LSL v. WYF

FCMC 3527 / 2019

[2023] HKFC 76

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 3527 OF 2019

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BETWEEN

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JUDGMENT
( Ancillary relief: clean break; spousal periodical payments )

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Issues & open offers

1.  After a failed financial dispute resolution before HH Judge C K Chan in August 2022, the parties’ cross claim for ancillary relief is transferred to this court for trial.

2.  In September 2022, shortly before the pre-trial review hearing, the respondent (“wife”) took out her summons for maintenance pending suit, seeking monthly payment of $60,000 to be back-dated to the date of the petition filed by the petitioner (“husband”). She withdrew this summons on the 1^st day of trial and agreed to bear the costs of the summons, to be taxed if not agreed.

3.  Upon the court’s clarification of their original open offers on the 1^st day of trial, the parties further narrowed down their disputes and thus the issues for trial. They also provided improved open offers, but sadly these were not accepted by either party. That said, the court is glad to be informed that they are no longer in dispute as to the size of the assets to be shared, which comprises mainly of 3 properties either jointly owned by them or solely owned by the husband, their bank reserves and stock investments, and the husband’s pension/retirement funds earned or to be earned pre- and post-separation, the total assets of which are worth about $16.96 million.

4.  It is the wife’s stance that she is a full time housewife without any earning capacity, whereas the husband is a high income earner and should be able to continue to work after the normal retiring age of 65 and probably until 82 as an engineer or a self-employed freelancer, earning about $150,000 - $160,000 per month.[1] He thus should be made to continue to financially support her until her notional age of 88 (the average life span of women in Hong Kong as at 2021 is 87.9). Her needs way forward, including medical expenses and her travelling expenses to the USA to visit their adult son, is around $75,000 per month, bringing her total future needs up to her notional age of 88 to $22.5 million. As the net worth of the total assets of the parties are insufficient to capitalize her future needs, a spousal periodical maintenance order becomes inevitable.

5.  Originally in her affirmation made pursuant to section 7 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“section 7 affirmation”), she suggests a clean break arrangement, provided that she will retain all her assets and the husband shall pay her a lump sum of $6.3 million to cover her needs until she is 70 years old, and that he should also transfer all his interests in their jointly owned properties in Tai Po (“Tai Po Property”) and Shamshuipo (“Shamshuipo Property”) to her, so that she can have a roof over her head in one of the properties and rent out the other property to cover her expenses after 70 years old. This suggestion of her would mean that she would get about 98% of the pot, leaving only less than $300,000 of the total assets to the husband.

6.  She revises her open offer in her opening submission, and offers that she shall share 50% of the total assets of the parties (and she wants to take the Shamshuipo Property valued at $5,130,000). On top of this, the husband shall pay her maintenance pending suit by way of a lump sum of $2,700,000 and a monthly maintenance of $60,000 until she remarries.

7.  She gives a further revised open offer, after withdrawal of her summons for maintenance pending suit, as follows:[2]

(1) the parties shall equally share their total assets;

(2) the husband shall pay her periodical maintenance of $75,000 per month;

(3) the husband shall pay her costs of the ancillary relief matters.

8.  The husband does not agree to pay her monthly maintenance. He avers that he would soon be 63, and though still working as an engineer on a contract basis, his contract will end by May 2023 and it is uncertain if the contract will be extended. He says that there is no evidence to support that he would be able to work until 65 or thereafter. In view of the advanced age of the parties, they should have a clean break arrangement. And in order to do so, he is willing to let the wife keep the more expensive and recently renovated Shamshuipo Property (while he shall take the less expensive and dilapidated Tai Po Property) and to pay her a lump sum of $4,720,000, ie $2,000,000 by 31 January 2023; and $2,720,000 by 30 June 2023, which means that she will keep roughly 60.6% of the total pot. On top of all these, he also offers to bear all the transfer costs, such as legal costs and stamp duty, of the properties.

9.  It is thus clear that the remaining dispute that calls for determination centres on one major issue, namely whether there should be a clean beak arrangement between the parties, upon taking into account their financial resources and needs.

Background and case history

10.  The husband was born in 1960 and is approaching 63 this October. He is an engineer by profession.

11.  The wife was born in 1959, and will be 64 by this July. She is now a housewife and does not have a job.

12.  The parties were schoolmates in their secondary school. They got married in 1984. After their marriage, they each continued to work. In 1984, they bought the Tai Po Property which became their 1^st matrimonial home. They were, and still are, the joint owners of this property.

13.  In 1991, the husband went to further his study in the university of the UK. The wife went and stayed with him in the UK. After graduating as a civil engineer in 1993, he returned to Hong Kong and joined a renowned construction consultancy, Mott McDonald, whereas the wife stayed behind to take a degree course (Bachelor of Science in Computing Mathematics with Business Studies). Upon her graduation in 1996, she returned to Hong Kong and worked as a senior administrator with the IBM.

14.  The wife got pregnant in 1997. In the same year, they bought Shamshuipo Property in their joint names. The Shamshuipo Property became their 2^nd matrimonial home.

15.  All seemed going on well until their only son was born in December 1997. Disputes then became to surface.

16.  First of all, the wife stopped working in 1998 after the son was born. According to her, it had become impossible for her to keep her job, take care of the son (who was born very weak and had a number of health issues) and deal with the household chores at the same time, as a result of which she quitted her job. But her decision of quitting her job was not supported by the husband who, since then, allegedly physically abused her, including slapping at her left ear which adversely caused damage to her hearing ability, and later financially bullied her by cutting his financial support to her and the son. The husband does not dispute that he was not happy about the wife’s job-quitting decision, but denies any physical assault to her. He alleges that since she stopped working, she demanded him to pay all his income to her, yet did not perform her duty of taking care of the household chores and cooking, and left all these works to him to be done after his working hours or during his spare time.

17.  Then, there was also the problem of different parenting styles, in that the wife arranged the son to take part in a number of tuition classes or extra-curricular activities, but the husband was of the view that the frequency of such activities were just too much for the son.

18.  No matter what was/were the actual reason(s) for the breakdown of their relationship, it is true that as tension between them grew, police reports were made from time to time.

19.  In 2006, the husband decided that he would stop giving all his income to the wife but would transfer only $30,000 (ie half of his then monthly income) to her each month. Shortly after this arrangement, the wife moved out of the Shamshuipo Property with the son to a rented flat in Kowloon Tong. As they could not agree on how to deal with his monthly income, they lived in separate properties between 2006 and 2009.

20.  In 2009, they decided that the son should go to Australia to study. The husband agreed that the wife should go with the son to keep him accompanied. All their expenses in Australia from 2009 to 2011 were paid by the husband.

21.  In 2011, the son returned to Hong Kong to study in the American International School. The parties re-united under the same roof in the Shamshuipo Property for about 6 months, after which the wife moved with the son to live in the Tai Po Property ever since. The parties never resumed living under the same roof again.

22.  During the period when the wife and the son were living in the Tai Po Property, the husband paid her $15,000 per month to cover her and the son’s expenses. He paid for the mortgage repayments of the Tai Po and Shamshuipo Properties as well.

23.  In 2016, the son went to study in the USA. Since then, the husband abruptly stopped paying the wife $15,000 per month or any sum. However, the wife did not ask him for money, either.

24.  The husband paid for all the son’s expenses in the USA. According to him, which is not expressly challenged by the wife, although the average reasonable expenses for studying in the USA at that time was around $500,000 per year, he gave the son about $650,000 per year (ie $50,000 - $60,000 per month) and let the son have a free hand as to what and how to spend the money on his education and living expenses in the USA. I gather from the husband’s oral evidence that he knows that the son might have been paying money (given by him to the son) to the wife for her use over these years.

25.  The husband filed his petition for divorce in March 2019 relying on the behaviour of the wife. He later amended his petition by relying on the fact that they have separated from February 2014. The wife defends the Amended Petition, but was absent during the trial of the defended petition. Upon conclusion of the trial, HHJ C K Chan granted the decree nisi on 5 August 2021. By then, this marriage lasted for 37 years (if up to the date of the decree nisi) or for 30 years (if up to the year of separation).

26.  Their only son is now 25 and working in the USA, having obtained a Master Degree there. The Family Court has already made a declaration pursuant to section 18 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”). It is unknown as to why the husband has not applied for decree absolute.

Applicable Law

27.  The law relating to the distribution of family assets in ancillary relief matters are set out in section 7 of the MPPO, which states:

“ (1) It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.”

28.  The Court of Final Appeal in its landmark judgment of LKW v DD [2010] 13 HKCFAR 537 has enunciated 4 guiding principles as to how section 7 of MPPO should be approached, namely (i) objective of fairness, (ii) rejection of sex or role discrimination, (iii) yardstick of equal division, and (iv) rejection of minute retrospective investigation. It has further laid down a 5-step approach in dealing with ancillary relief claim, including:

(1) to ascertain the financial resources of each of the parties calculated as at the date of the hearing;

(2) to assess the financial needs of the parties;

(3) to apply the sharing principle to the parties’ total assets (if surplus assets would remain after the parties’ needs have been catered for);

(4) to consider whether there is/are good reasons for departing from the principle of equal division;

(5) to decide the outcome.

29.  In relation to the assessment of the financial needs of the parties, Riberio PJ in LKW had these to say:

“E.3 Step 2: Assessing the parties’ financial needs

[74] The next step is for the court to assess the parties’ financial needs. As has been noted, the section 7 exercise often stops at this point since the total resources may be insufficient to go beyond or even to meet both parties’ needs. If so, no room is left for the application of any sharing principle. Addressing the needs of say, the wife and children may immediately absorb more than half of the total assets. If so, “needs” are, for want of any alternative, determinative. Where the assets are meagre, a “clean break” may not be possible and it may be necessary to have recourse to an order for periodical payments.

[75] The position is neatly summarised by Sir Mark Potter P in Charman v Charman (No 4) as follows:

“… when the result suggested by the needs principle is an award of property greater than the result suggested by the sharing principle, the former result should in principle prevail: per Baroness Hale in Miller at [142] and [144]. … It is also clear that, when the result suggested by the needs principle is an award of property less than the result suggested by the sharing principle, the latter result should in principle prevail: per Lord Nicholls in Miller at [28] and [29] and Baroness Hale at [139].”

[76] This is an approach which should dispel the fear expressed in Figgins v Figgins, that “rule equality” is likely to work injustice where the assets are meagre.

[77] As section 7(1)(b) indicates, the process of evaluating “needs” involves assessing the financial needs, obligations and responsibilities which each of the parties has or is likely to have in the foreseeable future in the light of present and foreseeable resources. The matters referred to section 7(1)(c) to (e), that is, standard of living, age and disability, will often be relevant. As Lord Nicholls put it in White:

“Financial needs are relative. Standards of living vary. In assessing financial needs, a court will have regard to a person’s age, health and accustomed standard of living.”

[78] And in Miller/McFarlane his Lordship stated in respect of “needs”:

“When the marriage ends fairness requires that the assets of the parties should be divided primarily so as to make provision for the parties’ housing and financial needs, taking into account a wide range of matters such as the parties’ ages, their earning capacity, the family’s standard of living, and any disability of either party. Most of these needs will have been generated by the marriage, but not all of them. Needs arising from age or disability are instances of the latter.”

[79] Baroness Hale stressed that the parties’ needs should be “generously interpreted”. Accordingly, in trying to ensure that each party and their children have enough to supply their needs set at a level that equates, in so far as resources allow, to the standard of living they enjoyed during the marriage, those needs should not be assessed according to some perceived lowest common denominator, but with flexibility in the light of all the relevant circumstances.” (emphasis added)

Identification of assets

30.  As said above, the parties have no dispute as to what be put into the pot for sharing, and have given me an updated tabulated table dated 29 December 2022, which I shall streamline the table as follows (the figures are rounded up/down to the last decimal):

	Husband	Wife
Tai Po Property (free from mortgage)	$2,402,487	$2,402,487
Shamshuipo Property (free from mortgage)	$2,565,000	$2,565,000
PRC property at Dongguan	$401,140	---
Various bank accounts	$1,634,798	$540
Joint BEA account	$773	$773
Stocks	$958,225	$364,696
Insurance	$205,350	$64,872
Mott McDonald Employee Trust	$494,690	---
MPF ($98,407.99 + $99,424.14 + $1,691,817.58)	$1,889,650	---
Contract-end gratuity received on 3/5/2022	$393,427	---
Contract-end gratuity to be received in 5/2023	$219,222	---
Legal fees taken out of the pot (add-back)	$378,000	---
Credit card repayment (add- back)	$22,037	---
Net total:	$11,564,799	$5,398,368

31.  The parties have a joint BEA account, which has very trivial amount and which I understand that the parties would arrange to close it and share it themselves, such that there is no need for the court to make further order for sharing in respect of this particular joint account.

32.  Carving out the said joint BEA account, the total assets of the parties are worth $16,961,621.

Living standard during marriage

33.  According to the husband,[3] the parties led a very frugal life during their marriage. The wife seldom shopped for branded items. She never went to high-end places; never spent much on clothing or personal grooming. She did not travel much, save and except accompanying the son to attend overseas competitions or for short trips with the son when he was studying overseas. They did not enjoy the service of a maid except in 1999.

34.  The wife does not expressly object to the aforesaid husband’s description of their living standard in her own section 7 affirmation (which was made almost a week later than the husband’s section 7 affirmation).

35.  She describes the living standard during the marriage in her 2^nd Form E like these. They own 2 properties of total areas of over $1,000 sq feet. The husband paid for the spending of the family, including overseas trips and meals out. There was world-wide insurance coverage. In the section 7 affirmation, she claims that the husband, on top of defraying all daily expenses of living, transport, clothing and food (衣食住行) of her and the son, used to pay her $15,000 per month for her own expenses. In her oral evidence, she says for the first time that the husband also paid her lump sums by cheques, averaging out to be about $30,000-$40,000 per month. These moneys became the source of her savings which she had to utilize since 2016 when he stopped paying her any money any more.

36.  I have reservation of what is claimed by the wife as to how much the husband gave him during the marriage. Without disrespect to him, I do not hold an impression that the husband is that generous to her in terms of money. If what she says is true, she would have literally received a net total sum of $45,000-$55,000 per month from him between 2011 (after the son returned to Hong Kong from Australia) to 2016, the total of which would come to at least $3,000,000 (if $50,000 is taken to be the median figure). It then begs an explanation of where she had spent these substantial amount of money since 2016. Notably, it is not her case that she bought or owned any expensive or branded wardrobe or jewelleries, or dined out in high-end restaurants at the material times.

37.  It is observed by the court that the parties’ former matrimonial homes, namely the Tai Po Property (of about 570 sq feet) and the Shamshuipo Property (of about 770 sq feet in total), are not in the traditionally prestigious residential areas. The Tai Po Property is not even a wholly private development; it is a home ownership flat only. The parties did not enjoy any club membership. There is no suggestion that they enjoyed expensive food or luxurious travel arrangements.

38.  I am thus of the view that the living standard of the family during their marriage was of average standard only.

The husband’s financial resources

39.  The husband’s bank reserves, stock investment and retirement pension funds etc are all set out in the table at [30], and I shall not repeat.

40.  He describes his future plan in his section 7 affirmation supplemented by his oral evidence. Briefly, he says that he will be 63 by this October. He is now working as the Senior Resident Engineer with Mott McDonald on an individual construction project earning $154,341 per month. His current contract will expire in May 2023. He plans to retire upon completion of this project expected to be completed by December 2025. However, he is not sure if his current contract will be extended. He has made enquiry with Mott McDonald, but there is no reply yet. So, it is very likely that his contract would not be extended.

41.  The wife avers in her section 7 affirmation that there is no retiring age of the husband’s profession. So he can work full-time until 65, and thereafter continue to work until such time as he wishes as a self-employed freelancer, earning about $150,000-$160,000 per month. She adds that he had taken up free-lance jobs and teaching work in the past.

42.  The husband impressed me that he is not against the idea of working until 65. In fact, he states in his section 7 affirmation that he would like to work and see the completion of the construction project that he is now working on. He explains that for consultancy work, the age limit is 65 years old. On the other hand, he admits in his oral evidence that he had received 2 freelance jobs in 1995-1996, and had taught in evening courses between 1997 and 2005. He explains that he took on the freelance jobs at that time because they were offered by a very close friend of his. He has since then lost such connection to take on freelance jobs.

43.  I think it cannot be disputed that the husband possesses vast professional experience. He has been working with Mott McDonald for almost 30 years. He was last promoted to the senior rank of Project Director. In 2020 when he turned 60, his employment with Mott McDonald changed to a project-based arrangement, and he became a Senior Resident Engineer in an individual construction project of Mott McDonald. His fringe benefits including his salaries increases from $113,981 to $154,341 per month. This shows that despite his age, he is still highly regarded by Mott McDonald.

44.  It is thus my conclusion that in the overall circumstances of the case, it is more likely than not that the husband’s contract would be extended, such that he would be able to continue with his current post until 65. If not, given his experience, it would be more likely than not that he can work until around that time. His likely income would be similar to his current income, ie roughly around $154,000 or so per month.

45.  In my view, there is simply not sufficient evidence to support the wife’s contention that he should be able to work as a freelancer after he retires at 65 and until he is 82 with a handsome income of $150,000-$160,000 per month.

46.  Accordingly, the husband will continue to earn about $154,000 per month for the next 2.5 years, subject to deduction of his expenses which is the next topic for discussion.

The husband’s needs

47.  I will set out below the husband’s general and personal expenses claimed in his 2 Form Es for easy discussion:

	1st Form E (24/5/2019)	2nd Form E (25/1/2025)
General
Utilities & rates	$1,800[4]	$2,000
Management fee	$1,500	$2,000
Food	$6,000	$5,000
Miscellaneous household expenses	$1,500	$2,000
Sub-total:	$10,800	$11,000
Personal
Meals out of home	$8,000	$2,000
Transport	$2,000	$2,000
Clothing/ shoes	$2,000	$2,000
Personal grooming/ haircuts/cosmetics	$500	$500
Entertainment/presents	$1,000	$1,500
Holiday	$2,000	$2,000
Medical/ dental	---	$1,000
Insurance	---	$2,143.16
Tax	$19,377	$29,327
Contribution to parents	$3,000	$3,300
Sub-total:	$37,877	$45,770.16
GRAND TOTAL	$48,677	$56,770.16

48.  I have already ruled that it is more likely than not that the husband would continue with his present job, or would work as a professional engineer until he is 65. As long as he is still working, I accept that his claimed expenses in his 2^nd Form E is reasonable. Such expenses will be paid by his income, which needs not eat into his capital. Even more, he would be able to save up the excess in the sum of at least $90,000 per month before his retirement.

49.  When he retires at the age of 65, he is no longer required to pay tax. He can make more use of public transport which costs him $2 per trip generally. The need to entertain and dine out due to his professional connection is expected to reduce, which means that he can spend less on his wardrobe and meals out. In my judgment, his future needs since his retirement would come to a broad brush figure of $25,000 per month.

50.  Further, I have to remind myself that if the wife shall take the Shamshuipo Property and leaving the Tai Po property to the husband, he will need to set aside funds for the renovation of the Tai Po property, including contribution to the manager for repair/renovation of the common parts of the building, which according to the wife, would be around $600,000. He has agreed to bear all transfer costs, including legal fees and stamp duty, of the Shamshuipo and Tai Po Properties.

The wife’s financial resources

51.  Given that the wife is now 63 and that she has not been working for more than 20 years, she should not be expected to go back to the labour market. I accept that she does not have any meaningful earning capacity in the future.

The wife’s needs

52.  For easy discussion, I set out in the following table the wife’s alleged needs at different stages of this case:

	1st Form E (17/10/2019)	2nd Form E (5/2/2022)	Affirmation re: maintenance pending suit (31/8/2022)	Section 7 Affirmation (15/9/2022)	Affirmation in reply re: maintenance pending suit (17/11/2022)	Day 1 of trial (28/12/2022)
General
Utilities	$2,270	$770	$3,000	$3,000	$2,000	$2,000
Management fee	$730	$730	$814	$814	$814	$814
Food	$9,000	$400	$10,000	$10,000	$10,800	$10,800
Miscellaneous household expenses	$3,000	$30	$3,000	$3,000	$2,000	$2,000
Insurance	$200	---	$4,700	$4,700	$4,700	$4,700
Maid	---	---	$5,000	$6,400	---	---
Misc (house-hold repairs, funds for compulsory examination of windows and building)	$4,000	---	$4,000	$4,000	---	---
Visits to younger brother	---	---	---	---	$1,500	$1,500
Sub-total:	$19,200	$1,930	$30,514	$31,914	$21,814	$21,814
Personal
Meals out of home	$1,500	---	$1,500	$1,500	$1,500	$1,500
Transport	$1,500	$100	$100	$100	$100	$100
Clothing/ shoes	$2,000	---	$2,000	$2,000	$2,000	$2,000
Personal grooming/ haircuts/cosmetics	$3,000	---	$3,000	$3,000	$500	$500
Entertainment/presents	$6,000	---	$6,000	$6,000	$1,500	$1,500
Holiday	$4,000	---	$4,000	$4,000	---	---
Visiting son in the USA	---	---	---	---	$35,693	$35,693
Medical/ dental	$1,000	---	$10,000	$10,000	$1,000	$10,000
Entertainment/presents for the child	$1,500	---	$1,500	$1,500	$100	$100
Sub-total:	$20,500	$100	$28,100[5]	$28,100	$42,393	$51,393
GRAND TOTAL	$39,700	$2,030	$58,614	$60,014	$64,207	$73,207

53.  While in the witness box, the husband shows his lack of concern of the wife’s expenses. He says that he has no interest in knowing her expenses or expressing any comment on them. When pressed, he takes the view that some of her expenses are excessive, such as her food and meals out, and some other expenses are merely copycat items of his expenses, eg miscellaneous household expenses, personal grooming, entertainment and presents. He explains that since the wife is not working, her expenses should not be as much as his. For example, her reasonable food expenses (including dining out) should be around $7,000-$8,000 per month, but not $12,300.

54.  As a starting point, I remind myself that in assessing the wife’s expenses, needs have to be “generously interpreted” as said in LKW (supra). However, “needs” has also to be assessed according to the living standard of the parties during the marriage, which I have already found to be of average level only.

55.  Further, I have also come to the conclusion that despite that the husband stopped paying any money to the wife directly since their son went to study in the USA in 2016, the son had been using the money given by the husband to contribute to the wife’s expenses. Such contribution was roughly $150,000 per year (See: [24] above), averaging out to be about $12,500 per month, which can then easily and logically explained why the wife did not ask the husband for money after he unilaterally decided to stop paying any money to her. Notably, this sum of about $12,500 per month is far from sufficient to cover her claimed expenses at different stages of the case tabulated above, save and except in her 2^nd Form E. I have taken into account that she says she had savings of about $500,000-$600,000 when the husband stopped to pay her since 2016. However, her claimed savings would not be sufficient to cover her claimed expenses over all these years since 2016. Hence, unless she had other major undisclosed source(s) of income since 2016 (which is not her case in this trial), the only logical conclusion I can arrive at is that she has flagged up her expenses in this trial.

56.  It is also very telling that her claimed expenses at different stages of this litigation, as reflected in the above table, would vary so significantly without any good reason(s), from as low as $2,030 per month to as much as $73,207 per month.

57.  I shall not go into each and every item of her latest expenses to give a detailed analysis. In my view, only the following major items of expenses need to be discussed.

58.  The first item is the expenses to visit the son in the USA. She claims a very substantial sum of $35,693 per month, which is equal to $428,316 per year. She explains that the son is of weak health since he was young and thus she needs to go to take care of him and his health. She would go to the USA 3 times a year. Each time, she will stay for about 2 to 3 months. This would mean she will be in the USA for about 180 days per year. The return air tickets cost $31,616 per return trip. For each day she is in the USA, she needs to spend $1,849 each day, including hotel costs at $1,303 each night, and food costs at $546 (about USD 70) per day.

59.  The son was born in 1997 and will be 26 by the coming December. He has completed his Master Degree in the USA and has started working. He is and should be regarded as an independent and self-cared adult in all respects. There is no concrete evidence before me to substantiate the wife’s proposition that he is weak and of bad health, except her bare oral assertion. However, this oral assertion does not sit well with her 2 Form Es. In both of her Form Es at Part 1.12 where she can provide the particulars of illness of herself and the child of the family, she either wrote “nil” or left it blank.

60.  Besides, one should take a closer look into the USA expenses. According to the wife, she will spend about 180 days or 6 months in the USA. If so, her actual monthly expenses merely in the USA alone would come to as high as $71,386 per month ($35,693 x 12 ÷ 6), which in my judgment, is not only excessive and exaggerating, but is also not commensurate with the living standard of this family. I thus do not believe that she would stay in the hotels, instead of staying at the son’s place, when she visits him.

61.  However, I do accept that it is reasonable for her to travel to the USA to take a holiday and to visit the son from time to time, but probably in non-peak season and definitely not in the frequency and the duration claimed by her. Further, it must be true that as her age advances, such travelling would be reduced. I will hence allow a broad brush figure of $3,000 per month to cover her holiday expenses in the USA.

62.  The second item of expenses which needs further discussion is her medical/dental expenses. She claims that she needs $10,000 per month. She says that during the marriage, the husband slapped at her left ear, causing damage to her hearing ability and she needs to buy hearing aids. Moreover, it is recently found out that there are a few nodules in her throat which need nasopharynx check-ups at about $2,600 each time. Upon divorce, she would not be able to enjoy the spousal medical benefits of the husband. She thus needs his continued payment of $10,000 to cover her medical expenses.

63.  I shall start with her hearing problem. I do not find it necessary to go into retrospective examination to find out if the husband had really slapped her at her left ear. Putting her case to its highest, after the alleged incident, the wife was required to receive follow-up consultation only twice, and that the doctor did not say that she needed to use hearing aids. And in fact, she tells the court during her oral evidence that she has bought any hearing aids for use since the alleged slapping incident. When asked if it is because she does not have money to buy one, she responds that she does not need to wear hearing aids in her daily life; she requests to use hearing aids in this trial merely because the plastic panels installed in the courtroom as a result of the Covid-19 pandemic have made it difficult for her to hear clearly in court. This is understandable, especially everyone in the courtroom was required to wear, and thus speak, with a mask on, which makes it even more difficult to hear one’s voice clearly. Upon due consideration, I come to the conclusion that it is unlikely that she would need any hearing aids in any near future.

64.  I now turn to the nodules found in her throat. It has to be pointed out that she has not mentioned about her throat problem in any of her affirmations. She mentions this for the first time in her oral evidence in chief. When being cross-examined on her throat problem by Mr Tam, counsel for the husband, she is not able to give a more definite date of when these throat nodules were discovered. She merely tells that it is “possible” (有機會) that the nodules were found out in December 2022, and that no biopsy or diagnosis is made yet.

65.  I find it hard to accept that she is unable to tell the court more exactly when the throat nodules were firstly discovered, if this is a real health issue that has caused her grave concern. She is not able to provide any documentary evidence, such as medical receipts or medical chits showing that she needs regular check-ups of her throat and that each consultation costs her $2,600. I have some doubt as to the seriousness of her throat nodules. I certainly doubt that she needs $10,000 per month to cover her check-up of $2,600 each time, for if it was true, it would literally mean that she needs to do check-ups almost every week.

66.  On the other hand, it is noted that she has recently purchased 2 medical insurances which cost her $4,700 per month. She has a referral letter which can facilitate her to enroll with the ENT department of public hospitals. She tells in court that she will enroll with a public hospital for consultation, but points out that it may take years to have an appointment. With the availability of her medical insurance and the availability of the service of public hospitals, I conclude that her medical needs should be around $1,000 per month.

67.  She claims she needs a total of $12,300 per month to cover her food and meals out. Taking into account the living standard of the parties during the marriage, and the fact that she does not need to go to work and thus work-generated social gatherings are not applicable, I accept the husband’s case that her food and meals out should be around $7,000 per month.

68.  Her younger brother is now living in care home and relying on comprehensive social security assistance. While I accept that the wife may need to visit him from time to time and may bring along food for him to enjoy, I am not prepared to accept that she will need to hire a regular helper to take care of him or take him to hospital for medical consultations. She now only needs to pay $2 each trip on public transport. Hence, only $500 will be deemed as her needs under this item of expenses.

69.  In summary, I assess her needs to be around $24,614 per month as follows:

Utilities	$2,000
Management fee	$814
Food + meals out	$7,000
Miscellaneous household expenses	$2,000
Insurance	$4,700
Visits to younger brother	$500
Transport	$100
Clothing/ shoes/personal grooming/ haircuts/cosmetics	$2,000
Entertainment/presents	$1,500
Holiday	$3,000
Medical/ dental	$1,000
GRAND TOTAL	$24,614

70.  I shall round up the above sum to $25,000, which is the same as the husband’s deemed needs upon his retirement at 65.

Periodical payments vs clean break

71.  The crux of the wife’s case on why periodical payments are necessary is already set out at [4] above, and thus I shall not repeat. Ms Ma, her counsel, highlights that the husband is a high-income earner who should be at least able to continue to work for Mott McDonald for another 2 years or so until 2025 when the construction project completes. During this period, he would be able to earn $5,133,555,[6] which should be counted as his available financial resources. By comparison, the wife is unable to earn any salary or income way forward.

72.  The husband’s case for rejection of making periodical payments to the wife is already described succinctly at [8] above. His counsel, Mr Tam, explains that by the latest open offer of the husband, the wife will take the Shamshuipo Property, which has already been recently renovated as to the property itself and the common parts of the building, which means that she does not need to dip into her capital any more in order to make provisions for such renovation. On the contrary, the husband, after taking the Tai Po Property, will have to spend a substantial amount of money on its renovation including contribution to the repair/renovation of the common parts of the building (and this is also one of the reasons why the wife refuses to take the Tai Po Property in which she has been occupying since 2014). He has also agreed to pay for all the fees and costs associated with the transfer of the 2 properties from joint ownership into their respective sole names. On top of all these, he will give her a lump sum of $4,720,000, and together with her own assets worth of about $430,108, she will bring home a net total amount of $5,150,108, for her to use and enjoy for the rest of her life. On the other hand, he will merely keep a liquidity of about $1,876,539 and the Tai Po Property, representing less than 40% of the total agreed assets of the parties. Counsel further adds that the suggestion of periodical payments will only prolong the litigation between the parties.

73.  In other words, the husband accepts that there should be a departure of equal sharing of the total assets, in that the wife takes roughly about 60.6% of the assets to cater for her future needs, in order to achieve a clean break between them.

Discussion

74.  I shall start the discussion by going into the law on spousal periodical payments and clean break.

75.  In England, the Matrimonial Causes Act 1973 was amended in 1984 and a new section 25A was inserted:

“25A Exercise of court’s powers in favour of party to marriage on decree of divorce or nullity of marriage.

(1) Where on or after the grant of a decree of divorce or nullity of marriage the court decides to exercise its powers under section 23(1)(a), (b) or (c), 24 or 24A above in favour of a party to the marriage, it shall be the duty of the court to consider whether it would be appropriate so to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considers just and reasonable.

(2) Where the court decides in such a case to make a periodical payments or secured periodical payments order in favour of a party to the marriage, the court shall in particular consider whether it would be appropriate to require those payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.

(3) …”

76.  The new section 25A has been described as the statutory steer to an eventual clean break. Unless “undue hardship” would likely to be experienced, the court ought to be thinking of providing an end date to periodical payments.

77.  Following the introduction of the new section 25A, Ward LJ in C v C (Financial Relief: Short Marriage) [1997] 2 FLR 26 set out the general approach which judges should follow:

“(1) The first task is to consider a clean break which pursuant to section 25A(1) requires the court to consider whether it would be appropriate to exercise its powers so that the financial obligations of each party towards the other will be terminated soon after the grant of the decree as the court considers just and reasonable.”

78.  In Miller v Miller & McFarlane v McFarlane [2006] 2 AC 618, Baroness Hale observed that there were advantages of a clean break:

“133. Section 25A is a powerful encouragement towards securing the court’s objective way of lump sum and capital adjustment (which now includes pension sharing) rather than by continuing periodical payments. This is good practical sense. Periodical payments are a continuing source of stress for both parties. They are also insecure. With the best will in the world, the paying party may fall on hard times and be unable to keep them up. Nor is the best will in the world will always evidence between formerly married people. It is also logical consequence of the retreat from the principle of the lifelong obligation….”

79.  However, Her Ladyship also warned at para 134 that “a clean break is not to be achieved at the expense of a fair result”, and went on to give the examples where a clean break was feasible and fair,

“143. But there are many cases in which the approach of roughly equal sharing of partnership assets with no continuing claims one against the other is nowadays entirely feasible and fair. One example is Foster v Foster [2003] 2 FLR 299, a comparatively short childless marriage, where each could earn their own living after divorce, but where capital assets had been built up by their joint efforts during the marriage. Although one party had earned more and thus contributed more in purely financial terms to the acquisition of those assets, both contributed what they could, and the fair result was to divide the product of their joint endeavours equally. Another example is Burgess v Burgess [1996] 2 FLR 34, a long marriage between a solicitor and a doctor, which had produced three children. Each party could earn their own living after divorce, but the home, contents and collections which they had accumulated during the marriage could be equally shared. Although one party might have better prospects than the other in future, once the marriage was at an end there was no reason for one to make further claims upon the other.”

80.  As to the rationale for imposing the obligation to maintain into the future, and how the court is to operate the principles of fairness, equality and non-discrimination, Baroness Hale went on to explain,

“137. So how is the court to operate the principles of fairness, equality and non-discrimination in the less straightforward cases? As Ward LJ has argued non-judicially (“Have the House of Lords abused Cinderella? Their Contribution to Divorce Law”, lecture at King's College, London, 23 November 2004) given that we have a separate property system, there has to be some sort of rationale for the redistribution of resources from one party to another. In my view there are at least three. Any or all of them might supply such a reason, although one must be careful to avoid double-counting. The cardinal feature is that each is looking at factors which are linked to the parties' relationship, either causally or temporally, and not to extrinsic, unrelated factors, such as a disability arising after the marriage has ended.

138. The most common rationale is that the relationship has generated needs which it is right that the other party should meet. In the great majority of cases, the court is trying to ensure that each party and their children have enough to supply their needs, set at a level as close as possible to the standard of living which they enjoyed during the marriage (note that the House did not adopt a restrictive view of needs in the White case [2001] 1 AC 596, 608g-609a). This is a perfectly sound rationale where the needs are the consequence of the parties' relationship, as they usually are. The most common source of need is the presence of children, whose welfare is always the first consideration, or of other dependent relatives, such as elderly parents. But another source of need is having had to look after children or other family members in the past. Many parents have seriously compromised their ability to attain self-sufficiency as a result of past family responsibilities. Even if they do their best to re-enter the employment market, it will often be at a lesser level than before, and they will hardly ever be able to make up what they have lost in pension entitlements. A further source of need may be the way in which the parties chose to run their life together. Even dual career families are difficult to manage with completely equal opportunity for both. Compromises often have to be made by one so that the other can get ahead. All couples throughout their lives together have to make choices about who will do what, sometimes forced upon them by circumstances such as redundancy or low pay, sometimes freely made in the interests of them both. The needs generated by such choices are a perfectly sound rationale for adjusting the parties' respective resources in compensation.

139. But while need is often a sound rationale, it should not be seen as a limiting principle if other rationales apply. This was the error into which the law had fallen before the White case. Need had become “reasonable requirements” and thus more generous to the recipient, but it was still a limiting factor even where there was a substantial surplus of resources over needs: see Page v Page [1981] 2 FLR 198. Counsel would talk of the “discipline of the budget” and suggestions that a wife's budget might properly contain a margin for savings and contingencies, or to pass on to her grandchildren, were greeted with disbelief.

140. A second rationale, which is closely related to need, is compensation for relationship-generated disadvantage. Indeed, some consider that provision for need is compensation for relationship-generated disadvantage. But the economic disadvantage generated by the relationship may go beyond need, however generously interpreted. The best example is a wife, like Mrs McFarlane, who has given up what would very probably have been a lucrative and successful career. If the other party, who has been the beneficiary of the choices made during the marriage, is a high earner with a substantial surplus over what is required to meet both parties' needs, then a premium above needs can reflect that relationship-generated disadvantage.

141. A third rationale is the sharing of the fruits of the matrimonial partnership. One reason given by the Law Commission for not adopting any one single model was that the flexibility of section 25 allowed practice to develop in response to changing perceptions of what might be fair. There is now a widespread perception that marriage is a partnership of equals. The Scottish Law Commission found that this translated into widespread support for a norm of equal sharing of the partnership assets when the marriage ended, whatever the source or legal ownership of those assets (Scot Law Com No 67, paras 3.66-3.68). A decade earlier, the English Law Commission had found widespread support for the automatic joint ownership of the matrimonial home, even during marriage: First Report on Family Property: A New Approach (1973) (Law Com No 52). Earlier still, the checklist of factors accompanying the new powers of property allocation in the Matrimonial Proceedings and Property Act 1970 had introduced the contributions which each party had made to the welfare of the family, including the contribution made by looking after the home and caring for the children. Thirty years later, the authors of Settling Up (see para 128 earlier), p 56, found that “there appeared to be a relatively widespread assumption that an 'equal' or 50/50 division was the normal or appropriate thing to do”, alongside a recognition of needs and entitlements (but their respondents' views on entitlements might not be quite the same as the lawyers', a point to which I shall return).

142. Of course, an equal partnership does not necessarily dictate an equal sharing of the assets. In particular, it may have to give way to the needs of one party or the children. Too strict an adherence to equal sharing and the clean break can lead to a rapid decrease in the primary carer's standard of living and a rapid increase in the breadwinner's. The breadwinner's unimpaired and unimpeded earning capacity is a powerful resource which can frequently repair any loss of capital after an unequal distribution: see, e g, the observations of Munby J in B v B (Mesher Order) [2003] 2 FLR 285. Recognising this is one reason why English law has been so successful in retaining a home for the children.”

81.  In SS v NS [2014] EWHC 4183, Mostyn J gave a succinct summary on the relevant principles applicable to an application for spousal maintenance after the new section 25A came into force:

“46. Pulling the threads together it seems to me that the relevant principles in play on an application for spousal maintenance are as follows:

(i) A spousal maintenance award is properly made where the evidence shows that choices made during the marriage have generated hard future needs on the part of the claimant. Here the duration of the marriage and the presence of children are pivotal factors.

(ii) An award should only be made by reference to needs, save in a most exceptional case where it can be said that the sharing or compensation principle applies.

(iii) Where the needs in question are not causally connected to the marriage the award should generally be aimed at alleviating significant hardship.

(iv) In every case the court must consider a termination of spousal maintenance with a transition to independence as soon as it is just and reasonable. A term should be considered unless the payee would be unable to adjust without undue hardship to the ending of payments. A degree of (not undue) hardship in making the transition to independence is acceptable.

(v) If the choice between an extendable term and a joint lives order is finely balanced the statutory steer should militate in favour of the former.

(vi) The marital standard of living is relevant to the quantum of spousal maintenance but is not decisive. That standard should be carefully weighed against the desired objective of eventual independence.

(vii) The essential task of the judge is not merely to examine the individual items in the claimant's income budget but also to stand back and to look at the global total and to ask if it represents a fair proportion of the respondent's available income that should go to the support of the claimant.

(viii) Where the respondent's income comprises a base salary and a discretionary bonus the claimant's award may be equivalently partitioned, with needs of strict necessity being met from the base salary and additional, discretionary, items being met from the bonus on a capped percentage basis.

(ix) There is no criterion of exceptionality on an application to extend a term order. On such an application an examination should to be made of whether the implicit premise of the original order of the ability of the payee to achieve independence had been impossible to achieve and, if so, why.

(x) On an application to discharge a joint lives order an examination should be made of the original assumption that it was just too difficult to predict eventual independence.

(xi) If the choice between an extendable and a non-extendable term is finely balanced the decision should normally be in favour of the economically weaker party.”

82.  Locally in Hong Kong, section 4(1)(a) of the MPPO provides that spousal periodical payments may be ordered by the court for the maximum duration set out at section 9(2)(a), ie during the joint lives of the parties to the marriage or until the receiving party remarries. Yet, the MPPO does not have a corresponding section 25A of the English Matrimonial Causes Act which imposes a duty on the court to consider a clean break or to fix a limited duration for spousal periodical payments unless there is “undue hardship”.

83.  Our Court of Final Appeal, however, commented on the desirability of a clean break arrangement in matrimonial cases. In Raymond Kin Sang Hung v Mimi Kar Kee Wong Hung (2015) 18 HKCFAR 210, the Court of Final Appeal was tasked to decide, among other things, whether a clawback order made by the Court of Appeal is contrary to the clean break principle and/or the principle of fairness. Ma CJ (as he then was) in giving judgment for the Court propounded the following view on the finality in litigation in matrimonial proceedings:

“E FINALITY AND CLEAN BREAK

35. The desirability of finality in litigation has a somewhat special application in matrimonial matters in that while it is desirable to have a clean break between parties, the law recognises that this may not always be possible in the interests of fairness. Thus, for example, particularly where children are concerned, orders are frequently made for periodic payments which look to the future. Various orders which a court can make under ss 4, 6 or 6A of the Ordinance also look to the future.

36. Nevertheless, in accepting the above, one must as far as possible try to achieve a clean break between parties who, following the dissolution of a marriage, can often be severely at odds with one another. The desirability of a clean break should be at the top of a judge’s mind when considering issues of ancillary relief. While there is no statutory backing for this approach, it is a common law principle of long standing. In LKW, reference was made to the clean break principle [at para 74]. In Miller v Miller, to which reference was made in LKW, the desirability of a clean break was emphasised in a number of passages. In one, Lord Nicholls of Birkenhead referred to a familiar passage in the speech of Lord Scarman in Minton v Minton: “An object of the modern law is to encourage [the parties] to put the past behind them and to begin a new life which is not overshadowed by the relationship which has broken down.” I would also echo the sentiments of Stock JA in L v C [2007] 3 HKLRD 819: -

“…That policy consideration is one that itself recognizes the considerable trauma that attends prolonged and costly matrimonial disputes, and the obvious advantage in settlement rather than in the litigious cauldron that stirs bitterness, prolongs uncertainty, and is the enemy of the clean break that enures to the advantage of husband, wife and children.” (my emphasis added)

84.  It was held by the Court of Final Appeal that the terms of the clawback order made by the Court of Appeal were fraught with difficulties and would inevitably have given rise to substantial disputes between the parties in the future, and concluded that the clawback order should not have been made.

85.  The Court of Appeal in TL v SN (Ancillary Relief) [2010] HKFLR 506 at para 106 has made similar comment on the importance to have regard to the need for finality in litigation, for if this is not rigorously applied, the floodgates would be opened with a vengeance.

86.  It is thus clear from the above case law on the finality in litigation and clean break principle applies to family cases in Hong Kong, though there is no statutory requirement imposed by our MPPO. In such circumstances, I am of the view that the legal principles enunciated from the English authorities on clean break and spousal maintenance provide helpful insight to this court in considering whether to make a clean break order or a spousal maintenance order in this case.

87.  Applying the above principles into this case, there are a few factors which operate in favour of the wife and they are these. This was not a short and childless marriage in which cases clean break order are more readily made (See: C v C (Financial Relief: Short Marriage) [1997] 2 FLR 26). This was a long marriage of at least 30 years up to the date of separation. Further, I accept that shortly after the birth of the son, the wife stopped working and devoted her time and effort in taking care of the son. She became financially dependent on the husband. It is rather irrelevant for him to say that it was her own choice not to continue to work. What remains highly relevant is that over many years of this long marriage, it was the wife who gave very hands-on care to the son. The family had a helper only for a very limited period of time. The career break which resulted from concentration on motherhood in the middle years of her life means that it is extremely unlikely that she, at the age of 64 by this July, can return to the work market in the future. As explained by Baroness Hale in Miller (supra) at para 138, the most common rationale for imposing the obligation to maintain into the future is to meet needs which the relationship has generated.

88.  On the other hand, one must not lose sight of the following facts.

89.  First, although this was a long marriage, the parties’ only son is now an independent adult who does not require the caring of the wife any more. The pivotal factor mentioned by Mostyn J in SS v NS (supra) as to the presence of the children of the family who need to be taken care of by the carer-parent (usually the wife) is not engaged in this case. This, in my view, allows more room for both parties to move forward and be financially independent of one another.

90.  Second, the husband will be 63 by this October, and I have found that he can work until the normal retirement age of 65 only, but not further and certainly not until over 80, which means that he will be able to work for roughly another 2.5 years. It thus makes no logical or practical sense to make a spousal maintenance order in favour of the wife which would endure another 24 years until her notional age of 88, by which time the husband would be 87 years old. The parties’ advanced age is a vital factor in my determination as to whether there should be a clean break between them.

91.  Third, despite that the parties have separated since 2014, the husband has, very fairly in my view, offered that any post-separation accruals, such as his contract-end gratuity and MPF, need not be carved out for sharing and would be shared by the wife.

92.  Fourth, during the next 2.5 years, the husband’s income is deemed to be around $154,000 per month. However, I disagree with the calculation of Ms Ma in [71] above that he would bring home as much as $5,133,555 in the next 2 years or so, because counsel has not taken into account the following matters:

(1) the husband’s contract-end gratuity to be received in May 2023 (ie $219,222) is already included into the pot;

(2) the husband has to pay his monthly expenses of about $56,770 out of his salaries, which means that his salaries would be net to about $97,000 per month only;

(3) the husband will have other financial needs in relation to the renovation of the depilated Tai Po Property, including renovation contribution demanded by the manager of the building, which according to the wife is around $600,000;

(4) the husband would also need to pay for the costs associated with the transfer of the Shamshuipo and Tai Po Properties, including legal fees and stamp duty.

93.  In my view, net of his expenses found to be about $56,770 per month (before his retirement), and putting the wife’s case to its highest, the husband would bring home a total income net to around $3.46 million only before his retirement.[7] Taking also into account his other financial needs as to the renovation of the Tai Po Property and the payment of the transfer costs of the Shamshuipo and Tai Po Properties, which will not be less than $600,000, I would say that his net future financial resources before his retirement is about $2.86 million only.

94.  According to the table at [30], the husband has liquid assets, such as his bank reserve, stock investment, MPF, of about $6.19 million, from which he openly offers to pay the wife $4.72 million. If that is paid, he will be left with only about $1.47 million as his liquidity reserve (or about $1.87 million if his PRC property is to be taken into account), apart from the Tai Po Property which he cannot sell instantly as he needs a roof above his head. If taken into account the said $2.86 million at [93], his liquidity reserve would be increased to $4.33 million (or about $4.73 million if his PRC property is to be taken into account) by his 65 years old, to cater for his own future needs.

95.  By comparison, the wife, after receiving $4.72 million from the husband and taking into consideration her own liquid assets, would have about $5.15 million to cater for her future needs.

96.  It may well be true that the capital reserves of the respective parties after such distribution of assets may not sufficient to cover their respective future needs until their demise. However, in my judgment, it is not fair to only focus on the wife’s future needs; the court should not overlook the husband’s future needs upon his retirement at the age of 65 by which time he, like the wife, would have to rely on their capital and the interest gained on such capital to support their daily living costs.

97.  Fifth, in times, the parties may consider to join the Reverse Mortgage Programme (安老按揭計劃) which enable them to turn their property into immediate, stable and lifelong streams of income, in order to pay for their daily expenses which will likely to be reduced as they get older in age. It must be reiterated that if this course is taken, the wife would be able to receive a higher stream of income than the husband, as she will take the more expensive Shamshuipo Property. According to the Reverse Mortgage calculator provided by the Hong Kong Mortgage Corporation Limited, which is public information readily obtainable from its website,[8] the wife is likely to receive about $12,900 per month on a life-long basis if she joins the Reverse Mortgage Programme.

98.  Upon weighing and balancing all of the aforesaid matters and factors, I come to the conclusion that there shall be a clean break order in this case.

Deciding the outcome

99.  This is a case which involves a long marriage of over 30 years. The parties were married in 1984 and separated in 2014. Their only son, born in 1997, is now an independent adult living and working in the USA.

100.  Both parties are in their 60s. The wife has been a housewife since around the birth of their only son. She will be 64 by this July and is not regarded as having any earning capacity way forward. The husband will be 63 by this October. He is an engineer. The court has ruled that he should be able to work until 65 earning about $154,000 per month, which is similar to his current income. The court has rejected the wife’s contention that the husband would be able to work as an engineer or take up freelancer jobs after the age of 65 and until over 80, so that he should be made to continue to pay a monthly maintenance of $75,000 to her until her notional age of 88.

101.  The total assets of the parties are agreed and are worth about $16,961,621 (See: [30]). If these are shared equally, each will take about $8,480,810. The husband has agreed that the wife may take the Shamshuipo Property, from which he is willing to move out and go to live in the Tai Po Property at which the wife is now living. He is also willing to leave behind any furniture and electrical appliances of the Shamshuipo Property at the choice of the wife. He asks the wife to remove all her belongings and items in the Tai Po Property by a deadline, after which he is free to dispose of the same without resorting to her any more.

102.  I have assessed the needs of the parties. The wife’s reasonable needs are about $25,000 per month. The husband’s needs prior to his retirement is about $56,770, which will be reduced to $25,000 when he retires at the age of 65. It is indisputable that as their age advances, their monthly expenses are likely to be reduced.

103.  The total assets in the pot is not able to satisfy the wife’s future needs up to her notional age of 88. However, apart from considering her needs, the court should not overlook the husband’s future needs, in particularly after his retirement. Given their advanced age, it is not fair to impose a financial duty on him to pay the wife continued periodical maintenance after his retirement at the age of 65. Hence, upon balancing all the matters and factors set out at [87] to [97] of this judgment, I am of the view that if the wife is to keep the Shamshuipo Property (which will cater for her housing needs) and if the husband is to give her a lump sum of $4.72 million, couple with her own reserve of about $430,108, she will bring home a total of about $5.15 million, and together with the availability of the option of Reverse Mortgage, her future needs in the years to come will be sufficiently provided for. This distribution would mean that the wife would get about 60.6% of the pot. A clean break order should thus be made.

Costs

104.  On the issue of costs, I think that it is fair for me to take into account the following matters:

(1) the husband’s unsatisfactory disclosure of the updated value of his HSBC MPF and his contract-end gratuity to be received by May 2023, such that the court, in the pre-trial review hearing of 21 November 2022, had to order him to file a supplemental affirmation on these matters;

(2) as at the 1^st day of trial before oral evidence was called, one of the major dispute of the parties related to the size of the family pot.[9] There were there and then 22 items of disputed assets/liabilities, of which 5 items were related to the husband’s ledger and the rest concerned the wife’s ledger. Upon clarification by the court with the parties, the disputed items were no longer at issue. Importantly, the husband conceded on the items relating to his legal fees and his contract-end gratuity to be received in May 2023, which added back about $597,222 into the pot for sharing. Also crucial to note is that the wife withdrew her stance of insisting to take a different date in valuing the husband’s HSBC MPF and her various stock investment;

(3) after aforesaid concession was made by the respective parties, it became clear that the size of the pot for sharing was no longer in dispute. The parties then made further open offer, after taking into account the agreed size of the pot. The husband’s latest open offer is now accepted by the court as the final determination of the ancillary relief matters. The wife is not able to beat his open offer;

(4) had the wife accepted the latest open offer of the husband, the trial could have been avoided and costs and time would be saved. The wife’s insistence that there should not be a clean break and that the husband should work after the normal retirement age of 65 to provide her with monthly maintenance is regarded as unreasonable;

105.  Hence, I conclude that the wife should bear costs of this ancillary relief trial, but not the costs incurred prior to the trial, on a nisi basis, which shall be made absolute within 14 days from the date hereof. I certify the attendance of counsel in the trial.

Order

106.  Due to the matters set out aforesaid, I will make the following order:

(1) The husband shall transfer all his rights and interests in the Shamshuipo Property to the wife within 3 months from the date of the grant of the decree absolute;

(2) The wife shall transfer all her rights and interests in the Tai Po Property to the husband within 3 months from the date of the grant of the decree absolute, subject to the consent of the Housing Department or Housing Authority (as the case may be);

(3) The husband shall be solely responsible for all the transfer costs, such as legal fees and stamp duty, of the transfer stated at clauses (1) and (2) above;

(4) The parties shall deliver vacant possession of the above respective properties on the date of the transfer;

(5) The husband shall pay the wife a lump sum of $4.72 million, which is subject to the first charge of the Director of Legal Aid, as follows:

(a) A sum of $2 million within 14 days upon the grant of the decree absolute;

(b) The remaining sum of $2.7 million within 3 months upon the grant of the decree absolute.

(6) Subject to the above clauses (1) to (5), each party shall keep the assets under their respective names;

(7) All other ancillary relief claims between the parties, if any, do stand dismissed on the grant of the decree absolute;

(8) There be a nisi order that there be no order as to costs of the ancillary relief matters between the parties including all costs previously reserved, save that the wife shall bear the costs of this ancillary relief trial, with certificate for counsel. This nisi order shall be made absolute within 14 days of this judgment;

(9) The wife’s own costs shall be taxed in accordance with Legal Aid Regulations;

(10) There be liberty to apply in respect of the implementation of this order.

107.  I shall hold the husband to an undertaking that he will leave behind any furniture and electrical appliances kept in the Shamshuipo Property at the choice of the wife. I shall also hold the wife to an undertaking that she shall remove all her personal belongings from the Tai Po Property by the time when the parties complete the transfer of the Tai Po Property to the husband.

108.  I urge both parties to liaise between themselves or via their respective solicitors forthwith as to the practical arrangement of the above undertakings and all the matters set out at [101] in respect of the switching of properties between them.

109.  This court order shall be drawn up by the husband’s solicitors for approval. I also remind them to apply for decree absolute forthwith and without delay.

110.  To complete the court records, I also remind the wife’s legal team to draw up the order in respect of the withdrawal of her summons on maintenance pending suit as follows:

(1) Leave to the wife to withdraw her summons filed on 1 September 2022;

(2) The wife shall bear the husband’s costs of this summons, to be taxed if not agreed;

(3) The wife’s own costs be taxed in accordance with the Legal Aid Regulations.