NKPL v. NSF

FCMC 14532 / 2019

[2022] HKFC 140

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 14532 OF 2019

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J U D G M E N T
(Preliminary Issues and Ancillary Relief)

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Introduction

1.  This is the trial of the preliminary issues relate to a property situated at Tsuen Wan which was the former matrimonial home (“FMH”) of the parties and the Petitioner’s (“Wife”) application for ancillary relief and maintenance for the two children of the family.

2.  The FMH is registered under the sole name of the Respondent (“Husband”).

Background

3.  The parties married in May 2015. Both of them are now 35 years old. The Wife is working as a manager in a learning centre. The Husband is a police constable. There are two children of the family, a boy who is now 5 and a girl who is now 4 (“Children”).

4.  The Wife petitioned for divorce on 10 December 2019 on the ground of two years’ separation since 3 April 2017, which was before the birth of the daughter. Decree Nisi was granted on 7 July 2020.

5.  On 7 August 2020, by consent of the parties, His Honour Judge CK Chan ordered that joint custody of the Children be granted to the parties with care and control be granted to the Wife and reasonable access to the Husband. The Children are now studying and living with the Wife at the maternal grandparents’ flat in Ap Lei Chau.

6.  Pursuant to the Order of His Honour Judge S. Lo dated 23 April 2021, the Husband was ordered to pay interim maintenance of the Children in the sum of HK$10,000 per month. The Husband also undertook to pay for the daughter’s insurance premia.

Preliminary issue

7.  By a Consent Order dated 23 April 2021, the Husband’s mother was joined as intervenor (“Mother”) in these proceedings, and asked for the beneficial ownership of FMH to be determined as preliminary issue.

The Mother’s case

8.  The Mother said she is one of the beneficial owners of the FMH since its acquisition, the Wife and the Husband merely held the FMH interest on trust for her.

9.  In 2014, the Mother learnt that the Husband wanted to purchase a property to be used as the parties’ temporary resident before a married quarter was assigned to the Husband.

10.  The Mother had some savings in her bank account, and she considered that it would be beneficial to invest money in a real estate property than leaving it in a savings account. She therefore suggested providing the Husband HK$1 million to purchase a property. She saw her contribution as a long term investment.

11.  The Husband planned to arrange a mortgage loan from the bank, however as the Mother did not wish to shoulder an ongoing liability (given she was 67 in 2015), it would be difficult if not impossible for her to obtain a mortgage loan.

12.  The Mother decided not to be the registered co-owner of the FMH. However, due to the Husband’s low income at that material time, the bank suggested the Husband to ask someone to be the guarantor of the mortgage loan. Both the Husband’s eldest brother and the Wife refused to act as guarantor. As an alternative, it was suggested that the Wife could be added as a co-owner, so that the parties could be co-borrower of the mortgage loan. The FMH was then acquired in the names of the parties.

13.  As it was the common intention of the parties that the Mother would have a beneficial interest in the FMH to the extent of her contribution, the following events took place:

(1)  The Mother paid a total sum of HK$1,500,000 as the down payment of the FMH and other expenses, including legal costs;

(2)  The parties applied for mortgage to facilitate the acquisition of the FMH; and

(3)  The parties were allowed to stay in the FMH until the Husband was allocated a married quarter. After a married quarter was assigned to the Husband, the FMH would be let out for earning rental income.

14.  According to the Mother, the purchase price of the FMH was settled and paid in the following manner:

Initial deposit paid by the Mother	HK$100,000
Further deposit paid by the Mother	HK$355,200
Down payment and/or part of the purchase price paid by the Mother	HK$910,400
Sub-total	HK$1,365,600
Balance of purchase price paid by the mortgage	HK$3,186,400
Total:	HK$4,552,000

15.  The Mother in her Points of Claim pleaded that her interest in the FMH is either:

(1)  30% of the purchase price or market value of the FMH free from encumbrance, as she financed the purchase of the FMH to the extent of HK$1,365,600; or

(2)  32.95% of the purchase price or market value of the FMH free from encumbrances, as she financed the purchase of the FMH to the extent of HK$1,500,000.

16.  The Mother said it was the Husband who was solely responsible for the repayment of the mortgage.

17.  Around August 2018, the Mother learnt that the relationship between the Husband and the Wife had worsened to the stage of imminent divorce. The Husband said he needed to pay HK$700,000 as lump sum payment in full and final settlement of the Wife’s claims for maintenance and ancillary relief. The Wife in return would transfer her half share of legal title in the FMH to the Husband.

18.  Since the Husband did not have the means to settle the total sum of HK$700,000 to be paid to the Wife, the Husband decided to take out a new mortgage on the FMH.

19.  In September 2018, the Husband managed to discharge the mortgage with Standard Chartered Bank and re-mortgage the FMH to HSBC under his own name. The loan amount of the HSBC mortgage was HK$3,588,630. He continued to be responsible for the mortgage repayment.

20.  On 18 September 2018, the Wife assigned her half share of interest in the FMH to the Husband.

21.  In December 2018, the Husband was allocated a flat at the married quarters. Upon the Husband moved into the quarters, the FMH was let out by the Husband for earning income. The rental was deposited into the Husband’s bank account and he utilized the rental to repay his mortgage and other expenses of the FMH.

22.  The Mother’s counsel in his closing submissions stated that the Mother is now only claiming 30% beneficial interest in the FMH.

The Husband’s Case

23.  The Husband agreed that it was the Mother who suggested that she could help him to purchase the FMH. There was, however, no express discussion amongst the parties about any common intention or issues in relation to trust or beneficial ownership in the FMH.

24.  The Husband told the Wife that the Mother would help the parties to purchase a property, and the parties then started to look for suitable property.

25.  The Husband initially wanted to purchase the FMH in his sole name, however he could not pass the stress test and it was suggested that he should either find a guarantor or add the Wife to be a co-owner. At the end, the Wife was added as a co-owner.

26.  It is not disputed that the Wife did deposit a sum of HK$5,000 into the parties’ joint account on a monthly basis. The Wife stopped her contribution in September 2018, after she assigned her legal title in the FMH to the Husband.

27.  The Husband said the Wife’s monthly contribution was used to settle utilities expenses. The Husband was the one responsible for the monthly mortgage repayment of HK$12,000.

28.  The Husband said he would not treat the Mother’s financial assistance as a gift to him, because he was supposed to be the one to take care of the Mother. He agreed that a total sum of HK$1,500,000 was paid by the Mother for the purchase of the FMH.

29.  The relationship between the parties turned sour since mid-2016, when the Wife was already pregnant with their son. After their son was born in December 2016, the Wife and the son moved to the maternal grandparents’ place.

30.  In or around 2018, the parties decided to divorce and it was agreed that the Husband should make a lump sum payment of about HK$700,000 to the Wife as full and final settlement of her maintenance and ancillary relief claim.

31.  In September 2018, the Husband managed to re-mortgage the FMH and paid an amount of HK$651,129.04 to the Wife. As a result of the said payment, the Wife assigned her legal title in the FMH to the Husband.

32.  The Husband said the Mother had no doubt contributed to the down payment of the FMH, hence the Mother should be one of the beneficial owners of the FMH to the extent of her contribution, which is 30% of the purchase price.

The Wife’s Case

33.  The Wife in her pleaded case denied that the Mother has any interest in the FMH, nor the Mother had any role to play in the purchase of the FMH.

34.  Before the parties got married in 2018, it was the Husband who insisted that they should purchase a property. The Husband said he would resolve the down payment issue.

35.  The Wife initially claimed that she had no knowledge that it was the Mother who settled the down payment. The Wife said the purchase of the FMH was jointly decided and chosen by the parties.

36.  The Wife criticized the Mother for changing her case from “being the sole beneficial owner” to “being one of the beneficial owners”.

37.  The Wife also relied on the defence of illegality. The Wife said at the time of the purchase of the FMH, the Husband signed a statutory declaration to the Inland Revenue Department which stated:

(1)  he did not own any other property in Hong Kong;

(2)  he was a beneficial owner of the FMH; and

(3)  he was representing himself to the purchase of the FMH.

38.  The Wife said if the Mother was indeed one of the beneficial owners, then the Husband must be making a false declaration when he said he was representing himself to the purchase. The Mother would then be in joint enterprise to commit criminal offence.

39.  The Wife said the Husband was able to pass the bank’s stress test for obtaining the mortgage loan, but eventually she insisted that they should be co-owners of the FMH, because it was their consensus that they should encounter all difficulties and to contribute to the family expenses, including the purchase of the FMH together. Therefore, they purchased the FMH as joint tenants.

40.  The Wife submitted that if the Court accepts that the Mother did contribute to the down payment for the purchase of the FMH, such money was either a gift or a loan to the Husband.

41.  The Wife said the parties had a joint account with the Standard Chartered Bank. When the joint account was opened, the Wife had deposited a sum of HK$300,000 into the joint account. The said sum was borrowed from her parents. Consequently, she made a contribution of HK$5,000 per month, while the Husband contributed a sum of HK$12,000 per month. Various family expenses were paid through this joint account, including mortgage repayments.

42.  The Wife claimed she also paid around HK$3,000 per month as the family’s sundries expenses.

43.  In January 2018, the daughter of the family was born and the Husband wanted to award her for giving birth to the Children and all her pain and suffering during the process. The Husband said he had nothing to offer but to re-mortgage the FMH, and gave a lump sum payment to the Wife as award and compensation.

44.  However, the Husband also said the Wife must assign her legal title in the FMH to him. The Wife therefore assigned her interests in the FMH to the Husband.

45.  As a result of the re-mortgage, the Husband got HK$651,129.04 in cash. He gave the whole sum to the Wife. The Wife made a payment of HK$250,000 to her parents to repay their loan of HK$300,000.

46.  The Wife denied that there was ever any nuptial or post-nuptial agreement as suggested by the Husband.

Issues

47.  Based on the parties’ pleadings, these are the issues to be determined by the court:

(1)  Did the Mother pay for the down payment of the FMH?

(2)  Was there an understanding or arrangement between the Mother, the Husband and the Wife that the FMH would be placed in the parties’ joint name for the purpose of facilitating their application for mortgage and the parties would hold the FMH on trust for the Mother to the extent of her contribution?

(3)  In light of my findings on (1) and (2) above, has the Mother made out a case on common intention constructive trust?

(4)  Alternatively, has the Mother made out a case on resulting trust?

The Legal Principles

48.  It is trite that where there is sole legal ownership (as is the present case), the burden of proof rests squarely on the Mother to prove on a balance of probabilities that beneficial ownership is different from the legal ownership: Stack v Dowden [2007] 2 AC 432 at [56].

49.  The law on constructive/resulting trust are well settled and have been succinctly summarized by Coleman J in Lam Ka Kui v Choi Yuen Ling [2020] HKCFI 2647; HCA 537/2017 (unrep., 23 October 2020), [8]-[13] and [15]:-

8. Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary: see, for example, Luo Xing Juan Angela v Estate of Hui Shui See Willy, deceased [2009] 12 HKCFAR 1 at §38.

9. Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (1) the common intention, (2) the claimant’s detrimental reliance on their common intention, and (3) the unconscionability of the property owner departing from it.

10. The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership. The focus is on the intention of the parties at the time of acquisition of the asset. Contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.

11. Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties’ conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

12. In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 at §§2.3-2.4, Cheung JA identified two situations where a common intention constructive trust may arise. The first is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The finding of such an agreement or arrangement can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property, and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust.

13. A resulting trust arises by virtue of the plaintiff’s contribution in money or in some other way towards the property’s acquisition. Equity holds the legal owner to be a trustee of that property for the plaintiff in an appropriate share, giving effect to the parties presumed intention. Particularly in a domestic context, but also generally, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust.

15. Reference can also be made to Stack v Dowden [2007] 2 AC 432, where at §§68-69 it was emphasised that an intention to have beneficial interest different from legal interest in property is unlikely, and the task of showing that should not be lightly embarked upon. It was recognised that, in family disputes, strong feelings are aroused when couples split up which can often lead the parties, honestly but mistakenly, to reinterpret the past in self exculpatory or even vengeful terms. If a difference is to be found between the beneficial and legal interest, clear evidence will be required. Unequal contributions to the purchase price of property will not likely be enough to move away from the starting point that equity follows the law.

50.  The disputes here involve mother, son and former daughter-in-law, who were having a close relationship before the breakdown of the marriage. I have borne in mind that “members of the family dealt with each other on the basis of trust, not mistrust. They could not have envisaged litigation in the future, and they would not have generated records to protect themselves out of the blue” when assessing the evidence. See Cheung Lai Mui v. Cheung Wai Shing & Ors, unreported, HCA 1562/2012, 10 April 2017 at [95].

Analysis of factual evidence

51.  Each party puts forward their own interpretation to the relevant facts or conduct of the other party. I do not find it necessary or useful to set out my consideration of each and every allegation of facts and/or submission made by the parties. Suffice to say, I have considered them all, and would deal with the more significant points which I regard as being essential for a proper determination of the disputes herein.

Credibility

52.  While it is a fact that the Mother had changed her case from being the sole beneficial owner of the FMH to beneficial ownership to the extent of her contribution to the purchase price of the FMH, I nevertheless find her to be an honest witness.

53.  The Mother worked in the wet market throughout her life. At the beginning, she assisted her brother to run a poultry stall and later her husband who operated a beef stall. The Mother was trying her best to tell the court what she remembered. She had nothing to hide from the court.

54.  The Husband is an honest and credible witness who was forthright and not shaken during his cross-examination.

55.  The Wife’s viva voce evidence contradicted with her pleaded case and affirmations. Below are examples of her contradictory evidence:

(1)  It is the Wife’s pleaded case that she had no knowledge of the Mother’s contribution, however, when she testified in court, she admitted that she knew the Mother had contributed to the down payment, although she was not certain about the exact amount of her contribution.

(2)  In her affirmation she said it was her parents who contributed to the costs of the wedding photo shooting, yet in her oral evidence, she said she was the one who paid for such expenses.

(3)  In her Form E, she claimed that she did not own any gold ornaments, but when she gave evidence she admitted that some of the gold ornaments given by the Mother is now under her bed.

(4)  She produced invoices to show that the son signed up for summer course at the company she worked for. She said her son’s English had improved after attending the course. The Husband’s counsel pointed out that indeed at the material time of the alleged summer course, all learning centers were closed under COVID-19 restrictions. The Wife did not deny this fact.

I am of the view that the Wife is an untruthful and unreliable witness, and I do not accept what she alleged as true and/or logical.

56.  While the Wife alleged that there may be an issue about making false statements to the Inland Revenue, it seems that these statements were not usually made with any ill intent. For the purpose of this trial, I do not consider it is helpful to go into details of those allegations.

Payment of Purchase Price

57.  In considering this issue, I bear in mind that although there is no evidence as to the Mother’s savings between 2014 and 2015, the available evidence does suggest that she used to work in the wet market and owned two properties. She has a property in Tin Wan, which she allowed her eldest son to use it as his matrimonial home. It is not unusual for a working lady to accumulate some wealth over all these years.

58.  The Mother’s case is straight forward: she contributed to the down payment with her own savings but agreed to put in the parties’ name for the purpose of obtaining mortgage, an arrangement which is quite common in Hong Kong amongst family members.

59.  Copies of application for casher’s orders, cashier’s orders and the said cashier’s orders being deposited into the Husband’s bank account were produced as evidence in support. The Wife also acknowledged that the Mother had contributed to the down payment.

60.  Objectively speaking, at the time of purchasing the FMH, the Husband was at the age of 29. He was a police constable with a monthly income of HK$26,000. It is not disputed by the parties that the Husband’s eldest brother and the Wife refused to act as guarantor of the mortgage. If the Husband was indeed financially sound and strong, the bank would not have asked for a guarantor of the mortgage loan.

61.  Further, the Wife acknowledged that at the time of the acquisition of the FMH, the parties did not have sufficient financial means to purchase property.

62.  The Wife said she asked the Husband how could they afford to pay for the purchase (“買樓我地邊有錢？”) and it is the Wife’s evidence that the Husband replied that he had a way (“得啦，我有辦法”).

63.  At the trial, the Wife admitted that the Mother did contribute to the purchase price of the FMH.

64.  In light of the above evidence, I accept that the Mother has discharged her burden of proving that the down payment of the FMH was paid by her.

Alleged Common Intention / Contribution by the Mother to the acquisition of the FMH

65.  In paragraphs 69-70 of the judgment of Stack v Dowden, Baroness Hale set out a non-exhaustive list of factors to ascertain the true intention of the parties in a domestic context as follows:

(1)  any advice or discussions at the time of the transfer which cast light upon their intentions then;

(2)  the reasons why the home was acquired in their joint names;

(3)  the reasons why (if it be the case) the survivor was authorised to give a receipt for the capital moneys;

(4)  the purpose for which the home was acquired;

(5)  the nature of the parties' relationship;

(6)  whether they had children for whom they both had responsibility to provide a home;

(7)  how the purchase was financed, both initially and subsequently;

(8)  how the parties arranged their finances, whether separately or together or a bit of both;

(9)  how they discharged the outgoings on the property and their other household expenses; and

(10)  the parties' individual characters and personalities.

66.  On this issue, I again find that the Mother has discharged her burden of proving the pleaded understanding or arrangement between her, the Husband and/or the parties at the time of the acquisition of the FMH for the following reasons:

(1)  Both the Mother and the Husband admitted that there were no discussions between them as to whether and to what extent the Mother will have an interest in the FMH. Since there was no such evidence, one asks whether a common intention could be inferred from the conducts of the parties.

(2)  According to the Mother and the Husband, the Mother did visit the FMH prior to its purchase. The Husband did seek the view of the Mother before the FMH was purchased. Although the Wife said she did not view the FMH with the Mother, she however admitted that she would not know if the Mother had viewed the FMH with the Husband.

(3)  I find the Mother and the Husband are honest witnesses and I accept their case that the Mother and the Husband did view the FMH before purchase. Both of them could provide details of viewing of the FMH, while the Wife simply put forward a bare denial case.

(4)  The parties agreed that once the Husband was assigned a married quarter, the parties would move out from the FMH and the FMH would be made available for letting. These facts were made known to the Mother before the acquisition of the FMH.

(5)  It is not disputed that it was the Husband who initiated the purchase of the FMH. The Wife was added as co-owner because the Husband had difficulty in obtaining mortgage in his sole capacity.

(6)  I also accept the Mother and the Husband’s case that many communications between the two of them was made in the absence of the Wife. The Wife in her oral evidence accepted that she knew of the Mother’s contribution to the purchase price of the FMH, hence I find that the Wife knew that the Mother has an interest in the FMH.

(7)  Throughout the marriage, the Husband contributed HK$12,000 into the parties’ joint account, while the Wife contributed HK$5,000. It is undisputed that the Husband was the one who managed the mortgage application and repayment all along. The Wife’s contribution of HK$5,000 obviously is insufficient to settle the mortgage repayment, therefore I accept the Husband’s case that the sum of HK$12,000 was used to repay the mortgage, while HK$5,000 was applied to settle the family’s utilities expenses.

(8)  The Mother is not a wealthy lady and the sum of HK$1.5 million is a substantial sum as far as she is concerned.

(9)  The Mother has four sons and she has never given HK$1 million to any of her sons as wedding gift. For example, her eldest son is allowed to stay in the Mother’s Tin Wan property as his matrimonial home by paying monthly rental to her.

(10)  While the Mother agreed that she did not get involve in matters, such as renovation of the FMH, yet before the Husband applied for re-mortgage and letting out the FMH, the Husband would inform the Mother and seek her consent. If the Mother had no interest in the FMH, the Husband would not need to consult the Mother and inform her about the matters related to the FMH.

(11)  It is logical for the Mother to say that she expected the parties would have taken into account of her contribution to the acquisition of the FMH, and that the Husband and/or the parties hold the FMH on a common intention constructive trusts for her.

(12)  If the Mother’s contribution to the acquisition was indeed a gift as suggested by the Wife, one would expect the parties to express their gratitude to the Mother at some stage. There is however no such evidence before the court.

(13)  At the trial, the Wife admitted that she knew the Mother did contribute to the acquisition of the FMH, and she no longer said that it was a gift to the Husband or the parties.

(14)  It is common that people in the Mother’s generation would have preferred to invest money in a real estate property instead of leaving in a savings account. I have no hesitation to accept the Mother’s case that the sum of HK$1.5 million was not meant to be a loan or a gift to the Husband or the parties.

(15)  The Wife submitted that it was the Husband’s plan to hold the FMH until his retirement, in that case, the Mother may never get any return during her lifetime. I do not see any force in this submission. There is still another 20 years more to go, before the Husband retires. As the Husband explained, the FMH could be put on sale anytime and no one knows what is going to happen in the future.

67.  The Mother submitted that her interests in the FMH should be free from encumbrances. I do not accept the Mother’s submissions in this respect. It is indeed the Mother’s case that she is fully aware of the FMH would be financed by a mortgage to complete the purchase. In the circumstances, it would be unfair to disregard the existence of the mortgage.

68.  For the reasons articulated above, I am satisfied that the Mother has discharged her burden of proof that the Husband and/or the parties did hold the FMH on constructive trust on her behalf to the extent of her contribution, i.e. 30% of the purchase price. The Mother’s interest is subject to mortgage loan.

Resulting Trust

69.  Since the Mother has succeeded in establishing her beneficial ownership of the FMH by way of constructive trust, I need not rule on her claim based on resulting trust.

Disposition

70.  For the reasons set out above, the Mother’s claim of 30% interest in the FMH succeeds.

71.  I grant the following orders in respect of the preliminary issue:

(a)  a Declaration that the Mother has 30% beneficial interests in the FMH; and

(b)  the Husband shall account of all benefits, monies, income and/or profit that may have been received by him in connection with the FMH to the extent of the Mother’s 30% beneficial interest in the FMH.

Costs

72.  There is no reason why costs should not follow the event. Therefore, I shall make a costs order nisi that the Wife shall bear the costs of and occasioned by the Mother and the Husband of the trial of the preliminary issues, including all costs reserved, to be taxed if not agreed, with certificate for counsel. The costs order nisi will be made absolute within 14 days from the date of this judgment.

Ancillary Relief

73.  I now turn to the Wife’s application for ancillary relief and maintenance for the Children of the family. It is common ground that the Wife’s ancillary relief should be dealt with on a clean break basis.

The Wife’s open proposal

74.  The Wife proposed that: -

(1)  the Husband shall pay a lump sum of HK$1,000,000 upon granting of Decree Absolute; and

(2)  the Husband do pay periodical payments to the Wife for the maintenance of the Children in the sum of HK$14,000 per month, each child HK$7,000 per month, commencing from the date of Decree Absolute until the Children reach the age of 18 or ceases full time education, whichever is the later.

The Husband’s open proposal

75.  The Husband proposed that:-

(1)  the Husband do pay a lump sum of HK$300,000 as full and final settlement of the Wife’s maintenance; and

(2)  the Husband do pay a periodic payment of HK$5,000 to each child (HK$10,000 in total) a month as their maintenance, until they reach 18 years old.

The Law

76.  The governing principles in relation to the distribution of the family assets in the dissolution of marriage are set out in section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), Cap. 192 and the Court of Final Appeal’s decision in LKW v DD (2010) 13 HKCFAR 537, laid down ‘4 Principles’ and ‘5 Steps’ as “guidelines” as to how section 7 of the MPPO shall be approached.

77.  The relevant law and legal principles in respect of the jurisdiction of the court in granting financial provision were succinctly summarized in JTMW v NAV [2022] HKFC 46 by His Honour Judge Ivan Wong as follows:

24. The jurisdiction of the court in granting financial provision for a party is governed by section 4 of the Matrimonial Proceedings and Property Ordinance (Cap 192) (“MPPO”). Pursuant to sections 6 and 6A of the same legislation, the court has the power to grant orders for transfer, settlement or sale of properties.

25. The principles upon which this case is to be considered are the conventional ones, namely those set out in section 7 of MPPO which confers a broad discretion on judges dealing with ancillary relief. That said, these principles are to be interpreted in the light of the Court of Final Appeal judgment in LKW v DD (2010) 13 HKCFAR 537. In that case, Riberio PJ referred to the four principles which are applicable to all ancillary relief proceeding, viz, (1) the objective of fairness: [56], (2) rejection of discrimination: [57], (3) the yardstick of equal division: [58] – [61] and (4) avoidance of ‘minute retrospective investigation’: [62] – [69].

26. Ribeiro PJ further set out the steps to be taken by the courts in undertaking the exercise. In brief, they are:

(1) The ascertainment of the financial resources of each of the parties calculated as at the date of the hearing: [71] to [73];

(2) The assessment of the parties’ financial needs. If the total resources are not enough to meet the parties’ needs, the s.7 exercise should stop at this step and there is no room to apply any sharing principle: [74] to [79];

(3) If surplus assets would remain after the parties’ needs have been catered for, the next step should normally be for the court to apply the sharing principle to the parties’ total assets, with a yardstick of equal division as part of that principle. This means that the total assets should be divided equally between the parties unless there is good reason for departing from an equal division: [80] to [82];

(4) In considering whether good reasons exist for departing from equal division, the answer is to be found in the terms of s.7 and the implicit objective of a fair distribution of the assets. Factors like source of the assets, conduct, financial needs, duration of the marriage, contribution to the family and compensation are all material considerations: [83] to [130]; and

(5) The weight to be given to each of the factors is a matter of discretion for the court: [131].

27. Lastly, I do bear in mind the reminder given by Thorpe LJ in Parra v Parra [2003] 1 FLR 942 at [22] that the proper judicial task of the court is to exercise a singularly broad judgment that obviates the need for the investigation of minute detail.

78.  The court will need to consider whether there are any surplus assets available for division by the parties. If the assets are only adequate to cover the needs of the parties, the court need not consider the division of matrimonial assets.

Issues

79.  The main issues to be considered are: -

(1)  Identification of assets;

(2)  What is the earning capacity of the parties?

(3)  What are the needs of the parties?

(4)  How much maintenance should the Husband pay for the Children going forward?

(5)  Whether there are any surplus assets for division?

(6)  What is an appropriate division of assets in the circumstances, bearing in mind the principles identified in the Court of Final Appeal’s decision in LKW v DD?

Identification of assets

80.  The parties agreed that the value of the FMH is HK$5,800,000, and after the deduction of the outstanding mortgage balance, the value of the FMH is HK$2,486,870.25. Given the fact that I find the Mother has 30% beneficial interest in the FMH, hence the Husband’s share in the FMH worth HK$1,740,809.18 (i.e. HK$2,486,870.25 x 70%).

81.  Further, the parties used to maintain a joint bank account with the Standard Chartered Bank. The Husband said the Wife had withdrawn a total sum of HK$148,480 from the joint account without his consent.

82.  At the trial, the Wife said those sums withdrawn from the joint account was reasonable as they were either money given to her sister, as wedding gift to her sister and given to her father for medical purpose. I agree with the Husband’s counsel submissions that whether there were valid or legitimate reasons for the Wife to withdraw the money from the joint account was irrelevant. The issue here is whether such withdrawals were done with the consent of the other stakeholder, i.e. the Husband.

83.  There is no evidence to suggest that the Wife had obtained the Husband’s consent before withdrawing the money from the joint account.

84.  I would take into account of the Wife’s above behaviour which is regarded as financial misconduct having a direct effect on the net assets of the parties, and would consider to depart from equality of division by way of adjustments to achieve a fair result if the assets exceed the needs of the parties: see MKKWH v RKSH [2013] HKFLR 540.

85.  The Husband also suggested that the amount of HK$80,500, being “lai-see” money in the Children’s bank account should be taken into account in the ancillary relief as well. With respect, I fail to see any reason why the Children’s money should be put into the matrimonial pot.

Liabilities

86.  The Wife is debt-free. While the Husband said he had borrowed a total sum of HK$577,938.58 from his family members and fiancée for payment of legal costs, tax payment, household expenses, daily general expenses and payment of partial interim maintenance.

87.  Loans for payment of legal costs, tax payments, daily general expenses and household expenses are not family liabilities, therefore I would exclude these items as the family’s liabilities.

88.  As for the alleged loan for payment of partial maintenance in the sum of HK$3,475, and an unidentified sum from the Husband’s brother, I would again exclude these items from liabilities as there is no evidence to show that these sum were applied as maintenance payment.

89.  The Husband also claimed that he owed the Mother a sum of HK$220,746.58, being money obtained from the re-mortgage. It is never the Mother’s case that she lent money to the Husband. The Mother’s interest in the FMH is set out in my above decision and I consider the Husband’s case in this respect is devoid of merits.

The parties’ MPF

90.  The illiquidity nature of pension or MPF was discussed by His Honour Judge Ivan Wong in SSLT v SMFC, [2019] HKFC 250 at [44] to [48] and Her Honour Judge Grace Chan in LWF v WST, [2021] HKFC 164 at [48] to [50].

91.  The parties are now in their mid-30s. The Husband, as a police constable normally is expected to retire at the age of 55, but there would be an option to delay retirement and continue to work until the age of 60. The Wife would probably work until the age of 65. Taking into account of all the circumstances of the case, I give a discount of 60% on the face value of their MPF.

The Wife’s income and earning capacity

92.  The Wife is working as a manager of a learning center. According to her Form E filed on 24 January 2020, her 4^th affirmation and her Counsel’s closing submissions, the total value of her assets is HK$394,127.72, including HK$148,273.75 in banks, HK$141,094.20 being value of insurance policies, HK$161,899.43 being value of her MPF (40% of which is HK$64,759.77) and HK$40,000 for the gold ornaments. She receives a monthly income of HK$22,000.

93.  At the trial, the Wife admitted that she has in possession of four gold ornaments. There is no evidence as to the value of the gold ornaments. The Wife proposed the gold ornaments worth HK$40,000 in total, while the Husband claimed that the gold ornaments worth HK$80,000.

94.  In the absence of any evidence as to the value of the gold ornaments, I would accept a valuation of HK$40,000.

95.  The Wife said when the son entered primary school, she would resign from the current full time job and find a part time job in order to follow up the son’s homework. Therefore, her future income is expected to reduce by half.

96.  The Wife does have an earning capacity and it should be noted that going forward the onus for providing for the Children lies with both parents. Before separation, the Wife also contributed to the family expenses (including the Children’s expenses), her responsibility would not cease after separation.

97.  I appreciate that the Wife would like to spend more time with the Children as they go to primary school. Unfortunately given the present financial situation of the parties, it seems that this will not be possible. In such circumstances there may be no alternative, but for the Wife to continue to work in a full time capacity.

The Husband’s income and earning capacity

98.  The Husband is working as a police constable. According to his Form E filed on 13 March 2020, his 2^nd affirmation and his share in the FMH as assessed by the court, the total value of his assets is HK$2,194,057.77, including his 70% beneficial interest in the FMH in the sum of HK$1,740,809.18 (after deduction of mortgage), HK$18,066.32 in banks, $7,000 personal belongings, and HK$1,070,455.69 being value of his MPF (40% of which is HK$428,182.27).

99.  His monthly income, comprising of basic salary and overtime pay less MPF, was averaged to HK$40,095.

The matrimonial pot

100.  The total value of the Wife’s assets is HK$394,127.72 and the total value of the Husband’s assets is HK$2,194,057.77. The matrimonial pot is therefore worth HK$2,588,185.49.

The Wife’s financial needs

101.  The Wife said her monthly expenses are HK$19,705.49, with breakdown as follows:

	Amount (HK$) as claimed by Wife	Husband proposed amount (HK$)
General
Utilities	1,000
Food	1,000
Sub-total	2,000
Personal
Meals out of home	3,000
Transport	600
Clothing/Shoes	600
Personal grooming   (including haircut and cosmetics)	300
Entertainment/presents	1,000	500
Holiday	1,000	500
Medical/Dental	500
Tax	172.83
Insurance premia	1,866
Contributions to parents	4,000
Rent (i.e. $14,000 x 1/3)	4,666.66	0
Sub-total	19,705.49

102.  The Wife said she is able to pay for her own expenses without any maintenance by the Husband, however she would not be able to afford the Children’s expenses. As such, the Wife submitted that this is a “sharing” case, instead of a “need” case.

103.  The Wife said in the future, she would need to rent a flat in the size of 200 to 300 sq ft in Aberdeen or Ap Lei Chau. The rental is around HK$14,000, 2/3 of which should be attributed to the Children and 1/3 as her portion.

104.  The Wife also said after she moved out from her parents’ property, she would need to hire a domestic helper to take care of the Children, as such there would be an expense of around HK$4,000 per month.

105.  In so far as the Wife’s personal expenses are concerned, I note that she has included a contribution to her parents of HK$4,000 per month. The Wife explained that such sum is paid to her parents as contribution to the living expenses for herself and the Children.

106.  Since the Wife and the Children are staying at her parent’s place, it is reasonable for the Wife to contribute HK$4,000 to her parents as living expenses. I allow this item.

107.  The Husband accepted most of the items of the Wife’s general and personal expenses, save the entertainment and holiday expenses.

108.  I am of the view that the entertainment and holiday expenses of the Wife are reasonable, hence I will allow them in full.

109.  The Wife earns an income of HK$22,000, and after deducting the allowable expenses in the sum of HK$19,705.49, she would have HK$2,294.51 left.

Children’s expenses

110.  The Wife sets out the Children’s expenses as follows:

	Amount (HK$) as claimed by the Wife	The Husband proposed amount (HK$)
Children
School fees	3,476	3,476
Extra tuition fees	2,800	1,000
School books and stationery	1,000	1,000
Daughter’s AIA Insurance Policy		527 (paid by way of   contribution to insurance)
Medical/Dental	400	635 (paid by way of   contribution to insurance)
Entertainment/presents	1,000	1,000
Holidays	1,000	1,000
Clothing/Shoes	1,000	1,000
Transport	500	500
Child-minding fees	4,000	2,000
Uniform	180	180
Others (specify)   (milk powder, napkins)	1,000	1,000
Rent ($14,000 x 2/3)	9,333	0
Sub-total	25,689	13,318

111.  The Husband is of the view that HK$4,000 of child-minding fees is excessive. The Wife explained that this sum is currently paid to her mother for the purpose of taking care of the Children.

112.  The Husband admitted that before separation, he did pay HK$4,000 to the Wife’s mother as child-minding fees. I accept the Wife’s case that it would be unreasonable to expect her mother to take care of the Children on an entirely voluntary basis. I will allow this item in full.

113.  In the future, should the Wife hire a domestic helper to replace her mother to take care of the Children, the said sum of HK$4,000 is still a reasonable amount.

114.  The Husband said the Children had been living at their maternal grandparent’s place since their birth, hence it is unreasonable for the Wife to claim that she needed to rent a separate place for the Children.

115.  It is a fact that since the birth of the Children, they have been living at the maternal grandparents’ place. The Wife also spent money to renovate a room at the maternal grandparent’s place.

116.  However, I accept that in the long run the Wife and the Children would need an accommodation. From the evidence before me, it is clear that the parties planned to live in separate accommodation after their marriage. It would be unfair to expect the Children to reside in their maternal grandparents’ place going forward. It would equally be unfair to the maternal grandparents to shoulder the burden in providing a permanent residence to the Wife and the Children. In the circumstances, I find that the Husband should pay for the rental of the Children.

117.  In the absence of contrary evidence, I accept that the reasonable monthly rental for a property in Aberdeen or Ap Lei Chau is HK$14,000, hence the Children’s share would be HK$9,333.

118.  As for the extra tuition fees, in light of the age of the Children, I am of the view that HK$2,800 is excessive. I would only allow HK$2,000 for this item.

119.  I would allow the following sum as the Children’s expenses:

	Amount (HK$) allow by the Court
Children
School fees	3,476 (by way of the Husband’s undertaking)
Extra tuition fees	2,000
School books and stationery	1,000
Daughter’s AIA Insurance policy	527 (by way of the Husband’s undertaking)
Medical/Dental	635 (by way of the Husband’s undertaking)
Entertainment/presents	1,000
Holidays	1,000
Clothing/Shoes	1,000
Transport	500
Child-minding fees	4,000
Uniform	180
Others (specify)   (milk powder, napkins)	1,000
Rent ($14,000 x 2/3)	9,333
Total	25,651

The Husband’s financial needs

120.  The Husband’s monthly expenses are as follows:

	Amount (HK$) claimed by the Husband	The Wife proposed amount (HK$)
General
Mortgage instalments	13,000	13,000
Utilities	2,350	500
Food	3,500	3,000 (including meals out of home)
Household expenses	800	400
Car expenses	660	660
Insurance Premia	85	520
Sub-total	20,395	18,080
Personal
Meals out of home	4,000
Transport	1,000	400
Clothing/Shoes	500	1,000
Personal grooming	500
Entertainment/presents	500
Holiday	1,000	500
Medical/Dental	500	500
Tax	4,000	4,000
Insurance premia	1,600
Interim maintenance	10,000
Contributions to parents	4,000	4,000
Sub-total	27,600	10,400
Total	47,995	28,480

121.  The Husband’s personal expenses included contribution to the Mother in the sum of HK$4,000 per month. Such payment is voluntary in nature and is made out of his love and concern for the Mother, which may not be necessarily shared by the Wife. I will not allow this item for the purpose of the ancillary relief.

122.  The Wife criticized the utilities expenses of HK$2,350 being excessive. The Husband explained that the utilities expenses are on the high side because his fiancée keeps more than 10 dogs. I consider that a reasonable sum under this head should be HK$1,000.

123.  Since the Husband already claimed HK$660 as car expense, I would only allow HK$500 as transportation expenses. I would allow HK$1,000 for food and HK$3,000 for meals out of home.

124.  The item of interim maintenance should be taken out from the expenses.

125.  I am of the view that the Husband’s other general expenses are reasonable and I would allow them in full. I would allow the following sum as the Husband’s expenses:

	Amount (HK$) allow by the Court
General
Mortgage instalments	13,000
Utilities	1,000
Food	1,000
Household expenses	800
Car expenses	660
Insurance Premia	85
Sub-total	16,545
Personal
Meals out of home	3,000
Transport	500
Clothing/Shoes	500
Personal grooming	500
Entertainment/presents	500
Holiday	1,000
Medical/Dental	500
Tax	4,000
Insurance premia	1,600
Sub-total	12,100
Total	28,645

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

126.  The Husband earns an income of HK$40,095, hence after deducting the allowable expenses, he would have HK$11,450 left. The Wife would only have HK$2,294.51, say HK$2,294 left after deduction of her expenses. The Children’s personal needs are HK$25,651.

127.  The parties have ultimately chosen to have two children together. They must therefore do everything within their power to ensure that the Children’s basic financial needs are met.

How much maintenance should the Husband pay for the Children going forward?

128.  The Wife in her open offer only requested the Husband to contribute HK$14,000 as the Children’s maintenance. Obviously, the Wife made this open offer with a view that a lump sum of HK$1 million would be paid to her.

129.  It is trite that the welfare of the Children is paramount. Upon considering the earning capacity and the financial means of the parties, I am of the view that the Husband should be responsible for an amount higher than HK$14,000 as the Children’s maintenance and by doing so, the lump sum, if any, to be paid to the Wife would decrease accordingly.

130.  It is clear from the above analysis that after meeting their own needs, the parties are not able to meet the Children’s daily needs from their total income. The parties will need to access to other financial resources in order to provide a basic standard of living for both themselves and the Children.

131.  The Children’s expenses are HK$25,651. The Husband undertakes to pay for the school fees, medical insurance of the Children and the daughter’s insurance policy with AIA, which I would hold the Husband onto these expenses.

132.  After deducting the school fees, medical expenses and the daughter’s AIA insurance policy, the sum for Children’s expenses is HK$21,013. Things are tight financially for the parties and they will need to observe their spendings.

133.  In my view, the Husband’s earning capacity and financial resources are better than the Wife, hence in addition to his undertaking, which amount to HK$4,638 (being HK$3,476 + HK$635 + HK$527), the Husband should pay HK$16,000 as monthly maintenance for the Children (i.e. HK$8,000) for each child.

134.  In summary, the Husband is expected to contribute HK$20,638 (including his undertakings) as Children’s maintenance.

135.  Even taking into account of the Husband’s balance of his income of HK$11,450, there is still a deficit of HK$9,188 per month.

136.  The Children are in the age of 5 and 4. Assuming maintenance for the Children is paid up at least to the age of 18, the son would reach the age of 18 in 13 years’ time. With this calculation, in addition to the remaining balance of his monthly income, the Husband is expected to contribute an additional sum of HK$1,488,456 (i.e. (For Children HK$9,188 x 12 x 13) + (For daughter only HK$4,594 x 12) during this period.

137.  The Husband’s assets are worth HK$2,194,057.77. It would be in the interests of the Children to set aside a sum of HK$1,488,456 from the Husband’s assets to secure their future maintenance. I find it appropriate that the said sum is to be secured by way of a charge over the Husband’s interest in the FMH pursuant to section 5(2)(b) of the MPPO.

138.  I am alert that a substantial amount of the Children’s maintenance goes to rental and the Children are still staying at their maternal grandparent’s home. Consequently, it would be fair to order the Husband to start paying the sum of HK$9,333 upon the Wife renting an accommodation for the Children.

139.  The Wife is also expected to contribute to the Children’s maintenance. After deducting her expenses from her income, she will have HK$2,294 left. She is expected to contribute a monthly sum of HK$5,013 to the Children’s expenses. I hold the view that if the Wife would be more mindful with her own spending, for example less meal out of home and less entertainment, she would be able to support the Children without great difficulties.

Whether there are any surplus assets for division?

140.  After setting aside the said sum for the benefit of the Children from the Husband’s assets, the value of the matrimonial pot is HK$1,099,729.49.

What is an appropriate division of assets in the circumstances?

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

141.  The parties enjoyed an ordinary standard of living similar to that of many other working class families in Hong Kong during the marriage.

Duration of marriage

142.  They were married for 2 years – so this was a short marriage.

The contribution made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family.

143.  I accept that both parties made contribution to the marriage financially. I also accept that the Wife has been the primary caretaking parent and that this is likely to continue.

Should this case be regarded as a “needs based case” or should the sharing principle be applied?

144.  The Wife argued that this is a “sharing” case, while the Husband argued that the Wife should be restricted to the “needs”.

145.  After determining the basic needs of the parties and the Children, it seems the available assets are merely adequate to cover the needs of the Children going forward until they reach their 18^th birthday. Taking into account of the needs of the Children, there is still surplus available to the parties for distribution.

Treatment of the sum of HK$651,129.04 being paid by the Husband to the Wife in September 2018

146.  The Wife admitted that the Husband paid her a sum of HK$651,129.04 in September 2018, and she claimed that it was an award and compensation from the Husband for the pain and suffering of her giving birth to the Children.

147.  The Husband, on the other hand said the sum was paid to the Wife as full and final settlement of her maintenance and claims for ancillary relief.

148.  The parties agreed that the Wife’s title in the FMH was transferred to the Husband as a result of the payment of HK$651,129.04.

149.  The Court of Final Appeal in SPH v SA (2014) 17 HKCFAR 364 decided that, although separation agreements did not override the powers of the court to grant ancillary relief, they carried considerable weight in relation to the exercise of the court’s discretion when granting such relief.

150.  Her Honour Judge Grace Chan in her judgment in CM v GRP [2022] HKFC 36 at [103] had referred to a checklist of questions that was set out in K v K (Ancillary Relief: Prenuptial Agreement) (2003) 1 FLR 120.

151.  The Wife argued that the Husband’s alleged post-nuptial agreement was an oral agreement which did not satisfy the requirement of section 14 of the MPPO.

152.  Further, the Wife said even putting the Husband’s case to the highest, there was no disclosure of assets and liabilities at the time of the alleged agreement. There was also no evidence to suggest that the Wife had obtained independent legal advice prior entering into the alleged agreement.

153.  The Wife also submitted that in any event the sum of HK$651,129.04 was not used as her maintenance. She used part of the money to repay her parents and part of the money as the Children’s maintenance.

154.  It is indisputable that the alleged post-nuptial does not fulfill the requirements as set out by K v K (Ancillary Relief: Prenuptial Agreement). It is very clear that the alleged agreement was in oral form. There was no mention of disclosure of material information, nor the party had taken any legal advice of it.

155.  With the analysis above, I accept that there could be no binding post-nuptial agreement between the parties.

156.  On the other hand, having considered the evidence, I also find the Wife’s case that the sum of HK$651,129.04 was paid to her as award and compensation for giving birth to the Children is unbelievable for the following reasons:

(1)  According to the Wife’s petition, the parties were separated since September 2017, i.e. before the birth of the daughter, if the Husband appreciated or cherished the relationship, it is logical that the parties would be reunited, but not separated.

(2)  If the Husband wanted to award the Wife with something, he could have re-mortgaged the FMH without the need of asking the Wife to transfer her ownership to him. The Wife’s case is illogical.

(3)  Further, the Husband had produced WhatsApp record to show that the parties did discuss matters relating to their personal belongings and properties around May 2019. The Wife did on 14 October 2019 expressly said in the WhastApp message that the FMH was none of her business (“而家層樓已經唔再關我事”).

(4)  The Wife stopped injecting any money into the joint account after receiving the said sum from the Husband.

(5)  The Wife did not state that she has a beneficial interest in the FMH in her Form E filed on 24 January 2020.

157.  I do not accept the Wife’s case that the court should totally exclude this sum of HK$651,129.04 paid to her. Suffice to say, the sum of HK$651,129.04 came from the re-mortgage of the FMH, and the Husband was the only person who shouldered the liabilities of such arrangement.

158.  In paragraph 148 (i) & (j) of the Wife’s closing submissions, she submitted that she was required to solely bear the deficiencies in the Children’s maintenance from August 2018 to May 2022. As a result of which, most of HK$651,129.04 was spent on the Children.

159.  The Husband began to pay interim interim maintenance in the amount of HK$10,000 from 1 September 2020 as per His Honour Judge CK Chan’s order dated 7 August 2020. I accept the Wife’s case that out of HK$651,129.04, HK$360,000 was spent on the Children.

160.  The Wife said she paid HK$250,000 back to her parents upon receipt of HK$651,129.04. As stated above, I do not find the Wife to be a truthful witness. At the trial, she initially said the sum was given by her parents as a gift, later she said it was a loan.

161.  In any event, the sum of HK$250,000 was not applied for the benefit of the Children or the family. After deducting the sum of HK$360,000 being money spent on the Children, I find that the Wife had received HK$291,129.04 from the matrimonial pot. I would take this into account when considering whether to depart from equality of division.

Has there been material financial non-disclosure by either party and should the court draw adverse inferences accordingly?

162.  The Husband accused the Wife of material non- disclosure with respect to (1) the withdrawal of a total sum of HK$148,180 from the joint account without his consent; and (2) gold ornaments owned by her which worth HK$60,000 – HK$80,000.

163.  The duty of full and frank disclosure is an absolute and continuing one. Clearly, the Wife had failed to comply with her duty of full and frank disclosure when she only admitted there are at least 4 gold ornaments in her possession at cross examination.

Whether good reasons for a departure from equality exist?

164.  Having largely dealt with section 7(1) of the MPPO considerations when discussing the different issues as set out above, and the fact that:

(1)  the Wife had withdrawn a sum of HK$148,480 from the joint account without the Husband’s consent;

(2)  she failed to give full and frank disclosure of her assets;

(3)  she received a sum of HK$651,129.04 in September 2018; and

(4)  she did not contribute to the mortgage of the FMH after August 2018.

I find that the Wife’s conduct, in particular her failure to give full and frank disclosure is obvious which would be inequitable to disregard. This is a suitable case to depart from the yardstick of equality.

165.  The Wife accepted that she has sufficient earnings to cover her own expenses and she does not need a periodical payment order to make up her monthly needs.

166.  Having considered all of the above factors and my findings as set out above, I find that the matrimonial pot be split between the Wife and the Husband on the ratio of 40: 60.

167.  The sum which the Wife is entitled to receive from the matrimonial pot is HK$439,891.80. The Wife contributed HK$394,127.72 to the matrimonial pot, therefore the Husband needs to pay a lump sum of HK$45,764.08 to settle the Wife’s claim.

168.  Having considered that the Husband is in a tight financial position, I will order the Husband to pay the lump sum within 2 months upon the grant of decree absolute.

Costs

169.  In terms of their open offers, neither the Wife nor the Husband can be considered as wholly successful. I consider the appropriate order in the circumstance is no order as to costs. In coming to this decision, I have already taken the conclusion reached by me that the Wife should be wholly responsible for the costs of the trial of the preliminary issue.

Other Matters

170.  The Husband asked the court to make an order in respect of tax allowance matters. Tax allowance matters are not any of the order which the court could make under sections 4,5 and 6 of the MPPO.

Order

171.  I shall make the following order:

UPON the Husband undertaking to pay for the Children’s school fees in the total sum of HK$3,476, and thereafter to pay any Government school or Aided school fees and Tong Fai (堂費) for primary and secondary school;

AND UPON the Husband undertaking to pay the monthly contribution of the daughter’s insurance policy with AIA;

AND UPON the Husband undertaking to pay for the monthly contribution of the Children’s in-patient medical insurance with the HKPF Zurich Policy;

IT IS ORDERED THAT: -

1.  The Husband do pay periodical payments for the Children of the family in the sum of HK$6,667 per month, (i.e., HK$3,333.50 for each child), the first payment to be made on the 1^st day of the month until each child’s 18^th birthday or cessation of full time education, whichever is the later, or until further order. The said periodical payment shall be secured by way of a charge over the Husband’s interest in the FMH;

2.  Upon the Wife renting an accommodation for the Children, the Husband do pay periodical payments for the Children of the family in the sum of HK$16,000 per month (i.e.HK$8,000 for each child), the first payment to be made on the 1^st day of the month until each child’s 18^th birthday or cessation of full time education, whichever is the later, or until further order. The said periodical payment shall be secured by way of a charge over the Husband’s interest in the FMH;

3.  The Husband do pay the Wife a lump sum of HK$45,764.08 within 2 months upon the grant of decree absolute;

4.  There be no order as to costs of this ancillary relief application (including all costs reserved); and

5.  I grant the declaration under section 18 of the MPPO that I am satisfied with the arrangement of the Children.