WSSF v. WNYA also known as WANY

FCMC 6611 / 2022

[2025] HKFC 147

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 6611 OF 2022

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JUDGMENT
( Ancillary Relief )

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A.  OVERVIEW

1.  This is the trial on the parties’ ancillary relief upon divorce that formally ends their close to 30-years marital relationship.

2.  The Petitioner (“H”) is 64 years old and the Respondent (“W”) is 61. They are both Canadian citizens and Hong Kong permanent residents.

3.  They met each other in the university and got married in XXXXX on XXXXX 1989. After marriage, they lived in XXXXX and worked there in the banking industry for a few years. They moved back to Hong Kong in 1993.

4.  The parties have XXX daughters, now 25 years old, working full time in Hong Kong and XXXXX respectively.

5.  W quitted her job in July 2004 and became a full time housewife. Since then, the family expenses have been met by H’s income.

6.  H is the CFO of a company providing XXXXX service (“Employer”). Until the parties’ separation, H used to deposit his salary into a joint bank account. W used the funds in the joint account for household and personal expenses.

7.  They purchased the former matrimonial home with car parking space (“FMH”) in December 2007. Apart from the FMH, their assets are primarily bank deposits, stocks and mutual funds managed by H.

8.  In January 2019, H moved out of the FMH. On 26 July 2022, he presented a petition for divorce on the ground of 2 years’ separation.

9.  H had once taken out a Summons to withdraw his Petition. That application was subsequently withdrawn. W filed her Cross-Petition based on 2-years’ separation. Decree nisi was pronounced on 4 May 2023.

10.  W is residing in the FMH with one of the daughters. H rented a place for his residence upon moving out. His monthly rental payment was initially HK$29,500 and now reduced to HK$20,000.

11.  Both parties filed their affidavit evidence, Form E and Answers to Questionnaire. They also testified at the trial.

12.  By an order dated 10 January 2025, a single joint expert (“SJE”) was appointed to prepare a Duxbury report in respect of both parties’ needs for the purposes of this trial.

13.  The SJE prepared a Duxbury Report dated 22 April 2025 (“1^st Duxbury Report”). A Supplemental Duxbury Report dated 21 May 2025 (“Supplemental Duxbury Report”) was further prepared to address both parties’ comments on the 1^st Duxbury Report. The 1^st Duxbury Report and the Supplemental Duxbury Report are collectively referred to as “Duxbury Reports” in this Judgment. The SJE testified at the trial.

14.  The matters that the court should have regard to in applications for ancillary relief are set out in section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”). The Court of Final Appeal in LKW v DD (2010) 13 HKCFAR 537 laid down authoritative guidance on the approaches in the exercise of the board discretion in considering section 7 factors. The parties adopted these well-established principles and the 5-steps approach set out in LKW v DD. I do not propose to repeat them here save to note that the ultimate goal is to achieve fairness between the parties in the distribution of their family assets on divorce. In the process of determination, the concept of the yardstick of equality should be upheld, and minute retrospective investigation of the parties’ finances and past history should be rejected.

15.  As analysed below, this is a sharing case. There are surplus assets after catering for the parties’ reasonable financial needs.

B.  AGREED ASSET AND LIABILITIES

16.  The parties have helpfully confirmed at the end of the closing submissions their agreement to the following assets and liabilities:

Item	Value (HK$)	H (HK$)	W (HK$)
Former Matrimonial Home (“FMH”)	22,581,986	11,290,993	11,290,993
Joint bank accounts	75,856	37,928	37,928
H’s bank accounts	19,573,643	19,573,643
W’s bank accounts	2,471,341		2,471,341
H’s Axxx Shares	185,023	185,023
Joint investment	74,794	37,397	37,397
H’s investments	35,750,287	35,750,287
W’s investments	108,144		108,144
H’s personal valuables	40,000	40,000
W’s personal valuables	30,000		30,000
(H) 50% of H’s late mother’s apartment in Canada (based only on H’s sister’s verbal advice to share half with H if sold)	1,684,851	1,684,851
H’s MPF/RRSPs	1,931,329	1,931,329
W’s RRSPs	686,854		686,854
H’s liabilities	(288,346)	(288,346)
W’s liabilities	(297,015)		(297,015)
Net Assets Total	$84,608,747	$70,243,105	$14,365,642
Costs paid by parties after 30 April 2025 and up to 27 June 2025	(1,465,037)	(1,465,037)	0[1]
Total (after above payments on costs)	$83,143,710	$68,778,068	$14,365,642

17.  The parties have also confirmed at the closing submissions that they did not pursue the following claims:

17.1.  H did not pursue the claims for adding back the sum of $5 million paid to W on 1 February 2023 and 27 January 2025 (which H described as Charman Payment).[2] After considering the evidence, especially W’s evidence on legal costs, H accepted that the above sum has been more likely than not deployed by W to pay for her living and legal expenses.

17.2.  W did not pursue the claims for adding back H’s moving costs of $200,000.

C.  DISPUTED ASSETS AND LIABILITIES

C1.  Post-separation accrual and inheritance

18.  At the time of the trial, the parties have separated for 6 years (January 2019 to 2025).

19.  H sought to exclude the following from the pool of assets for sharing by reason that they are post-separation accruals and/or inheritance external to the marriage:

19.1.  First, the inheritance received or to be received by him from his late mother’s estate (“Inheritance”) after separation in the sum of $10,965,652 and a further sum of $1,684,851 representing 50% of the net sale proceeds of his late mother’s property if and when it is sold. This property is registered in H’s sister’s sole name and occupied by H’s niece.

19.2.  Second, his post-separation salary, allowances and bonus from February 2021 onwards (i.e. 2 years after the parties’ separation) net of expenses and tax (“Post-Separation Accruals”), particularised as follows:

(a)  the sum of $2,453,825 for the period from February 2021 to February 2023 (i.e. until $3 million payment was made to W);

(b)  the sum of $4,706,234 for the period from March 2023 to April 2025; and

(c)  the sum of $5,200,282 being H’s bonuses from July 2022 (for FY2021 to FY2023) to September 2024.

19.3.  Third, the Axxx Shares (valued at $185,023) acquired after separation and the dividends of $1,090,441 derived therefrom since 2023.

20.  W disputed and contended that the above sums should not be excluded. Furthermore, H’s salary, bonus and Axxx Shares dividends received during the period from January to April 2025 in the sum of $258,333 and $180,970[3] should be added to the pool for sharing.

21.  It was widely recognised that certain assets can be classified as non-matrimonial property. Equal distribution of such assets upon divorce may be unfair to the parties. Property acquired during the marriage by one of the parties from a source wholly external to the marriage such as gift or inheritance, unilateral assets acquired or created by a party by virtue of his personal industry and not by use of an asset created during the marriage could be classified as non-matrimonial property. In determining whether an asset should be classified as non-matrimonial and be excluded from sharing, the court would consider, inter alia, the nature of the property, the means or efforts by which it was acquired, the length of marriage and the duration of separation period. Efforts and expenses should not be wasted in trying to establish a sharp dividing line between matrimonial and non-matrimonial assets. The ultimate guide is the objective of achieving fairness of the financial outcome in a matrimonial context. (See: Rossi v Rossi [2007] 1 FLR 790 §§10, 24.1-24.7; LKW v DD §§87-89)

22.  There are two recognised approaches to deal with non-matrimonial assets. One is the telescope approach, that is to adjust the sharing percentage from 50% to take into account the non-matrimonial assets. The other is the two-step approach by first identifying the scale of non-matrimonial property to be excluded, leaving the matrimonial property alone to be divided in accordance with the equal sharing principle. It is observed that there is a tendency of the Hong Kong courts preferring the telescoped approach, while the English court tends to favour the two-step approach for clarity. Neither of the above approaches should be taken as a formula to be followed mechanically in every case. The factual matrix of each case is different and the court’s discretion is unfettered. The court may use the approach it considers suitable and align with the established principles: PW v PPTW §§59-70; WLK v TMC (2010) 13 HKCFAR 618 §84; TCWF v LKKS [2014] 1 HKLRD 896.

23.  In PW v PPTW §§72-73, Kwan JA (as she then was) explained that whichever approach is adopted, the factors for considering whether and how to apply the sharing principle are similar:

“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 added)

24.  Mr Eugene Yim, counsel for H, referred this court to Standish v Standish [2025] UKSC 26, a recent English Supreme Court decision given on 2 July 2025 that summarised the relevant legal principles on this topic (see §§46 -56).

25.  In summary, the English Supreme Court acknowledged that save for exceptional cases, non-matrimonial property should not be subject to the sharing principle though it can be subject to the principles of needs and compensation. The approach of excluding non-matrimonial property and applying equal sharing principle to matrimonial property is favoured. The concept of “matrimonialisation” was explained as meaning what starts as non-matrimonial property may become matrimonial property, resting on how the parties, over time, were treating the assets as shared.

26.  Without disputing the principles laid down in LKW v DD and PW v PPTW remain the laws binding on this court and that this court has the discretion to use the telescope approach or the 2-step approach, Mr Yim, in reliance of Standish, highlighted the importance of considering the parties’ intention and the way they treated the property.

27.  The way that the property was treated by the parties has always been a matter considered by the Hong Kong courts. This can be seen from the factors such as “the way the parties organised their financial affairs”, “the way the non-matrimonial property was preserved, enhanced or depleted during the marriage”, and “the question of mingling” as expounded by Kwan JA in PW v PPTW.

28.  I apply these principles to the parties’ claims in respect of the assets acquired or accrued post-separation.

C1.1  Inheritance

29.  H’s late mother passed away on 31 May 2023 which was more than 4 years after the parties’ separation. Both parties accepted that the inheritance, acquired by H after the date of separation, was from a source wholly external to the marriage.[4]  I agree that it is fair, in the circumstances, to exclude the inheritance from sharing between the parties. The sums of $10,965,652 and $1,684,851 are thus excluded from the pool, and there shall be no add back of $393,970, being money in H’s late mother’s estate account.

C1.2  Post-Separation Accruals

30.  In Kan Lai Kwan v Poon Lok To Otto (2014) 17 HKCFAR 414, the Court of Final Appeal held that the profits accrued from the husband’s business during the post-separation period arose out of the business built up in the course of the marriage, in respect of which the wife can legitimately assert an unascertained shares on the principles accepted in LKW v DD.[5]

“129. Where, however, there has been a substantial period of separation prior to the hearing and where during that period, there has been a steep increase in the value of the matrimonial assets attributable to the independent business or professional efforts by one spouse, unmatched by any contribution from the other spouse, grounds may exist for departing from equality. In some such cases, fairness may dictate that the non-contributing spouse has no claim to share equally in the post-separation accrual to the matrimonial assets.”

130. There are opposing arguments as to whether a spouse should be excluded in such cases. As Nicholas Mostyn QC explained in Rossi v Rossi:

“…it can legitimately be argued that the party in question has traded with the other party’s undivided share and so should share with that party the profit that has been generated. On the other hand it can equally convincingly be said that the second party has not contributed to the industry or endeavour that gave rise to the profit or growth and so it is unfair that the second party should share to the same extent in that profit as the first who made all the effort.”

131. In Cowan v Cowan, Thorpe LJ favoured the former approach and visualised only rare and exceptional departures from equality by reason of post-separation accruals:

“The assessment of assets must be at the date of trial or appeal. The language of the statute requires that. Exceptions to that rule are rare and probably confined to cases where one party has deliberately or recklessly wasted assets in anticipation of trial. In this case the reality is that the husband traded his wife’s unascertained share as well as his own between separation and trial … The wife’s share went on risk and she is plainly entitled to what in the event has proved to be a substantial profit. If this factor has any relevance it is within the evaluation of the husband’s exceptional contribution.”

132. His Lordship’s reference to “exceptional contribution” was a reference to cases where it can be established that the increase is only attributable to what has been called one spouse’s “stellar” contribution. As discussed in LKW v DD cases in that class are necessarily rare and exceptional. H makes no claim to “stellar contribution” in respect of the increased profits of the business in the present case.

133. The summary of the principles provided in Rossi v Rossi is broader than Thrope LJ’s stricter approach and is, in my view, preferable. It points to various factors relevant to deciding whether a post-separation accrual justifies departure from equality, including the length of the marriage and separation, the nature of the property accruing and the means or efforts by which it was acquired, and so forth. Of particular present relevance is the following passage:

“Assets acquired or created by one party after (or during a period of) separation may qualify as non-matrimonial property if it can be said that the property in question was acquired or created by a party by virtue of his personal industry and not by use (other than incidental use) of an asset which has been created during the marriage and in respect of which the other party can validly assert an unascertained share. Obviously, passive economic growth on matrimonial property that arises after separation will not qualify as non-matrimonial property”

31.  In the present case, H included in the pot his post-separation accruals up to January 2021 (i.e. 2 years after separation). Quoting Mostyn QC’s remarks in Rossi §24.4 that “Although there is an element of arbitrariness here, I myself would not allow a post-separation bonus to be classed as non-matrimonial unless it related to a period which commenced at least 12 months after the separation.”, H contended that he had agreed to include accruals well beyond the aforesaid 12 months.

32.  Mr Yim also referred to the decision of HHJ I Wong in SSLT v SMFC [2019] HKFLR 213 where it was held that 50% of the bonus received about 8 to 9 months after separation and the deferred share profit payment received 2.5 years after separation (part of which relates to the period during relationship) were excluded from sharing by the parties. It is of note that parties in SSLT had been married for 6 years while this case is a marriage of 30 years.

33.  Each case must be evaluated in the context of its factual matrix. Rossi has not laid down any rule of the 12 months limit, nor SSLT suggested that bonus and profits received post-separation ought to be excluded in part or at all. Neither Poon Lok To Otto nor SSLT should be treated as having laid down a numerical benchmark for exclusion of assets acquired after a particular length of separation.

34.  The existence of minority interest in Poon Lok To Otto was not a determinative factor on the issue, hence I do not agree with Mr Yim that the lack of minority interest in this case is a feature distinguishing from Poon Lok To Otto.

35.  This is a marriage of 30 years. The parties separated for more than 6 years. H presented the petition 3 years after separation. The period between the petition and the trial is 3 years. During marriage, the salary and bonus arose out of H’s employment have been treated as the joint property of the parties.

36.  The salary and bonus received by H during the period of separation is a financial continuum. It arose from his employment. W has made contribution by taking care of the family and the children throughout during marriage so that H could focus on his employment.

37.  H’s unilateral act to segregate his income from the joint accounts since February 2021 did not change the source and nature of these assets. These sums should be included in the pot for sharing.

38.  Nevertheless, I do not agree with W that the salary and bonus for the period from January 2025 (i.e. after the cut-off point for the agreed schedule of assets and liabilities) to April 2025 (i.e. the month before the trial) should be added to the pool. It would be unfair to add back only H’s salary and bonus after the agreed cut-off point without taking into account the other matters that affect the financial position, such as expenses, on which no evidence was adduced.

C1.3  Axxx Shares and dividends

39.  H has been employed by his Employer since 2012. In 2013 and 2014, he received 0.35% shares in Axx-1 (holding company of H’s Employer) as part of an employment incentive scheme financed by a loan from Axx-1 which was later waived. Therefore, H obtained these shares at no extra costs to him. When Axx-1 was dissolved on 30 December 2022, the Axx-1 shares became worthless. H received no distribution or compensation from Axx-1’s dissolution.

40.  In 2022, Axxx-T was set up by creditors and was subsequently held under Axxx which was incorporated on 21 December 2022. Axxx-T acquired the assets of Axx-1 (including the Employer).

41.  On 29 December 2022, as part of the management incentive plan under the new corporate structure, H acquired Axxx Shares for a total consideration of US$28,899 funded from the bank account in H’s sole name. At that time, the parties have separated for almost 4 years.

42.  H’s case was that the Axxx Shares were made available to him after Axxx became the new owner of the Employer following corporate restructuring. The objective for the incentive plan was to “motivate key employers within the [XXX] Group to achieve [Axxx]’s business plans” after the change in ownership. There is no evidence that suggest the Axxx Shares had any correlation with H’s loss of Axx-1 Shares. The Axxx Shares were not given to him as an element of his employment remuneration package. H has made an active decision to acquire them and invest in Axxx by paying the consideration out of his own pocket. H also assumed the risks involved in the decision to buy. For instance, the amount of cash paid in the event of an Exit will depend on the value of the shares at the time of the Exit, and whether he was considered a good leaver or a bad leaver at that time.

43.  The Axxx Shares were held by H subject to certain restrictions, including the vesting schedule and a sale back requirement upon H ceases to be employed by the Employer:

43.1.  Only 28% of the shares had been vested on 16 August 2024. It is uncertain as to whether H would be eligible to or willing to invest in the other stages subsequently.

43.2.  If H ceases to be employed, he may be required to transfer his Axxx Shares back to Axxx. The price paid will depend on whether he will be a good leaver or a bad leaver. There is no guarantee that the sale back price would be higher than the purchase price.

43.3.  H may transfer his Axxx Shares to his spouse only with the prior written consent of the board of directors of Axxx (“Board”). H is not a member of the Board. W’s eligibility is also doubtful as she is not H’s spouse after the divorce.

43.4.  Decisions on dividends are subject to the sole discretion of the Board. There is no dividend policy, no provisions on how often dividends would be paid nor any predetermined formulas on how dividends are calculated.

44.  The value of Axxx Shares held by H was agreed to be $185,023 and the dividends received therefrom since 2023 was $1,090,441.

45.  I find that although the Axxx Shares and the dividend derived therefrom were acquired after separation, they are part of the financial continuum and should not be excluded from the pool for sharing by the parties:

45.1.  Firstly, the entitlement to subscribe the Axxx Shares arose from an incentive scheme made available to H by reason of his employment. Once H made the subscription, the Axxx Shares became his assets. The restrictions attached to the Axxx Shares may affect the value but do not change the nature of it being assets owned by him.

45.2.  Secondly, H had transferred a substantial amount of funds from the joint account to his sole bank account during separation. Although the Axxx Shares were subscribed by using the funds in H’s sole bank account, such fund or a substantial part of it came from the joint bank account.

C2.  Add-backs claims

46.  Both parties made claims for an add back of certain items.

47.  The relevant legal principles are not in dispute. Add back has to be conducted very cautiously. Usually clear evidence of dissipation with a wanton element is required. The following succinct summary by the Court of Appeal in LCC v LTLA [2024] 2 HKLRD 1177 provides a helpful guidance:

“34. … it is clear from the above authorities whether a spouse’s conduct in relation to financial matters after the separation is relevant is a conduct issue under s.7 of our MPPO, and for the courts to have regard to such conduct, the conduct has to be obvious and gross and that it would be inequitable to disregard it. It is not the case that a finding of misconduct must inevitably lead to a re-attribution of assets to the guilty spouse, and not very item of non-marital expense can be added back even though it could be said that such expense was a depletion of the matrimonial pot and as such it reduces the share of the spouse who has not benefitted from such expenditure, and any-attribution must be conducted very cautiously by clear evidence of dissipation in which there is a wanton element. The ultimate goal is to achieve fairness.”

“61. … In cases where one spouse alleges the other spouse of misconduct of over-spending, there must be clear evidence of dissipation in which there is a wanton element. In considering whether there has been wanton dissipation, the court has taken into account matters including (i) the extent, timing and nature of the alleged wanton dissipation; (ii) the general assessment of the overspending party; (iii) the motivation for the overspending such as whether the overspending was with the intention to reduce the other spouse’s financial claims, and/or whether it was bona fide; and (iv) the negative financial impact upon the parties. Upon the misconduct being established, the court will then consider how the misconduct and its financial consequences should impact upon the outcome of the financial award having regard to all the relevant section 7 factors. “Add-back” is ordered in very limited circumstances even though it is recognized as an option, and the courts in England appear to be moving away from this option, with at least one judge pointing out that this technique does not re-create any actual money and is a process of penalisation. What is clear is that, there has been a constant reminder that the add-back has to be conducted very cautiously. No matter which route one pursues, the ultimate goal is to achieve fairness.”

(emphasis added)

C2.1  Payment to W’s Mother

48.  H sought to add back the money transferred by W to her mother between April 2022 and November 2024 in the total sum of $537,494.

49.  W’s case was that the parties have been financially supporting her mother since 1999. When her mother lived with them during 1999 and 2009, her mother’s expenses were paid by the parties. She said that the financial support continued after mother moved out and resided with W’s sister.

50.  H denied that such pattern for payment had been discussed or established during marriage. The parties did not charge W’s mother for her accommodation with them and covered her reasonable expenses while living with them was out of courtesy and filial piety. There is no continuing obligation to maintain W’s mother. H did not directly pay any money to W’s mother. The sum of $537,494 was sent by W without H’s consent. H also noted that since April 2022 (after separation), there was a sudden increase in the transfer of substantial sums to W’s mother.

51.  Although the money was transferred to W’s mother without H’s consent, I am not satisfied that the payment was a deliberate or wanton dissipation of the matrimonial assets. Thus, there is no add-back of this item.

C2.2  Payment to Ms V

52.  Ms V is a friend of H. W said that H and Ms V had a romantic relationship. H did not seriously deny. He said that Ms V was his close friends for about a year and their relationship has ceased.

53.  On H’s case, Ms V had supported him while he was diagnosed with cancer after separation. The sum of $198,000 was transferred to Ms V in order to help her out during a difficult period in her life when she had medical issues and was unemployed as well as to pay her back some items purchased for him.

54.  Having regard to the size of the payment as compared with the size of the matrimonial pot, the short duration and the purpose of payment explained by H, I find that the threshold for an add back was not met. It was not proved that the payment was wanton or reckless with an intention to deplete matrimonial assets. (See also MKKWH v RKSH [2013] HKFLR 540 §66; MAP v MFP [2016] 1 FLR 70).

C2.3  W’s columbarium niche

55.  H’s claims for adding back the purchase price of W’s columbarium niche ($191,600) was not by reason of it being a wanton or reckless dissipation of assets, but because the columbarium niche is an asset of W and should be included.

56.  W disputed. She initially claimed that was an expenses. At cross-examination, she changed to say that it was a gift to her daughter after her demise. W also said that the columbarium niche has no resale value.

57.  W’s allegation of gift to her daughters is an after-thought inconsistent with her earlier claim. There is no evidence to support W’s assertion that the columbarium niche cannot be resold.

58.  The columbarium niche, being part of W’s asset, should be so treated in these proceedings.

D.  EARNING CAPACITIES

59.  The parties are in their early sixties.

60.  W had worked in large institutions such as XXXXXXXXXXXXXX and XXXX. Her last position was XXXXX in marketing at XXXX. She ceased to have any gainful employment since July 2004 and assumed the role of housewife, taking care of the children and the family. In view of her age and she had left the workforce for a substantial period, it is unlikely that she would have a gainful employment after divorce.

61.  She was earning car park rental income of $2,500 per month together with dividend income from stocks and investment income from bank deposits.

62.  H has been the breadwinner of the family. His monthly remuneration was about $448,000 including basic salary of $312,500, discretionary bonus of $64,583 for 2024 and other allowances.

63.  W referred to the historical average bonus received by H and argued that the amount of bonus should be higher. There is no need to determine this issue because of my rulings below on the issue about H’s retirement.

64.  H is reaching the age of 65 in August 2026. He planned to retire by then due to his age and health condition.

65.  He was diagnosed with prostate cancer in 2020 and underwent surgery of its removal in February 2021. There is a 10 to 15% chance of relapse. He requires ongoing regular check up every year.

66.  In 2022, he was diagnosed with glaucoma and thyroid eye disease which he described as an autoimmune disorder in that his immune system attacked the muscles and tissues surrounding his eyes. He underwent surgery on his right eye in July 2024. His right eye’s vision is largely impaired. He is almost totally relying on his left eye for vision. He said that he could not look at the computer screens for an extended period of time and could become blind if he suffers the same problem with his left eye. He has been on regular medication monitoring his diabetes and high cholesterol condition.

67.  Furthermore, his Employer’s business was in the downturn as its XXXXX are reaching the expiry date. The financial prospect of his Employer was uncertain. H said that there was a considerable risk of him not being able to stay in his job until his planned retirement next year.

68.  W argued that H can work till at least to the age of 70. She contended that H has exaggerated the problem of his eyes.

69.  There is no medical evidence on the severity of H’s eye problem and the extent of its impact on H’s work. Irrespective of whether H’s eye problems have prevented or would prevent him from working, I find that retirement at the age of 65 years is fair.

E.  FINANICAL NEEDS

70.  The assessment of the parties’ financial needs, obligations and responsibilities under section 7(1)(b) of MPPO are to be conducted generously and on a broadbrush basis: LKW v DD. The court is to assess the reasonable financial needs of the parties and is not bound by the actual expenses spent by them. The production of receipts evidences the expenses spent but it does not necessarily follow that those expenses are reasonable: P v P, FCMC 13264/2002, 20 September 2005 §70.

71.  H claimed that his monthly financial needs is $165,991 including payment of $33,000 for mortgage of FMH and $57,191 for tax. After the sale of the FMH and his retirement, his financial needs would be $75,800. On a broadbrush basis, I find the expenses claimed by H is reasonable.

72.  W claimed that her monthly financial needs is $182,150 (comprising general expenses of $88,900 and personal expenses of $93,250). Having carefully considered the evidence, on a broadbrush basis and generously assessed, I find that W’s reasonable financial needs should be around $100,650 with the following adjustments:

E1.  W’s medical expenses (including medical insurance)

73.  W claimed the need for a monthly medical and dental expenses of $28,500 and insurance premia of $14,500 (i.e. a total annual sum of $516,000).

74.  W said that she chronically suffers from Scoliosis and Osteoporosis for decades and requires regular attendance to physiotherapy and other treatments. Her health condition further deteriorated in 2024 when she was found to have aneurysm. She received a XXX surgery. The surgery was successful. She still suffers from episodes of vertigo and requires close monitoring by regular CT scans or MRI procedures. Due to the health issue arose in 2024, she became more cautious and undertook preventive measures including receiving craniosacral therapy, hair loss treatment and taking supplements.

75.  W is now enjoying the medical insurance benefit provided by H’s Employer. This insurance coverage would cease after divorce or H’s retirement. She made some searches and found that only one insurance company is willing to accept her application for medical insurance. The quote for first year insurance premium is about $173,677 (around $14,473 per month).

76.  H contended that W’s estimated medical expenses is significantly higher than her average medical expenses in the past 6 years, including the period after December 2024 when her medical expenses had increased.

77.  H said that W opted for a luxurious insurance plan not commensurable with their financial condition. He produced a quotation from the same insurance company of a policy with US$3,000 deductible, the average monthly premia is $10,805. He took the view that when they cease to have the protection of the comprehensive medical insurance plan provided by the Employer, it is reasonable to be more prudent on medical spending. The public healthcare in Hong Kong or Canada should also be deployed for part of their medical needs. I agree.

78.  Having considered the matter, I find that a reasonable sum for W’s medical needs after H’s retirement, generously assessed, is $25,000.

E2.  W’s need to support mother

79.  W’s mother, aged 88, is residing with W’s sister in Canada. W said that she needs to contribute to her mother’s maintenance including the costs for private nursing home.

80.  W has put forward different figures for her contribution to mother at different stages of these proceedings.

80.1.  In W’s Form E dated 11 January 2023, she declared a contribution of $21,000 to her mother.

80.2.  In her updated Form E dated 23 September 2024, she declared a monthly contribution of $15,000 with an anticipated increase to $24,000 because her mother had been diagnosed with dementia and other chronic disease such as diabetes and high blood pressure.

80.3.  In §57 of her 4^th Affidavit (section 7 narrative affidavit) dated 14 March 2025, she claimed the sum of $16,500.

80.4.  In the agreed schedule of expenses lodged for the trial, the claim for contribution to W’s mother was $12,500.

81.  Without disrespect to W’s filial piety, I disallow this item. W’s mother is residing with XXXXXXXXXXX at the property originally belonged to the mother but transferred to W’s sister in 2019. W’s sister is taking care of the mother. Although there is evidence of remittance from W to her mother from time to time after separation, there is no evidence showing that W’s mother is relying on W’s financial support. There is also no evidence of an immediate need to move W’s mother to a private nursing home.

82.  Further, I do not agree to Mr Jeffrey Li’s (counsel for W) argument that W’s contribution to her mother is a relationship-generated need. No authority was provided nor evidence was adduced to substantiate this argument.

E3.  W’s holiday expenses

83.  W claimed a monthly holiday expenses of $15,000 (i.e. $180,000 per year) including the costs for visiting her mother in Canada and renting Airbnb apartment costing $40,000 for her and her mother during her visit.  

84.  The amount claimed is excessive. It is also inappropriate to take her mother, who suffers from dementia, away from her home and stay in an Airbnb apartment which is unfamiliar to her.

85.  I allow $6,000 per month for holiday expenses (same as the amount for H), i.e. $72,000 per year.

E4.  Other expenses

86.  The household used to employ domestic helper during marriage. It is reasonable to provide for the employment of one domestic helper. I allow the amount claimed by W for this item.

87.  The amount for W’s rental expenses and food expenses should be adjusted.

88.  W claimed $60,000 for rental expenses. This is excessive and should be adjusted to $25,000 having regard to her standard of living during marriage and the reduction in number of household after separation.

89.  W claimed $10,000 for food and $7,000 for meals out of home. These two items shall be adjusted to $10,000.

F.  ANY DEPARTURE FROM EQUAL SHARING

90.  I find that there is no reason to justify a departure from the starting point of equal distribution.

90.1.  Firstly, the parties had a long marriage lasting close to 30 years as of the date of separation. Both parties had made contributions to the family in their respective roles.

90.2.  Secondly, following H’s intended retirement in August 2026, both parties would mainly rely on their current assets for their needs.

90.3.  Thirdly, I reject W’s argument that she should have a larger share because of H’s skill in investment and his ability to generate more investment returns. Investment carries risk. The potential investment returns have been taken into account in the Duxbury Reports.

90.4.  Fourthly, with respect to W’s complaints on H’s litigation conduct, Mr Li (after taking instruction) confirmed at the closing submissions that only the point about H’s late abandonment of the claims for Charman Payment was pursued. W did not pursue the other matters which could not be considered as “gross and obvious”.

90.5.  Fifthly, I do not agree that H’s abandonment of the claims for Charman Payment at the closing submissions is a “gross and obvious” misconduct. H has fairly and sensibly dropped the claims after hearing evidence. It did not result in a material depreciation or loss of the matrimonial assets that calls for a departure from equal division: LSY v HTF [2013] 2 HKLRD 1233; Tavoulareas v Tavoulareas [1998] 2 FLR 418; OG v AG [2021] 1 FLR 1105.

91.  As found in Sections B and C above, the value of the parties’ adjusted total net assets is $70,684,807[6], out of which H has $56,127,565[7] and W has $14,557,242[8]. The value of one half of their net assets (i.e. $35,342,403.50) should be distributed to each party.

G.  DUXBURY REPORTS

92.  The calculation in a Duxbury report is a useful guide in assessing the amount of money required to provide for a person’s financial needs. It is mainly used as a guide to check whether the sum produced by the sharing principle will be enough to meet the parties’ needs: White v White [2001] 1 AC 596 at 609; Simon v Helmot [2012] 5 LRD 536 §68.

93.  In respect of the parties’ disputes on the assumptions adopted in the Duxbury calculations:

93.1.  I accept the SJE’s evidence that it is reasonable to take 65 as H’s retirement age.

93.2.  I agree with the SJE that the choice of S&P 500 ETF Trust (Tracker Fund of the United States) (“Scenario 2”) in place of HKMA Exchange Fund Notes (“Scenario 1”) is more reasonable in view of the current market. This difference has no material impact on the outcome because the capital requirements based on the parties’ financial needs as found will be met in both scenarios by an equal distribution of the net assets (i.e. $35,342,403.50 each).

94.  The Duxbury Reports show that if W’s financial needs is $102,050 (higher than the assessed needs of $100,650), she will require a capital size of $32,513,988 under Scenario 1, and $26,456,831 under Scenario 2. On the basis that H’s financial needs is $75,300 (slightly lower than the assessed need of $75,800), he will require a capital sum of $17,743,651 under Scenario 1 and $14,568,717 under Scenario 2.

95.  As cross checked with the calculations in the Duxbury Reports, both parties’ future financial needs can be met by an equal distribution of the adjusted net assets.

H.  DISTRIBUTION OF AXXX SHARES IN SPECIES

96.  W asked for a distribution of the Axxx Shares in species. Her reason is that she should be entitled to the dividends to be generated from the Axxx Shares.

97.  I decline to make an order for distribution of Axxx Shares in specie for the following reasons:

97.1.  H’s entitlement to subscribe the Axxx Shares was under a management incentive plan. The plan permits a transfer of the Axxx Shares to spouse, civil partner children or family trust subject to the prior written consent of the Board.

97.2.  Upon divorce, W ceases to be H’s spouse. Whether W will still be eligible to hold the Axxx Shares under the scheme is doubtful.

97.3.  The criteria for granting consent of the transfer is unknown.

97.4.  Upon H’s exit from the Axxx at retirement, he is required to sell back the Axxx Shares on terms depending on whether he is a bad leaver or good leaver. The ultimate value that may be materialised from the Axxx Shares is uncertain.

97.5.  Certainty and finality are key to the resolution of the parties’ financial disputes upon divorce. There is no basis for the court to override the requirement of the Board’s consent to a transfer of the shares.

I.  ORDER

98.  By reasons of the above, I order that:

98.1.  The parties do sell the FMH within 6 months from the date of this Judgment.

98.2.  The net sale proceeds of the FMH (after reimbursing H for all mortgage repayments made from 1 May 2025[9] until the sale, and after deducting the outstanding mortgage, any stamp duty, tax, legal costs, estate agency fee and any other incidental fees and costs associated with and/or arising from the sale of the FMH before the completion of the sale) be distributed to the parties in equal shares within 14 days after completion of the sale or within 14 days from the making of Decree Absolute, whichever is the later.

98.3.  H do transfer to W his interest in the Tracker Fund of Hong Kong jointly held by the parties, in other word, 100% of the above fund (at an agreed value of $74,793.60) be retained by W.

98.4.  H do pay a lump sum of $20,747,764.70[10] (“Lump Sum”) to W in 2 instalments as follows:

(a)  $10,373,882.40 (rounded up from $10,373,882.35) within 14 days from the making of the Decree Absolute (“First Instalment”);

(b)  the remaining $10,373,882.30 (rounded down from $10,373,882.35) within 30 days after the payment of the First Instalment.

98.5.  W do pay H a sum $57,500, being her half share of the SJE’s costs, within 14 days from the making of the Decree Absolute to be set off against the First Instalment.

98.6.  All joint bank accounts of the parties be closed within 3 months from the date of this Judgment with the assets therein be divided and distributed to the parties in equal shares.

98.7.  Each party shall retain all of their respective assets held in their sole name (including their respective personal valuables) and be responsible for all their own liabilities.

99.  None of the parties can be considered as the successful party. I make an order nisi that there be no order of the costs of the ancillary relief dispute.

100.  I thank Mr Yim and Mr Li (with Ms Lee) for their helpful assistance.