AD (also known as AT) v. RT

HCMC 1/2022

[2026] HKCFI 124

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MATRIMONIAL CAUSES NO 1 OF 2022

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DECISION

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INTRODUCTION

1.  Unless otherwise stated, I shall adopt the definitions used in the Judgment dated 26 August 2025 (“the Judgment”), which was given after the trial on ancillary relief (“the AR Trial”) in the present case.

2.  By the Judgment, this Court made, among other things, the following orders:

(1)  H shall make a lump sum payment upon/after the date of the Decree Absolute (to be made by instalments) to W in the total sum of HK$41,700,000, subject to the deduction of HK$844 (i.e. W’s share in the balance of the joint accounts in India Overseas Bank) and the net sale proceeds of the 12D Flat;

(2)  Sister shall sell the 12D Flat within 3 months after the date of the Decree Absolute, and the net sale proceeds shall be paid to W;

(3)  H shall pay for Daughter’s school fees (including capital levy) upon presentation of invoice until she attains the age of 18 or ceases full time education, whichever is later;

(4)  The order dated 3 July 2023 on maintenance pending suit be varied to a monthly sum of HK$45,000 with effect from 1 September 2025 until further order;

(5)  The order dated 3 July 2023 on litigation funding shall continue to have effect until further order;

(6)  Parties shall seek to agree on the necessary further order/directions to bring the orders made under the Judgment into effect, and they have liberty to apply;

(7)  Parties shall use their best endeavours to agree on the schedule of payment of the lump sum. In case they cannot reach consensus on such schedule, they shall agree on the directions to be sought from this Court for the purpose of the determination of the schedule of payment.

3.  This Decision contains this Court’s determination on the following matters (“the Determination”) which have been raised by the parties by way of written submissions:

(1)  the payment schedule of the lump sum payment;

(2)  whether H should be ordered to make periodical payments pending full payment of the lump sum;

(3)  the time when the order for litigation funding should be discharged;

(4)  the sale of the 12D Flat to Sister;

(5)  direction for the payment of Daughter’s school fees.

THE PAYMENT SCHEDULE

4.  H has been ordered to make a lump sum payment of HK$41.7 million, subject to a deduction of HK$844 and of the net sale proceeds of the 12D Flat.

5.  W proposed that the said sum shall be paid by 2 instalments:

(1)  The first sum of HK$21 million shall be paid within 14 days of the pronouncement of the Decree Absolute;

(2)  The remaining balance shall be paid within 1 year of the pronouncement of the Decree Absolute.

6.  On the other hand, H suggested that the lump sum be paid in 4 years by 5 instalments:

(1)  The 1^st instalment of HK$7 million be paid within 14 days after the date of the Decree Absolute;

(2)  The 2^nd instalment of HK$7 million be paid 1 year after the date of the Decree Absolute;

(3)  The 3^rd instalment of HK$7 million be paid 2 years after the date of the Decree Absolute;

(4)  The 4^th instalment of HK$7 million be paid 3 years after the date of the Decree Absolute;

(5)  The 5^th instalment of the balance of the outstanding sum be paid 4 years after the date of the Decree Absolute.

7.  When deciding on the payment schedule, this Court has to bear in mind that H has been allocated the illiquid and risk laden family assets, namely, the shares in private companies, of which he is the key-man of the business involved. It has been held in the Judgment that letting H to hold those companies would facilitate the raising of funds.

8.  Another factor which this Court should consider is that while it is preferable to achieve a clean break between H and W as soon as possible, this desire should be weighed against the feasibility of the payment schedule and the reality. An unduly tight schedule which H cannot comply with would only lead to more litigations and that would not be in the best interest of Daughter nor the parties. Indeed, even W’s counsel recognises that the payment schedule should reflect the reality of H’s liquidity.

9.  The difficulty which this Court faces in the present case is that little is known about the current financial circumstances of H’s companies. Although W’s counsel has drawn this Court’s attention to the cash-rich position of H&H HK as reflected in its 2022 audited financial statements (which shows that H&H HK had HK$22.9 million of “cash and cash equivalents” at the time), I do not think that necessarily means that H is able to draw the entirety of such “cash and cash equivalents” without affecting the operation and viability of H&H HK (even if it is assumed that H&H HK is currently holding “cash and cash equivalents” of no less than the said amount).

10.  W’s reference to the financial position of H&H HK prior to 2022 is even less helpful.

11.  W also suggested that H should generate further liquidity by selling stakes in his companies. In my view, this Court should not fix the payment schedule on the basis that H shall sell his stakes (or even part of such stakes) in his companies. This is because:

(1)  A forced realisation of H’s companies would affect the price to be fetched;

(2)  It is very difficult if not impossible to estimate when such stakes will be successfully sold;

(3)  I take the view that letting H run his business is the most reliable way to ensure that the payment obligations imposed on H by the Judgment would be met.

12.  W also argued that adverse inference should be drawn against H on the basis of his failure to provide any audited or management accounts (or bank statements) of H&H HK for the periods after 2022 upon W’s requests made in her Questionnaire.

13.  I do not think it is appropriate to draw such an inference against H, when W did not pursue the same requests by way of application for specific discovery upon H’s refusal to supply her with the documents. From H’s answers, it could be seen that H was of the view at the material time that provision for such documents was unnecessary because H&H HK had been valued by the single joint expert. If W considered that such a reply was not to the point or in any way inadequate, then it would be up to her to take the matter further, but she did not.

14.  Looking at all the matters in the round, I tend to think that H’s proposed payment schedule should be adopted in principle, because this is a schedule which, according to H’s own case, is feasible. This Court is much more confident that this schedule (subject to the adjustment to be set out in the following paragraph) would be something which is achievable.

15.  The only adjustment which I would make to H’s proposed schedule is that I would order H to make more frequent payments (every 6 months rather than every 12 months), but for a smaller amount for each instalment, so that W would receive some cash on a more frequent basis rather than having to wait for a full year before she gets another round of cash from H. When I do the adjustment, I would keep the annual payable amount within HK$7 million (except the last instalment which would be more than HK$7 million even under H’s own proposal).

16.  W submitted that, in the event this Court is minded to give H more than a year to pay the lump sum, then that should only be done on the basis that H undertakes to pay interest on any outstanding sums at judgment rate from the date of the Decree Absolute.

17.  I refuse to make such an order on interest or to ask H for any such undertaking, because in my view, that would be wrong in principle. In this regard, it must be borne in mind that, in the circumstances of the present case which have been explained in the Judgment, H should be given the illiquid part of the assets. It is because of this that the Court had stated in [488] of the Judgment that “[the lump sum payment] unavoidably would have to be satisfied by instalments”, for it was anticipated that H would need time to raise money. In my view, it would not be fair if H is ordered to bear interest right from the beginning, because the non-payment of instalments which are not yet due should not be viewed as if H were already in default from the start.

PERIODICAL PAYMENTS

18.  W submitted that her needs should continue to be met by periodical payments from H until she receives full payment of the lump sum of HK$41.7 million.

19.  On the other hand, Ms Booth submitted on behalf of H that the order on maintenance pending suit should be discharged upon H paying the first instalment of the lump sum, and no further order of periodical payment should be made.

20.  In this regard, attention should be drawn to [488] and [489] of the Judgment which read:

“488. It will be seen below that this Court will order H to make a lump sum payment to W. However, that unavoidably would have to be satisfied by instalments, and it may take a while before the final order may be made, since parties have requested to have the chance to make further submissions on payment schedule upon their perusal of this Judgment.

489. I am of the view that, in the meantime, W’s needs have to be provided for by H’s monthly payments. However:

(1) I do not agree that H should be ordered to make monthly payments to W until full payment of the lump sum. In my view, provided the first instalment to be made by H is not of too small an amount, her immediate needs should have been taken care of by such a payment, even if it will take a while for the lump sum payment to be fully made. Having said that, that is not a matter which can be decided right now. I will leave the time of cessation of monthly payment to be further dealt with when this Court gives its ruling on payment schedule;

(2) […]”

(emphasis added)

21.  I maintain my view as highlighted above.

22.  Following the 1^st payment of HK$7 million, W will have more than adequate money to fund her monthly expenses as well as to pay off her liabilities[1] which her counsel referred to in paragraph 7 of her submission dated 30 October 2025. It would be most unfair if H has to continue with his monthly payment to W thereafter.

23.  I therefore agree that an order as suggested by H should be made.

LITIGATION FUNDING

24.  The relevant order for litigation funding in the present case was made on 3 July 2023, under which H has been ordered to pay W’s lawyers in the sum of HK$120,000 per month (“the Litigation Funding Order”).

25.  It is submitted by W that the Litigation Funding Order should remain until the question of costs of the AR Trial has been concluded (whether by reason of the order nisi becoming absolute[2] or upon the determination of any application to vary the said costs order nisi).

26.  H’s proposal is a bit more complicated. It is suggested that the Litigation Funding Order should be discharged:

(1)  Upon H paying the 1^st instalment of the lump sum under paragraph 5 of the order dated 26 August 2025;

(2)  14 days after this Decision; or

(3)  Upon the determination of any application to vary the costs order nisi given in the Judgment,

whichever is earlier.

27.  In my view, the adjudication on the question of cessation of the Litigation Funding Order is a straight forward one which only requires us to go back to the basic principle that, in order to obtain litigation funding, the burden is on the applicant to demonstrate that she cannot reasonably procure legal representation by any other means. To the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, either directly or as the means of raising a loan to fund legal services: WW v LLN formerly known as LSM [2020] 2 HKLRD 487, [2020] HKCA 178, at [20(1)].

28.  Considered in such light, the yardstick in my view must be the time when W receives the 1^st instalment of HK$7 million from H. Since then, she must be able to procure legal representation with such funds (even if part of the funds would have to be used towards W’s needs as well as for settling W’s various debts).

29.  I therefore hold that the Litigation Funding Order shall cease upon H paying the 1^st instalment of the lump sum.

SALE OF THE 12D FLAT

30.  It has been ordered pursuant to the Judgment that Sister shall sell the 12D Flat within 3 months after the date of the Decree Absolute, and that the net sale proceeds shall be paid to W.

31.  Since then, Sister has proposed to buy the 12D Flat for HK$5,480,000, which both H and W have accepted.

32.  What W would like to make sure is that either the relevant HSBC mortgage shall be redeemed or a deed be obtained from HSBC to release W from her guarantee.

33.  In this regard, H has not stated any objection through his counsel’s submissions.

34.  As far as Sister is concerned, she has, through her solicitors’ letters dated 9 October 2025 and 22 October 2025 respectively, confirmed that she would agree to remove W as a guarantor of the said mortgage.

35.  Given the above latest development, I propose that this Court would only give an order herein so as to clarify that, despite paragraph 8 of the order dated 26 August 2025, H and W are at liberty to sell their beneficial interest in the 12D Flat to Sister at HK$5.48 million, and that any costs of the transaction should be shared between H and W. However, since Sister has not been invited to make submissions on the consequential directions and orders for such a sale, I do not think it is appropriate for this Court to give further directions in this regard. Insofar as it is considered necessary, H, W and Sister are at liberty to seek further order by consent, or for further directions such that any disputed matters may be adjudicated on paper.

DAUGHTER’S SCHOOL FEES

36.  W’s counsel informed this Court that Daughter is now studying in a school which does not issue invoices but rather provides termly statements and operates on a direct debit system. It was therefore proposed that an order for direct payment by H is a practical direction to bring the order for school fees into effect, as this would ensure timely payment of Daughter’s school fees, and avoid unnecessary administrative steps by W.

37.  H did not make any submission on this matter, apart from saying that this is not a matter which is properly placed before the Court for adjudication, and that neither was it raised at the trial.

38.  I do not understand why it is said that the mechanism for payment of Daughter’s school fees is not properly placed before this Court. As Mr Marwah for W pointed out, this Court has expressly directed parties to agree on the necessary further order/directions to bring the orders under the Judgment into effect (at [496]). The order on the payment of school fees must be one of those orders.

39.  I therefore accede to W’s application.

ORDER

40.  For the above reasons, I make the following orders:

(1)  H shall make the lump sum payment under paragraph 5 of the order dated 26 August 2025 in the following manner:

(a)  The 1^st instalment of HK$7 million be paid within 14 days after the date of the Decree Absolute;

(b)  The 2^nd instalment of HK$3.5 million be paid within 6 months after the date of the Decree Absolute;

(c)  The 3^rd instalment of HK$3.5 million be paid within 1 year after the date of the Decree Absolute;

(d)  The 4^th instalment of HK$3.5 million be paid within 18 months after the date of the Decree Absolute;

(e)  The 5^th instalment of HK$3.5 million be paid within 2 years after the date of the Decree Absolute;

(f)  The 6^th instalment of HK$3.5 million be paid within 30 months after the date of the Decree Absolute;

(g)  The 7^th instalment of HK$3.5 million be paid within 3 years after the date of the Decree Absolute;

(h)  The 8^th instalment of HK$3.5 million be paid within 42 months after the date of the Decree Absolute;

(i)  The 9^th instalment of the balance of the outstanding sum be paid within 4 years after the date of the Decree Absolute.

(2)  Upon H paying the first instalment of the lump sum pursuant to paragraph (1)(a) above:

(a)  Paragraph 1(1) of the order dated 3 July 2023 (on maintenance pending suit), as varied by paragraph 13 of the order dated 26 August 2025, shall be discharged;

(b)  W’s right to maintenance pending suit and spousal maintenance shall be dismissed;

(c)  The Litigation Funding Order shall be discharged.

(3)  Despite paragraph 8 of the order dated 26 August 2025, H and W are at liberty to sell their beneficial interest in the 12D Flat to Sister at HK$5.48 million. The vendors’ costs shall be shared by H and W equally.

(4)  H shall pay Daughter’s school fees pursuant to paragraph 11 of the order dated 26 August 2025 by way of direct payments to the school.

COSTS

41.  I take the following tentative view on the costs matter in relation to the Determination:

(1)  The written submissions made in relation to consequential directions/orders herein are independent of the AR Trial. As a result, the costs of those submissions should be considered separately, and should not be linked up with the costs order made/to be made in relation to the AR Trial;

(2)  H should be considered the successful party as far as the consequential directions/orders are concerned;

(3)  While W is successful in relation to the issue on school fees, the costs in relation to that issue must be minimal and as a result may be disregarded without injustice;

(4)  Costs in relation to the submission on the sale of the 12D Flat may also be disregarded for the same reason.

42.  I therefore make a costs order nisi that:

(1)  W shall bear H’s costs in relation to the Determination;

(2)  H’s costs shall be summarily assessed in lieu of taxation. Unless any application for variation of this costs order nisi is made within time, H shall lodge and serve his statement of costs within 7 days after the expiry of the 14-day period as to be provided in [43] below. W shall lodge and serve her statement of objection within 7 days thereafter. Summary assessment of H’s costs will be conducted on paper (no matter whether any statement of objection is lodged by W) thereafter;

(3)  The costs assessed shall be set-off against the 1^st instalment to be paid by H (in the event it has not yet been paid by the time of the due date for the payment of costs), or shall be paid within 14 days after assessment (in the event the 1^st instalment has already been paid by the time of the due date for the payment of costs).

43.  The above order nisi shall become absolute in the absence of application to vary (which, if any, will be disposed of on paper) within 14 days hereof.