HHY v. LHW

FCMC 12621 / 2019

[2024] HKFC 161

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES NO. 12621 OF 2019

----------------------------

------------------------

-----------------------------------

J U D G M E N T

(Final Ancillary Relief)

-----------------------------------

A.  Introduction

1.  This is a judgment to determine the issue of final ancillary relief, including maintenance for the child of the family going forward.

2.  The Husband and the Wife, both currently 43 years old, married on 19 December 2014.

3.  They have 1 son, LTC (born on 9 October 2015 and now nearly 9 years old) (the “Son”), who was attending Primary 2 at a local school in Hong Kong at time of trial.

4.  Petitions for divorce had previously been filed in FCMC 6455/2019 and FCMC 6514/2019. Both proceedings had been dismissed by Order of DDJ Susan Wong dated 15 October 2019, whereupon the present proceedings were commenced based on a petition dated 22 October 2019 for divorce on grounds of 1-year separation by consent, the date of separation being 14 October 2018.

5.  A Decree Nisi was granted on 17 November 2020.

6.  By Order of DDJ Susan Wong dated 10 August 2020, the parties were granted joint custody of the Son and with interim care and control to the Husband and defined access to the Wife.

7.  The issue of care and control was litigated in a 7-day trial, culminating in an Order of DDJ Susan Wong dated 28 September 2021 which granted sole care and control of the Son to the Wife, and defined access to the Husband during term time for inter alia (i) alternate weekend staying access from Friday after school to Sunday 8pm and Friday after school to Saturday 8pm; (ii) day access every Tuesday and Thursday from 6:30pm to 8:30pm if the Husband does not need to work. The parties are to equally share the Son’s long school holidays.

8.  Both parties are in stable employment without expectant significant change. The Husband has been a policeman since 2009. His current income is HK$40,000/month.  The Wife has been employed as a physiotherapist in a private hospital since around 2011. Her current income (inclusive of bonus) is around HK$63,000/month.

9.  In this trial, the Wife is represented by Mr Eric Leung and the Husband is represented by Mr Enzo Chow. In their oral opening submissions, both Counsel confirmed that this is a sharing case, given the parties’ income and resources are sufficient to meet the reasonable needs of themselves and the Son.

10.  The main dispute lies in how the key asset should be dealt with, being a property at Victoria Skye with agreed value of HK$9,185,000 registered in the sole name of the Husband (“Property”). While both parties agree that an order for sale should be made, they are unable to agree on the apportionment of the net sale proceeds.

11.  The Wife and the Husband are the only witnesses giving evidence in this trial. I find both of them to be generally truthful witnesses. I accept their evidence, save to the extent identified in my judgment below.

B.  Ancillary Relief – Overview

B.1  Relevant Legal Principles

12.  Pursuant to section 7 of the Matrimonial Proceedings and Property Ordinance (Cap. 192) (“MPPO”), the Court is tasked with having regard to the following factors in deciding what ancillary relief orders to make:

“(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.”

13.  The Court of Final Appeal has laid down 4 principles in its landmark decision of LKW v DD (2010) 13 HKCFAR 537 on how section 7 should be approached, namely fairness, rejection of discrimination, the upholding of the concept of the yardstick of equality and the rejection of minute retrospective investigation of the parties’ finances (see §§56 to 70 per Ribeiro PJ).

14.  In addition, the Court of Final Appeal has identified a five-step approach to be adopted in all ancillary relief trials (see §§71 to 132 per Ribeiro PJ), namely:

(1)  The identification of the assets;

(2)  Assessing the parties’ financial needs;

(3)  Deciding to apply the sharing principle;

(4)  considering whether there are good reasons for departing from equal division; and

(5)  deciding the outcome.

B.2  Issues

15.  The following issues on final ancillary relief now fall to be determined by this Court:

(1)  Identification of the assets:

(2)  Reasonable needs and child maintenance;

(3)  Considering whether there are good reasons for departing from equal division, such as:

(a)  Length of marriage;

(b)  the parties’ respective monetary contribution to purchase of the Property;

(c)  whether either party acted inequitably in maintaining their respective positions regarding how the Property should be dealt with, ie. (i) for the Husband to refuse to rent out the Property or permit the Wife to store her personal belongings thereat pending determination of these proceedings and (ii) for the Wife to refuse consenting to a sale of the Property at an earlier stage.

16.  The issue of the Husband’s contribution to the Son’s maintenance is dealt with in the section regarding the parties and the Son’s needs.

B.3  The parties’ open proposals

17.  I set out the Wife’s open offer as follows:

(1) “To reflect the following factors, there is a departure from equality and the matrimonial assets shall be shared by the Wife and the Husband with a ratio of 70% to the Wife and 30% to the Husband:-

(a) Short marriage of 3 years and 10 months.

(b) The Wife contributed significantly more to purchase of the Victoria Skye Property which should be considered non-matrimonial in nature.

(c) The Wife’s loss of her share in the rental income due to the Husband’s conduct or the Husband’s reduction in his contribution towards the mortgage of Victoria Skye Property had he rented it out as demanded by the Wife.

(d) The additional storage fees paid by the Wife due to the Husband’s conduct.

(2) The matrimonial assets are therefore to be distributed in the following manner:-

(a) To the Wife: $5,597,162 x 70% = $3,918,013 i.e. $3.92 million

(b) To the Husband: $5,597,162 x 30% = $1,679,148 i.e. $1.68 million.

(3) The logistics of carrying out the above distribution shall be as follows:-

(a) Save and except the Victoria Skye Property, the Wife shall keep her personal assets in the amount of $783,930 and the Husband shall keep his personal assets in the amount of $1,046,287.

(b) The Victoria Skye Property shall be sold for a price of not less than $9,185,000 or any other price as mutually agreed by the parties and after deducting the outstanding mortgage and other costs and disbursements incurred in the sale, the net sale proceeds received shall distributed as follows:

(i) The Wife shall obtain $3,134,083.

(ii) The Husband shall obtain $632,861. All payments to the Husband shall be payable to the Director of Legal Aid.

(4) The Husband do pay to the Wife $12,393 per month being his share of the maintenance of the Child until he reaches 18 years old or completes his full-time education, whichever is later. The Husband’s contribution to be backdated to September 2021 which was when the care and control of the Child was varied and granted to the Wife

(5) Pursuant to Section 17(3) of the Legal Aid Ordinance, the Husband shall pay the Wife’s costs of the FDR and ancillary relief including all costs reserved personally on an indemnity basis.”

18.  The Husband’s open offer is as follows:

(1)  “The [Property] be sold and the net proceeds of sale (after deducting the outstanding first and second mortgages, stamp duty (if any), legal expenses, agent’s commission and all other necessary outgoings) be shared equally between H and W. Upon receipt of the parties’ respective share, there shall be a clean break on the ancillary relief between the parties.

(2)  From the date of the trial of the ancillary relief issues until the actual sale of the FMH, W shall be responsible for one-half of the mortgage repayments as well as other outgoings (including management fee and rate and Government rent) of the FMH.

(3)  H would pay his portion in respect of W’s rental (HK$2,600), domestic helper (HK$567) and the Son’s uniform (HK$43), i.e. in the total sum of HK$3,210 (please refer to the Joint Scott Schedule).

(4)  For all other expenses of the Son, each party do bear their respective expenses on the Son and they shall have no claim in this regard against each other.

(5)  Each party shall bear their respective costs of and incidental to the ancillary relief issues (including all costs previously reserved and ordered) and H’s own costs be taxed in accordance with the Legal Aid Regulations and there be Counsel’s certificate for the ancillary relief issues.”

19.  In other words, the battlelines are drawn as follows:

(1)  Ancillary relief: whether the parties’ assets (including net sale proceeds of the Property) should be divided 70:30 in favour of W on W’s case, or largely 50:50 on H’s case;

(2)  Child maintenance: whether the Husband should pay HK$$12,393/ month to be backdated to September 2021 (on W’s case) or HK$3,210/ month going forward.

C.  Identification of the assets

20.  The parties’ assets were largely agreed pursuant to a schedule of asset and liability dated 15 September 2023 (“Agreed Schedule”).

C.1  W’s assets & liabilities

21.  In respect of the Wife:

	Wife’s assets	(HK$)	Husband’s position
1.	Cash in bank accounts	$40,808.64	Agreed
2.	Insurance policy	$158,134.3[1]	Agreed
3.	MPF	$632,097.17	Agreed
	Sub-total:	$831,040.11
	Wife’s liabilities
4.	Loan from mother for legal costs in divorce and criminal proceedings[2]	($46,500)	Disagree as immediately repayable
5.	Loan from mother on 15/9/2023 for payment of legal costs[3]	($380,000)	Disagree as immediately repayable
	Sub-total:	($426,500)

22.  The Wife claimed that an I-owe-you promissory note had been signed to reflect her initially borrowing of HK$405,000 from her mother (as per 2022 Form E), but such document has not been disclosed. In the Wife’s Answer to Questionnaire dated 28 April 2022[4], the Wife explained that the HK$405,000 loan was for purposes of paying legal fees, and cheques made out by her mother for HK$370,000 on 14 July 2021 and of HK$35,000 on 27 July 2021 to her legal representatives were exhibited[5].

23.  It is her position when the Agreed Schedule was prepared, that the outstanding liability under that loan has been reduced to HK$46,500, though I have not been provided with evidence on the details of the apparent repayment of HK$358,500. I note that her evidence under cross-examination was that the sum is only repayable after the Property was sold.

24.  On the first day of trial, the Wife disclosed a letter stating she confirmed that on 15 September 2023, she borrowed a further HK$380,000 from her mother and solely used to pay her legal fees for this trial, and that she promises that she shall pay back her mother in full after the sale of the Property as her mother is her immediate debtor. The letter is accompanied by a copy of a cheque made out by the Wife’s mother to the solicitor firm representing the Wife in these proceedings and a bank-in slip.

25.  The Husband’s position as set out in his closing submissions §§69-72, is that the Wife’s parents are both retired civil servants with the benefit of government pension. The Wife accepted under cross-examination that her mother never chased her for the repayment and have no imminent need of the sum. It appears that the Husband does not take issue with the fact of the liability owed by Wife to her mother, but merely that she is not under any pressure of immediate repayment (which tallies with the Wife’s evidence that such loans need only be repaid when the Property is sold).

26.  As such, I find that the Wife’s net asset position is around HK$405,000.

C.2  H’s assets & liabilities

27.  In respect of the Husband:

	Husband’s assets	(HK$)	Wife’s position
1.	Property	Agreed value: $9,185,000 Outstanding Hang Seng Bank mortgage (as of June 2023): $4,149,819.21   Outstanding Easy Credit mortgage (as of April 2023): $1,258,699.87   Net value: $3,776,481	Net value agreed, contribution to purchase monies disputed
2.	Cash in bank accounts	$25,553	Agreed
3.	MPF/ Pension	$1,020,731.9	Agreed
	Sub-total:	$4,822,765.9
	Husband’s liabilities
4.	Credit card	($2,844.8)	Agreed

28.  As such, I find that the Husband’s net asset position is around HK$4,820,000, his assets net of the Property being HK$1,043,440.

C.4  Conclusion

29.  To conclude, I find that the Wife’s net worth is HK$405,000 and the Husband’s net worth is around HK$4,820,000. The family pot is therefore around HK$5,225,000.

D.  Assessing financial needs

30.  As mentioned above, both parties submit this is a sharing case as their resources are sufficient to meet the reasonable needs of themselves and the Son. Having said that, it appears both parties’ reported spendings are in excess of their income pursuant to a joint scott schedule dated 15 September 2023 (“Joint Scott Schedule”):

(1)  W’s income is HK$63,000/month, yet her spending together with the Son’s is said to be HK$71,462/month (as opposed to HK$62,065/month in her 2022 Form E[6]);

(2)  H’s income is HK$40,000/month, yet his spending together with the Son’s is said to be HK$54,848/month (as opposed to HK$47,820/month in his 2022 Form E[7]).

31.  For reasons set out below, I find there to be forensic exaggeration of reasonable expenses by both parties of varying degree.

D.1  Wife’s Needs

32.  The Wife’s latest position on the monthly expenses of herself and the Son pursuant to the Joint Scott Schedule as updated at trial, together with the Husband’s response, is as follows:

General Expenses

Item	W’s position (HK$)	H’s position in Joint Scott Schedule (HK$)	H’s position in closing submissions (HK$)
Rent	15,500	13,000 and he should only be responsible for (40%[8] of the Son’s half share), i.e. HK$2,600.	0 because care and control was awarded to the Wife because it was beneficial for her and the Son to live with the Wife’s parents.
Utilities (electricity, gas, rates, telephone & water)	1,500	Agreed	No change
Food	5,000	2,500 as the Son will also have dinner at H’s home	0 as W lives close to her parents and this is double-counted with the HK$15,000 contribution to parents
Household expenses	2,000	1,500	0 as W lives close to her parents and this is double-counted with the HK$15,000 contribution to parents
Domestic helper(s)	5,800	4,730.00 and H should only be responsible for 40% of the Son’s half share when he was with W (ie.60% of the time), i.e. HK$567	No evidence that new helper will be hired after present contract ends. $5,800 too high for serving 1 adult 1 minor anyway.
Total monthly household expenses	29,800	23,230	1,500

Personal Expenses

Item	W’s position (HK$)	H’s position in Joint Scott Schedule (HK$)	H’s position in closing submissions (HK$)
Meals out of home	5,000	2,000 as there is canteen in the hospital in which W works	No change
Transport	1,500	1,100 as there is direct bus and minibus reaching the workplace of W	No change
Clothing/Shoes	1,000	800, as the amount claimed by W is not supported by documentary evidence	No change. W wears uniform at work.
Personal grooming (including haircut and cosmetics)	2,000	1,000 as the amount claimed by W is not supported by documentary evidence	No change. Skin care product can last more than a month and treatment set is not a regular recurrence.
Entertainment/presents	1,000	No comment	No change
Holiday	1,600	1,000 as the amount claimed by W is not supported by documentary evidence	Double counted with the Son’s expenses.
Tax	4,000	No comment	No change
Insurance premia	677	No comment	No change
Contribution to parents	15,000	5,000 as both of W’s parents are retired civil servant who enjoy pensions	0, paid out of filial piety and not any real need
Total monthly personal expenses	31,777	16,577	10,577

33.  It would appear the “big ticket” disputes are:

(1)  Whether the Wife is entitled to move out of her parents’ flat and rent a place of her own with the Son, and if so, what is the reasonable rent?

(2)  Whether the Wife’s contribution to her parents of HK$15,000/month is reasonable?

34.  On issue (1) on rental budget, I have considered the judgment of DDJ Susan Wong resulting in the Order dated 28 September 2021 granting care and control of the Son to the Wife in [2021] HKFC 194 (“Judgment”). I accept a relevant fact which led to the learned Judge’s order is the Wife’s proposal at the time that if she is granted care and control, she intends to continue to live with her parents at their residence:

“137. M said in her 2^nd Affirmation,

“41. If the Court grants me care and control of my son, I intend to continue to live with my parents at the present residence as my son loves and enjoys living there so that they can help me to take care of my son when I am not at home. In addition, as my work hours are flexible….so that I can arrange to work in the shift between 8:30am and 4:30pm on average half a month and the remaining half will be between 10am and 6pm. This can ensure that I will be the primary care of my son after I return home at around 5:30pm or 7pm to 7:15pm after work.

42. My family and I have considered moving to a place near my son’s school. However, we have decided that it would be better if we continue to reside in Sham Tseng and to arrange for travelling from Sheng Tseng to school either by my father driving or booking a fixed taxi or Uber to drive….

43. As to residence, the reason why I decided to stay in Sham Tseng is that this estate is nice and spacious and has club house activities. My family and I have recently arranged to view some rented flats closer to my son’s school in Lai Chi Kok with my son but after viewing, my son said he likes to live in Shem Tseng more….”

137. I accept her arrangement. I also accept that M continuing living with her parents is beneficial to both M and TH. In view of Maternal Grandfather’s evidence in Court, I find that he cares very much about M and TH. He is the one who is responsible for taking TH to lessons in SAHK and he would take detailed notes in class so that the family can work at the exercises with TH at home. The most important is that M would send those notes to F.” (my emphasis)

35.  As stated in the Judgment, the Wife was previously diagnosed with Obsessive Compulsive Disorder, but by the time of the trial (ie. July – August 2021), the learned Judge was satisfied that the Wife is in remission and that she is capable of being the carer of the Son (§67). In contrast to an earlier order dated 24 November 2020 where staying access was granted to the Wife on the express proviso that “[the Wife] had to exercise access in the company of her parents and [the Son] had to sleep with the maternal grandparents during staying access” (§21), the Order dated 28 September 2021 granting care and control of the Son to the Wife was not conditional upon the Wife’s indefinite stay with her parents, although the learned Judge observed that a continuation of that arrangement would be beneficial to both the Wife and the Son.

36.  I also note that the Husband’s open proposal for care and control and access for the 2021 trial was for the Wife to have care and control of the Son from Monday after school until Friday before school, which was not conditional upon the Wife and the Son residing with the maternal grandparents (Judgment p8).

37.  It transpired that by a tenancy agreement dated 14 June 2023, the Wife rented her current residence in Sham Tseng for 2 years commencing on 23 June 2023 at HK$15,500/month.

38.  I reject the suggestion that the Wife should not be permitted to rent a place and live with the Son apart from her parents for the following reasons:

(1)  The order for care and control was not a conditional one, and indeed the learned Judge’s comment that it would be beneficial for the Wife and the Son to continue living with the maternal grandparents was made in 2021 at a time when the Wife has been in remission.

(2)  Another 3 years had elapsed since. If it is indeed contrary to the Son’s best interest for the Wife to move out with him since June 2023, I would have thought this is a matter for the children order to be revisited, instead of having it resolved indirectly in a final ancillary relief and child maintenance trial.

(3)  In any event, I note that the Husband was prepared to agree to a rental budget of HK$13,000 in the Joint Scott Schedule.

39.  I also find that HK$15,500/month is a reasonable sum to incur for rent, noting this is in fact the rental payable under the tenancy agreement, and within the bracket of reasonable rent suggested by the Husband.

40.  As to issue (2) regarding the Wife’s contribution to her parents of HK$15,000/month, it was the Wife’s evidence that she previously paid HK$20,000/month to her parents since May 2019, which was varied down to HK$15,000/month since June 2023. She said this is paid out of filial piety. As mentioned above, both her parents are retired civil servants with the benefit of government pension, and indeed her mother had sufficient resources to loan her significant sums of monies to pay legal fees without insisting on imminent repayment.

41.  I note that the Husband himself suggest a HK$10,000 budget for his own contribution to his parents, notwithstanding some financial support given by his parents to him throughout the years as elaborated below. As such, it would appear to me that as between the parties, it is not controversial that contribution to parents be made as a reasonable expense, notwithstanding their parents may not be in any financial need.

42.  Taking into account other demands on the Wife’s resources, I adopt HK$5,000/month as suggested by the Husband in the Joint Scott Schedule as a reasonable figure.

43.  Doing the best I can and having regard to the fact that the Wife is the care and control parent with whom the Son spends more time with especially during school terms, I consider the following represent reasonable spending of the Wife:

General Expenses (Wife and Son)

Item	(HK$)
Rent	15,500
Utilities (electricity, gas, rates, telephone & water)	1,500
Food	4,000
Household expenses	1,500
Domestic helper(s)	5,800
Total monthly household expenses	28,300

Personal Expenses of the Wife

Item	(HK$)
Meals out of home	4,000
Transport	1,500
Clothing/Shoes	1,000
Personal grooming (including haircut and cosmetics)	1,000
Entertainment/presents	1,000
Holiday	1,000
Tax	4,000
Insurance premia	677
Contribution to parents	5,000
Total monthly personal expenses	19,177

44.  The Wife’s income is HK$63,000/month. In light of reasonable general expenses of HK$28,300/month (for both herself and the Son) and reasonable personal expenses of HK$19,177/month, she has around HK$15,500/month disposable income to meet the Son’s personal expenses.

D.2  Husband’s Needs

45.  The Husband’s latest position on the monthly expenses of himself and the Son pursuant to the Joint Scott Schedule as updated at trial, together with the Wife’s response, is as follows:

General Expenses

Item	H’s position (HK$)	W’s position in Joint Scott Schedule (HK$)	W’s position in closing submissions (HK$)
Rent	10,000	0, because this item was not in H’s Form E.	0 because H accepts he is not actually paying rent for his present occupation of his parents’ place.
Mortgage instalments	24,400	0, as this sum will not be necessary after sale of the Property.	No change
Utilities (electricity, gas, rates, telephone & water)	2,500	700 because H lives with his parents.	0, as this is actually paid by parents.
Management fees	1,920	0, as this sum will not be necessary after sale of the Property.	No change
Food	3,000	2,500	0, as this is actually paid by parents.
Household expenses	2,000	0, because this item was not in H’s Form E.	0, as this is actually paid by parents.
Car expenses	2,500	0, because this item was not in H’s Form E.	0, as this is actually paid by parents.
Total monthly household expenses	46,320	3,200 (after sale of Property)	0

Personal Expenses

Item	H’s position (HK$)	W’s position in Joint Scott Schedule (HK$)	W’s position in closing submissions (HK$)
Meals out of home	3,000	Agreed	No change
Transport	2,000	Agreed	No change
Clothing/Shoes	800	Agreed	No change
Personal grooming (including haircut and cosmetics)	500	Agreed	No change
Entertainment/presents	1,200	Agreed	No change
Holiday	1,000	Agreed	No change
Medical / Dental	500	Agreed	No change
Tax	300	Agreed	No change
HK Police Credit Union	500	Agreed	No change
Contribution to parents	10,000	5,000	0, H accepts he is not actually paying this sum.
Total monthly personal expenses	19,800	14,800	9,800

46.  It would be noted that the significant reduction in Husband’s reasonable expense that the Wife is prepared to agree to arose from the Husband’s evidence in Court that in fact he had not been paying any general expenses save mortgage instalment and management fees totalling HK$26,320/month of the Property. He has not been paying any contribution to his parents either. Rather, his parents had always been supporting him financially by subsidy of HK$2,000-HK$3,000/month since around May 2017 which was increased to around HK$10,000/month from June 2019 when the Husband moved to live with his parents, being his budget above for utilities (HK$2,500), food (HK$3,000), household expenses (HK$2,000) and car expenses (HK$2,500).

47.  The Husband confirmed that his parents are willing to help with caring for the Son when he stays over for access and spend time with them, including to pay out of their pocket to meet the Son’s needs. If the Husband continues to have financial needs, his parents would be prepared to continue assisting him with subsidies as such, though he would be embarrassed to rely on his parents as their only son.

48.  In his oral evidence, the Husband confirmed his income is around HK$40,000/month, and his disposable income is around HK$12,000/month, having paid mortgage instalments to the 2 financial institutions and management fees of the Property. It is his case that he has been paying HK$9,918/month on the Son (as elaborated below), and therefore only has HK$2,000/month or so to spend on himself. His parents had therefore been meeting the shortfall of his general/ personal expenses.

49.  The issue of third-party financial assistance had been considered by the the Court of Final Appeal in KEWS v NCHC (2013) 16 HKCFAR 1 per Ma CJ as follows:

“36. In every case where third party assistance is involved, there are two critical evidential questions for the court to consider:-

(1) What is the extent of the financial assistance provided by the third party to the husband or wife?

(2) What is the likelihood of such financial assistance continuing in the foreseeable future?

37. It goes without saying that in the fact finding exercise, the court must look at the reality of the situation and have regard to matters of substance and not just form. In looking at reality, the court can take into account not only what a party actually has, but also what might reasonably be made available to him or her if a request for assistance were to be made. In O’D v O’D [1976] Fam 83 , which involved the court taking into account the financial support given to the husband by his father, Ormrod LJ said at 90 D-E “In making this assessment the Court is concerned with the reality of the husband’s resources, using that word in a broad sense to include not only what he is shown to have, but also what could reasonably be made available to him if he so wished”.”

50.  In light of the above evidence, I find that on a balance of probabilities that there is a likelihood of the continuation of financial assistance from the Husband’s parents in the foreseeable future up to around HK$10,000/month. Such financial assistance should be taken into account as financial resources of the Husband under s.7(1)(a) of the MPPO.

51.  In the premises, I find the Husband’s reasonable expenses are as follows after sale of the Property:

General Expenses

Item	(HK$)
Rent	0
Mortgage instalments	0
Utilities (electricity, gas, rates, telephone & water)	700
Management fees	0
Food	2,500
Household expenses	0
Car expenses	0
Total monthly household expenses	3,200

Personal Expenses

Item	W’s position (HK$)
Meals out of home	3,000
Transport	2,000
Clothing/Shoes	800
Personal grooming (including haircut and cosmetics)	500
Entertainment/presents	1,200
Holiday	1,000
Medical / Dental	500
Tax	300
HK Police Credit Union	500
Contribution to parents	5,000
Total monthly personal expenses	14,800

52.  As mentioned above, it would appear to me that as between the parties, it is not controversial that contribution to parents should be made as a reasonable expense, notwithstanding their parents may not be in any actual financial need or indeed able to provide financial support to their son or daughter as the case may be. As such, I consider HK$5,000 a reasonable sum for the Husband to contribute to his parents after he no longer has to shoulder mortgage repayment and management fees after sale of the Property.

53.  Under cross-examination, the Husband said he wishes to move out from his parents’ home after sale of the Property. In his closing submissions, it is suggested that HK$20,000/month would be budgeted for such rental expenses. In the Joint Scott Schedule, the Husband remarked that it should be reasonable for him to rent a flat for himself and for staying access to the Son after sale of the Property.

54.  The Husband is of course at liberty to re-organise his life as he wishes, but I have reservation on adopting his proposal that renting a new place at HK$20,000/month should be taken as his reasonable expenses. Under the access order, the Husband has weekend staying access on a 2-nights and 1-night alternate week arrangement during term time, and equal sharing of long holidays. It does not appear to me that a residence separate from the parents is required to cater for staying access, when the Husband had been conducting very substantial access to the Son as he resided with his parents since June 2019, ie. for the past 5 years.

55.  The Husband’s income is HK$40,000/month. In light of reasonable general expenses of HK$3,200/month and reasonable personal expenses of HK$14,800/month, he has around HK$22,000/month disposable income to meet the Son’s expenses.

D.3  Son’s Needs

56.  As mentioned above, I find that reasonable general expenses of the Wife and the Son who resides with her for most of the time come up to HK$28,300/ month. Both parties agree that the Son’s share would be half of this sum, thus HK$14,150/ month.

Item	(HK$)
Rent	15,500 / 2 = 7,750
Utilities (electricity, gas, rates, telephone & water)	1,500 / 2 = 750
Food	4,000 / 2 = 2,000
Household expenses	1,500 / 2 = 750
Domestic helper(s)	5,800 / 2 = 2,900
Total monthly household expenses	28,300 / 2 = 14,150

57.  The parties’ respective cases on the Son’s reasonable personal spendings when he is with the Wife are as follows:

Item	W’s case (HK$)	H’s case(HK$)
Extra tuition fees	3,100	1,500
School books and stationery	216	108
Medical /Dental	460	0
Extra Curricular Activities	1,900	1,400
Entertainment/presents	1,000	500
Holidays	1,600	1,000
Clothing/Shoes	500	500
Insurance Premia	500	500
Lunches and pocket money	500	500
Uniform	109	43
Total monthly expenses for children	9,885	6,051

58.  The parties’ respective cases on the Son’s reasonable personal spendings when he is with the Husband are as follows:

Item	H’s case (HK$)	W’s case (HK$)
Extra tuition fees	2,695	0, as this was not in H’s Form E
School books and stationery	108	0, W already paying for these.
Medical /Dental	500	0, W already paying for these.
Extra Curricular Activities	1,375	0, W already paying for these.
Entertainment/presents	500	Agreed
Holidays	2,000	1,600
Clothing/Shoes	700	Agreed
Other Transport	1,000	500
Uniform	100	0, W already paying for these.
Others (specify):- Food	940	500
Total monthly expenses for children	9,918	3,800

59.  I am prepared to adopt a generous interpretation of the Son’s needs, especially since I note it is stated at Judgment §28 that the Son was diagnosed to be suffering from Global Development Delay, and one medical report described him as displaying “features suspicious of Autistic Spectrum Disorder” (Judgment §96).

60.  Both parties’ reported spending on the Son’s expenses are largely similar, ie. just shy of HK$10,000/month. I note the Son spends more time under the care and control of the Wife. Indeed the Husband tries to quantify his access time as 40% in a year since he exercises overnight access during weekends only during term time while long holidays are equally shared. However, it is apparent that both parties are keen to enrol the Son in a significant number of extra-curricular activities which appear duplicative. Since the parties are joint custodial parents, it is important that they collaborate together and ensure that the collective support they are providing the Son as a team is coherent, suited to meet his special needs, and neither excessive nor insufficient.

61.  I find the Son’s reasonable expenses as follows:

Item	With W (HK$)	With H (HK$)	Total (HK$)
Extra tuition fees	2,800	1,000	3,800
School books and stationery	216	108	324
Medical /Dental	460	0	460
Extra Curricular Activities	1,500	1,000	2,500
Entertainment/presents	800	500	1,300
Holidays	1,600	1,600	3,200
Clothing/Shoes	500	700	1,200
Insurance Premia	500	0	500
Lunches and pocket money	500	0	500
Uniform	109	0	109
Other Transport	-	500	500
Others: - food	-	500	500
Total monthly expenses for children	8,985	5,908	14,893

62.  In the premises, I find that the Son’s reasonable expenses to be around HK$14,900/month. Together with the Son’s share of reasonable general expenses at HK$14,150/month, the Son’s total expenses come out at HK$29,050/month.

63.  By the Husband’s open offer, he is prepared to contribute HK$3,210/month to the Wife as child maintenance, being his 40% share of the Son’s portion of rental (HK$2,600), domestic helper (HK$567) and uniform (HK$43). The Husband’s proposed 40:60 sharing of the Son’s expenses is made on the basis that this reflects the ratio of the respective income of the parties, which is around 38:62.

64.  In the circumstances, I order that the Husband do pay the Wife HK$7,000/ month as child maintenance going forward, on the basis that reasonable expenses borne by him during his time with the Son is around HK$5,908/ month, thus his overall contribution to the Son’s total expenses would be around 45%, representing some departure from equal sharing in light of the disparity of income.

65.  I note the Wife’s open offer for the Husband’s contribution to be backdated to September 2021 which was when the care and control of the Child was varied and granted to her. However, I do not consider this to be an appropriate case for back-dating given the Husband’s limited disposable income since June 2019 when he shouldered mortgage repayment and other out-goings of the Property alone.

66.  I consider this a fair award which can be met by the parties’ respective disposable income:

(1)  The Husband’s income is HK$40,000/month. He has around HK$22,000/month disposable income to meet the Son’s expenses (whereby he has reasonable general expenses of HK$3,200/month and reasonable personal expenses of HK$14,800/month). This is more than sufficient to cover his reasonable expenses on the Son of HK$5,908/month plus the children maintenance to be paid to the Wife of HK$7,000/month.

(2)  The Wife’s income is HK$63,000/month. After meeting reasonable general expenses of HK$28,300/month (for both herself and the Son) and reasonable personal expenses of HK$19,177/month, she has around HK$15,500/month disposable income to meet the Son’s reasonable personal expenses under her care, which is HK$8,985/month. The additional HK$7,000/month from the Husband would provide her and the Son with some financial cushion.

67.  In light of the above, I accept that parties’ resources are sufficient to meet their needs.

E.  Sharing / Departure from Equality

68.  Having dealt with the parties’ and the Son’s needs, I now consider whether there are good reasons for departing from equal division, such as:

(1)  Length of marriage;

(2)  the parties’ respective monetary contribution to purchase of the Property;

(3)  whether either party acted inequitably in maintaining their respective positions regarding how the Property should be dealt with, ie. (i) for the Husband to refuse to rent out the Property or permit the Wife to store her personal belongings thereat pending determination of these proceedings and (ii) for the Wife to refuse consenting to a sale of the Property at an earlier stage.

E.1  Length of Marriage

69.  As mentioned above, the parties married on 19 December 2014 and the agreed date of separation is 14 October 2018. As such, this is a relatively short marriage just shy of 4 years.

70.  Duration of the marriage is a material factor in conducting the s.7 exercise. See LKW v DD (2010) 13 HKCFAR 537 per Ribeiro PJ at §§108-109:

“108. Section 7(1)(d) specifies duration of the marriage as a factor which the court must consider when exercising its discretionary powers. This is potentially of great importance to the question whether the court should depart from an equal division. While the sharing principle applies to both long and short marriages, [115] it is clear that when a short marriage comes to an end, fairness may dictate that one party should exit the relationship with less than half of the total assets.

109. In Lord Nicholls’s words, this “reflects the instinctive feeling that parties will generally have less call upon each other on the breakdown of a short marriage”. [116] Viewing marriage as a partnership of equals, the fruits of the partnership are likely to be less substantial after a short marriage. [117] Mutual commitment being shorter-lived, the extent of any disadvantage brought about by separation may well be less profound. Moreover, as we have seen [118] after a short marriage, the court may well treat property acquired by one of the parties before marriage or during the marriage by way of inheritance or gift or from some other wholly external source as excludable non-matrimonial property. We have also noted [119] that Baroness Hale held that following a short marriage, unilateral assets in the sense explained above might be excluded. Accordingly, the duration of the marriage is highly relevant and an equal division is more likely to be sustained after a long, rather than a short, marriage.” (emphasis supplied)

71.  In PW v PPTW, CACV 224/2013 dated 12 March 2015, Kwan JA (as she then was) considered the proper approach in sharing when the existence of pre-martial, or non-matrimonial property, is established at §§59-74. Broadly:

(1)  Citing WLK v TMC (2010) 13 HKCFAR 618 (§84) per Ribeiro PJ at §69:

“…The better approach is to regard the sharing principle as always applicable when there are assets surplus to needs but accepting that, as part and parcel of that principle, an equal division should indeed be departed from if good reason exists for so doing. The shortness of a marriage, the absence of marital acquest and similar matters can all be considered as possible reasons for such a departure. The circumstances of a particular case may lead the court to decide, for example, that equal division should be departed from to the extent of restricting the award to a sum sufficient to meet one of the parties’ needs. But that is not to say that the sharing principle has been ‘displaced’. “ (emphasis supplied)

The 2 school of thoughts, ie. the “telescoped approach” v the “two-step approach”, essentially boil down to similar considerations:

“72. Thus, in applying the telescoped approach regarding non-matrimonial property, and in deciding to what extent equal division should be departed from where needs have been satisfied, according to the guidance given by the courts relevant factors may include: the duration of the marriage; the nature and value of the non-matrimonial property; the way the parties organized their financial affairs; their standard of living and the extent to which it has been afforded or enhanced by drawing on the non-matrimonial assets; the way the non-matrimonial property was preserved, enhanced or depleted during the marriage.

73. Similarly, in applying the two-step approach, in deciding whether it is fair and just that the existence of non-matrimonial property should be reflected, as stated in N v F at §14, this “depends on questions of duration and mingling”. And if it does decide that reflection is fair and just, in considering how much of the pre-marital property should be excluded, the court would be looking at factors such as the historic sum, the extent of mingling, springboard effect and passive economic growth, not dissimilar to some of the relevant factors considered in the telescoped approach. In any event, the fairness of the award in applying the two-step approach is to be tested by the “overall percentage technique”. (emphasis supplied)

72.  I shall bear these principles in mind as I consider division of the parties’ assets, and notably the Property, which constitutes over 72% of the “pot” (HK$3,776,481 out of HK$5,225,000).

E.2  The Property

73.  The Property was purchased in the sole name of the Husband by a preliminary agreement dated 6 June 2017 for HK$8,074,200[9]. At the time, it was still under construction. Both parties put in their respective ballot for draw and the Husband’s ballot was selected. The Property was eventually constructed and handed over to the Husband for possession on 20 May 2019[10].

74.  According to the agreement, the payment schedule was as follows:

(1)  Preliminary deposit (5%) of HK$403,710 on 6 June 2017;

(2)  Further deposit (5%) of HK$403,710 on 25 August 2017;

(3)  Balance of purchase price (90%) of HK$7,266,780 on 23 November 2017.

75.  The Husband took out a first mortgaged loan from Hang Seng Bank with principal sum of HK$4,842,720. The first drawdown date was 23 November 2017[11]. Repayment amount varies from around HK$16,800/month to HK$18,300/month.

76.  The Husband also took out a second mortgaged loan from Easy Credit Finance Limited with principal sum of HK$1,400,000. The first drawdown date was 23 November 2017[12]. Repayment amount is HK$7,416.08/month.

77.  In other words, with the benefit of the 2 mortgages, HK$1,831,480 of the purchase monies (being HK$8,074,200 – HK$4,842,720 – HK$1,400,000) need to be met from the parties’ own resources.

E.2.1  W’s Case

78.  It is the Wife’s case that her monetary contribution to the purchase of the Property totalled HK$2,735,930[13] with breakdown as follows:

Contribution to down payment, stamp duties, legal costs

(1)  Cheque no.31 dated 17 May 2017 from Wife to Kao, Lee & Yip for HK$298,820[14];

(2)  Cheque no.33 dated 18 May 2017 from Wife to Husband for HK$100,000[15];

(3)  Cheque no.37 dated 21 May 2017 from Wife to Hong Kong Property Services (Agency) Limited for HK$100,000[16];

(4)  Cheque no.39 dated 31 May 2017 from Wife to Husband for HK$500,000[17];

(5)  Cheque no.41 dated 18 August 2017 from Wife to Husband for HK$403,710[18];

(6)  Cheque no.42 dated 16 November 2017 from Wife to Husband for HK$445,000[19]; and

(7)  Cheque no.557651 dated 16 November 2017 from Wife to Husband for HK$460,000[20].

Sub-total: HK$2,307,530.

Mortgage repayments for December 2017 to June 2019

(8)  HK$23,800/month by standing instructions (debited on 20^th day each month) from Wife’s ICBC account to Husband’s Hang Seng Bank account[21] for 18 months

Sub-total: HK$428,400.

79.  W relies on the following arguments in support of an unequal division of the sale proceeds of the Property in her favour:

(1)  While accepting it is a matrimonial asset and not relying on any resulting trust argument, the Wife argues that in light of the short marriage (3 years and 10 months) and the fact that she pooled her pre-marital savings into purchase of the property, an overall 70:30 division of all assets in her favour should be the fair outcome.

(2)  This is further justified given the respective monetary contribution to the purchase of the Property, being HK$2,735,930 from Wife and only around HK$1.274 million from the Husband, being mortgage repayment of around HK$24,000 – HK$25,000/month from June 2019 until trial, thus 52 months. The ratio therefore comes out at around 68:32 as at the date of trial. In this regard, I note it is not disputed that the Wife has ceased to contribute to mortgage repayment from June 2019 onwards, and therefore the Husband’s absolute and relative monetary contribution would only increase as time goes by without any change of circumstances.

(3)  The Wife also asserted for the first time under cross-examination that there was an oral agreement between the parties that division of sale proceeds of the Property would be based on their respective contribution to the purchase price (“Wife’s Alleged Oral Agreement”). It is said that this alleged oral agreement was entered into in May 2017 when the parties both put in ballots for purchase of the Property. This is denied by the Husband.

E.2.2  H’s Case

80.  It is the Husband’s case that the Property was purchased as an intended matrimonial home. He argues that in light of that intention, and the fact that it is an undisputed matrimonial asset, being purchased 2.5 years into the 3 year 10 month marriage, sale proceeds should be equally shared between the parties.

81.  On the Husband’s case, his monetary contribution to the purchase of the Property came to around HK$1,895,700 as at the date of trial with breakdown as follows (with response to the Wife’s case):

Contribution to down payment, stamp duties, legal costs[22]

(1)  Accepted that the Wife’s Cheque no.31 (HK$298,820[23]) and no.33 (HK$100,000[24]) were paid towards the initial 5% deposit of HK$403,710, but H paid the short fall of HK$4,890 and Kao Lee & Yip handling fees of HK$10,000 by their bill dated 26 June 2017[25];

(2)  Asserted that the Wife’s Cheque no.37 (HK$100,000[26]) was returned to her because her ballot failed;

(3)  Asserted that only HK$302,783[27] of the Cheque no.39 for HK$500,000[28] was paid towards stamp duties, the rest was spent on family expenses;

(4)  Accepted that the Wife’s Cheque no.41 (HK$403,710[29]) was paid towards the further deposit of the same sum;

(5)  Asserted that the Wife’s Cheque no.42 (HK$445,000[30]) and Cheque no.557651 (HK$460,000[31]) were to settle the remaining purchase price in excess of what was covered by the 2 mortgage loans, ie. HK$1,024,060 (being HK$7,266,780[32] less Hang Seng mortgage of HK$4,842,720 and Easy Credit mortgage of HK$1,400,000). The Husband paid the shortfall of HK$119,060.

(6)  The Husband also paid legal fees of HK$22,250 to Kao Lee & Yip by his cheque dated 16 November 2017[33].

Sub-total: HK$156,200.

Mortgage repayments for December 2017 to date of trial

(7)  HK$24,000 – HK$25,000/month x 71 months = around HK$1,739,500.

Sub-total: HK$1,739,500.

82.  Of the above, the Wife disputes the following:

(1)  She does not accept her Cheque no.37 (HK$100,000[34]) was returned to her because her ballot failed.

(2)  She does not accept that of the HK$500,000 paid over by her Cheque no.39, only HK$302,783 was paid towards stamp duties, the rest was spent on family expenses.

(3)  The Husband’s assertion that her standing instructions for HK$23,800/month to be paid to his Hang Seng account was to defray family expenses only and not for contribution to mortgage repayment is denied.

E.2.3  Analysis

83.  The Wife has made clear her case for departure is not based on any trust argument, such as resulting, common intention constructive trust, or otherwise.

84.  As to the Wife’s Alleged Oral Agreement, I accept it was only raised by the Wife under cross-examination, and never mentioned in any documents filed in these proceedings which had been on foot since 2019, thus 4 years by the time of trial. It is particularly notable that pursuant to an order dated 24 January 2022, the parties were directed to file and exchange their respective affidavits relating to “any factual disputes, in particular, the ownership of and payments made in relation to the [Property]”. In compliance with that direction, the Wife filed her 3^rd affirmation dated 28 April 2022. The Wife also filed her 4^th and 5^th affirmations for purposes of this trial. The Wife was unable to supply any meaningful explanation for her omission of what would appear to be a very important agreement save to say (i) she accepted she missed out on stating that in her affirmations, and (ii) that it was an oral agreement unsupported by any documents.

85.  Given this long-running dispute over how the value of the Property should be divided between the parties, which is the key concern in these proceedings in light of its monetary significance so much so that was the subject of a specific court order for parties to elaborate on their respective case, I am unable to accept the Wife’s bare assertion that the Alleged Oral Agreement existed in light of her unconvincing explanation of its omission from her written evidence.

86.  With the above, the need to engage in a dollar-and-cent tracing of how the Property was purchased falls away. In this regard, I bear in mind the Court of Final Appeal’s caution against minute retrospective investigation of parties’ contribution in the marriage since the outcome of ancillary relief cases depends upon the exercise of a singularly broad judgment that obviates the need for the investigation of minute detail and equally the need to make findings on minor issues in dispute: see LKW v DD §§62-70.

87.  I shall now consider the following issues:

(1)  Whether the Property was intended as a matrimonial home;

(2)  Appropriate apportionment of net sale proceeds.

88.  It is the Wife’s case throughout these proceedings that the Property was purchased for investment and not intended as a matrimonial home. In light of the following reasons and evidence, I am able to accept her position:

(1)  It was her oral evidence that the parties started dating in early 2012, and they had already started looking for a property to purchase. They had considered a number of properties close to the Husband’s parents’ home at the time.

(2)  When exploring the Wife’s investment habits, she confirmed that prior to getting married, her mother would sort out her stock portfolio for her. She was never very active in making any investment, as she only ever just saved up her earnings.

(3)  The parties continued to look for properties after they married, before and during the Wife’s pregnancy with the Son, and after his birth.

(4)  To fund the purchase of the Property, which the Wife accepted was to move from one form of investment to another very different form, she (i) liquidated her stock portfolios of couple of HK$10,000 and (ii) used up most of her savings (including from time deposit of just a few thousand dollars).

(5)  The Wife acknowledged that an uncompleted first-hand property was a high-risk investment which may take a long time to yield any return, especially compared to her earlier habit of merely saving up. She said the only scenario she would consider living in the Property was if the value falls below the purchase price.

(6)  She stated she thought about investing in property with her sister, but her sister only wanted to buy a 1-room flat, whereas she wanted a new 3-room flat.

89.  It appears to me that the Wife has been a very conservative investor. The jump from investing by keeping her earnings as mere savings in bank account to putting nearly all of it in a property which the parties had been looking for before and throughout their nuptials (including during pregnancy) as a pure investment move is inherently improbable. The fact that the Wife insisted on purchasing a 3-room property seems to me to be more consistent with an intention to meet the housing needs of her growing family with the Husband, rather than an investment simpliciter.

90.  I therefore find, on a balance of probability, that the Property was purchased intending to be the parties’ matrimonial home.

91.  In LKW v DD, the Court of Final Appeal held as follows regarding the nature of a property intended for family use in the context of departing from the equality principle where unilateral assets are present:

“98. It should be noted that these refinements are not generally applicable to the matrimonial home and other assets which have been intended for and devoted to family use. Lord Nicholls pointed this out in Miller/McFarlane as follows:

“The parties’ matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose. ... in principle the entitlement of each party to a share of the matrimonial property is the same however long or short the marriage may have been.” [103]

Baroness Hale agreed, describing the matrimonial home as a prime example of a capital family asset. [104]”

92.  Notwithstanding, I note there had been situations where the Court was prepared to depart from strictly equal sharing of the value of a matrimonial home where it was purchased from a party’s own resources. See S v AG (Financial orders: Lottery Prize) [2012] 1 FLR 651 per Mostyn J, where parties were married for 27 years with 2 children, and the wife purchased a home in her sole name from her GBP500,000 share of the national lottery she won on a syndicate arrangement with another friend. In awarding the husband a mere 15-20% share (§37), the Judge placed much weight on the fact that (i) the source of the matrimonial property was not a joint endeavour but rather non-matrimonial property of the wife’s, (ii) the relatively short period (4 years) that the husband actually lived in the property and (iii) the fact that the marriage has become troubled and unhappy with the parties drifting into separate lives socially and economically when the purchase was made (§15).

93.  Mostyn J canvassed a number of authorities on how matrimonial properties should be treated (§§6-9). See in particular:

“[8] While matrimonial property will normally be divided equally, this is not an invariable rule. The reason for this is that sometimes the matrimonial property in question will not be the product of the endeavours of the parties within the social-economic partnership that is marriage (as Guest J described in the Australian case of Farmer and Bramley [2000] FamCA 1615 at para 188). Sometimes one party brings assets in which become, 'part of the economic life of [the] marriage… utilised, converted, sustained and enjoyed during the contribution period' (ibid at para 190). This is the concept of mingling referred to by me in N v F (Financial Orders: Pre-acquired Wealth) at para [9] (where I cited the remarks of Lord Nicholls in Miller v Miller; McFarlane v McFarlane at paras [24]–[25] and of Baroness Hale of Richmond at para [148]), and by Wilson LJ in K v L (Non-matrimonial Property: Special Contribution) at para [18](b). But even if there has been much mingling, the original non-matrimonial source of the money often demands reflection in the award. Thus in S v S (Non-Matrimonial Property: Conduct) [2006] EWHC 2793 (Fam), [2007] 1 FLR 1496 Burton J divided the matrimonial property 60/40 to reflect this factor.

[9] In Miller v Miller; McFarlane v McFarlane Lord Nicholls specified that the matrimonial home should always be designated matrimonial property, whatever its source. He stated at para [22] that 'the parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose'. This is reflected in the remarks of Wilson LJ in K v L (Non-matrimonial Property: Special Contribution) at para [18](c). But even the matrimonial home is not necessarily divided equally under the sharing principle; an unequal division may be justified if unequal contributions to its acquisition can be demonstrated. In Vaughan v Vaughan [2007] EWCA Civ 1085, [2008] 1 FLR 1108, Wilson LJ stated at para [49]:

'Such would be the award notwithstanding that the home had been owned by the husband, free of mortgage, since well before the marriage and that, putting to one side his misconduct in dissipating assets following the breakdown of the marriage (the effect of which is intended to be rectified by the calculation), the contributions of each party to the welfare of the family during the marriage were in effect agreed to have been equal in value albeit not in kind. Although, in the words of Baroness Hale in Miller v Miller, McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618 at 663E, “the importance of the source of the assets will diminish over time”, I consider that the husband's prior ownership of the home carried somewhat greater significance than either the district or circuit judge appears to have ascribed to it.' (emphasis supplied)

94.  In light of the above dicta, I shall set out my finding below as to the parties’ respective financial contribution in a broad-brush manner as opposed to a dollar-and-cent approach, so as to inform whether any departure from equality is required as a matter of fairness, and if so, how much.

95.  It is not disputed that the down payment, stamp duties and legal costs etc for purchase of the Property come up to around HK$2.3 million. Taking the Husband’s case to the highest, he contributed HK$156,200 to this part of the cost outlay. On any view, the Wife forked out the lion share of the purchase price in this respect.

96.  As to mortgage repayment from December 2017 to June 2019 (totalling around HK$465,500), both parties claim they are the only one contributing wholly to this out-going, whereas the other party contributed to family expenses. For the first time under cross-examination, the Husband asserted there is an oral agreement to the effect that the Wife’s deposit of HK$23,800/month into the Husband’s account with Hang Sang Bank by standing instructions was to go wholly to family expenses. This was of course denied by the Wife, who claimed that the fact of that standing instructions points to her contribution being solely for mortgage repayments because (i) the amount roughly corresponds to the total mortgage repayment each month and (ii) from bank statements, the Husband’s Hang Seng Bank account was largely used for mortgage repayments anyway, though she accepts some withdrawals for are the Husband’s credit card repayment, and therefore unrelated to the Property[35].

97.  It is not disputed that mortgage repayments to both Hang Seng Bank and Easy Credit come up to around HK$24,000 – HK$25,000/month. As such, even on the Wife’s case, her HK$23,800/month standing instruction is insufficient to cover the entirety of those repayment. In the absence of contemporaneous evidence that support either parties’ case that they were solely responsible for such repayment, I consider neither of them came up to proof of their assertion. Indeed there were family expenses in addition to mortgage repayments during marriage, and it would appear that both parties contributed to these out-goings. As such, I would treat mortgage repayment from December 2017 to June 2019 (totalling around HK$465,500) as equally shared by the Wife and the Husband.

98.  It is not disputed that the Husband is solely responsible for mortgage repayment since June 2019. This comes up to around HK$1.274 million up to date of trial (52 months).

99.  Overall, I consider a 60:40 share of the net sale proceeds of the Property in favour of the Wife to be a fair outcome, noting the Husband would have solely contributed further to mortgage repayments after trial.

100.  In arriving at this conclusion, I draw some comfort from that fact that both parties apparently consider a fair award should largely reflect their relative monetary contribution. This has of course been the Wife’s stance in these proceedings. Under cross-examination, the Husband also explained that he made an open proposal for 60:40 division in his favour at a PTR in August 2023 because if he were to continue to make mortgage repayments, his monetary contribution would increase and therefore he should be awarded a larger share.

101.  Other assets should be shared equally. As such, the division of the entire pot with agreed value as at the date of trial is around 57:43 (Wife : Husband).

E.3  Any other inequitable conduct

102.  Both parties invited the Court to consider whether there had been conduct so inequitable that calls for an adjustment of the award.

(1)  The Wife asserted that it was inequitable for the Husband to refuse to rent out the Property since he gained possession in June 2019 or permit the Wife to store her personal belongings thereat pending determination of these proceedings. The loss of rental profit would be around HK$672,000[36]. The storage fee incurred came up to HK$25,940[37]. The Husband’s explanation was that he was keen to sell the Property and therefore did not wish to have it encumbered.

(2)  The Husband asserted it was inequitable for the Wife to refuse consenting to a sale of the Property at an earlier stage. It had been the Wife’s position that she would only agree to a sale above HK$11M. She accepts the property market deteriorated since around 2023 and in any event, the Husband’s suggestion for sale only came by a letter dated 18 January 2023[38] and not earlier.

103.  Section 7(1) of MPPO expressly provides that in the exercise of the court’s power in relation to financial provision, the court is to have regard to the conduct of the parties and the circumstances of the case. In LKW v DD, Ribeiro PJ held that:

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

104.  In the context of this case, it may be that both parties have conducted themselves for perceived litigation advantage, speculations on the property market or otherwise. Notwithstanding, I do not consider their conduct to meet the very high threshold of “obvious and gross”. In any event, their competing claims of inequitable conduct would result in any adjustment being netted off against each other.

F.  Deciding the outcome

105.  By way of summary, I have found that:

(1)  the Wife’s net worth is HK$405,000 and the Husband’s net worth is around HK$4,820,000 (his assets net of the Property being HK$1,043,440). The family pot is therefore around HK$5,225,000.

(2)  the Son’s monthly expenses is HK$29,050;

(3)  the Wife’s reasonable needs are around HK$33,300/ month;

(4)  the Husband’s reasonable needs are around HK$18,000/ month;

(5)  the Wife’s earning capacity is around HK$63,000/month;

(6)  the Husband’s earning capacity is around HK$40,000/month.

106.  In the circumstances, I shall make an order as follows:

(1)  The Property be sold at a price mutually agreed by the parties within 3 months of the Decree Absolute being granted. After deducting the outstanding mortgages and other costs and expenses incidental to the sale, the net sale proceeds be divided as follows:

(a)  60% to the Wife;

(b)  40% to the Husband.

(2)  The Husband do transfer HK$319,220[39] to the Wife forthwith upon receipt of the 40% net sale proceeds referred to in sub-paragraph (1)(b) above (“Date of Receipt”);

(3)  The Husband do pay the Wife HK$7,000 /month for maintenance for each of the Son, starting from 14 days from the Date of Receipt, by depositing the sum into a bank account to be nominated by the Wife, and he shall continue to pay in the same manner on the same day of every succeeding months, until the Son turns 18 or completes full time education, whichever is the later;

(4)  A section 18 declaration to be issued;

(5)  Liberty to apply.

Cost

107.  Neither party emerged as the victor in these proceedings. I also bear in mind the importance to take into account both parties’ needs on the issue of costs.

108.  From their latest Forms H:

(1)  The Husband has spent around HK$690,000 on ancillary relief matters after failure to settle at FDR (inclusive of this trial), whereas pre-FDR costs (inclusive of children matters) come up to HK$1.4 million. In other words, the Husband has incurred legal fees in excess of HK$2 million with the benefit of legal aid.

(2)  The Wife has incurred HK$426,000 on ancillary relief matters after failure to settle at FDR (inclusive of this trial). Total cost spent on legal fees on ancillary relief matters only from the start of proceedings come up to HK$926,000. As stated above, the Wife raised litigation funds by borrowing a total of HK$785,000 from her mother.

109.  While I do not have information on the Wife’s costs for children matters, the fact that the parties have spent close to HK$3 million from what I can gather appear to be disproportionate to the family pot of around HK$5.2M as I find above. Indeed the extent of departure from equal sharing of the “pot” largely constituted by net sale proceeds of the Property advocated by each party is plainly not commensurate with the legal cost which has been incurred.

110.  I can only echo the sentiment expressed by the Hon Lam Acting CJHC (as he then was) in Court of Appeal’s decision of LLC v LMWA & another [2019] 2 HKLRD 529 at §§30-37 on the problem of how legal costs incurred by the parties drained away an unreasonably large proportion of the family wealth, resulting in “ruinous expense to the parties”. See also the observations of Munby J in KSO v MJO and MJO (PSO intervening) [2009] 1 FLR 1036, cited with approval in LLC v LMWA §33/ as follows:

“[80] The picture is deeply dispiriting. And it is not as if it is only the adults who suffer from the consequences of such folly. The luckless children do as well. The present case is a sobering, and for me deeply saddening, example. If, instead of spending – squandering – over £430,000 in costs, the wife and the husband had been able to resolve their differences at a more modest and, dare I say it, more seemly level of costs, there might very well have been enough left in the matrimonial 'pot' to house the wife and children and to enable the children to remain at their school, whilst still leaving something more than a mere consolation prize over for the husband. As it is, it is hard to see much being left from the wreck, not least after the trustee in bankruptcy has had his costs, expenses and remuneration. It is difficult not to be reminded at this point of Jarndyce v Jarndyce (see the Appendix). And the wife and the husband – and for this purpose I refer to them as the mother and the father, for that is what they are – are faced now with the wretched and thankless task of trying to explain to their daughters how it has all come to this.”

111.  The fact that the Husband is litigating at the expense of the public purse does not weaken the strength of those observation. Notwithstanding, it could not be said that he acted wholly unreasonably in resisting the Wife’s open offer and persisted in this piece of litigation. Neither party was wholly successful. As such, I decline to make an order pursuant to section 17(3) of the Legal Aid Ordinance (Cap. 91), noting this is not a case where the Husband’s case or evidence was found to be fabricated, or that there was impropriety in the conduct of litigation such as raising of unnecessary issues: cf. Standard Chartered Bank v Li Wai Ping [2011] 5 HKC 149 (§§11-12); Cheung Ping Sum v Wong Chi Hang [2019] 5 HKLRD 485 (§12).

112.  I consider the order I made reflects a fair division of the family assets and it would not be appropriate to have it further adjusted as a result of a cost award.

113.  As such, there shall be an order nisi to be made absolute in 28 days’ time that there be no order as to costs of and occasioned by the ancillary relief proceedings. Each party shall bear their respective costs of and incidental to the ancillary relief issues (including all costs previously reserved and ordered) and the Husband’s own costs be taxed in accordance with the Legal Aid Regulations with certificate for one Counsel.