FCMC 13698/2013
[2024] HKFC 70
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES
NO. 13698 OF 2013
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BETWEEN
| | ALDL | Petitioner |
| | and | |
| | FTFC | 1st Respondent |
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| Coram: | His Honour Judge S. Lo in Chambers (Not Open to Public) |
| Dates of Trial: | 19 - 22 December 2022, 22 - 24 May 2023 |
| Date of Petitioner’s closing submissions: | 7 November 2023 |
| Date of 1st Respondent’s closing submissions: | 19 December 2023 |
| Date of Petitioner’s reply submissions: | 16 January 2024 |
| Date of Judgment: | 17 April 2024 |
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J U D G M E N T
(Ancillary Relief)
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1. This is the trial of the ancillary relief between the Petitioner (“W”) and the 1st Respondent (“H”).
2. Before this trial, there was a 7-day trial for the preliminary issues and section 17 applications involving the parties and the 2nd Respondent (“R2”). As the facts of these 2 trial are interrelated, I deliberately arrange to hand down the judgment for the preliminary issues and section 17 applications (“Preliminary Issues Judgment”) together with this judgment for the ancillary relief (“Ancillary Relief Judgment”) on the same day.
3. The parties have no objection to rely on the evidence given by them and R2 in the trial for the preliminary issues and section 17 applications for the purpose of the ancillary relief trial. Needless to say, my findings and decisions in the Preliminary Issues Judgment have very great impact on the Ancillary Relief Judgment since they are binding on H and W.
A. Background
4. The background of the marriage is succinctly set out in the judgment[1] of Judge A Tse dated 22 November 2019 (Variation of Maintenance Pending Suit).
5. In gist, the parties were both born in 1964 and are now aged 59. They met in 1984 when H was a medical student at the University of Queensland and W was studying for her degree in Occupational Therapy. They married three years later in Australia in 1987. There are no children of the family.
6. W settled in Australia with her family from a young age. She graduated in mid-1988 and began working immediately thereafter.
7. H graduated in 1990 and subsequently worked in Brisbane as a general practitioner with modest income.
8. In 1992, the parties relocated to Hong Kong. H took up specialist training with the Hospital Authority. W worked full-time at Hong Kong Polytechnic University teaching occupational therapy. They rented a flat of about 550 sq ft before moving into larger government quarters in Fotan in 1993/1994 (until 1999).
9. Between 1994 and 2000, W completed and obtained a PhD by distance learning with the University of Queensland. In 1995, W took up a coveted Assistant Professorship with Hong Kong Polytechnic University. She researched and taught in the English language.
10. In July 1995, they purchased an apartment in Sceneway Garden in Hong Kong (“Sceneway Garden Apartment”) for HK$4,730,000 with mortgage in joint name. In October 1997, they purchased a car park in the same development (“Sceneway Garden Car Park”) for HK$728,000 also with mortgage in their joint name.
11. In 1998, H obtained his first specialist qualification in anaesthesiology with the Hospital Authority in Hong Kong. In 1999, H obtained his second such qualification. They moved to a 3-bedroom flat of at least 1,000 sq. ft. in Union Court, Shatin (“Former Matrimonial Home”) for monthly rent of $13,000.
12. H admitted that he started an extra-marital affair with R2 in 2001. Since mid-2001, H started to stay overnight about once or twice a week in the apartment rented by R2.
13. In September 2005, a property in Metro Town, Tseung Kwan O (“Metro Town Property”) was purchased in the name of H and his mother.
14. By 2006, H was earning about $130,000 per month with the Hospital Authority. W was earning about $58,000 per month as an Assistant Professor. Thus, total income was about $188,000.
15. In April 2006, H moved out of the Former Matrimonial Home to live with R2.
16. On 5 May 2006[2], after H refused to return to stay overnight at the Former Matrimonial Home, W ingested an overdose of sleeping pills which left her unconscious (“Overdose Incident”). H discovered her unconscious and called an ambulance. W was admitted to intensive care of the Prince of Wales Hospital and stayed there in the following weeks.
17. There is no dispute that parties came to some form of consensus about finances in the aftermath of the Overdose Incident, namely:
(1) H would not petition or ask for divorce without W’s agreement.
(2) H would be transparent about his income and give 50% to W on a monthly basis.
18. Afterwards, H left employment in the public sector and took up work as a private anaesthesiologist with Tsuen Wan Adventist Hospital.
19. H returned to visit the Former Matrimonial Home following the Overdose Incident once per week at first; sometimes overnight; and reducing in frequency over time. However, W said that he stayed overnight every week until July 2012.
20. In about 2007 to 2008, W claimed that she began suffering from a chronic medical condition called ‘Myalgic Encephalomyelitis’ commonly known as ‘Chronic Fatigue Syndrome’ (“ME/CFS”).
21. In January 2009, H left Tsuen Wan Adventist Hospital to commence self-employment as an anaesthesiologist, as a sole proprietor. H agreed to provide a new sum of $150,000 per month to defray the mortgage for the Sceneway Garden Apartment and Sceneway Garden Car Park ($32,000) and the rent for the Former Matrimonial Home where W still lived ($23,000) – leaving W with $95,000 to spend at her leisure.
22. In June 2009, W resigned from her full time employment with Hong Kong Polytechnic University and has not worked regularly since.
23. In January 2012, a company (“TF Co. Ltd.”) was incorporated to house H’s anaesthesiology business. H was the sole director and sole registered/legal shareholder.
24. In August and October 2012, W received a total sum of HK$12,803,624.30 from the sale of the Sceneway Garden Apartment, Sceneway Garden Car Pak, and Metro Town Property, which are all the landed properties held by the family. On 13 September 2012, she acquired a flat in Parc Royale, Tai Wai (“Parc Royale”) of about 1,600 sq. ft. consisting of 4 bedrooms, 2 toilets, storeroom, living room, dining room, balcony, for HK$12,500,000 as her current residence.
25. H accepts that he continued to make monthly payments in the total sum of $12.16 million to W over 7 years, ie HK$5.69 million between May 2006 and May 2009 (on average about HK$158,000 per month) and HK$6.47 million between May 2009 and February 2013 (on average about HK$140,000 per month). He only ceased making monthly payments to W after March 2013.
26. W then commenced the petition for divorce against H based on unreasonable behaviour on 10 April 2013 and subsequently issued a fresh petition on 26 September 2013 based on one-year separation from and since July 2012 with H’s consent.
27. Decree Nisi was granted on 17 January 2014.
28. H was ordered to pay Maintenance Pending Suit in the sum of $125,000 per month in February 2015, which was varied upwards to $220,000 plus $300,000 for 12 months in legal costs provision, by the order dated 22 November 2019[3]. H’s application to vary downwards was dismissed by me as per the order dated 17 February 2022[4].
B. H’s brief case
29. H strongly denies that Wife is suffering from ME/CFS.
30. He alleges that he reached an agreement with W after the Overdose Incident in May 2006 (“alleged Financial Agreement[5]”) so that the parties are then financially independent and free to spend the 50% income of H as they wished. He further reached another agreement after the receipt of all the sales proceeds for around HK$12.8 million by W in about October 2012 (“alleged Divorce Agreement[6]”). H argues that the alleged Divorce Agreement would be in full and final settlement of all financial claims of W.
31. H claims to suffer from Post-Traumatic Stress Disorder (“PTSD”), which affects his income and earning capacity. He also plans to get married with R2 and retire at the age of 60.
32. Since W has already received nearly HK$50 million in total since 2006, her needs have been met and exceeded. She has received more than she ever could have done applying the sharing principle. Her claim ought to be dismissed.
C. W’s brief case
33. The alleged Financial Agreement and the alleged Divorce Agreement are denied.
34. W hardly retains any earning capacity in light of her age, health condition in particular her ME/CFS and prolonged unemployment. This is a clear-cut ‘needs’ case.
35. W submits that if the Court were to find there are insufficient assets to cover her needs and pay her requested capital sum through a ‘clean break’, this is a case where she should be awarded the maximum possible lump sum payment, with funds for her remaining needs to be provided by a lifelong periodical payment order in the sum of HK$300,000 per month payable by H.
D. Date of separation
36. One of the parties’ main issues in dispute is when they start to separate.
37. H said that the date of separation is April 2006 when he moved out of the Former Matrimonial Home to live with R2 whilst W said it is July 2012 which is the date of separation as agreed by H in the Petition.
38. It is not disputed that H returned to visit the Former Matrimonial Home following the Overdose Incident in May 2006 once per week. H said that he sometimes stayed overnight and reduced in frequency over time. W said that he stayed overnight every week until July 2012.
39. At that time, they also reached some form of consensus including that H would not petition or ask for divorce without W’s agreement.
40. W accepted in her oral evidence that her relationship with H was no longer “affectionate” nor “romantic”. H came home they ‘didn’t have many conversations’ and ‘didn’t have that many exchanges’. They never took any holidays together and H never kissed W again. W also accepted that the marriage “broke down before 2007/8”.
41. H continued to provide monthly maintenance to W mostly through their joint account until early 2013.
42. In my view, since H agreed in May 2006 to return to visit W at the Former Matrimonial Home once per week, it gives the hope to W that H would be back home one day such that their marriage could be reconciled though it turns out to be a false hope. Whether or not sometimes he stayed overnight or how frequent he stayed overnight, I do not think that it really matters.
43. H conceded in his oral evidence that “perhaps some soup was prepared [by W]” during his visits to the Former Matrimonial Home. Judging from the evidence, I find that they were still living as a couple under the same household when H stayed at the Former Matrimonial Home although just once per week with some overnight stays. The agreement that H would not petition or ask for divorce without W’s agreement further shows that at least W did not want to separate with H completely at that time. In other words, there is no separation yet.
44. H only firmly refused to return to the Former Matrimonial Home until July 2012. That is the clear conduct of H showing to W that he decided to separate with her completely and W had no choice but to accept it. The facts that they had no holidays, no kiss or just very little communications at the material time are not conclusive as to whether they had separated.
45. It is understandable that H might be afraid of W’s attempt to suicide after the Overdose Incident, so he agreed to return to visit W at the Former Matrimonial Home once per week. It only shows that H still cared about W or did not want her suicide again at that time. I consider that H always has the free will to return to the Former Matrimonial Home or not. If he chose to keep the promise to return once a week or return at the request of W, there is no separation. Until and less he unequivocally communicates with W that he would no longer return, then the separation really begins.
46. In the circumstances, I find that the parties only started to separate in July 2012. The duration of marriage is therefore about 25 years.
E. The relevant legal principles and approach
47. In respect of the financial provision for a party to marriage in case of divorce, the Court's jurisdiction in making an order for periodical payments, lump sum, transfer and sale of property is founded on sections 4, 6 and 6A of the Matrimonial Property and Procedure Ordinance (“MPPO”), in particular section 4(l)(a) provides:
"(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation, or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of sections 25(1), make any one or more of the following orders, that is to say-
(a) an order that either party to the marriage shall make to the other such periodical payments and for such term as may be specified in the order.
….."
48. The factors to be taken into account by the Court in the exercise of its powers under the above sections are set out in section 7 of the MPPO:
"(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 of 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.”
49. In LKW v DD (2010) 13 HKCFAR 537, after considering the line of English authorities of White v White [2001] 1 AC 596; Miller v Miller and McFarlene v McFarlene [2006] 2 AC 618, the Court of Final Appeal (“CFA”) has given a detailed discussion on how a Hong Kong court should approach the issue of ancillary relief. A brief summary is as follows:
(1) When the court exercises its discretionary powers under section 7 of the MPPO, guidance may properly be sought from the White v White line of cases;
(2) Financial provision applications are highly fact-sensitive and judges dealing with them must ultimately be guided by section 7 of the MPPO and the implicit aim of arriving at a fair financial outcome as between the parties;
(3) In most cases, the available assets are usually not sufficient to cater for the needs of both parties so that the exercise does not progress beyond consideration of their needs;
(4) On how section 7 of the MPPO should be approached, the CFA identified four principles underpinning the White v White line of cases:
(a) The first principle - objective of fairness. The implicit objective of a section 7 exercise is to arrive at a fair distribution of the assets as between the parties;
(b) The second principle - Rejection of discrimination. The concept of fairness requires the refutation of any gender or role discrimination;
(c) The third principle - yardstick of equal division: With a view to eliminating insidious discrimination and promoting fairness, judges should check their tentative views on distribution against a yardstick of equal division which should be departed from only for good articulated reasons;
(d) The fourth principle - rejection of minute retrospective investigation: The court should not countenance any attempt to engage in costly and often futile retrospective investigations of the failed marriage which tends to deplete the parties' (and the court's) resources and to increase antagonism and discourage settlement;
(6) The actual steps to be taken by a court in undertaking the section 7 exercise are as follows:
(a) Step 1: Identifying Assets:
The ascertainment of the financial resources of each of the parties calculated as at the date of the hearing.
"The object will of course compute the net financial resources, taking into account of all material liabilities. At this stage, the court need not attempt to distinguish between matrimonial and non-matrimonial property, that being an exercise best undertaken (if necessary) when considering distribution of the assets."[7]
(b) Step 2: Assessing the parties' financial needs:
The assessment of the parties' financial needs. If the total resources are not enough to meet the parties' needs, the section 7 exercise should stop here and there is no room to apply any sharing principle;
(c) Step 3: Deciding to apply the sharing principle:
If surplus assets would remain after the parties' needs have been catered for, the next step should normally be for the court to apply the sharing principle to the parties' total assets, with a yardstick of equal division as part of that principle. This means that the total assets should be divided equally between the parties unless there is good reason for departing from an equal division;
(d) Step 4: Considering whether there are good reasons for departing from equal division:
In considering whether good reasons exist for departing from equal division, the answer is to be found in the terms of section 7 and the implicit objective of a fair distribution of the assets. Factors like source of the assets, conduct, financial needs, duration of the marriage, contribution to the family and compensation are all material considerations; and
(e) Step 5: Deciding the Outcome:
The question as to whether factors exist justifying a departure from equality is fact-sensitive and the weight to be given to such factors remains a discretion for the court. But where the court decides upon a departure, articulation of reasons for doing so is necessary as a check to ensure fairness of the outcome.
50. I would follow the guidelines laid down in LKW’s case and discuss the relevant matters as mentioned in section 7 of the MPPO below.
F. Identification of the Assets
51. Parties has filed a Joint Schedule of Assets and Liabilities on 29 July 2023 (“Joint Schedule”). There are a lot of disputes concerning parties’ assets and liabilities.
F.1H’s net assets
52. Based on the findings in the Preliminary Issues Judgment, H is not the beneficial owner of the Landed Properties as defined therein. Therefore, he has no landed assets under his name. He now lives with R2 in Parc Oasis[8] owned by her.
53. Also based on the findings in the Preliminary Issues Judgment, H is the sole owner and shareholder of TF Co. Ltd. and the respective sums of HK$7,500,000 being the Dividends and HK$1,804,935.67 being the Unit Trust shall be added back to H’s assets when dealing with the trial of the ancillary relief.
54. Mr Marwah and Mr Baker for H argued that as TF Co. Ltd. was incorporated in 2012, ie about 6 years after the parties’ separation in 2006, its value shall not be counted. I accept the submission of Ms Cheng and Mr Kwan for W that for the purpose of Step 1: Identifying Assets, the concept of post-separation accrual is not relevant. But I will no doubt consider the issue of post-separation accrual in the subsequent Steps, if and when necessary.
55. As stated by W in the Joint Schedule, the value of TF Co. Ltd. as at 31 May 2022 was HK$3,330,459.27 comprising HK$3,137,044.27 in the bank account and value of motor vehicles valued HK$193,415. W relied on the bank statement produced in the Trial Bundle[9]. H disagreed and stated HK$0 in the Joint Schedule. He referred to the statements from 29 April 2023 but failed to refer me to any page reference in the Trial Bundle. I therefore accept the W’s figure of HK$3,330,459.27. I also reject H’s contention that HK$1,800,000 cannot be disposed of pursuant to his undertaking in the Order dated 24 March 2014. His undertaking will certainly be discharged after this judgment for ancillary relief.
56. I shall deal with H’s bank accounts as set out in the Joint Schedule. Since the Unit Trust Section 17 Application[10] was ruled in favour of W, the amount in H’s 119 Account[11] shall wholly belongs to H. I reject H’s contention that he holds any sums in this account on trust for R2. Thus, I accept the figure of HK$733,396.03 claimed by W as stated in the Joint Schedule.
57. For the 2 HSBC Australia account no.xxxx118 and account no.xxxx439 both jointly held by H and R2, the balances as at 16 January 2023 were shown in the attachments to the letter dated 22 May 2023 from H’s solicitors. However, such attachments were never adduced as evidence by H. Therefore, I accept the respective figures of AUD327.92 and AUD143,303.90 as at 16 June 2022 (equivalent to HK$854.72 and HK$373,521.62) claimed by W as stated in the Joint Schedule. Since these 2 accounts are jointly held by H and R2, I will take half of the sums HK$187,188.17 being (HK$854.72 + HK$373,521.62)/2 as H’s share.
58. The total amounts of H’s interest in the bank accounts are HK$920,584.20 (ie HK$733,396.03 + HK$187,188.17).
59. H owns a HSBC Investment account no.119XXXX380. The value as at 31 May 2022 was HK$375,356.65 as stated by W but stated as HK$0 by H in the Joint Schedule. W relied on the bank statement produced in the Trial Bundle[12] whilst H gave no explanation. I therefore accept the figure of HK$375,356.65.
60. H has the balance of HK$572,603.26 in his MPF account and HK$725,194.82 in his Private Superannuation in Australia.
61. W contended that H’s mother died intestate on 2 September 2014 and H’s interest for the sum of HK$1,180,000 in his late mother’s estate shall be counted. The administrator of his late mother’s estate is H’s sister. The estate comprised a property which was sold for HK$7.58 million. H said that he did not receive any part of the sale proceeds but produced no document for his disclaimed interest. In my view, if H did receive this sum of HK$1,180,000 or any part thereof, it will be reflected in his bank account. I will not accept that he may receive it in cash and then hide it somewhere as it is a huge sum of money. Since there is no evidence showing the deposit of the sum of HK$1,180,000 into his account by his sister, I have to accept H’s evidence that he did not receive it. In other words, I will not count this sum.
62. The loans agreements between H and R2 for the sum of HK$3,494,000 were only produced until the last day of the trial. In my view, H does not need to borrow money from R2. As found in the Preliminary Issues Judgment, he made gifts for several million dollars to R2 for purchasing the Landed Properties, and also paid the Dividends and Director’s Emoluments in huge sums to her from time to time. His medical service income ranging from HK$8.3 million to HK$11.3 million a year between 2013 and 2021[13]. H also admitted that he regards R2 as de facto wife and plans to marry her upon issuance of the decree absolute. I have no doubt to reject these loans agreements.
63. For H’s liabilities, I accept the 4 figures as stated by H in the Joint Schedule, the total sum of which is HK$166,852.87 (ie HK$8,554.64 + HK$5,884.5 + HK$15,731.13 + HK$136,682.60).
64. To sum up, the total value of H’s net assets is HK$15,062,281, breakdown as follows:
| i. | Bank account | $920,584.20 |
| ii. | TF Co. Ltd. | $3,330,459.27 |
| iii. | HSBC Investment account no.119XXXX380 | $375,356.65 |
| iv. | MPF | $572,603.26 |
| v. | Private Superannuation in Australia | $725,194.82 |
| vi. | Unit Trust Section 17 Application[14] | $1,804,935.67[15] |
| vii. | Dividends Section 17 Application[16] | $7,500,000.00[17] |
| Less: | liabilities | ($166,852.87) |
| Total | | $15,062,281.00 |
F.2 W’s net assets
65. It is not disputed that W owns Parc Royale valued at $15.62 million and has cash at bank of $1,111,615.13.
66. A property in Brisbane, Australia is registered in the joint name of W, her mother and her brother. I have no doubt to reject H’s contention that W’s mother will pass away in the foreseeable future and that W would then receive a one-half share with her brother by the right of survivorship under the Australian law. There is simply no evidence to support H’s contention. It is only a speculation that W’s mother will pass away earlier than W. I accept W’s interest therein is one-third and the value is HK$1,172,925.
67. W also has three insurance policies with surrender values of HK$1,222,606.13. She argued that she has no intention to surrender. In my view, it is not relevant as to whether she has any intention to surrender or not. In this stage, the court has to assess the value of these insurance policies, just like a motor vehicle owned by H or his company, its market value shall be counted regardless whether H intends to keep it forever or sell it in the near future. I am of the view that these insurance policies are realisable assets. W is free to realise them if so wishes. As to the H’s submission regarding the guaranteed death benefit, I also consider irrelevant since it is only payable conditional upon W’s death before certain date.
68. W’s MPF is agreed at HK$488,991.75.
69. H contended that W has a Government Provided Superannuation in Australia with a cash value of HK$1,450,389.64 in the Joint Schedule as W’s Superannuation should be at least double to the value of his Private Superannuation (ie HK$725,194.82). W had relocated from Australia with H in 1992 and since then, she does not work in Australia. I see no evidence to support H’s speculation even if W worked for 1 ½ years longer than H in Australia before 1992. There is very little evidence as to how much the parties’ exact income in Australia before 1992. Besides, I consider that W’s Government Provided Superannuation and H’s Private Superannuation are entirely separate concepts or product entities and that one cannot assume that they all operate on the same terms and yields. Indeed, H took out a summons for discovery of W’s Superannuation documents on 5 May 2023, which was about 6 months after the trial began and was dismissed by me. In short, I disagree that W is in breach of her duty to make full and frank disclosure of her Superannuation. I accept the value of W’s Superannuation to be HK$225,015.
70. H also alleged unexplained withdrawals by W amounting to HK$11,748,242.08 in the Joint Schedule. Mr Marwah and Mr Baker for H submitted that W avoided explaining where large withdrawals of money went, including HK$240,000 in May 2014, HK$800,000 in June 2014 and HK$266,650 in July 2019 during the cross examination at the trial.
71. W explained that all these withdrawals were simply her expenses. Ms Cheng and Mr Kwan for W submitted that it has never been put to W in cross-examination that the withdrawals were part of a surreptitious plan to stash away millions of dollars in assets and that there are in fact ample records of W’s regular and sizeable cash expenditures which have been diligently disclosed throughout these proceedings, including in her Answers to Questionnaires and applications for MPS.
72. I accept W’s submission and consider that as H only sought information about the source and nature of the withdrawals by two letters dated 15 May 2023 and 16 May 2023, namely about 6 months the trial began, H’s last minute requests for information about the withdrawals are unfair and oppressive. The court had given directions to the parties as the filing of questionnaire and answers in the early stage of the proceedings but H fails to explain why his solicitors could not raise these queries as to the said withdrawals in the relevant questionnaire at that time.
73. Accordingly, I refuse to add back the alleged withdrawals of HK$11,748,242.08 to W’s assets as contended by H.
74. Turning to the loan from Prof. Cummins, who is W’s mentor and friend, W said that she has borrowed from him to fund part of the legal costs of these proceedings and that previously, she had to rely on Prof. Cummins to meet her expenses from time to time, owing to H’s regular default of MPS and LCP payments. These borrowings have since been returned to Prof. Cummins, inclusive of interest by 7 July 2022. On 11 April 2023, Prof. Cummins and W entered into a Deed of Indebtedness for AUD 420,000 for the purpose of settling her outstanding fees in these proceedings. I accept her evidence and disagree with H’s argument of “soft loan”. I find that she is liable to repay Prof. Cummins in the sum of AUD 420,000 (equivalent to HK$2,200,000 as stated in the Joint Schedule).
75. To sum up, the total value of W’s net assets is HK$17,641,153.01, breakdown as follows:
| i. | Bank account | $1,111,615.13 |
| ii. | Parc Royale | $15,620,000.00 |
| iii. | interest in Brisbane property | $1,172,925.00 |
| iv. | MPF | $488,991.75 |
| v. | Government Superannuation in Australia | $225,015.00 |
| vi. | surrender values of insurance policies | $1,222,606.13 |
| Less: | liability to repay Prof. Cummins | ($2,200,000.00) |
| Total | | $17,641,153.01 |
76. Hence, after adding the value of H’s net assets, the total value of the family pot is HK$32,703,434.01 (ie $15,062,281 + $17,641,153.01).
G. W’s health condition
77. It is undisputed that she has been unemployed since leaving her long-term employment at the Hong Kong Polytechnic University in June 2009 and has since relied entirely on H for financial support.
78. Apart from contributing some academic publications in honour of a retiring professor, there is no evidence to suggest that W has written substantially in the past decade and that such academic writing generates any income.
79. W was diagnosed with endometrial cancer and underwent immediate surgery in October 2015. This surgery included a complete removal of her entire reproductive organs, all the lymph nodes in her pelvis, and partial stripping of wall lining of the cervix.
80. W’s ME/CFS condition is challenged by H who argues that P does not suffer from ME/CFS but has merely been malingering or feigning her symptoms.
81. As early as in November 2008, W had already been suspected of possible chronic fatigue by Dr Ruth McNair. Dr McNair’s diagnosis of ME/CFS was later re-confirmed by Dr Michael Oldmeadow in his Medical Report dated 24 February 2014. Dr Oldmeadow is a specialist involved in the diagnosis and management of over 5,000 patients with long term fatigue and associated problems.
82. In 2009, it was H who recommended W to visit his brother-in-law, Dr Fung. Dr Fung attended to W on a number of occasions on 8 January 2009, 24 February 2009, 28 February 2009 and 2 June 2009. After recording an extensive number of symptoms, Dr Fung considered W’s condition as ‘compatible’ with ME/CFS by ‘impression’ on her third visit.
83. The issue of W’s ME/CFS had been briefly discussed in the judgment[18] of Judge A Tse dated 22 November 2019 (Variation of Maintenance Pending Suit), who rightly said that she not in a position to rule on the dispute between the two experts at this stage. But the learned judge also rightly pointed out that Dr Calais Chan, expert appointed by H at that time, has not ruled out the possibility that W is suffering from ME/CFS.
G.1 ME/CFS Evidence of W’s Expert
84. W’s ME/CFS expert, Dr Lucinda Bateman (“Dr Bateman”), was a member of a US National Academy of Medicine (Formerly the Institute of Medicine (“IOM”)) committee which published new clinical diagnostic criteria for ME/CFS in 2015 (“IOM Report”). Dr Bateman diagnosed W in her Expert Report dated 17 November 2016, and most recently provided an updated diagnosis of W in her Updated Supplemental Report dated 12 November 2022.
85. Ms Cheng and Mr Kwan for W are very helpful to summarise the key elements of Dr Bateman’s evidence as follows:
a. W has ME/CFS. Hers is a typical history and clinical presentation of the condition.
b. ME/CFS is a longstanding, multisystem, severe version of chronic post-viral illness. It is characterised by impairment of normal function (physical, cognitive, orthostatic, emotional), post-exertional malaise, dysregulated sleep, cognitive impairment, orthostatic intolerance as core symptoms, together with chronic pain and immune dysregulation in many. The illness often arises during a time of severe stress when the immune system is compromised.
c. Severity of the illness varies, but the majority of people with ME/CFS are unable to sustain employment, and those who are ill for more than 3 years carry a poor prognosis for recovery. This makes it difficult to say whether W’s condition will be much improved after the end of these proceedings apart from the possibility that some symptoms might lessen because ME/CFS is not cured by removing emotional stress.
d. As ME/CFS is often seen as a diagnosis of exclusion, misdiagnosis as a psychological problem is common. There is a known lack of access to informed medical care about ME/CFS, whether in the United States, or worldwide. It is an illness that is difficult to describe and its symptoms may seem highly dramatic to ordinary people (e.g., patients needing to crawl across the floor).
e. W’s ability to function varies day to day. The variation in her activity tolerance stems from post exertional malaise:
i. It is in the very nature of ME/CFS that there will be “good days” and “bad days”, akin to a “small battery” that can be easily discharged.
ii. On bad days, W cannot even get out of bed, take a shower or stand on her feet without laboured breathing, palpitations, and more pain. She also has clear signs of orthostatic tolerance (confirmed by a NASA Ten-Minute Lean Test), cognitive impairment, and chronic pain.
f. The adrenergic and sympathetic response to orthostatic intolerance is very similar to anxiety and panic attacks, and all of the frightening features of ME/CFS can provoke an anxiety response. Apart from stresses surrounding W’s divorce and financial uncertainty, anxiety is also heighted by the fact that illness relapse is unpredictable, miserable, and of unknown duration.
g. W’s situation has not improved between her first and second diagnosis but, in fact, worsened since her temporary move to Australia. As reported by Dr McNair in August 2022 (which Dr Bateman reviewed), W underwent a brain MRI scan in view of the severity of her cognitive symptoms. The scans appear to show recent developments suggestive of “chronic migraine headaches”.
h. The support and self-help treatments W has been using, such as massage, micro-current / electro-therapy, relaxation techniques, and supplements, are appropriate and warranted.
i. As there are no specific treatments for ME/CFS, there is:
“… no medical reason why W cannot use “whole body massage, Quantum Energy Biopads, low dose ultrasound and micro-electrotherapy” as well as traditional herbal remedies if she experiences even partial relief of chronic symptoms.” [Emphasis supplied]
There is a general emphasis and use of non-pharmacologic interventions to avoid polypharmacy. In this regard, Dr McNair was also supportive of W’s use of supplements, yoga, dietary preparation, and other alternative therapies.
j. The leading cause of death for ME/CFS patients is suicide. Although it is unclear whether ME/CFS reduces life expectancy, under-diagnosis and the lack of supportive treatment are material factors that come into play.
k. The assessment of each patient was highly sophisticated and contained mechanisms for detecting malingering.
G.2 ME/CFS Evidence of H’s Expert
86. Professor Shekhar Madhukar Kumta (“Prof Kumta”) is the expert instructed by H and gave expert opinion on behalf of H.
87. In his report, Prof Kumta commented that W had self-diagnosed her condition as Chronic Fatigue Syndrome and that she exaggerated her symptoms. While W’s symptoms qualified her to be classified under the category of Chronic Fatigue, he had serious doubts about veracity of her claims.
88. Dr Bateman and Prof Kumta met on a without prejudice basis via Zoom on 23 November 2022, for about 45 minutes. A joint report was filed on 12 December 2022.
G.3My finding on W’s ME/CFS
89. Prof Kumta is an orthopaedic surgeon and had been an expert witness for numerous personal injury and employee compensation claims in Hong Kong. At trial, Prof Kumta claimed that his qualifications as an MBBS (i.e., Bachelor of Medicine and Bachelor of Surgery) alone gave him adequate qualifications to make judgments about chronic fatigue without any need for specialisms. He then went on to inform the Court that it was not necessary for him to claim expertise in ME/CFS because W’s diagnosis had not been established, and that he did not need to be an ME/CFS expert in order to pass judgment on whether such a diagnosis could be made. Besides, Prof Kumta is neither a specialist in alternative medicines, nor a qualified Traditional Chinese Medicine practitioner.
90. Ms Cheng and Mr Kwan for W submitted that his evidence is inadmissible as he is, by his own admission, not an expert in ME/CFS. In his Reply to Dr Bateman’s Updated Supplemental Report, Prof Kumta openly revealed:
“Dr. Bateman states that “Dr. Kumta is not an ME/CFS Expert.” I have not claimed expertise in ME/CFS, in my opinion, that is unnecessary.”
91. I accept that general practitioners of medicine are qualified to diagnose ME/CFS and that Prof Kumta is also qualified to give comments on W’s claims on ME/CFS. Nonetheless, when comparing with the expertise of the parties’ experts regarding this special area, I have no doubt to consider that the expertise of Dr Bateman is much higher than that of Prof Kumta. As rightly stated by Dr Bateman in the Joint Expert Report dated 12 December 2022, Prof Kumta’s only clinical experience with ME/CFS is that he “had several patients with features suggestive of ME”. On the other hand, Dr Bateman devoted full-time to this area of medicine, started a “fatigue consultation clinic” and engaged in clinical research including service on boards of 3 non-profit organisations related to ME/CFS for many years. It cannot be denied that Dr Bateman has much more extensive experience in dealing with ME/CFS patients than Prof Kumta.
92. Dr Bateman also correctly pointed out in the Joint Expert Report that Prof Kumta used outdated references materials to prepare himself to discuss ME/CFS as Prof Kumta only reviewed the 2015 or 2017 website which was completely revised in 2016 and in 2022.
93. Dr Bateman further set out in details her disagreements with Prof. Kumta’s comments one by one in the Joint Expert Report. For instance, when Prof Kumta claimed that W had not seen any practitioner for her chronic fatigue and only went to “beauty therapists” for treatments, Dr Bateman considered that it was appropriate for an ME/CFS patient to utilize self-care and to seek supportive care from non-physicians, including “beauty therapists” who have additional skills that are helpful for headaches, anxiety and pain. I accept Dr Bateman’s opinion in this regard as it is undisputed that there is no specific treatment for ME/CFS.
94. Prof Kumta further commented that W visited to see Dr Fung was purely by her need to pursue an insurance claim. I am of the view that this comment is not fair not just to W but also to Dr Fung. Dr Fung who is in fact H’s brother-in-law, attended to W on 4 occasions from January to June 2009. Only after the third visit, Dr Fung considered W’s condition as ‘compatible’ with ME/CFS. In my view, Prof Kumta is not in a position to give “expert” evidence to the court as to whether the purpose of W’s visits to see Dr Fung was purely for her insurance claim or not. Prof Kumta was too keen to act as an advocate for H.
95. I also consider that the criticism of Prof Kumta against Dr Ruth McNair for not verifying whether W fulfilled the IOM criteria is unjustified since Dr Ruth McNair had treated W for more than 10 years and kept a lot of medical notes and records concerning W’s health conditions. He also prepared 3 medical reports dated 1 November 2012, 3 June 2013 and 16 December 2013 respectively. Furthermore, W’s ME/CFS was later re-confirmed by Dr Michael Oldmeadow.
96. In H’s closing submissions, Mr Marwah and Mr Baker for H made many attacks on Dr Bateman’s opinion including her methodology for diagnosing ME/CFS. Most of these attacks go substantially beyond the evidence of H’s own expert and is thus devoid of any proper basis. Prof Kumta gave evidence in court that:
“… I’m not challenging the criteria [of Dr Bateman’s opinion]. The criteria are well established. I’m challenging the veracity of whether they really existed because they were not reported or not specifically analysed or repeated measures and repeated follow-ups by the people who [W] was seeing at the time she complained of these symptoms….”
“Yes, but I have -- the gist of my report is saying exactly what I am saying that these criteria, I’m not challenging the criteria. I’m just challenging the veracity of the symptoms reported and that has always been -- you know, what I have claimed in my report…”
“No, I think, I’ve said that I didn’t find any objection to Dr Bateman’s reports, and I said it is based on self-reported complaints. That is the part that I need to -- that I said needs to be verified and, as you said, that is what I have reservations against….” (emphasis added)
97. In the circumstances, I do not think necessary to deal with H’s attacks on Dr Bateman’s opinion one by one.
98. Having carefully considered all the materials including the 2 experts’ oral evidence, I prefer the expert opinion of Dr Bateman than that of Prof Kumta. It cannot be denied that W has been diagnosed ME/CFS by different medical practitioners, such as Dr Fung, Dr Ruth McNair and Dr Michael Oldmeadow. I consider that this court is entitled to take into account the medical notes, reports and other materials prepared by all of them. No doubt, in all the legal proceedings that the court has to guard against the potential malingering by the party who alleges to suffer from any physical or mental illness. However, on a balance of probabilities, I find that W suffers from ME/CFS.
H. W’s earning capacity
99. W is now 59 years old. She has not worked and wholly financially relied on H since 2009 up to March 2013 when H ceased paying her any maintenance.
100. H argued that that W has “significant unused earning capacity” and could be a private tutor charging “as much as HK$1,000 per hour”.
101. Ms Cheng and Mr Kwan for W cited M v M (Financial Provision) [1987] 2 FLR 1, in which Heilbron J observed, at 10:
“The wife (and she will not mind my saying so) is no longer a young woman and she is beginning to enter the world of work from a base of 46 or 47 years of age. She is embarking on a difficult and unpredictable life in an increasingly difficult world of work – things do not get easier – and the older she gets, in all probability, the more difficult will it be for her, in my opinion, to work and make her way in that world of employment.” [Emphasis supplied]
102. Although W has very high educational background, I am satisfied that in view of her age, overall health condition including ME/CFS, she has very minimal or almost no earning capacity. Furthermore, after her resignation in 2009, H never requested her to return to the workforce but continued to support her financially. So, I consider that it is unreasonable for H to expect her to work as a private tutor after divorce. Indeed, H did not give any estimated figure as to how much he expects W to earn as a private tutor every month. In my view, even if such estimated figure is given by him, it is not realistic and would not be a great sum.
I. Standard of Living
103. Before assessing the parties’ needs, it is always necessary to consider their standard of living during marriage.
104. The Former Matrimonial Home was a 3-bedroom flat, which H said over 1,000 sq. ft. but W said at least 1,400 sq. ft.. The parties did not have a live-in helper. Both contributed to their own parents’ upkeep.
105. H’s evidence is that during the marriage before 2006, they lived comfortably, having overseas holidays, avoiding extravagance: second-hand cars, handbags and electronic goods; 3rd party car services; inherited / clearance furnishings; cheaper goods from the Mainland.
106. On the other hand, W recalls ‘expensive/high end’ dining which she ‘continues’ to eat and 5 star hotels when travelling. The parties had extensive travelling habits and lived in opulent hotel accommodation, such as the Hyatt, Intercontinental Bangkok, Westin, Shangri-La, and the Lotte Hotel. W also made numerous leisure trips out of Hong Kong per year (not counting the pandemic period and when she was undergoing cancer treatment) and regularly flew business class on long-haul flights, such as her visit to Toronto in 2002. W indulged in high quality, branded fashion items, such as Bottega Veneta, Prada, Gucci, Coach, and Hermes.
107. I find that the parties were well-educated persons with a cosmopolitan lifestyle and lived very comfortably. The income of H increases significantly after he turned from public sector to private practice, especially after the incorporation of TF Co. Ltd. in January 2012. As between May 2009 and February 2013, H was willing to pay W on average over HK$140,000 per month even after her purchase of Parc Royale in September 2012. It shows that he had already accepted that W’s living standard at that time was fairly high.
J. W’s needs
108. The parties’ needs should be “generously interpreted”. In so far as resources allow, to the standard of living they enjoyed during the marriage, those needs should not be assessed according to some perceived lowest common denominator, but with flexibility in the light of all the relevant circumstances.
109. In LKW’s case, CFA said:
“74. The next step is for the court to assess the parties’ financial needs. As has been noted, the section 7 exercise often stops at this point since the total resources may be insufficient to go beyond or even to meet both parties’ needs. If so, no room is left for the application of any sharing principle. Addressing the needs of say, the wife and children may immediately absorb more than half of the total assets. If so, “needs” are, for want of any alternative, determinative. Where the assets are meagre, a “clean break” may not be possible and it may be necessary to have recourse to an order for periodical payments.
75. The position is neatly summarised by Sir Mark Potter P in Charman v Charman(No 4) as follows:
“... when the result suggested by the needs principle is an award of property greater than the result suggested by the sharing principle, the former result should in principle prevail: per Baroness Hale in Miller at [142] and [144]. ... It is also clear that, when the result suggested by the needs principle is an award of property less than the result suggested by the sharing principle, the latter result should in principle prevail: per Lord Nicholls in Miller at [28] and [29] and Baroness Hale at [139].”
76. This is an approach which should dispel the fear expressed in Figgins v Figgins, that “rule equality” is likely to work injustice where the assets are meagre.
77. As section 7(1)(b) indicates, the process of evaluating “needs” involves assessing the financial needs, obligations and responsibilities which each of the parties has or is likely to have in the foreseeable future in the light of present and foreseeable resources. The matters referred to section 7(1)(c) to (e), that is, standard of living, age and disability, will often be relevant. As Lord Nicholls put it in White:
“Financial needs are relative. Standards of living vary. In assessing financial needs, a court will have regard to a person's age, health and accustomed standard of living.”
78. And in Miller/McFarlane his Lordship stated in respect of “needs”:
“When the marriage ends fairness requires that the assets of the parties should be divided primarily so as to make provision for the parties’ housing and financial needs, taking into account a wide range of matters such as the parties’ ages, their future earning capacity, the family’s standard of living, and any disability of either party. Most of these needs will have been generated by the marriage, but not all of them. Needs arising from age or disability are instances of the latter.”
79. Baroness Hale stressed that the parties’ needs should be “generously interpreted”. Accordingly, in trying to ensure that each party and their children have enough to supply their needs set at a level that equates, in so far as resources allow, to the standard of living they enjoyed during the marriage, those needs should not be assessed according to some perceived lowest common denominator, but with flexibility in the light of all the relevant circumstances.”
110. Ms Cheng and Mr Kwan for W also relied on Hammoud v Al Zawawi [2019] EWHC 839 (Fam), in which Holman J confirmed, at §58:
“As all specialist family financial lawyers and judges know, the concept of ‘needs’ is, in any but a subsistence level case, extremely elastic. It is in the evaluation of “needs” that the broadest discretion to which Lord Collins referred may lie.” [Emphasis supplied]
111. In FF v KF [2017] EWHC 1098 (Fam), Mostyn J remarked:
“… ‘needs’ does not mean needs. It is a term of art. Obviously no-one actually needs £25m, or £62m, or £224m for accommodation and sustenance.” [Emphasis supplied]
112. Throughout these proceedings, W filed 3 Forms Es respectively dated 10 June 2013, 25 September 2017 and 28 January 2021. W’s current expenses are broadly set out in her Narrative Affidavit dated 19 October 2022 as per table below. She explained that her 2021 Form E was prepared when she was living in Australia and those expenses do not reflect the cost of living in Hong Kong. As she was only able to return to Hong Kong from Australia upon the end of COVID-19 lockdowns, she had insufficient receipts of her living expenses in Hong Kong when the Narrative Affidavit was filed. She disclosed records of her expenditure for the period between 22 August 2022 and 28 February 2023 showing total monthly average expenses of HK$347,537. She accepts that these figures may be higher than normal owing to certain one-off and / or immediate expenses, such as home repairs and restocking of supplies. HK$300,000 to HK$320,000 is claimed to be a fair approximation of her living costs.
| W’s General Expenses |
| Item | Estimate |
| Rent and Mortgage Instalments | Nil |
| Utilities (Including Government Rates) | HK$6,200 |
| Management Fees | HK$5,077 |
| Food | HK$12,000 [19] |
| Household Expenses (Home Products, Repairs) | HK$9,200 |
| Car Expenses (Petrol, Cleaning, Insurance) | HK$6,500 |
| Insurance Premia | HK$20,000 |
| Local Domestic Helper (Part Time) | HK$5,000 |
| Other (Driver) | HK$5,000 |
| Sub-Total of General Expenses: | HK$68,977 |
| W’s Personal Expenses |
| Item | Estimate |
| Meals Out of Home (Takeaway Included) | HK$7,500 |
| Transport | HK$3,000 [20] |
| Clothing / Shoes / Bags / Accessories | HK$15,000 |
| Personal Grooming (Haircut, Care, Cosmetics, Nail, Hand, Feet) | HK$5,000 |
| Entertainment, Leisure, Presents | HK$5,000 |
| Holidays / Travel (Including Visits to W’s Mother) | HK$37,000 |
| Medical, Dental, Health and Wellness | HK$130,000 |
| Contribution to Parents | HK$16,000 |
| Others | HK$1,800 |
| Sub-Total of Personal Expenses: | HK$220,300 |
| Total (General Expenses + Personal Expenses): | HK$289,277 |
113. The figure of HK$289,277 is adjusted by W to HK$300,000 to HK$320,000 due to the heightened cost of meals out of home (including take-aways) and cost of medical, dental, health and wellness expenses, against the backdrop of inflation. For example, W assesses her cost of eating out has risen to approximately HK$10,000 per month.
114. Concerning W’s explanation that her 2021 Form E was prepared when she was living in Australia and those expenses do not reflect the cost of living in Hong Kong, there is no evidence before me the cost of living in Hong Kong shall be higher or lower than that in Australia. I think that as Australia is a well-developed country, the cost of living in Hong Kong shall be treated as more or less the same as that in Australia. When W was living in Australia, I see no reason why she cannot maintain a similar standard of living there as that in Hong Kong. On the other hand, I would accept that during Covid-19, most people in general would reduce their activities, such as shopping, meals out of home, or travelling etc.
J.1W’s accommodation
115. She is presently living in her own property Parc Royale which is a 1,600 square foot, 4-bedroom, 2-toilet, 2-carpark, dual reception, refurbished apartment.
116. Mr Marwah and Mr Baker for H argued that W is grossly over housed. Parc Royale should be sold, so that the proceeds may be invested to meet any recurring needs and that W can purchase an adequate property in Brisbane for HK$5 million.
117. As mentioned above, the Former Matrimonial Home was said over 1,000 sq. ft. by H whilst W said at least 1,400 sq. ft.. In my view, if H raises the issue of W’s over-housing, he has to prove the actual size of the Former Matrimonial rather than loosely saying “over 1,000 sq. ft.” which, in my view, could have no contradiction to W’s version of “at least 1,400 sq. ft.”. In the circumstances, I have to take W’s version of “at least 1,400 sq. ft.”. For the period from 2006 to 2012, W was living alone in the Former Matrimonial Home except that H would come back once a week sometimes overnight. I find that W is just a bit but not grossly over housed. As W’s needs should be “generously interpreted”, in so far as resources allow, I consider that it is insignificant for the purpose of these proceedings.
118. Concerning the suggested sale of Parc Royale and purchase of property in Brisbane for HK$5 million by H, I see no justification of this suggestion since the parties had chosen to relocate back to Hong Kong since 1992 namely over 30 years, it is entirely unreasonable for H to expect W to relocate back to Brisbane and purchase a house there. On the other hand, it is entirely the choice of W and reasonable for her to continue to stay permanently in Hong Kong with a purchased apartment instead of a rented one.
J.2W’s Medical, Dental, Health and Wellness expenses
119. Regarding W’s claim of Medical, Dental, Health and Wellness for HK$130,000 a month, which is the biggest item in her monthly expenses, H argued that none of the beauty treatments nor any of the supplemental health products, for either ME/CFS or for her other alleged health ailments, are medically prescribed. The tonics and other Chinese medicines that W claims to need are not recorded in her medical notes.
120. In H’s closing submissions, he contends that massages, micro-current and radio-currency used allegedly to ‘unblock system’, does not translate into anything medically meaningful. Micro-current, pulse laser treatments, ‘quantum energy’ and ‘bio pads’ are ‘not validated’. Beauty therapies are not valid treatments and have not been tested or studied for efficacy; they would not be prescribed by a Hong Kong doctor. Her claims for HK$73,000 in beauty house treatment and HK$27,000 in beauty house products are clear exaggerations.
121. On the other hand, Dr Bateman expressly stated in her report that low dose ultrasound, whole body massage, and other supportive treatment “… delivered by therapists can be and certainly are used by patients with ME/CFS seeking relief from achiness, muscle tension, fluid retention, generalized unwellness”.
122. According to the oral evidence of Prof Kumta, he agreed with Dr Bateman’s view that treatments through complementary and alternative medicine providers, physical methods and modalities such as massage, health garments, gentle yoga, interventions that improve circulation, weight, dietary health, psychological well-being and self-help capabilities are all valid for treating ME/CFS. He accepted that low-dose ultrasound and massage would be effective to reduce pain and did not consider there would be any downsides to the use of micro-current. In response to the advice of the Centre for Disease Control cited by Dr Bateman, which endorsed other pain management methods such as stretching and movement therapies, gentle massage, heat, toning exercises and water therapy, and acupuncture, Prof Kumta also said in the court that:
“Again, with reservation [in agreeing to the Centre for Disease Control’s advice] with the understanding that these are not mired in substantial research, but, again, I see no medical contraindication. If people feel they are being relieved then, I suppose, there is no contraindication to the use of these therapies.” [Emphasis supplied]
123. I accept Dr Bateman’s opinion that it might be appropriate for ME/CFS patients to utilise self-care and seek support from non-physicians, including beauty therapists who have additional skills that are helpful for headaches, anxiety and pain. Indeed, it is undisputed that there are no hard and fast rules on how ME/CFS symptoms should be treated.
124. Furthermore, it is nowadays very common for a woman (or even for a man) to spend some money on beauty treatments, beauty and health products including Chinese herbal tonic and supplements for general care. It all depends on her (or his) living standard and affordability. Whether or not the expenses for this kind of treatments incurred by W are medically proven to be beneficial to her ME/CFS or her general health, in so far as she may simply subjectively believe so, I accept that she shall be entitled to incur such expenses.
125. I also accept that aside from W’s chronic illnesses and compromised immunity due to ME/CFS, she is a cancer survivor and needs to remain vigilant against the risk of her cancer reoccurring. Understandably like many cancer survivors, she is acutely aware of, and determined to avoid, this outcome. H did not challenged that W’s cancer surgery resulted in the stripping of all her reproductive organs and pelvic lymph nodes in their entirety. Needless to say, the other cancer treatments have adverse impacts or side effects on her.
126. I have no doubt to reject H’s submission that the monies spent on these beauty treatments are wanton and reckless expenditures which shall be added back to the matrimonial pot.
127. With regard to the quantum of W’s claim for HK$130,000 a month, she has not produced sufficient receipts for proof. I do not think that she would have any difficulty in obtaining receipts even though she was in Australia during the period of Covid-19. In her 2 Form Es filed 25 September 2017 and 28 January 2021, her claim under this head are HK$86,000 and HK$88,385 respectively. The increase is only HK$2,385 by 3 odd years. Even I accept that her expenses under this head in her 2021 Form E should not be considered due to her living in Australia, there is no explanation by W as to why in in 2022, such expenses have to increase up to HK$130,000, ie more than HK$44,000 or 50% after 5 years.
128. Judging from her age, health and accustomed living standard, I consider her claim of HK$130,000 a month is exaggerated and only allow HK$100,000 per month under this head.
J.3W’s expense of hiring a driver
129. For the estimated expense of hiring a driver, W has not yet hired one but claims HK$5,000 a month. No driver was hired before the parties’ separation. No expense for hiring a driver is claimed in her 3 Form Es filed 11 June 2013, 25 September 2017 and 28 January 2021. No medical evidence is produced to show that she is unable to drive on her own. I do not see any justification for hiring a driver and therefore reject her claim. In my view, her claim for Car Expenses together with transport expenses in the total sum of HK$10,500 (ie HK$6,500 + HK$4,000[21]) per month are sufficient.
J.4W’s holidays/travel and other expenses
130. H contended that W grossly exaggerated her holidays/travel and other expenses. W only made 4-5 trips per year between the period 2013 and 2019 including visits to her mother. W can stay in the Brisbane property without incurring any accommodation costs when visiting her mother.
131. I accept that W’s holidays/travel expenses for HK$444,000 a year is excessive. There is no reason why she has to stay in a hotel but not the Brisbane property when she visits her mother in Australia. Of course, I would accept that if she travels for leisure only, it is justifiable for her to stay in a 5 stars hotel. However, such leisure trip or trips will only be once or twice a year and should not be many in view of her health condition. Having carefully considered W’s age, health and accustomed living standard, I allow HK$360,000 a year or HK$30,000 per month.
J.5My finding of W’s needs
132. Save as to the above, since the other expenses claimed by her are not specifically challenged by H and I have to interpret W’s needs generously, I find that they are reasonable. It is also noteworthy that H claims his monthly expenses for the sum of about HK$240,000 in his latest Form E filed in 2021. To sum up, I assess W’s needs as follows:
| W’s General Expenses |
| Item | Amount |
| Utilities (Including Government Rates) | HK$6,200 |
| Management Fees | HK$5,077 |
| Food | HK$12,000 |
| Household Expenses (Home Products, Repairs) | HK$9,200 |
| Car Expenses (Petrol, Cleaning, Insurance) | HK$6,500 |
| Insurance Premia | HK$20,000 |
| Local Domestic Helper (Part Time) | HK$5,000 |
| Sub-Total of General Expenses: | HK$63,977 |
| W’s Personal Expenses |
| Item | Amount |
| Meals Out of Home (Takeaway Included) | HK$7,500 |
| Transport | HK$4,000 |
| Clothing / Shoes / Bags / Accessories | HK$15,000 |
| Personal Grooming (Haircut, Care, Cosmetics, Nail, Hand, Feet) | HK$5,000 |
| Entertainment, Leisure, Presents | HK$5,000 |
| Holidays / Travel (Including Visits to W’s Mother) | HK$30,000 |
| Medical, Dental, Health and Wellness | HK$100,000 |
| Contribution to Parents | HK$16,000 |
| Others | HK$1,800 |
| Sub-Total of Personal Expenses: | HK$184,300 |
| Total (General Expenses + Personal Expenses): | HK$248,277 |
133. I accept that the expenses estimated by W in October 2022 have to be adjusted due to inflation covering the period of about 1 ½ year up to now. I consider that as a whole, 5% is reasonable. Hence, the adjusted expenses of W is HK$260,690.85 (ie HK$248,277 X 1.05) rounding up to HK$260,700 for convenience.
K. H’s needs, income and earing capacity
K.1 H’s PTSD
134. Both of Dr KK Leung (expert for W) and Dr Amos Cheung (expert for H) filed their reports on the expert issue of H’s PTSD and also gave oral evidence in the court. Dr Cheung diagnosed H with PTSD, associated with and triggered by the Overdose Incident in May 2006 whereas Dr Leung diagnosed H with major depressive disorder (MDD).
135. Mr Marwah and Mr Baker for H submitted that the relevance of H’s PTSD (to his needs) is that if left untreated he may breakdown and ultimately commit suicide. Thus, it is only reasonable that he be allowed to retire at 60 so as to avoid exacerbating his PTSD symptoms. I think that such submission is unsupported by the experts’ opinion.
136. Besides, H’s PTSD diagnosis was only disclosed to the Court on 19 August 2022 and was said to have arisen from “witnessing and participating in the rescue of the Petitioner, where the Petitioner attempted to commit suicide by drug overdose in 2006”. If so, it would appear H has been suffering from PTSD for more than 17 years. Nonetheless, there is no evidence that he can no longer work in his present job as an anaesthesiologist due to his purported PTSD diagnosis. On the contrary, his income increases significantly since 2006.
137. The average annual gross income of T F Co. Ltd. (wholly owned by H) is HK$8,993,751.6 for last 10 years according to its audited financial statements (“AFS”) as follows:
AFS Year
(Ended 31 March) | Medical Service Income |
| 2013 | HK$9,003,132 |
| 2014 | HK$8,342,087 |
| 2015 | HK$8,606,540 |
| 2016 | HK$8,386,606 |
| 2017 | HK$8,778,793 |
| 2018 | HK$9,733,105 |
| 2019 | HK$11,322,250 |
| 2020 | HK$10,202,495 |
| 2021 | HK$6,653,865 |
| 2022 | HK$8,908,643 |
| Total Gross Income (Past 10 Years): HK$89,937,516 |
138. Furthermore, when H was absent from Hong Kong for just over one month from 10 March 2020 to late April 2020, he was still able to receive a total of AUD43,815 or HK$232,219 as salary from the hospital in Australia. In fact, there is no evidence of any decrease in H’s practice despite his approaching the age of 60 nor any evidence showing hospitals’ preference to choose anaesthetists under 60 years of age.
139. In my view, even if H did suffer from PTSD or MDD, which must be very mild, it has minimal or even no impact on him as to his earning capacity. I also refuse to accept that he really plan to retire at the age of 60, which is only about a year later. It is only his mere-say-so.
K.2H’s accommodation
140. In his Form E filed 26 January 2021, his monthly expenses are HK$242,276. Except the rent of HK$28,000 for Parc Oasis allegedly paid to R2, W did not challenge the others monthly expenses of H in her closing submissions.
141. H produced two unstamped tenancy agreements for his purported leasing of Parc Oasis from R2 as follows:
(1) Tenancy Agreement between H and R2 dated 25 March 2011, for the period between 1 April 2011 and 31 March 2012, at a monthly rental of HK$25,000.
(2) Tenancy Agreement between H and R2 dated 25 March 2012, for the period between 1 April 2012 and 31 March 2014, at a monthly rental of HK$25,000[22].
142. As the tenancy agreements are unstamped, I am of the view that they are not admissible. Even if they are admissible, I would not accept them as evidence for proving payment of rent by H to R2 for the reasons below.
143. First, there is no separate record produced by H showing regular monthly transfer of HK$28,000 or HK$25,000 from him to R2, nor any evidence for paying property tax to the Hong Kong Government by R2.
144. Secondly, Parc Oasis is indeed a gift by H for R2. Coupling with the special relationship of H and R2 as cohabitees with plan to marry, I refuse to accept that H would make payment of rent to R2 for his accommodation in Parc Oasis.
145. In the circumstances, I assess H’s present monthly expenses to be HK$214,276 (ie HK$242,276 - HK$28,000) only.
K.3My findings as to H’s ability to pay W’s needs
146. As mentioned above, the average annual gross income of T F Co. Ltd. is about HK$9 million for last 10 years and his annual financial needs are only about HK$2.6 million. Mr Marwah and Mr Baker for H did not make any submissions in H’s closing that H is unable to pay W’s financial needs as claimed. Furthermore, as found in the Preliminary Issues Judgment, huge amount of monies were given by him to R2 for purchase of the Landed Properties, the Dividends and Director’s Emoluments for many years.
147. I have no doubt to find that H has very high earning capacity and is financially capable to pay W for the sum of HK$260,700 every month, which is around HK$3.13 million a year.
L. Duxbury analysis
148. The Court has the assistance of the parties’ Duxbury experts, Mr Jerome Michael McDonagh of Matson Driscoll & Damico (“Mr McDonagh”) for H and Mr Tsui Ting Fung of PricewaterhouseCoopers (“Mr Tsui”) for W. The experts’ respective reports and their joint report were filed and they also gave oral evidence in court.
149. Before the experts gave evidence, I had observed that this is not a case in which Duxbury analysis is necessarily warranted since the parties’ assets are comparatively meagre. As found in this judgment, the total value of the family pot is approximately HK$32.7 million which can only satisfy W’s needs for about 10 years. Therefore, it is wholly academic to discuss the difference in opinion between 2 experts. Perhaps, in addition to paras. 74 to 79 in LKW’s case as set out above, it may be helpful to further cite the other relevant paras. therein:
“D.2 The exercise often stops at “needs”
54. The second point is that in most cases, discussion of the guidelines is superfluous. Usually, the available assets are insufficient to cater for the needs of both parties after termination of the marriage so that the exercise does not progress beyond consideration of their needs. As Lord Nicholls put it in Miller/McFarlane:
“In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes. The court seeks to stretch modest finite resources so far as possible to meet the parties’ needs.”[62]
55. It is therefore only in cases where surplus assets remain to be distributed after seeing to the parties’ needs that the guidelines may require consideration. The disposal of simple cases should not be pointlessly complicated by inappropriate attempts to apply such guidelines.”
150. In other words, after assessing the parties' financial needs in Step 2, I find that the total resources are not enough to meet their needs. Hence, the section 7 exercise should stop here and there is no room to apply any sharing principle.
K. The alleged Financial Agreement and Divorce Agreement
151. W denied the existence of the alleged Financial Agreement made after the Overdose Incident in 2006. I accept that the parties has reached some form of arrangements at that time but not necessarily a legally binding agreement in the context of a family dispute. Besides, H claimed that one of the terms of the alleged Financial Agreement is that H would be transparent about his income and give 50% to W on a monthly basis. However, I find that H was not wholly transparent about his income and did not give 50% to W every month after the Overdose Incident. In any event, I consider that the alleged Financial Agreement has no or very little significance in these ancillary relief proceedings.
152. Mr Marwah and Mr Baker for H further tried to argue that W and H came to another informal agreement or arrangement in 2012 (ie the alleged Divorce Agreement), pursuant to which the family’s assets at the time were sold, and W was provided with the overwhelming majority of the net proceeds (ie 72% in cash). H relied on certain extracts from W’s emails sent to him as follows:
“..there would be no divorce against my will .. [H] would cease … requesting a divorce”
“I [W] have relieved you in mind and spirit in freeing you from our marriage … Now please help free me in mind and spirit from our marriage about the financial sum I should get to allow me to move on at having a starting chance for rebuilding my life and myself”
153. My view is that nothing in these emails shows that the alleged Divorce Agreement was intended by W to be an agreement in full and final settlement of her ancillary relief claims against H. In particular, the relevant part of the email from W to H dated 19 December 2012 reads as follows:
“As previously agreed and assured by you of the understood conditions, I will honour my word in freeing you from this marriage, upon receiving the property sale money and continued financial support of $181000 per month until you retire. However, these past few months I noted a monthly shortfall of $31000 in the bank deposits you have made. Will be great if this can be resolved so I can initiate the divorce process.” (emphasis added)
154. It cannot be denied that after W had received the total sums of around HK$12.8 million being the sale proceeds of the Sceneway Garden Apartment, Sceneway Garden Car Pak, and Metro Town Property in about October 2012, H continued to make monthly payments in the sum of HK$150,000 to W up to February 2013. That is why W asked for a shortfall of HK$31,000 as she thought that H would continue to pay her HK$181,000 every month. It clearly indicates that at least W never contemplates the alleged Divorce Agreement to be in full and final settlement of W’s ancillary relief claims or that H shall continue to pay a reasonable monthly payment to support W financially even after her receipt of the relevant sale proceeds.
155. In any event, as rightly submitted by Ms Cheng and Mr Kwan for W, the alleged Divorce Agreement as well as the alleged Financial Agreement are not enforceable as it was made without legal advice and without full disclosure of material information to W. Besides, it cannot oust the Court’s duty to assess the parties’ financial resources and needs under s 7(1)(a) and 7(1)(b) MPPO: SPH v SA (2014) 17 HKCFAR 364, §33,§34; Jenna Kremen v Boris Agrest [2012] 2 FLR 414, §72.
156. I therefore conclude that the alleged Divorce Agreement does not exist and that even if it exists, I will find that there is a term in the agreement that H should continue to pay a reasonable sum to W on a monthly basis after her receipt of the relevant sale proceeds.
L. Whether an order for joint-lives periodical payment is appropriate
157. As said in para. 74 in LKW’s case, where the assets are meagre, a “clean break” may not be possible and it may be necessary to have recourse to an order for periodical payments.
158. Mr Marwah and Mr Baker for H cited Mimi Kar Kee Wong Hung v Raymond Kin Sang Hung(No 2) (2015) 18 HKCFAR 210 §36:
‘… one must as far as possible try to achieve a clean break between parties who, following the dissolution of a marriage, can often be severely at odds with one another. The desirability of a clean break should be at the top of a judge’s mind when considering issues of ancillary relief ...’
159. In general, I accept that clean break should be achieved wherever possible, especially for a childless case. Nonetheless, each case must be decided on its own facts. In the present case, I consider necessary to have recourse to an order for periodical payment.
M. Whether Post-separation accruals should be excluded
160. I accept that if the court decides apply the sharing principle, then the court has the discretion to exclude the assets accrued by H after the separation in 2012 for distribution since it must be a good reason to depart from the equality principle.
161. Ms Cheng and Mr Kwan for W submitted that this is a case where W should be awarded the maximum possible lump sum payment, with funds for her remaining needs to be provided by a lifelong periodical payment order.
162. Indeed, I do not quite understand this submission. If the court is going to make a lifelong periodical payment order in favour of W so as to satisfy all her needs, namely her monthly expenses, I fail to see how she is still entitled to ask for the maximum possible lump sum payment from H at the same time. Furthermore, I accept that most of the assets[23] presently held by H are accrued after 2012, in particular the setting up and operation of TF Co. Ltd. In short, W makes no contribution to H’s post-separation accruals and should not entitled to share, especially when she had already received the total sums of around HK$12.8 million in about October 2012 representing more than half of the total value of the family pot at that time.
163. Further, based on my findings above, W is holding the assets, value of which is more than that of H by around HK$2.5 million. Ms Cheng and Mr Kwan for W did not made further submission to adjust the lifelong periodical payment to be made by H if “the maximum possible lump sum” order is awarded. In the circumstances, I reject W’s request for lump sum payment order.
N. Conclusion
164. To sum up, the duration of the parties’ marriage is about 25 years, a very long one. H has very high earning capacity, which is not affected by his mild PTSD. It is unbelievable that he will retire in the near future especially when T F Co. Ltd. (wholly owned by him) has the average annual gross income of around HK$9 million for last 10 years. There is no evidence showing that the company’s income is declining.
165. W has very minimal or no earning capacity, which is affected by her age and her health including ME/CFS condition. It is unreasonable to expect her to work as a private tutor as suggested by H. Her needs can only be met by an order for periodical payment as the total assets of the parties are comparatively meagre. I do not think that this court shall make an order for periodical payment against H only up to his retirement as there is no retirement age for a private medical practitioner. To be fair to H, W did mention in her email to H dated 19 December 2012 about “until you (H) retire”. Nonetheless, if I really make an order for periodical payment against H only up to his retirement, it will only create more uncertainty and disputes. With a view to achieving a fair financial outcome, a lifelong periodical payment order is appropriate. However, if one day H can prove his retirement to the satisfaction of the court, he may make suitable application for variation.
166. In the circumstances, I make an order as follows:
1. H do pay W a sum of HK$260,700 per month as her maintenance commencing from 1st day of May 2024 and thereafter on the 1st day of each month until the joint lives of the parties or the re-marriage of W, whichever is earlier;
2. All the undertakings given by H in the Order dated 24 March 2014 be discharged;
3. Save as to the above, all W’s claims for ancillary relief against H be dismissed.
167. Regarding the question of costs, I think that W can be regarded as the winner as most of the issues in dispute are ruled in her favour, except some minor issues and her request for the maximum possible lump sum payment. I now exercise my discretion to make an order nisi that H do pay W 80% costs of the ancillary relief proceedings including all costs reserved in relation thereto with certificate for one Counsel, to be taxed if not agreed, which shall become absolute unless any of the parties take out a summons to vary with supporting affidavit, if necessary, within 14 days.
168. For the avoidance of doubt, all legal costs provisions made by H to W shall be deducted from the costs taxed or agreed.
169. Last but not least, I thank all Counsel for their assistance.
| | ( Simon Lo ) |
| | District Judge |
Petitioner: Ms Bonnie Cheng and Mr Adrian Kwan instructed by Chaine Chow & Barbara Hung
1st Respondent: Mr Azan Marwah and Mr Josh Baker instructed by Tsang, Chan & Woo Solicitors & Notaries
[1] See para. 5 to 17 of the Judgment [2019] HKFC 292
[2] 5 May is the parties’ church wedding anniversary day.
[3] See Judgment [2019] HKFC 292
[4] See Judgment [2022] HKFC 22
[5] See para 18 of the Preliminary Issues Judgment
[6] See para 19 of the Preliminary Issues Judgment
[7] See para. 71 of LKW’s judgment
[8] See para 7(5) of the Preliminary Issues Judgment
[9] Bundle 32/396/7374
[10] As defined in para 10(3) of the Preliminary Issues Judgment
[11] As defined in para 9 of the Preliminary Issues Judgment
[12] Bundle 29/383/6479
[13] See para 83 of the Preliminary Issues Judgment
[14] As defined in para 10(3) of the Preliminary Issues Judgment
[15] See para 120 of the Preliminary Issues Judgment
[16] As defined in para 10(4) of the Preliminary Issues Judgment
[17] See para 119 of the Preliminary Issues Judgment
[18] See para. 57 to 68 of the Judgment [2019] HKFC 292
[19] W explained that Chinese herbal and tonic food supplements have now been shifted to medical and health expenses for HK$130,000 every month, below.
[20] W explained the decreased from HK$4,000 in 2017 Form E, due to hiring a driver.
[21] HK$4,000 for transport in 2017 Form E is adopted as her claim for hiring a driver is rejected by me.
[22] See paras. 60 and 96 of the Preliminary Issues Judgment
[23] Assessed in the sum of HK$15,062,281 as per para. 64 above