RE also known as ME v. POPM also known as P-M OPR
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FCMC 1658/2020
[2023] HKFC 255
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MATRIMONIAL CAUSES NO. 1658 OF 2020
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BETWEEN | ||
| RE also known as ME | Petitioner | |
| and | ||
| POPM | Respondent | |
| also known as P-M OPR | ||
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| Coram: | Her Honour Judge Thelma Kwan in Chambers (not open to public) |
| Date of Hearing: | 8 May 2023 |
| Date of Judgment: | 20 December 2023 |
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J U D G M E N T
( Ancillary Relief )
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1. This is the hearing of the Petitioner Wife’s (“W”) application for ancillary relief. H continues to be absent from these proceedings.
2. This decision should be read together with my extempore decision on 8 February 2023 with regard to maintenance for the three children of the family.
Brief background
3. Parties met in 2005 when they were young, Respondent husband (“H”) was 23 and W was 20. They commenced cohabitation in Denmark from then and got married in August 2010.
4. H is French and a businessman; W is Danish, and for the most part of the marriage was a housewife taking care of home and the Children.
5. There are three children of the family, at the time of this decision, they are respectively age 14, 12 and 10 (together the “Children”).
6. The family first resided in Denmark, then moved to Hong Kong in 2016. Their relationship deteriorated from around 2019, parties went to Denmark in January 2020 during covid and according to W, had expected to return to Hong Kong shortly thereafter as the domestic helper and the dog were still in their rental apartment here.
7. While in Denmark they attempted to initiate divorce proceedings, which application was dismissed by the court there for lack of jurisdiction. H came back to Hong Kong in March 2020, allegedly to “wrap things up” in Hong Kong, he terminated the lease then and dismissed the helper.
8. On realizing that Denmark has no jurisdiction, W petitioned for divorce in Hong Kong in March 2020, she and the Children stayed in Denmark until June 2020 and returned to Hong Kong thereafter.
9. W says H left her and the Children in March 2020, she also says he has stopped maintaining the Children since then. He subsequently moved to Thailand in or around March 2021, W has no specific knowledge of when or to where.
10. W was granted custody, care and control of the children by an Order of Court dated 27 January 2022.
11. On 16 June 2022, W applied for relocation to Denmark with the Children; with the consent of the H, moved backed in July 2022. She attended this hearing via VCF from Demark.
Court Proceedings
Jurisdiction
12. The parties took more than a year dealing with the issue of divorce jurisdiction.
13. As mentioned above, the parties first commenced proceedings by joint application in January 2020 in Denmark. This was dismissed by the Denmark Court as the parties were not residing in Denmark when they applied for divorce.
14. W says that H has appealed this decision twice with subsequent decisions in April 2020 and then from the Denmark High Court in December 2020, both times with the same findings that there is no jurisdiction. The decision in December 2020 was attached to the W’s affidavit and cites the lack of jurisdiction based on a police report H made in March wherein he told the police that they were in Denmark temporarily, and that they resided habitually in Hong Kong.
15. Following W’s Petition in Hong Kong, H filed a Summons to stay the W’s Petition in June 2020. Affidavits were exchanged. His application was adjourned in the interim, there were no hearing; and an Order was made by HHJ Melloy dated 6 May 2021 for H’s Summons for Stay to be withdrawn.
16. W filed a re-amended Petition on 6 May 2021, and the matter moved forward in Hong Kong. Decree Nisi was pronounced on 21 December 2021.
Schooling
17. W issued a Schooling Summons on 9 December 2020 for the Children to attend an international school in Hong Kong, as there was no agreement from the H.
18. This was resolved by a hearing on 25 January 2021 where the parties agreed to enrol the Children at the said international school, with an undertaking by H to apply for a bourse (financial aid for French citizens for schooling) and to pay $80,000 towards the school fees for the Children.
Maintenance
19. W made an application for maintenance for herself and the Children by affidavit on 29 July 2020, then by Summons on 12 August 2020. Due to GAP, DDJ R Egerton gave written directions for the case to be set down for hearing on a date to be fixed, and exchange of affidavits and Form Es. It appears that this was not proceeded with.
20. On 9 December 2020, W made another application for maintenance, followed by an application for interim interim maintenance on 22 January 2021. On 25 January 2021, the Court made an Order that all but the 9 December 2020 Summons were to be withdrawn.
21. Affidavits were exchanged, and the Court received the only Form E and Affidavit that H submitted with regard to finance in March and April 2021 respectively.
22. The MPS decision was made in a written judgement by HHJ Melloy dated 8 June 2021 where she ordered H to pay HK$7,350 for each of the three Children, and directed him to pay for their school fees.
Ancillary Relief
23. On 27 January 2022, the ancillary relief trial was set down for 20 June 2022.
24. W was prepared for trial on 20 June 2022, she submitted her submission and bundles, and evidence with regard to service on the H.
25. 20 June 2022 was also the return date of W’s application for permanent relocation to Denmark with the Children, H did not appear but gave written consent, the Relocation Order was made on the same day. Due to H’s absence, I made an Unless Order for him to submit his Form E and submission for ancillary relief hearing in accordance with a previous order made in January 2022, failing which he would be debarred from filing any further evidence. Trial was adjourned to 8 February 2023
26. At the hearing before me on 8 February 2023, W appeared in person via VCF from Denmark, H was again absent; I made an Order for H to pay $13,300 for each of the Children, inclusive of school fees.
27. I further directed W to file a consolidating affidavit so that her financial relief application can be heard on 8 May 2023. This was W’s Affidavit dated 8 March 2023 (the “Affidavit”) and served per Court’s direction on H as confirmed by her affidavit of service dated 3 May 2023.
28. Decree Absolute was granted on 15 March 2023.
H’s awareness of these proceedings
29. I refer to my aforementioned decision on 8 February 2023 regarding maintenance for the Children where in paragraphs 5 to 19, I cited the bases of my decision that I am satisfied that H is fully aware of the development of these proceedings. It is also clear to me that H has chosen to be involved only when he pleases, as in when he gave his written consent to W and Children leaving for Denmark, but chose not to engage with the ancillary relief hearing on the same day.
30. I was also satisfied that he was in receipt of documents and bundles that was prepared by W.
31. Further to the 8 February 2023 hearing, W has filed an affirmation of service dated 25 April 2023 of the service of her Affidavit on H. With this, she also produced an email (same as the email for service) from the H dated 9 March 2023 requesting a copy of the Affidavit:
“…
As I am the Respondent and it is my understanding that you were granted leave to serve the aforementioned affidavit on me by substituted service via email at [email address]. However, I have not received a copy of the affidavit and the deadline for service is fast approaching.
Therefore, I kindly request that you provide me with a copy of the affidavit as soon as possible. It is important for me to have a copy of this document in order to prepare for the upcoming hearing and ensure that I can respond adequately to your claims.”
32. This is evidential of the fact that H is fully aware of the on-going development of these proceedings, and fully aware of this adjourned hearing date which is contained in the same Order for the Affidavit.
33. Despite what he said, he did not turn up at this hearing. Nothing further was heard from him.
34. I am satisfied that H is in receipt of all up-to-date evidence and has, yet again, chosen not to appear to respond to W’s ancillary relief claim.
The Applicable Law & Legal Principles
35. Section 7 of the Matrimonial Proceedings and Property Ordinance (“MPPO”), Cap 192 sets out the matters that the court must have regard to when making orders for ancillary relief:
“(1) It shall be the duty of the court in deciding whether to exercise its powers under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say-
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
36. The Court of Final Appeal in its landmark judgment of LKW v DD [2010] 13 HKCFAR 537 has laid down a 5-step approach in assessing the division of the parties’ matrimonial assets:
1. The ascertainment of the financial resources of each of the parties calculated as at the date of the hearing (§§71 to 73);
2. The assessment of the parties’ financial needs. If the total resources are not enough to meet the parties’ needs, the s.7 exercise should stop at this step and there is no room to apply any sharing principle (§§74 to 79);
3. 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 (§§80 to 82);
4. In considering whether good reasons exist for departing from equal division, the answer is to be found in the terms of s.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 (§§ 83 to 130); and
5. The weight to be given to each of the factors is a matter of discretion for the court (§131).
37. Which are to be considered against 4 guiding principles, namely:
(i) objective of fairness,
(ii) rejection of sex or role discrimination,
(iii) yardstick of equal division, and
(iv) rejection of minute retrospective investigation.
Identifying the Matrimonial Assets
38. Under this heading, the Court is to consider the financial resources of the parties, with reference to s.7(1)(a) of the MPPO.
W’s case
39. W has produced two detailed submissions for the hearing in June 2022 and this current hearing. Throughout the W’s case in these proceedings, she was only able to speak to three assets as no other information has been made available to her.
a. ENH Poland
b. YouTube Channel / Review Channel
c. Investment Account S Bank
ENH Poland
40. It is W’s case that the parties met in 2005 when they were aged 23 and 20 respectively, started co-habitation in Denmark since then and got married in August 2010. H started a small business in trading agricultural machines financed by W’s father. H has continued developing in the same industry and had a successful business, he had his own company S, which he sold in 2016 (at HK$6.3M equivalent) and moved the family to Hong Kong. Here in Hong Kong, H invested S’s sale proceeds into a company in the same business called ENH Limited which was also funded in part by W’s father.
41. In the context of H’s earning capacity, W has this to say in her submission for the prior June 2022 proceedings:
“38. In the meantime, H managed complex engineering designs to launch new products for the hydraulic engine after-sells market. The H is an avid sales and negotiator and travelled often to Asia (South Korea, China, Hong Kong) to lead product negotiations with suppliers. He also initiated and create strong dealership agreements with clients across Europe.
…
40. All the proceedings of sale of S were reinvested in ENH Limited in Hong Kong to distribute hydraulic engines in the world following the same industry and same suppliers in Asia as with S.”
42. After the commencement of the divorce proceedings, W says H has moved the ENH Limited’s inventory via himself to a company in Poland (“ENH Poland”), this was captured in an Inventory Transfer Agreement dated 28 February 2020 (“ITA”). W also says in her June 2022 submission that ENH Poland:
“… kept the inventory, webshop and customers’ and suppliers’ dealership agreements, continues to operate till today with the same employees, the same brands and products as originally with the HK entity, as seen today on the publicly available site.”
43. It is of note that the website quoted by W is no longer available after this was discovered by the W and mentioned in these proceedings.
44. H claims that he sold ENH Poland in March 2020 to a friend, he produced a Sales Agreement. However, W was able to produce record of the Polish National Court Register that as of April 2021 (more than one year after the alleged sale), H was still on record as 100% owner and Chairman of this company. H says in his affidavit that this was due to covid and record not being updated. Nothing was produced by him in respect of updated record of ownership.
45. W says that the amount at which H sold this company (EUR207,680 / HK$1,700,000) was even lower than the amount of the inventory (USD254,162 / HK$1,955,185) per the ITA.
46. W also says that the transaction amount did not take into account “the company as a going concern based on previous profitability and / or future cashflows. Suppliers’ and customers’ dealership agreements, employees with technical know-how, a well-functioning e-commerce platform / webshop, among other intangible assets were not taken into account.”
47. She also casts doubt on H’s motivation for selling the business as H says it was sold due to his need for liquidity, but the substantial payment was only required to be made two years after the sale. W says there has been no information as to where the amount was paid and how it was deployed.
48. W therefore proposes that at least the value of the inventory in the ITA is to be placed into the matrimonial pot.
YouTube Influencer Channel / Review Channel (“YouTube Channel”)
49. W contends that H is the owner of several YouTube Influencer Channels.
50. This is what she has to say in the Affidavit:
“The Channel generated income from different affiliate programs (the business model can be compared to that of a blogger, where the visitor of the page clicks on links that leads to fx. Amazon or Walmart and the influencer is rewarded by a percentage ranging from 2-13 % of the sales amount. On top, for every ad displayed on the video, the influencer receives a payment from google.
The channel was very profitable and generated an income from the viewers / ads on Youtube / Google and from a range of different affiliate links. The latest does not figure anywhere, since the H did not disclose his Paypal account statements.”
51. At the time of the June 2022 submission, W says H has almost 200,000 subscribers.
52. H allegedly sold the channel to a friend, and put into evidence a sales agreement which was dated 11 March 2020 for the sum of HK$955,925, payments to be made over 48 months. W points out a number of issues with the sales agreement, including, not all the pages are enumerated, the agreement was undated on the signature page, and there were no witnesses to the signatures.
53. At the time of this hearing in May 2023, W drew my attention to a valuation report of the YouTube channel, this was previously produced in her documents in the bundle served on the H in June 2022. On questions by the Court, she explained that this was from a valuer that she found, but did not involve any court appointment. The report shows that the “Discounted cash flow” method was used based on annual income of approximately $662,000-778,000 over a number of years. She further says that this is based on the evidence of income found in the H’s bank statements which she says is not even complete so the valuation is underestimated.
54. The W’s valuer assesses the value of the YouTube channel to be $3,491,063.
Investment Account S bank
55. The only piece of evidence W was able to produce was an email dated July 2016 which the H sent showing a transfer of USD105,000 and he told W that the investment account had $1,016,000.
56. W also says his Citibank account shows a transfer from S bank of $141,752 in December 2020; showing the account in S bank was still active then.
57. Notably, H has not made any disclosure on this account. He said in his Form E that this account was closed; then later said it was dormant.
Value of the matrimonial pot
58. The W’s submission therefore brings the matrimonial pot to the following amount:
Asset Value which W proposes to be placed on the asset ($) Basis ENH Poland 1,995,185 Based on the ITA signed by H when the inventory from the HK company was transferred to him which he thereafter transferred to the ENH Poland YouTube channel 3,491,063 Based on W’s expert valuation report of the YouTube Channel S Bank 1,016,000 Per H as of 2016 TOTAL 6,502,248
H’s Case
59. According to the H’s Form E dated 9 March 2021, he reported he has a net asset value of $1,241,288. The substantial part of which was under “Monies Owed” which are allegedly the outstanding payments from his sale of ENH Poland and the Youtube Channel, and something about an “ENH settlement”.
60. H’s Form E also declared the existence of a real property in Denmark; however no details were given, not to ownership nor to value. This real property is however not mentioned in the two Form Es submitted by W, nor part of her claim.
H’s Earning capacity
61. In his March 2021 Form E, H reported his previous monthly income then as $65,000 under ENH Hong Kong’s employment, and then declared $0 as his income in Part 3.1 of his Form E. H has not produced any supporting documents for updated position on his income. H’s reasons are that he was not able to work due to covid, and his claim that he was “stranded” in Thailand. And despite an undertaking made on 7 May 2021 to the Court and W that he would inform both upon receipt of money from his employment, nothing has been filed. W has no information on what, if any, employment H is engaged in at this moment. Also interestingly, in this Form E, he repeatedly said he was due to report to work in Europe. It appeared that he never went there.
W’s earning capacity
62. For the most part of her married life, W was the home maker and carer of the Children. She had on occasion helped H in his business during the marriage; and for a short while between August 2020 and April 2021 worked as a real estate agent in HK, earning about $15,000 a month. This coincides with the time after her return to Hong Kong from Denmark until the time her father’s company provided sponsorship to her for on-going stay in Hong Kong from April 2021.
63. H alleges that W has various interest in her maternal family business; but she says none of these were income producing to the W, and she is only director to some of the family-owned companies. H never came forward to challenge her position on this.
64. On moving to Denmark, she started to engage in some online business, but she claims that full time work is difficult whilst looking after the Children, and she has been trying to settle them down after this drastic change in their young lives. She says the income therefrom is inconsistent.
Lack of disclosure
65. In W’s Affidavit, she cites the following missing disclosure from the H:
a. Missing statements from H’s Citibank account, HSBC account, American Express credit card since January / February 2021.
b. No statement was ever produced for S Bank, H said the account was closed and then said it was dormant.
c. No statement was ever produced for H’s Paypal account which is where W says H receives substantial income from his YouTube channel.
d. No statement was ever produced for H’s Hang Seng Bank account.
Disproving H’s alleged sale of business and Youtube channels
66. Furthermore, W’s Affidavit includes the analysis of the months from September to December 2020 of the H’s American Express card statements, she is able to identify some of the items of the transactions and says that despite H’s claim of the sale of the businesses beforehand, there are the following:
a. Monthly payment for accounting software used by ENH during the marriage
b. Monthly payment for domain, website hosting and online stores which shows the H runs several online businesses
c. Regular payment to freelance workers hire to manage the H’s website business and “Review Tube channel”
d. Payment to persons who were previously employees for the “Review Tube channel”
e. Payment to a person who was previously employed as Sales Representative for ENH Limited
Legal Principles on Non-Disclosure
67. In the English Court of Appeal case of Moher v Moher [2019] EWCA Civ 1482, the court gave guidance on how to assess a case in the event of non-disclosure of a party's financial resources in an ancillary relief matter. Moylan LJ said,
“86. My broad conclusions as to the approach the court should take when dealing with non-disclosure are as follows. They are broad because, as I have sought to emphasise, non-disclosure can take a variety of forms and arise in a variety of circumstances from the very general to the very specific. My remarks are focused on the former, namely a broad failure to comply with the disclosure obligations in respect of a party's financial resources, rather than the latter.
87. (i) It is clearly appropriate that generally, as required by section 25, the court should seek to determine the extent of the financial resources of the non-disclosing party.
88. (ii) When undertaking this task the court will, obviously, be entitled to draw such adverse inferences as are justified having regard to the nature and extent of the party's failure to engage properly with the proceedings. However, this does not require the court to engage in a disproportionate enquiry. Nor, as Lord Sumption JSC said, should the court “engage in pure speculation”. As Otton LJ said in Baker v Baker[1995] 2 FLR 829, inferences must be “properly drawn and reasonable”. This was reiterated by Baroness Hale of Richmond JSC in Prest v Prest [2013] 2 AC 415 , para 85:
“the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are.”
89. (iii) This does not mean, … that the court is required to make a specific determination either as to a figure or a bracket. There will be cases where this exercise will not be possible because the manner in which a party has failed to comply with their disclosure obligations means that the court is “unable to quantify the extent of his undisclosed resources”, to repeat what Wilson LJ said in Behzadi v Behzadi [2009] 2 FLR 649.
90. (iv) How does this fit within the application of the principles of need and sharing? The answer, in my view, is that, when faced with uncertainty consequent on one party's non-disclosure and when considering what Baroness Hale and Lord Sumption JJSC called “the inherent probabilities” the court is entitled, in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome. This is, effectively, what Munby J did in both Al-Khatib v Masry [2002] 1 FLR 1053 and Ben Hashem v Al Shayif [2009] 1 FLR 115 and, in my view, it is a legitimate approach. In that respect I would not endorse what Mostyn J said in NG v SG [2012] 1 FLR 1211, para 16(vii).
91. This approach is both necessary and justified to limit the scope for, what Butler-Sloss LJ accepted could otherwise be, a “cheat's charter”. As Thorpe J said in F v F [1994] 1 FLR 359 , although not the court's intention, better an order which may be unfair to the non-disclosing party than an order which is unfair to the other party. This does not mean, as Mostyn J said in NG v SG, at para 7, that the court should jump to conclusions as to the extent of the undisclosed wealth simply because of some non-disclosure. It reflects, as he said at para 16(viii), that the court must be astute to ensure that the non-discloser does not obtain a better outcome than that which would have been ordered if they had complied with their disclosure obligations.”
68. I shall proceed to conduct my analysis based on the above principles.
Discussion on the matrimonial pot
69. This is first step that this Court needs to attend to under the guidance of LKW v DD.
70. It is apparent to me that there is a serious lack of disclosure on the H’s part, which made the calculation of what is in the matrimonial pot an almost impossible task. The Court is left with only very sketchy information.
71. The general principle is that the value of the matrimonial assets should be that at the date of trial.
72. It is obvious that the asset information of this case is far removed from the general principles. We have a company valued based on price of inventory only; a valuation of the YouTube channel where the Court has no information as to the capability, experience and qualification of the valuer; and the amount in the S bank account which dates back to 2016. I am well conscious of these discrepancies, but all these were caused by the woefully inadequate disclosure on H’s part.
73. However, I remind myself the time that H has been well notified of the W’s case, not merely from all her affidavits, but also as her case was put together for the June 2022 trial, and as elucidated in her submission back then, and repeated for this trial.
74. H’s failure to provide necessary and updated information of the family assets has crippled the Court’s ability to make a fair assessment of the value of the matrimonial pot. Looking at the time line, H’s sale of both the ENH Poland and the YouTube Chanel took place in March 2020, which was shortly after he found out that Denmark has no jurisdiction on his divorce (despite his subsequent appeals), the W’s petition for divorce in Hong Kong and when he was supposedly back in Hong Kong to wrap things up; it looks like he was trying to dispose of these matrimonial assets, and as W alleges, at an undervalue.
75. W’s analysis of the H’s American Express credit cards shows that these multiple transactions appeared more than half a year after H says ENH Poland and YouTube channel have been sold and casts further doubts to his version of events. This is in addition to W’s case on these two transactions abovementioned. H could have come to this hearing to defend his case but chose not to. On a balance of probabilities, the court finds it hard to accept that these sale transactions took place as he alleges.
76. For almost a year from the first scheduled ancillary relief hearing in June 2022, H has never come forward (despite given opportunities) to challenge W’s case, in its scope, their value and the bases of her valuation of the assets she alleges are in the matrimonial pot. H’s silence speak much louder than words. I therefore accept W’s assessment of the value of the matrimonial assets as above.
77. H has been the sole breadwinner of the family. I find that with his age now at 41, he has substantial earning capacity, and on W’s words, been successful in his business. Despite his intention to represent himself as jobless (and as declared under the Income section in his Form E), I do not accept that he is not working or that he is not involved in some business ventures in some shape and form. In the clearly deliberate absence of a full and frank disclosure on his part, I shall draw negative inference against him and take the view that he has more financial resources than he represents, and certainly at least what the W says he has.
Assessment of the Parties’ Financial Needs
W’s needs
78. W proposal is that she gets 55% of the matrimonial pot.
79. By her calculation, she has a negative position of $450,980, this amount appears in her Affidavit. Looking at the bases of this claim, her first Form E dated 12 March 2021 shows liabilities of $563,626 made up of legal bill and personal loans; and her second Form E dated 16 June 2022 shows liabilities of $500,604 made up of two legal bills and an amount owed to the Children’s international school. The legal bills were provided in the supporting documents for her updated Form E. I enquired about these liabilities at the hearing. W says that the legal bills have been paid with a loan from her father, but she did not provide any supporting documents regarding this loan. As for the amount owed to the international school, her oral evidence is that after negotiation with the school, the outstanding amount was settled with the school debenture.
80. In her ask, she also factored a 7% increase annually of the money in S bank since 2016. I do not accept this calculation. It is unclear how this money has been spent back then, but I am not inclined to put an arbitrary percentage increase on this amount for calculation of this asset.
81. Factoring this 7% into account and taking into consideration her liabilities, she says her ask for 55% comes up to $3,952,849.
82. She also asks for maintenance payment pending the full payment of this sum which will bring a clean break between the parties.
H’s needs
83. I do not have any picture as to the H’s needs at the point of this hearing. Whatever appeared in his 2021 Form E could not be reflective of his needs now; to say the least, he now lives in a different country, these numbers are therefore not up to date. He has not filed a submission nor an open proposal for Court’s consideration.
84. However, based on my assessment of the H’s earning capacity, I have every reason to believe that his earning is sufficient to support his own needs, as well as maintenance for his Children.
Sharing and Departure from Equality
85. Taking into account the period of cohabitation, this is a marriage of more than 15 years. Considering the respective contributions by the parties to the marriage, and given the facts of this case, I take the position that the starting point is that the matrimonial assets are to be shared equally.
86. W asks for a departure from equal sharing under the principles of fairness and based on H’s post separation conduct and failure to discharge his duty to provide full and frank disclosure.
87. This is the 4th step that the Court has to consider. The case of LKW v DD has cited the following principles:
“Step 4: considering whether there are good reasons for departing from equal division
83. The fourth step therefore involves considering whether good reasons exist for departing from the principle of equal division. Any such departure means increasing or reducing one party’s share and correspondingly reducing or increasing the share of the other. The question for the court is whether the balance ought to be shifted from a point of equality to some other point in the circumstances of the case. This is necessarily a complex question which raises a range of separate issues.
84. What then are potentially good reasons for such a departure? The answer is to be found in the terms of section 7 and the implicit objective of a fair distribution of the assets. Any of the matters listed in paragraphs (a) to (g) of section 7(1) may provide an appropriate reason, as may the “conduct of the parties” and “all the circumstances” referred to in section 7(1). The catch-all category of “all the circumstances” makes relevant any matter which bears on the fairness of the financial outcome in a matrimonial context.
85. It is important to stress that while such factors, individually or cumulatively, are potentially capable of resulting in a departure from an equal division, a finding that one or more of those factors are engaged does not necessarily mean that a departure must occur. The weight to be given to such factors is in the court’s discretion to be exercised in Step 5 as described in Section E.6 below. It cannot be over-emphasised that the matter is fact-specific and discretionary. The sharing principle must not be mechanistically applied.”
88. The court went on to cite 6 scenarios where departure could be considered. The relevant one in this case is financial needs. In this case, W has the care of the Children. She has not been paid maintenance for a long while until she resorted to the Court. Even then, she has experienced uncertainty with regard to H’s due performance of Court Orders. Despite her age, she has left the job market for a long time and needs to be given time to find her footing back in Denmark. She should have a higher percentage of the matrimonial assets to ensure some security for the Children. For all these reasons, I take the view that there should be a departure from equal sharing at 60% to the W and 40% to H.
Other relevant s.7 factors
H’s physical condition
89. H claims to be suffering from herniated disc in his Form E, and needs to go through surgery in due course which he says he is trying to put off as long as he could.
90. W says that his condition could have been easily resolved with surgery but H has used this to justify his spending on personal training, dietary supplements, gym membership, body massage packages and reason for unemployment. She also says that H has been practising Thai boxing participating in local competition as late as in 2020.
91. The Court has no updated information on his condition, and as this evidence of his is untested, I am unable to place any weight on this issue affecting his earning capacity and financial status in any way.
Deciding the outcome
92. I have accepted W’s assessment of the matrimonial pot as $6,502,248.
93. Given that the amount owed to the Children’s international school has been settled, and I do not have any evidence regarding the loan from the W’s father; I have decided not to take W’s claim of her liabilities of $450,980 into consideration.
94. I have explained why I have decided to depart from equal division of the matrimonial assets at 60:40 split in favour of W.
95. W is therefore entitled to lump sum of $3,901,349. There shall be a clean break between the parties.
Periodical Payment pending payment of lump sum
96. W asks for maintenance pending full payment of the Court ordered lump sum.
97. In her latest Form E, her expenses in Denmark are as follows:
Item Total Amount General Expenses 41,410 Personal Expenses 8,366 Children Expenses (including school fees) 42,784 Total 92,560 And W asks for this full amount.
98. I make reference to my decision on 8 February 2023 where I have made Orders for H to pay maintenance for the Children. Therein I worked from the above numbers, and made minor adjustments to the Children’s expenses to arrive at $29,420 for the three of them. In paragraph 30 of that judgment, I said that W will have to be responsible for her portion of general expenses (¼), her own personal expenses, ½ share of the Children’s share of the general expenses, and ½ share of the Children expenses (excluding school fees). This translates to $10,352 + $8,366 + $15,530 + $14,710 = $48,958.
99. Clearly this is a hefty sum to be borne by W currently, and I am of the view that she is entitled to some assistance from H until the lump sum I intend to order is fully paid for. I shall therefore make an Order for H to pay $15,000 per month to the W, this periodical payment to be backdated to April 2023 to be paid until and include the month H pays off the full lump sum aforementioned.
Costs
100. There is no reason why costs should not follow the event, I will therefore make a Costs Order against H.
The Order
101. The Order shall be as follows:
a. H do pay $3,901,349 to W not later than 60 days from this Order.
b. H do pay $15,000 per month to W as periodical payment to be back-dated to April 2023, the last of this periodical payment shall be made in and including the month H fully pays the lump sum in subparagraph a herein.
c. All costs arising from these ancillary relief proceedings be to the W. This is to be a Cost Order Nisi which shall be made absolute from 14 days hereof.
| (Thelma Kwan) District Judge |
Petitioner acting in person (Attendance via VCF from Denmark)
Respondent acting in person and did not appear