and the money was given to her when the Husband had just earned a huge sum of money, of which he also explained in his evidence that this loan will not be recovered as he does not believe that AL has the means to do so.

78.  In relation to the other debts, Ms Rattigan submits that it would not be fair or equitable for the Husband to have to pay the Wife regardless of whether they are in fact recovered, as the loans made to BB were part and parcel of the investment into his business that the Husband thought would do well, which also applies to the money advanced to JM who is the Wife’s friend and university alumni, and since it was the parties’ agreement that they would diversify their investments, it would not be fair that the Wife should only stand to gain any profit, which she did in some of their investments, but not the losses, hence Ms Rattigan submits that the Husband’s decisions to make those loans and investments cannot be said to be reckless or financial misconduct as those referred in ARAV v VP supra, and that his proposal for the Wife to have 50% of any repayment if and when they are recovered.     

79.  In the case of ARAV v VP where the parties set up a family business known as BT of which they were equal shareholder, drawing a monthly salary and sharing the declared dividends during their marriage, but unbeknownst to the wife the husband formed another company known as FC and when their family business collapsed, the wife alleged that was because the husband had secretly transferred HK$32.5 million in loans, trade debts and outstanding commissions from BT to FC, and in the ancillary relief proceedings pursuant to their divorce, the court found that the matrimonial assets totalled HK$65 million for distribution between the parties, but declined the wife’s request to add back the HK$32.5 million to the matrimonial pot to reflect the husband’s ‘underhand’ and ‘deliberate’ misconduct, noting that his undertaking to account for any sums retrieved had dealt with any residual concerns the wife might have. The wife therefore appealed.

80.  The Court of Appeal in dismissing the appeal held that where a spouse had frittered away assets by extravagance or reckless speculation, the court could taken into account in ancillary relief proceedings by notionally adding back the value of such assets to that spouse’s matrimonial assets, and by doing so, the reckless spouse was deemed still to have those assets to be shared with the other spouse, but reckless financial conduct covered a wide spectrum of behaviour and would be highly fact sensitive, and that a finding of misconduct would not inevitably lead to the reattribution of assets to the pot, as pointed out by Cheung JA in his judgment at p763:

“[7] The conduct may be in many forms. The wife relied on financial misconduct of the husband. If conduct (which must be obvious and gross or inequitable to disregard) is one of the factors to be taken into account, then obviously the Court is not hamstrung in the precise way in which it will recognise this factor. Where the misconduct involves the wastage of the matrimonial assets, one way is to order the wasted funds to be added back to the joint assets before the Court makes the distribution: Rayden & Jackson on Divorce and Family Matters (18^th ed., 2005) para.16.54 and Norris v Norris [2003] 1 FLR 1142. However, in my view, that is not the only way to give recognition to misconduct. Another approach which is consistent with the Court’s power to achieve what is fair to the parties is to depart from the yardstick of equal division and equal sharing principle as explained by Ribeiro PJ in LKW v DD at paras.58-61.”

81.  Sitting in the same Court and giving the leading judgment, Fok JA (as he then was) agreed and articulated the principles applied in some of the relevant authorities to further explain that misconduct does not inexorably lead to the conclusion that expenditure made by a spouse guilty of any type of misconduct must inevitably be added back to the marital pot for the purpose of ancillary relief proceedings, as he stated at p772:

“[53] It is clear that, where a spouse has frittered away assets due to his or her extravagance or reckless speculation, the court can take into account in ancillary relief proceedings by notionally reattributing (or adding back) the value of the assets so squandered to that spouse’s side of the list of matrimonial assets. By doing so, the reckless spouse is deemed still to have those assets and, depending on the division of assets, to share them with the other spouse.

[54] Martin v Martin and Norris v Norris referred to above are instances of the court doing so. Similarly, in C v C [1990] 2 HKLR 183, a proportion of the wife’s gambling and futures speculation was added back to the assets to be divided between the parties to redress the wife’s financial irresponsibility.

[55] It is important, however, to recognise that misconduct that may constitute a factor for a judge to take into account in proceedings for financial relief under s.7 of the matrimonial Proceedings and Property Ordinance (Cap.192), can be constituted by acts which cover a wide spectrum of behaviour. The characterisation of particular behaviour as amounting to reckless financial conduct will be highly fact sensitive and depend on the judge’s view of the evidence.

[56] Thus, in Martin v Martin, Cairns LJ considered the husband’s use of a false name, concealment and lack of documentation of his property dealings justified the Judge drawing unfavourable inferences (p.343D). He regarded the evidence as justifying the conclusion:

… that he was entering into a transaction on a scale which was far beyond his own resources and which he could only finance by putting in jeopardy money which the wife was entitled to share. {p.343F}

[57] In Norris v Norris, the husband’s conduct leading to the add back was in the nature of extravagant overspending on jewellery for his mistress, a Ferrari motor car and expensive holidays. And in C v C, as noted above, the financial irresponsibility consisted of gambling and futures speculation.

[58] It does not therefore follow that there is a unitary concept of misconduct that inexorably leads to the conclusion that expenditure made by a spouse guilty of any type of misconduct must inevitably be added back to the pot of assets for the purposes of ancillary relief proceedings. Moreover, in Vaughan v Vaughan [2008] 1 FLR 1108, para.14, Wilson LJ (as he then was) noted that the reattribution of assets by way of add back:

… has to be conducted very cautiously, by reference only to clear evidence of dissipation (in which there is a wanton element) …

[59] Further, it is not the case, in my opinion, that a finding of misconduct on the part of a spouse must invariably lead to a reattribution of assets. In Morgan v Morgan [2006] 2 FLR 1253, for example, the Judge found the husband had been guilty of compulsive gambling and channelling funds to his new partner. However, instead of adding back the monies spent, the Judge took the husband’s conduct into account in arriving at a division of the proceeds of the couple’s joint assets: see para.96(d).

[60] Therefore, as I have endeavoured to demonstrate, the Judge was not faced with the stark choice of finding that the husband was guilty of financial misconduct so that the HK$32.5 million must be added back to the matrimonial pot, on the one hand, or on the other, absolving him from responsibility for simply having had the misfortune of having taken a calculated risk which did not succeed.”  

82.  In the present case the Husband has properly explained in both his narrative affidavit and in his testimony his reasons in details for making those loans and investments, and having heard him in evidence at the trial I agree with Ms Rattigan that it was out of his kindness and generosity that he made those loans to his friends, and for those investments which turned out unsuccessful, he did discuss with the Wife and although some may not have met with her full approval, they were nevertheless his genuine judgment-call and decisions which cannot be regarded as reckless financial misconduct, let alone gross or obvious conduct, as after all, he was the only financial expert here and there was no other expert at the trial to contradict him or to support the Wife’s case of reckless investments.

83.  As for the Wife’s argument that she would have filed for divorce 3 years earlier had she known about the Husband’s infidelity then and hence would have been entitled to 50% of a bigger marital pool before he was to make those loans and bad investments, it is in my view purely speculative and no different from, say, an argument that if she had known that their marriage would end up in divorce, she would not have married him in the first place, or that she would have spent more on her own favourite activities. Hindsight rarely assists in court and should have no place in this exercise.  

84.  As already conceded by the Husband, I agree that his extra-marital expenses of HK$704,565 are to be added straight back to the matrimonial assets for division, whilst for the loans I also agree with his proposal that if and when they are recovered 50% thereof shall be paid to the Wife. In the premises I shall put the total net value of the Husband’s assets at about HK$40.7 million for the present purpose of division.  

85.  Accordingly and by including the Wife’s assets of HK$25.1 million, I find that the total net value of the parties assets to have come to about HK$65.8 million for immediate division plus whatever monies due to the Husband from those loans if and when they are recovered, but before proceeding to consider the parties’ respective proposal as to how they are to be divided, it would be relevant for me to next proceed to undertake the section 7 exercise, starting with the least controversial one over the Wife’s earnings and earning capacity.

Wife’s Earnings/Earning Capacity

86.  The Wife now earns HK$35,000 per month from her tutor services which is unquestionably insignificant compared with that of the Husband, and it is submitted on her behalf that her earning capacity is significantly impaired as a result of her parenting the children instead of pursuing her career including giving up offer of equity in London fund management consultancy upon the Husband’s transfer to Tokyo, that the market for tutor services in Hong Kong being very competitive and overcrowded, and her health condition mentioned below.

87.  The Husband however believes that the Wife is capable of earning more at HK$55,000 per month as when these proceedings are concluded she will have the ability to take on more pupils for private tuition and to expend her business into more school as she has said she would like to.

88.  I agree that it would certainly be in her best interest to do so, and I have no doubt of her intelligence and ability as clearly evidenced throughout the proceedings, but at her age and in particularly her current health condition, and whilst the latter issue will likely improve after the end of these proceedings, as will be apparent when I come to discuss her medical problems later in this judgment, I am unable to say with any certainly at this stage that the Wife will indeed be capable of reaching the level of income as submitted by the Husband.

89.  I should however note that the Wife has the benefit of the rental of Rumstick House of US$6,000 per month which is about HK$46,800 per month, although it is her case that most of it has to be spent on various maintenance and up-keeping of the property, to which the Husband has expressed his doubt and I agree that it seems illogical to me that such a valuable property which the Wife once put at US$1.8 million in her Form E would yield such little return, and if it is somehow indeed the case, then the Wife should consider liquidating this asset and put the proceeds to some better investments with much better yields, unless of course it is her intention to return to the US after the divorce and to use it as her future home, of which I will no doubt have more to say when I come to consider her future needs later in this judgment.   

Husband’s Earnings/Earning Capacity

90.  The Husband’s evidence is that given his age and the current market conditions, he had had discussions with CFIC in March 2016 and reached an agreement that the joint venture between GCB and CFIC had been dissolved and that he along with other key members of his team at GCB have since become direct employee of CFIC.

91.  Accordingly the Husband is now employed by CFIC as a portfolio manager at a fixed salary of US$350,000 per annum which is on average HK$226,333 per month before tax.

92.  The Wife however submits that according to his offer of employment, the Husband is also entitled to the following increment to his salary and/or bonus:

(a) If his CP Fund exceeds US$150,000,000, he stands to receive an increase in his income having a variable salary which is 15% of the management fee instead, and if the Fund reaches above US$350,000,000 his variable salary will be subject to CFIC’s discretion for an annual review;

(b) He is also entitled to a year-end non-discretionary bonus as well as reimbursement of reasonable expense.  

93.  It is therefore the Wife’s submission that as foreseeable resources the Husband is a highly talented fund manager who in 2008 was able to earn US$8 million and enjoys strong reputation throughout Asia as both economist and fund manager.

94.  The Husband however argues that the Wife’s belief that his earnings from CFIC will increase and that he will receive a bonus is mere speculation, as he claims that there is no such prospect in the foreseeable future, and that instead there is a real risk that he could lose management of the fund and be made redundant at the end of the 12 months period, whilst the CP Fund would need to improve dramatically for 2 years before he would see any increase in his income especially as any profits from the CP Fund would first need to be repaid to CFIC for the losses that they took on, as confirmed by the SJE. In any event he argues that at his age of 55 it is unlikely that his earning capacity will increase drastically prior to his retirement.

95.  Whatever the Husband’s future earning may be, given the fact that the Wife now appears to have abandoned her claim for substantial periodical payment save for nominal maintenance, it seems to me sufficient for the present purpose to accept the Husband’s fixed income at just below HK$230,000 per month with entitlement to higher adjustment and/or bonus if his performance reaches certain target or conditions as set out under his employment terms but which may however be adversely affected by the heavy losses absorbed by CFIC as a result of its joint venture agreement with GCB being dissolved earlier during the proceedings.  

Standard of Living

96.  Given the income and assets involved in this case, there cannot be any serious dispute that the parties did enjoy a comfortable lifestyle during the marriage, and according to the Wife it was well reflected in their rental accommodation and travelling as set out in both her narrative affidavit and summarised in her Closing Submission as follows:

(a) Between 1996 and 2006, the parties paid rent of between HK$90,000 to HK$115,000 per month;

(b) In July 2006 when the Husband started to run his own investment fund (and hence had no income), the parties still rented a 2,400 sq. ft. apartment at Magazine Heights for HK$62,000 per month;

(c) In 2009 the parties moved to Tavistock which was a 4,860 sq. ft. flat with clubhouse, pool and health club and at rent and charges approaching HK$300,000 per month;

(d) From end of 2011 to early March 2014 the parties moved to Branksome on Tregunter Path at a rental of HK$120,000 per month;

(e) In March 2014 the parties moved to their 3,400 sq. ft. 4-bedroom former matrimonial home at La Hacienda for HK$145,600 per month paid by the Husband’s company;   

(f) The family would spend holidays on business class to UK, Europe and Asia in addition to staying at Rumstick House where the Husband would rent a Range Rover or Mercedes for the family at US$13,000 to $14,000 for the 3 weeks of their stay;

(g) For Christmas 2014/New Year 2015 the parties stayed at Sofitel St. James in London at the equivalent cost of HK$220,000, and in February 2015 they travelled to Venice for 3 nights where they stayed at the Gritti Palace Hotel for HK$67,000.     

97.  Whilst the Husband does not dispute that the family had a very good lifestyle throughout the marriage, and when he had very successful years in 2008 and 2013, they were able to move to La Hacienda on the Peak and to go on expensive holidays, but there were also times when the parties had to cut back their spending drastically, such as when he left HSBC with no salary for almost 3 years when the family had had to downsize significantly, or when their daughter left for boarding school, they rented accommodation for just HK$68,000 per month, and when GCB was not doing well in 2015, he argues that their lifestyle has had to change since these proceedings by him moving into a flat on Stubbs Road at HK$55,000 per month and by reducing his spending significantly including not having any holiday for over a year, but that the Wife has refused to do so and which he argues has led to their capital being significantly depleted during the proceedings.

98.  For obvious reasons lifestyle and standard of living of course would ordinarily commensurate with the parties’ financial means and resources, and in this case I agree with the Husband that their standard of living varied greatly depending on his income and job situation as the disparate rental costs indicate, and while their lifestyle was indeed at times very good, it was when he made very large amounts of money, and at times when this was not the case, they cut down their costs as demonstrated by their monthly rental expenses coming down from HK$120,000 at Branksome to HK$63,000 at Magazine Gap Road. Given his unchallenged evidence of the poor performance of GCB prior to the breakdown of the marriage, and now that there are two households on a significantly reduced income, I agree that the reality is that there has to be a downsizing as the parties had done in the past, which is indeed the reality in the majority of divorce cases. It is against these circumstances and the remaining available assets and resources of the parties that I now propose to consider their respective needs and how best they can be met.   

Wife’s Needs

99.  The Wife claims to require about HK$200,000 per month for her present expenses, but will need a bit more for her future needs as she explained in her narrative affidavit at para.263 [2(1)/277]:

“I reasonably need HKD190,000 – 200,000 per month to live. My rent, mgmt.. fees, rates and utilities come to about HKD95,000 per month. By the terms of the tenancy agreement, I must stay until the end of the lease, namely until 20 November 2017. In any case, for at least the next 5 years I will need a family home, for C (daughter) who does not finish until July 2020, and for A (son) who has not yet found a “real job” and when he does he will be unlikely to move to his own place until he has accumulated a deposit and has a salary that can cover both HK rent and living expenses. C will no doubt find herself in the same position 3 years from now.”

100.  Accordingly she estimates that her future monthly expenses will constitute the following figures:

rent plus management rates & utilities	HK$95,000
grocery/household	HK$17,000
domestic helper	HK$ 5,000
meals out of home	HK$ 4,100
transportation	HK$ 2,000
clothing/shoes	HK$ 7,500
personal grooming	HK$20,000
entertainment/presents	HK$ 6,300
holidays/travel	HK$17,500
medical insurance	HK$ 4,940
uncovered medical care	HK$ 1,500
medical & insurance for old age	HK$15,000
psychiatry/psychiatric drugs	HK$ 6,626
physiotherapy/medical	HK$ 3,500
personal trainer	HK$ 7,650
club/gym membership	HK$ 5,000
children expenses	HK$ 8,000
	Total: HK$226,616

101.  The above expenditure of the Wife is obviously predicated on her staying in Hong Kong which is according to her at least for the next 5 years apparently for the children, which is however not accepted to the Husband that she needs to stay in Hong Kong for them, as both children are over 18 with the son already working while the daughter is in university in UK wholly maintained by the Husband, and whilst she will want to visit the parties in Hong Kong during school holidays, the Husband argues that it is not accepted that the Wife needs to live in Hong Kong for that purpose, as she could choose to move back to the US, the daughter could still visit her there, and if the Wife lives in the Rumstick House property, the daughter has her own room there already. Hence it is submitted by the Husband that it is not accepted that the Wife has to remain in Hong Kong, and more particularly that she has to rent expensive accommodation at a cost of over HK$80,000 per month in Hong Kong on the pretext that it is for the children. 

102.  Apart from her claimed rental costs, the Husband also takes issue with some of the Wife’s alleged expenses, quite justifiably so in my judgment even if they are to be generously interpreted, such as HK$17,000 for grocery and household and HK$51,300 for clothing, personal grooming, entertainment and holidays as excessive, HK$25,126 for medical as unnecessary when she appears to be already well covered by her existing insurance, and HK$8,000 for children’s expenses as unnecessary for the reasons already stated above.

103.  Accordingly the Husband has put the Wife’s needs, generously interpreted at around HK$120,000 per month if she chooses to stay in Hong Kong, and that if she decides to move back to the US then her expenses will be far less as her housing needs will be met without the need for expensive rent.

104.  While it is my view that it is not for this court, or anybody else for that matter, to dictate to the Wife where she should make her home after the divorce, I agree with the Husband that it is simply unrealistic for her to maintain the same high standard as before or as much as she claims for her monthly expenditure if she chooses to remain in Hong Kong and hence to have to rent her accommodation. In which case I cannot say that the Husband’s assessment of her reasonable monthly needs, generously interpreted, at about HK$120,000 is improper or without merits.

105.  At any rate, with her half share of the matrimonial assets as well as the Husband’s offer of capitalised maintenance for 5 years at the average monthly rate of HK$76,000 as well as her own income discussed above, I agree that the Wife’s future reasonable needs as generously interpreted will be well catered for, as suggested by the Husband’s Duxbury Report from BDO [Attachment 3 to his Opening Submission], and more importantly appears to be accepted by the Wife herself which explains why she no longer insists in seeking substantive monthly maintenance from the Husband.

106.  Above all, if it is her intention to make Hong Kong her permanent home, as pointed out above the rental income from her Rumstick House would certainly add to her spending power to enable her to meet her needs in Hong Kong, and if it is true that those rental income have as alleged all been spent on the upkeep of that property, then she can and should sell it to make a better investment out of the sale proceeds, as she has suggested in her narrative affidavit when she said she “can well imagine selling the property for something more manageable and then with the proceeds buying and refurbishing student accommodation near Brown University.” [2(1)/283]. If on the other hand she is to move back to the US and to reside in Rumstick House or some more modest property, I agree with the Husband that her monthly needs should come down quite significantly without the expensive expenses for Hong Kong accommodation.    

Wife’s Health Problems

107.  It is however also the Wife’s case that she has significant medical, physical and psychological problems, with her physical condition of chronic pelvic pain (interstitial cystitis) have existed for more than 7 years prior to the separation, and significant provision for her medical expenses was covered by the parties paying out of pocket as well as medical insurance purchased through the Husband’s employment.

108.  Mr Pilbrow submits that the Wife’s long term prognosis is unknown as it is clear from her medical reports that since October 2015 she has been suffering from panic attacks, complex post-traumatic stress disorder (PTSD) and depression on top of her chronic pelvic pain since 2008, which necessitate her attending regularly GP Dr Sarah Borwein, Psychiatrist Dr Jenifer Chan and pain management consultant Dr Carina Li, all of whom collaborate on her treatments and prescribing her antidepressants, sedatives, opioids and sleep medication.     

109.  According to her evidence, the Wife has recently started the medical procedures recommended by Dr Li in her letter dated 10^th August 2016 [C4(13)/2892] in the hope that she can achieve more effective pain relief as well as to be weaned off opioids, but Mr Pilbrow submits that whilst it is hoped that her mental condition will stabilize and her health possibly recover, her medical future remains uncertain.

110.  Mr Pilbrow submits that the Wife therefore runs the following risks:

(a) Her medical insurance being inadequate as there is a US$50,000 cap to cover her ongoing palliative costs;

(b) Her medical cover for her chronic pelvic pain condition could be cancelled, as it has been in the past, leaving her with no options whatsoever for insurance;

(c) Her mental and psychological state being such that her earning capacity will be depleted.

111.  It is for these reasons, Mr Pilbrow submits, that the Wife needs to retain a maintenance or at least a nominal claim so that in the event that her health deteriorates further, she can at least be sustained if necessary by maintenance.

112.  The Husband has no dispute about the Wife’s illness, which he accepts is not new as it is a condition that she has been living with for some eight years, and that whilst he agrees that it is a painful condition he insists that it is not life threatening and has not stopped her from running her business, from providing private tuition and from pursuing these proceedings with the zeal that she has.

113.  Furthermore, he submits that she has adequate insurance which covers her condition, and that on the agreed settlement as well as his Open Proposal she already has more than enough to meet her needs with assets worth more than HK$32 million including a home in USA plus maintenance for another 5 years.

114.  In order to show that on his offer the Wife will have more than enough to meet her exaggerated needs as it assumes that she will live in Hong Kong rather than moving back to the US where she will be able to live for far less, the Husband has commissioned a Duxbury calculation from BDO [Attachment-3 to his Opening Submission] which calculates that from her age of 63 when her 5-years of capitalized maintenance will have been used up, she will require a capital of HK$27.5 million in order to sustain monthly expenses of HK$121,000 to the age of 82 being the average life expectation of an American woman. On the basis of the most conservative investment risk, the Husband argues that on his offer of HK$32.5 million to her, the Wife will still have an additional cushion of some HK$4.8 million over and above her needs.

115.  Ms Rattigan submits that the Wife will in fact be much better off than the BDO Duxbury assumes as she will be receiving the full lump sum now as opposed to when she is 63 so it can be used to start generating capital earlier than the report supposes and over the next 5 years while she is still receiving capitalized maintenance at the agreed sum of HK$76,000 per month.

116.  The Wife’s medical reports, and there are quite a few dating from October 2015 to February 2017 and can be found in [C4(2)/269, C4(11)/2485, C4(13)/2892, 3214, 3216 & C4(14)/3290]. As pointed out by Mr Pilbrow, none of which were challenged by the Husband at the trial, but it would be relevant to refer to some of them in more details so as to have a proper understanding of the extent of the Wife’s health problem and her future prognosis.

117.  The earliest report before the court is the one dated 9^th October 2015 by Dr Li [C4(2)/269] which confirms that the Wife has since 2008 been followed by her at the Pain Management Clinic for health issues cited as follows:

“She was noted to have depression issues related to her family and other stressors over years, and recently she was found to have newly symptoms of

1. post traumatic stress disorder related to divorce and family issues

2. worsening anxiety and depression, co-morbidity of poor sleep

3. flare up of her chronic pelvic pain, now near double her dose of potent opioids since July last when seen by me…

…

In conclusion, with her psychological status and health conditions, she requires numerous medicines that influence her cognitive functions and normal daily function. I would strongly advise her that she should not have further major decision making or major life changes, as she is already on a dangerous line of coping for her daily living.”  

118.  That report was about 6 months into these proceedings and I believe right in the middle of some intensive dispute between the parties over the discovery and disclosure of the Husband’s finances, which may explain the worsening anxiety and depression of the Wife as observed in the report.

119.  The next relevant medical report produced by the Wife came on 10^th August 2016 and also by Dr Li [C4(11)/2485] in which she gave more details of the Wife’s medical history and her health problems but which again confirmed their connection with her on-going divorce litigations, and also suggested various treatments options:

“Mrs B has been followed for pain management by me since 2008 with referral by Dr Sarah Borwein October 2008.

She was previously under my care at HK Sanatorium Hospital Comprehensive Pain Management Clinic in the Comprehensive Oncology Department from autumn 2008 – January 2015 with stable analgesic regime. Pain Score 5-7 out of maximum 10. She then was under the care of Dr T.W. Lee, another Pain Specialist at HK Sanatorium Hospital for the period of Jan-2015 – July 2015. She has been then under my care again jointly with Dr Sarah Borwein at Central Medical Health Practice (since July 2015 until present).

She was noted to have Chronic Pelvic pain (Visceral and Neuropathic Bladder pain of Interstitial Cystitis) and co-morbidity of depression issues related to her family/marital issues. More specific, she has been found to have additional symptoms of:

1. post-traumatic stress disorder related to divorce and family issues

2. worsening anxiety and depression, co-morbidity of poor sleep, already a problem due to pain level

3. flare-up of her chronic pelvic pain, so that she has nearly doubled her dose of potent opioids since July 2015. She needs additional strong opioid Methadone since July 2015 for her severe pain. Methadone is more potent and has lower cost as compared to Oxycodone.

She is currently on a high dose of Multimodal Analgesics (3 different types of potent opioids) and benodiazepam and hypnotics. Both Dr Sarah Borwein and I referred Mrs B to Psychiatrist Dr Jenifer Chan, Central Health medical Practice in October 2015, as she has gone through a very traumatic and stressful divorce and continues to suffer from insomnia, flashbacks, anxiety, panic attacks and overwhelm.

Her BDI score (Beck Depression Inventory) in October 2015, a measure of depression, comes out at 38, which puts her in the ‘severely depressed’ category. She has been then followed by Psychiatrist Dr Jenifer Chan since 13^th October, 2015 for management of PTSD/Panic Disorder/Depression, particularly in the context of a complex medical situation and stressful family issues.

Her updated prescription medications list and management Plan is …

Mrs B has been overwhelmed by the divorce issues in losing her ability to concentrate and perform work related to her business properly. She has also reported difficulty with meeting numerous work schedules deadlines.

Besides, our clinic record shows that on 7 occasions she needed to ask for refill of her medicine during the period of 14 pain consultations (July 2015 – August 2016). This did not happen over the preceding years 2008 – 2014 when her pain was high but she was able to handle her time and work schedule better. She has reported fitful sleep, difficulty in walking in the morning and need to take sleep during the day. Pain Score increased 7-10 out of maximum 10 most of the time…

In conclusion, with her psychological status, constant stresses and health conditions, she requires numerous medicines that influence her cognitive functions and normal daily function. She has been constantly in severe pain, low mood and difficult sleep over past 1-2 years, which was worsening in last 12 months with her stressful marital circumstances and divorce settlement.

Furthermore, she fulfils criteria to justify pain interventional procedures given her current high dose of multimodal analgesia (potent pain killers). However, with the time limitations with her busy schedule and finance constraints, she could not make up her decision to undergo the above-suggested treatments that we have discussed since early 2016. In addition, her pain could be also controlled with other treatment options, including evidence-based therapy for chronic pain and depression such as Mindfulness Therapy. In my opinion, such a therapy would be effective if she has more time for herself and is able to solve her current financial constraints.”    

120.  In both of her reports, although separated by some 10 months in between, Dr Li was of the same opinion that the Wife’s worsening condition was to do with her current divorce disputes with her husband. This is further confirmed by the Wife’s psychiatrist Dr Jenifer Chan in her even more comprehensive report dated 16^th August 2016 [C4(11)/2489] where she stated how the current divorce litigations have played a significant part on the Wife’s mental health problems which has led to the diagnosis of her suffering from a Major Depressive Disorder:

“10. … Mrs B found the final years of the marriage especially difficult because of the combination of Mr B’s explosions stemming from minor matters, the coldness of his putdowns of her and kindness and generosity from him. Before her discovery of his infidelity in late April 2015, she had new hope that she and her husband could work things out.

11. Subsequent to the separation, Mrs B had not coped well with the discovery of her husband’s adulterous activities…

12. During the divorce process Mrs B reported being devastated by learning about what she called her husband’s ‘double life’. She said that she did not expect her husband to treat her like he has. She had expected to be finished with divorce proceeding already and reported that she was very surprised that Mr B had not followed legal orders …

13. Mrs B has repeatedly throughout treatment described how shameful she feels when she thinks of her husband’s past behaviour, primarily citing his betrayal and humiliation of her and the children owing to his frequent and indiscreet adulterous behaviour … maintained that the shame was her burden to carry and that due to her strict New England upbringing she found the humiliation of what her husband had done to her unbearable …

CONCLUSION

19. Mrs B suffers from a Major Depression Disorder, currently in the severe intensity range as per scoring on the Beck Depression Inventory. Although her anxiety levels have improved, her depressive symptoms have proven more resistant to treatment.

…

22. The depression has so far not responded well to treatment but recovery is also made difficult given the ongoing psychological maintaining factors (e.g. being concerned about finances, finding social interaction difficult, stress from her family members like her children, the divorce process itself etc).”   

121.  It is therefore clear that from the medical evidence adduced by the Wife and unchallenged by the Husband, the emotional and psychological aspects of the Wife’s health problems were in effect caused by the breakdown of her marriage and exacerbated by her current litigation with the Husband, all of which, as argued by the Husband, will sooner or later become history and no longer a relevant or contributing factor to that part of her problems.

122.  There is of course still her chronic pelvic pain which has gone back for years but according to Dr Li’s report, it seems that certain new or advanced treatments have been recommended to the Wife and that she is expected to undergo some of them upon certain financial arrangement has been put in place, of which certainly it would not present any problem on the basis of the Husband’s proposal or the award she is to receive under this judgment.   

Husband’s Needs

123.  The Husband put his current total expenses at HK$268,263 per month [2(1)186], but by excluding the MPS sum of HK$80,000 for the Wife which will no longer be relevant after the divorce, his monthly expenditure should come down substantially to the more manageable amount of just below HK$190,000 and within his income after tax. Furthermore, in 3 years when the daughter should finish university, his burden will no doubt be further reduced.

124.  His case is that in 5 years when he will be 60 and ready to retire, and hence he will need all his share of the matrimonial assets and his income for the next few years to meet both his needs and those of the daughter as well as paying for those lump sum instalments for the Wife’s capitalised maintenance for the next 5 years. I agree, but also note that given his undisputed expertise and reputation in his field, his earning years may well be longer than he claims.

Revisit of Parties’ Proposals

125.  Having found the total matrimonial assets at about HK$65.8 million, and on the basis of an equal division thereof between the parties as proposed by them, it would be appropriate to revisit the parties’ latest revised proposal as set out in their Closing Submission, starting with the Wife’s which is apart from what has already been agreed as above, she seeks a lump sum of HK$15,560,000 and a nominal maintenance from the Husband on the following terms:

(a) HK$8,500,000 within 14 days of decree absolute being equalization of the total liquid assets being HK$56 million with 50% being HK$28 million less the Wife’s assets of HK$19.2 million;

(b) HK$2,500,000 on or before 31^st December 2020 being 50% of the 5 personal loans of HK$5.1 million plus Husband’s extra-marital expenses of HK$704,565 to be secured by way of legal charge against his assets with the condition of failure to pay any instalment due makes any balance due and payable forthwith;

(c) HK$4,560,000 to be paid by 5 equal instalments of HK$912,000 payable annually in advance from 31^st December 2017 to 31^st December 2021 inclusive and to be secured by way of life insurance and legal charge against the Husband’s assets and failure to pay any instalment due makes the remaining balance payable forthwith;

(d) Nominal maintenance to start after the Wife receives the lump sum of HK$8.5 million above. 

126.  Her claim for HK$8.5 million under (a) above must however be set against my findings in this judgment that she already has assets worth HK$25.1 million instead of only HK$19.2 million, and that the total assets stand at HK$65.8 million instead of HK$77 million, hence in order to bring her 50% of the total assets to HK$32.9 million it would require a lesser sum of HK$7.8 million instead to be added to her own assets of HK$25.1 million.

127.  However, the Husband argues that whilst he originally agreed to pay a lump sum of HK$6,043,859 to the Wife in order to effect an arrangement giving her just over 50% of the assets, but given that the parties have had to go through the second part of the trial and that their assets have since depleted further, it is only fair that the lump sum to be paid to the Wife should come down to HK$4,979,186 with an equalization of legal costs in the manner as proposed in his Closing Submission, plus the fact that the further lump sum of HK$4,560,000 being 5 years of capitalised maintenance at HK$912,000 per year is to ensure that she will not have to incur additional US tax which would otherwise be payable on maintenance payment, and for which the Husband also offers to take out a life insurance policy in the Wife’s favour to ensure she will receive the full lump in the event of his death but with the cost to be shared equally by the parties.   

128.  This proposal of the Husband as to the lump sum for the Wife would in effect mean that she would end up having just over HK$30 million, which is only about 45% and somewhat short of what the parties have always agreed to an equal sharing of the matrimonial assets. This is of course due to the Husband’s proposed adjustment for equalization of their ever increasing legal costs as a result of the Wife’s continued unreasonable litigation conduct which has led to reckless depletion of their assets.

129.  Litigation conduct, however as pointed out by Mr Pilbrow in following the guidance of the Court of Appeal in LSY v HTF (2013) HKLRD 1233, is best sanctioned by an order of costs and not as a factor justifying a departure from equal division.   

130.  In Tavoulareas v Tavoulareas [1998] 2 FLR 418 cited by the Court of Appeal in LSY v HTF with approval, Thorpe LJ stated that a distinction should be drawn between marital conduct and litigation conduct in determining the quantum of the financial award (at 426):

“The criterion of conduct under s 25(2)(g) of the Act is clearly stated to be relevant if the court concludes that it would be inequitable to disregard it. But it does seem to me that a clear distinction must be drawn in all these cases between what might loosely be described as marital conduct and what might conveniently be described as litigation conduct. It seems to me as a matter of construction that s 25(2)(g) is plainly aimed at marital misconduct. If the applicant’s misconduct is limited to misconduct within the ancillary relief case long after the separation of the parties, it is, in my judgment, questionable whether that factor should go to diminish the quantum of the financial award.”

131.  Similarly in M v M (Financial Provision: Party Incurring Excessive Costs) [1995] 3 FCR 321, also cited in LSY, Thorpe LJ applied the same decision at 330:

“ … Ordinarily speaking, it seems to me that the manner in which proceedings are misconducted is to be reflected in orders for costs rather than directly in the scale of the awarded sum. However, this seems to me to be exceptional case where the husband’s strategy has been so extreme that it would be inequitable to disregard it. It seems to me that it is appropriate to look at the quantification of the wife’s share not of what remains today but of what would remain today had that policy of waste and destruction not been pursued.”

132.  It seems quite clear to me from Ms Rattigan’s Closing Submission that the Wife’s misconduct as alleged by the Husband are all confined to the ancillary relief proceedings after the parties’ separation and hence as submitted by Mr Pilbrow should be more appropriately dealt with by an order of costs rather than be a factor relevant to the quantum of her award.  

133.  As for the further lump sum payments under (b) and (c) of the Wife’s revised proposal which are either already agreed by the Husband or rejected earlier in my judgment above, while the sum of HK$704,565 has also been added back to the total marital pot for division, the only remaining issue is whether their payments should be secured by way of a charge against the Husband’s assets in respect of non-payment, and whilst it is not clear from the Wife how this is intended to operate or what it is to be secured against, it is rejected by the Husband as unnecessary or unmerited, as Ms Rattigan submits for the following reasons:

(a) He has already agreed to take out a life insurance policy whereby the Wife will be protected in the event of his death prior to full payment of the lump sum;

(b) If he does not pay the lump sum he will be in breach of a court order and the Wife can simply enforce the same;

(c) If he loses his job or his income is reduced he will have to use his capital to pay for the daughter’s expenses as well as his own and he will have to use it to pay the lump sum to the Wife, hence it cannot be used as security;

(d) He has acted entirely honourably throughout these proceedings, hence there is no justification for seeking additional security against his share of the capital;

(e) The Wife has already received significant capital, so this is not a case where security is merited. 

134.  I agree these are all valid points given the Husband’s various genuine and serious attempts to settle with the Wife throughout the proceedings, and in the absence of any evidence to suggest that he may willingly or deliberately default with those payments which were after all proposed by him in the first place, I am unable to see any justification for them to be so secured as requested by the Wife.

Clean Break/Nominal Maintenance

135.  As noted above, this is the second major issue between the parties, as the Husband insists that upon the Wife being awarded her half-share of the matrimonial assets, there should be an immediate clean break between them with all her claims to be dismissed, while the Wife seeks a nominal maintenance order due to her limited earning capacity and her medical problem.

136.  As pointed out by Mr Pilbrow for the Wife, prior to the enactment of Matrimonial and Family Proceedings Act 1984 in UK, it was the prevalent view in England that a party was entitled to a nominal award and the same could not be dismissed unless with the consent of that party. Whilst those enactments have not been incorporated into the law in Hong Kong, it has been well established that our courts do have the power to dismiss a party’s claims to periodical payments without her consent, as so held by the Court of Appeal in Ngao Tang Yau-lin v Ngao Kai-suen & Another [1984] HKLR 310.

137.  Mr Pilbrow however submits that our courts should follow the guidance of English authorities when considering the appropriate circumstances in which this power should be exercised, of which he refers to Jackson’s Matrimonial Finance, 9^th edition, where it stated at Chap.  3.23:

“Factors commonly relied on by an applicant to support an argument against a clean break include long marriage, applicant’s earning capacity low or impaired, applicant’s insecure accommodation, dependent children of the applicant, applicant’s ill-health and future uncertainties facing the applicant. Factors commonly relied on to support an argument for clean break include short marriage, wife’s cohabitation with another man, applicant’s conduct, absence of children, applicant’s reasonable earning capacity, substantial capital available to the applicant and mutual poverty.”

138.  Ms Rattigan submits for the Husband that given the Wife’s unreasonable stance and terrible vexatious litigation conduct, the Husband remains terrified that the nightmares that this litigation has been for him will never be over, and hence there should indeed be a clean break between the parties upon the Wife receiving her fair share of the matrimonial assets.

139.  Such is his willingness to compromise, Ms Rattigan submits, that the Husband was even prepared to do so over the question of nominal maintenance in order to avoid the second part of the trial and to alleviate the Wife’s concern about her medical condition, by reluctantly proposing an order for nominal maintenance that would be conditional that she could only seek to vary the order if the variation related to her existing medical condition of Interstitial Cystitis, that it was not covered by her medical insurance, and that she had exhausted her funds, yet they were refused by the Wife which cements his fears that she has no intention of ever letting this litigation end.

140.  Furthermore, Ms Rattigan argues, the Husband’s business has gone under and his employment is precarious, whilst this litigation has taken a terrible toll on him and he cannot be left at the risk of further litigation, as he is already bearing enough risk paying all of the daughter’s expenses and agreeing to a lump sum for capitalised maintenance for the Wife for the next 5 years.

141.  On the other hand, Ms Rattigan argues that the Wife has sufficient insurance coverage for her illness and will have assets worth more than HK$32 million including a home in the US plus maintenance for the next 5 years to meet all her needs including medical expenses, as supported by the Duxbury Calculation from BDO noted above, hence Ms Rattigan submits that the court can be well satisfied that the Wife’s needs will be more than met by his proposed settlement, and that this is a case where there must be a finality and a clean break is entirely appropriate.

142.  As I have already remarked above about the Wife’s health problems and their prognosis that at least her emotional and psychological issues should no longer be relevant after the conclusion of her litigation with the Husband, while her pelvic pain will hopefully be also reduced by the further treatments recommended by her doctors, I agree with Ms Rattigan that with the financial award she is to receive from her equal share of the matrimonial assets and the capitalised maintenance proposed by the Husband, and given the huge costs not just financially but more significantly emotionally and psychologically of their disputes on both parties, it is in my judgment that it will be in the best interest in particularly to the Wife that there be a final closure to their litigation by way of a clean break between them without any order for nominal maintenance, conditional or otherwise.   

Costs/Litigation Conduct

143.  As already noted, both sides have raised the issue of litigation conduct as the basis for seeking costs against the other, with the Wife accusing the Husband of failing to provide full and frank disclosure of his means and breaching court orders as to his disclosure, while the Husband is blaming the Wife for adopting an unreasonable and unrealistic approach in the entire proceedings in seeking unnecessary and excessive discovery against him and in refusing to properly respond to his many settlement proposals and failing to make her proposals until only shortly before the trial. 

144.  The Wife’s case of the Husband’s failure to make full or frank disclosure is set out in her Closing Submission from paragraphs 42 to 88 of which I do not propose to set out here, but essentially over his various loans made to his friends and investments which turned to be unsuccessful to which he is said to have failed to disclose in the first place, and then thereafter failed to provide their details notwithstanding various orders requiring him to do so.

145.  To which the Husband refutes and insists that the Wife’s litigation conduct has been a cause of great concern for him throughout the proceedings and the resultant huge legal costs and depletion of their capital assets, as notwithstanding his answer to her first questionnaire on 2^nd October 2016 [B1(3)/424] was accompanied by such extensive disclosure which ran to 8 box files [B1(3) – (10)], the Wife saw fit to employ forensic accountants to examine them and then to seek further discovery from him by way of a schedule of documents that she said were missing from his answers, and for leave to serve further or supplemental questionnaire, all of which he insists he has complied, and still the Wife sought to serve a further questionnaire on those new answers provided by him up to the time of their FDR hearing in March 2017.

146.  Ms Rattigan further argues that the Husband has made every effort to settle this matter from the outset by offering 50% of all the marital assets and reasonable ongoing maintenance in accordance with what he earns, but the Wife made no proposal until her letter of 30^th September 2016, and then her asset schedule and offer seek to place the lowest possible values on those assets that are in her name or to be transferred to her while inflating other assets and seeking to add back that are entirely unjustified.

147.  Whilst I have earlier refused to accept the Wife’s submission that the Husband’s infidelity going back 3 years prior to their separation is a financial misconduct justifying adding back certain assets, I have no doubt about her emotional and psychological distress so exacerbated by the extent of such infidelity and the fact that she was a devout Catholic, but I suspect that they may have also contributed to her apparent bitterness and hostility towards the Husband in the pursuing proceedings, and caused her to not trusting any of his financial disclosure or considering any proposal or offer from him, and instead insisting in leaving no stone unturned in the investigation of his financial resources by adopting what the Husband claims to be senseless forensic investigation into each and every aspect of his finances which led to the huge legal costs in the proceedings and with hers almost doubling his.

148.  The sad fact is that by the time of the second part of the trial in February 2017, the Wife’s costs had run to more than HK$6.7 million while the Husband’s were HK$3.3 million, of which Ms Rattigan argues that this represents an obvious disadvantage to the Husband as the assets held by the Wife would have been at a much higher level but for these costs and thereby increasing the amount he has to pay her by way of lump sum to effect a 50/50 division, and therefore suffers the disadvantage of her excessive spending on legal costs.

149.  Such disparate levels of costs, Ms Rattigan submits, can properly be adjusted, as Sir Peter Singer held in RH v RH [2008] 2 FLR 2142, and Mostyn J in LS v JS [2012] EWHC 2960 (Fam) and in J v J [2014] EWHC 3654 (Fam), and the Husband therefore invites the court to make adjustment to the Wife’s award accordingly as above by taking adjustment of her legal fees into account, in which case he would be willing to forgo asking for his costs to be met in full, as this would be simpler and less costly than taxation proceedings given the Wife’s litigation conduct, but otherwise he would be asking an order that his costs be met in full by seeking to address the court further in relation to the disparate levels of costs and “without prejudice offers” that have been made to the Wife.

150.  There is no question that a combined legal costs of HK$10 million is by any standard a very substantial amount and could have meant an additional HK$5 million for each party in the equal division of the marital assets had they not spent a single cent on legal costs.

151.  Whilst the impact of such costs at about 11.5% of the marital pot then disclosed in the parties’ Form E is nowhere near as calamitous as in some of those cases mentioned by Mostyn J in J v J supra, it would still be relevant to refer to his following statement about the court’s concerns highlighted by such costs expenditure and what should be done about it:

“10. The impact of this costs expenditure is not as calamitous as it was in the infamous case of KSO v MJO & Ors [2008] EWHC 3031 (Fam) [2009] 1 FLR 1036. There the parties spent £553,000 out of a marital pot of £771,000 (or 71.7%), leading Mumby J, as he then was, to compare the case to Jarndyce v Jarndyce, he quoting from Chapter 65 of Bleak House in his Appendix. Here the proportion of the estate wasted is a little under half as much but the costs themselves are nearly twice as much. In his judgment Mumby J stated at para 81:

“Something must be done about the problems highlighted by this and by too many similar cases. We simply cannot go on as we are. The expenditure of costs on the scale exemplified by this and by too many other such cases is a scandal which must somehow be brought under control.”

11. Although the mantra “something must be done” is repeated time and again, nothing ever is. In the ancillary relief field the mantra has been incanted over and over ever since the iconic judgment of Booth J in Evans v Evans [1990] 1 FLR 319. The procedural reforms of 1996 and 2000 tried to address the problem, but with only limited success, as this and many other egregious cases show only too clearly. In the civil sphere the Jackson reforms of 2013 were intended to curb excessive litigation costs…

…

13. In my judgment the time has come when the law-makers in this country, whether they are legislators or judges, must stop saying something must be done and actually do something. The first thing would be to insist, as Lord Neuberger did in the lecture I have cited, on fixed pricing for cases, whether they are ancillary relief cases or anything else…

14. The second measure that needs to be taken is for the court in ancillary relief proceedings to be able to impose at the very beginning of the case a costs cap on what may be charged by the lawyers to their client for each of the three phases of the case. Naturally this cap would be variable if circumstances change but the change of circumstances would have to be a big one for a variation to be allowed.”  

152.  Mostyn J however also recognised that the power of the court to control the costs charged by lawyers to their clients, and if I may respectfully also add, the costs chosen by the parties to spend, is very limited and can usually only be done after the conclusion of the proceedings, or only after the damage has been done, and suggested that only if steps are taken for fixed pricing and judicial costs capping will such problems be arrested.

153.  His Lordship then proceeded to address the problem facing him in the case before him as to who was to be held responsible for running up the costs incurred to £920,000 from total marital assets of £2,885,000 or almost 32% of the assets, and how to resolve the issue:

“54. So I turn to the costs of £920,000. I first remind myself that in order to equalise the costs differential of £182,000 the husband has already paid £91,000 to the wife. Should he pay an additional amount by reference to his litigation conduct within the terms of FPR 28.3(6) and (7)? These provides:

“(6) The court may make an order requiring one party to pay the costs of another party at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them).

(7) In deciding what order (if any) to make under paragraph (6), the court must have regard to –

(a) any failure by a party to comply with these rules, any order of the court or any practice direction which the court considers relevant;

(b) any open offer to settle made by a party;

(c) whether it was reasonable for a party to raise, pursue or conduct a particular allegation or issue;

(d) the manner in which a party has pursued or responded to the application or a particular allegation or issue;

(e) any other aspect of a party’s conduct in relation to proceedings which the court considers relevant; and

(f) the financial effect on the parties of any costs order.”

55. Subsection (f) is highly important. This requires the court to ensure that its primary disposition, which will usually be strongly influenced by considerations of need, is not undone and subverted by a costs order. It was for this reason that the Calderbank principle was abolished (see rule 28.3(8) where Calderbank offers are made inadmissible). Some quarters are calling for the Calderbank principles to be reintroduced (and it is true that the current rules permit it to be used for certain proceedings other than the final hearing of an ancillary relief claim). For my part I will fight its reintroduction to the last ditch. In my opinion it would be retrograde and unconscionable to allow a carefully crafted disposition to be turned upside down by virtue of a without prejudice letter produced after judgment has been given.

56. I am satisfied that in certain respect the husband has been guilty of litigation misconduct which the court should, in principle, take into account under subparagraph (e). I am generally in agreement with the criticisms made of him in the second half of Miss Harrison QC’s written final submissions. It is unnecessary to spell them out here. Some of his misconduct I have already detailed. Most of it happened before the FDR. I remain completely baffled as to how the professionals on each side incurred £700,000 of costs following the FDR. It seems to me to have been an unbridled exercise where the only commodity being charged for was time rather than product.

57. In my judgment, having regard to subparagraph (f), I cannot reflect the husband’s misconduct other than symbolically. Miss Harrison seeks an order that he pays 75% of the wife’s costs. Ignoring amounts disallowed on assessment this would require the husband to pay £276,750. It would elevate the wife’s capital position to £1,350,250 and depress the husband to £614,750. This would be grossly unfair especially where I regard the wife as having litigated almost as disproportionately as the husband.

58. In my judgment the husband’s delinquency should be reflected by a costs order of £50,000 (inclusive of VAT) to be paid from his share of the FF share sale proceeds. The upshot will be that from the pre-costs starting point of £2,885,000 the wife will receive £1,123,500 (38% of the assets); the lawyers and experts will receive £920,000 (31.9%); and the husband £841,500 (29.2%). These figures speak for themselves. Such a result should not be allowed to happen again.”    

154.  Whilst in Hong Kong we do not have the equivalence of FPR 28.3 upon which our courts to have regard to those factors under paragraphs (7) and (8) thereof in deciding on the issue of costs in ancillary relief proceedings by reference to litigation misconduct, I do find them helpful in particularly subparagraph (f) when both parties here have similarly proposed to apply equal sharing in the division of all their marital assets, and that the various agreed and/or proposed terms were designed and accepted by both parties to ultimately achieve fairness between them as to the division of their marital assets and at the same time properly and  sufficiently meeting their respective present and future needs. I therefore propose to apply the same factors where relevant to the facts of this case in the determination of the issue of costs.

155.  While I agree, having rejected the Wife’s case against the Husband on both marital and financial conduct for the reasons already detailed above, there seems little difficulty accepting Ms Rattigan’s criticisms of the Wife’s own litigation misconduct in particularly her refusal or failure to accept the Husband’s further proposal to settle after the first part of the trial and still stubbornly pursued her claims over his various loans at the resumed trial which may justify to be reflected in the costs order, given the unchallenged medical evidence of the Wife’s emotional and psychological state of mind during the proceedings, and on reflection I confess to have the same problem as Mostyn J did in J v J to properly reflect her alleged litigation misconduct through a costs order or as to its quantum if not otherwise just symbolically.

156.  From the evidence before the court in particularly the unchallenged medical evidence, I agree with Mr Pilbrow that the Husband’s extra-marital conduct and activities did have a very material effect upon the Wife’s emotion and psychological health which may have traumatised her in such a way to have affected her various decisions making in the ancillary relief proceedings and which led to what he now argues to be her litigation misconduct.     

157.  It is of course necessary, and is in fact the court’s duty, to look at the facts of each case in the cold light of day, objectively and devoid of emotions, and while it has also been well established by authorities that a party’s conduct such as adultery or extra-marital activities may very well be sufficient to end a marriage but not relevant to the resultant ancillary relief proceedings, as I have so found above, I agree with Mr Pilbrow that even if another wife may have reacted differently, it would in my judgment not just be fair but also necessary to have regard to such impacts on the Wife as to her subsequent conduct in the pursuing ancillary relief proceedings.

158.  I am of course not suggesting that because a party has reacted so emotionally or so traumatised by the breakdown of the marriage that his or her subsequent litigation misconduct would be acceptable or even justified, especially when it results in serious financial costs or losses to the family assets, but that does not follow either that the court should be so oblivious to any such emotional impact on a particular party when determining how best to assign his or her liability in the resultant costs or losses as a result of his or her such reaction, as after all, marriages are essentially about emotions, and the extent and effect of their breakdown must be to each his own, some much more serious than the other, as Thorpe LJ once famously remarked that when marriages break down, sadly some parties are simply emotionally or psychologically incapable of managing their affairs.

159.  Whether this statement applies to the Wife in the present case, and if so how such emotional or psychological state of hers may have affected her decision-making relevant to such litigation misconduct that may justify a costs order against her can perhaps be first gleaned from her narrative affidavit as to how she described about the numerous events during the last years of the marriage which led to her discovery of the Husband’s extra-marital activities and his various financial dealings and their impacts on her emotion.

160.  Of course it was just she said which the Husband quite rightly chose not to waste the court’s time during the trial challenging each and everyone of them on the basis that, and again rightly so, they had fallen far short of establishing marital misconduct on his part as gross and obvious for the court to take into account on the issue of add-backs, nevertheless they are clear evidence from the Wife as to how she had been so affected emotionally and psychologically by these events.     

161.  There is also as noted above clear and unchallenged medical evidence from more than several doctors of the Wife as to the severity of both her physical as well as emotional and psychological problems at the time of the divorce and throughout the ancillary relief proceedings, cumulating of course by that panic attack and depression of hers in the middle of her evidence that broke up the trial into two parts.

162.  Of those medical evidence, it would be suffice to refer again to the one from Dr Li’s report dated 9^th October 2015 [C4(2)/269] to drive home the point that the Wife’s ability to make proper important decisions may have been so hampered as so stated in that report:

“She was noted to have depression issues related to her family and other stressors over years, and recently she was found to have newly symptoms of

1. poor traumatic stress disorder related to divorce and family issues

2. Worsening anxiety and depression, co-morbidity of poor sleep

3. Flare up of her chronic pelvic pain, now near double her dose of potent opioids since July last when seen by me …

In conclusion, with her psychological status and health condition, she requires numerous medicines that influence her cognitive functions and normal daily function. I would strongly advise her that she should not have further major decision making or major life changes, as she is already on a dangerous line of coping for her daily living.” 

163.  It is of course one thing that the Wife’s decision-making ability may have been affected by the medicine which she was taking at the material time, it is in my judgment also relevant to look into her motive or purpose behind her decision to launch such forensic investigations into the Husband’s financial affairs in particularly his various loans and failed investments to determine whether it was her vindictiveness against him for his extra-marital behaviour as suspected by the Husband, or otherwise typical of a wife wishing to maximize her financial claims with legitimate reasons.

164.  To do so it would be relevant to revisit her background and the history of her marriage. The undisputed evidence is that she was a “smart and hard-working girl” who went to a good university with aspiration for a successful career in economic and finance, but after marrying the Husband and moving with his job to places far away from home such as Tokyo and Hong Kong, and with childbirth came the inevitable sacrifice of her own career to become a fulltime mother and housewife wholly dependent on the Husband whose career on the other hand had since flourished.

165.  In 2008, as pointed in the Wife’s narrative affidavit the Husband “had a year so good we could never have imagined it” when he earned US$8 million and thereafter the parties purchased Rumstick House as their family home clearly with the intention of retiring into it. Then sadly came the Wife’s health problems starting with her Interstitial Cystitis and the gradual unravelling of the marriage and the ensuing divorce proceedings, and it was during financial disclosure that she learnt of the full extent of the Husband’s extra-marital activities as well as his various loans made to his close friends some of whom he also claimed to have suffered substantial losses investing in their business.  

166.  It must therefore be set against these circumstances that the Wife be judged whether she should be penalised with costs for her litigation conduct, and notwithstanding my criticisms of the way she had prepared her narrative affidavit and her stance taken against the Husband on both marital and financial conduct, it cannot however be said that her initial challenges against his unrecovered loans and failed investments were not without merits, and having regard to all the circumstances in particular her medical conditions at the material time, it is my judgment that this is one of those exceptional cases in which the Wife deserves the compassion of this court notwithstanding such litigation conduct, and accordingly I propose to make an order nisi that there be no order as to costs of the ancillary relief proceedings as the best mean to finally bring closure to the parties’ broken relationship, knowing that the Husband may on reflection agree that his kindness and generosity shown so readily to his friends should also be extended, again, to the Wife.   

Conclusion

167.  In conclusion and for the reasons given above, and on the basis of the parties’ agreement for equal sharing of their matrimonial assets, and in addition to what has already been agreed by the parties at paragraph 35 above and which I hereby so order, and upon the Husband’s undertaking to pay the Wife 50% of any of the loans owed to him if and when they are received by him, I order that the Husband shall pay the Wife a lump sum of HK$7.8 million to bring her current marital assets from HK$25.1 million to HK$32.9 million being half share of the total assets of HK$65.8 million within 3 months of the decree absolute.     

168.  For the agreed payments of the capitalised maintenance for the Wife by way of a further lump sum of HK$4,560,000 for the next 5 years by 5 equal instalments of HK$912,000 each annually starting from the first anniversary of the date of this judgment, I also so order upon the Husband’s undertaking to take out a life insurance policy in the Wife’s favour so that in the event of his death within the 5 years period she will stand to receive the balance of the said sum with the costs to be borne equally by the parties, with of course liberty to apply.  

169.  These terms shall be in full and final settlement of the parties’ claims for ancillary relief against each other as a clean break between them, which claims shall be dismissed.

170.  As for the support of the daughter, I also accept the Husband’s undertaking to continue to be wholly responsible for her until she finishes university. Accordingly I also make the Section 18 declaration.

171.  As indicated above, I also make an order nisi that there be no order as to costs of the ancillary relief proceedings between the parties, which order is to be made absolute at the expiration of 21 days, and should there be any application to vary the order nisi, I suggest that it be done on paper and for the parties to agree on a time table for filing their written submission.

172.  Last but not least, I am most grateful to counsel for both sides for their most valuable assistance rendered to the court and in particularly for the restrains and discipline they conducted their argument and cross-examination during the trial given the obvious emotions exhibited by the parties as well as the Wife’s health conditions.