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No-Fault Divorce in the UK_Is This What’s In Store For Hong Kong?

On 6th April 2022, England and Wales adopted a “No-Fault Divorce Law” pursuant to the Divorce Dissolution and Separation Act, which allows couples to legally separate without either party having to admit any wrongdoing.   As Editor-in-Chief at Hong Kong Divorce and as a qualified attorney with the State Bar of California and a member of the United States District Court, Southern District of California and United States District Court, Central District of California since 2007, I wanted to discuss No-Fault Divorce and how the new law in the United Kingdom compares to No-Fault Divorce in California.

Under this new No-Fault Divorce law in the United Kingdom, parties filing for Divorce can file a joint application for divorce without the need to cite terms such as Adultery or “Unreasonable Behaviour” and thus pointing to the conduct of the other party.  This is a change from the previous law in the United Kingdom where parties filed for Divorce citing fault either by way of adultery or unreasonable behaviour or desertion.  Whilst couples in the United Kingdom can opt for divorce based on 2 years’ separation, this basis for divorce requires consent from the other party and if no consent is received, parties must be separated for an additional 5 years before a Petition for Divorce can be filed.

No-Fault Divorce has long been something followed in California.  In fact, California was the first state in the USA to enact a No-Fault Divorce law.  This law was signed by Governor Ronald Reagan, a divorced and remarried movie star at the time and came into effect in 1970.  Many states in the USA now follow the No-Fault Divorce law including New York, Florida, Washington and Hawaii, among others.

For those in favour of the No-Fault Divorce law, the benefit of the move towards this new law is that the litigious heat that many couples face in divorce will be taken out of the divorce process as the courts will no longer look to fault and the reasons behind the breakdown of the marriage.  Instead, the view and hope are that the parties will instead focus on a more collaborative way forward in resolving issues related to children and financial division.  In the United Kingdom, industry leaders are embracing the move towards the No-Fault divorce law as “fault” creates unnecessary conflict and in fact, many believe that “fault” has no bearing on the outcome of financial proceedings.

It is true that in California, there are at times litigious divorces even though it is a No-Fault state.  Many parties can bring in “fault” through declarations and testimonies filed with the Court in support of their motions for relief.  It is not a perfect system.  And it is likely that in the United Kingdom, while the hope may be to create a more harmonious environment for divorcing parties, there still will be loopholes where parties’ attempts to bring in information to prove fault and blame will remain to play a pivotal role in the divorce.  However, similar to what California has seen in their No-Fault divorce system, the United Kingdom judges will no longer focus on what caused the breakdown of the marriage and instead focus on simply moving the divorce forward and focusing on the wishes of the parties to end the marriage.

With the new law in effect as of 6th April 2022, the parties can now file for divorce and cite “irreconcilable differences” which is how divorcing parties file for divorce in California and other No-Fault states. In addition to the citation of “irreconcilable differences” the parties will then file for a condition order (similar to a Decree Nisi in Hong Kong, which is a first step towards a divorce or Decree Absolute) and then once that is granted, the parties can then apply for a final order (Decree Absolute).

The big question many are now asking is whether the process in the United Kingdom with No-Fault divorce will result in a quicker divorce process.  According to experts in the United Kingdom, there will be a minimum period of 20 weeks from the commencement of the proceedings to the conditional order.  In California, the courts provide parties an opportunity to ponder upon the divorce and provides opportunity for reconciliation during the “waiting period.”  In California under Section 2339(a) of the California Family Code, the waiting period is six (6) months and begins once the Summons and Petition for Divorce is filed or the date of appearance of the Respondent, whichever occurs first.  This minimum 6-month period to obtain a divorce is to allow the parties sufficient time for parties to change their mind about the divorce and to reconcile.

The England and Wales No-Fault Divorce law follows the likes of many other international countries who have also adopted this No-Fault divorce including Australia (Family Law Act 1975), Canada (The Divorce Act 1968) and Sweden.  Whether the No-Fault divorce law will incite more divorces in the United Kingdom is yet to be seen.  Proponents against No-Fault divorce argue that this will only increase the filing of divorce petitions, in addition to the fact that without allowing fault to be introduced into the discussion, judges will make important decisions without consideration of the facts, behaviour and circumstances that led to the breakdown of the marriage.

A big question among practitioners and clients in Hong Kong is whether the Hong Kong courts will follow the United Kingdom by introducing No-Fault Divorce.  This is yet to be seen but it is likely that if Hong Kong courts decide to move towards No-Fault Divorce, it will take much time and consideration before any decisions are made.  History has demonstrated that Hong Kong courts are slow to follow the United Kingdom and thus, only time will tell if Hong Kong decides to move towards No-Fault Divorce.

Postnuptial Agreements vs. Deed of Separation – Which One Do You Need?

In this article, we are going to touch upon two important types of agreements that you and your spouse can enter into:  Postnuptial Agreements and a Deed of Separation.  What is the difference between the two agreements and which one should you opt for, if at all.  Let’s take a look!

Postnuptial Agreements:  A Postnuptial Agreement is a marital contract and entered into after the marriage.  In comparison, a Prenuptial Agreement is a marital contract entered into prior to the date of marriage.  Similar to a Prenuptial Agreement, a Postnuptial Agreement can be entered into between a husband and wife (because it is after the marriage) in order to set out terms for resolution of key issues in a divorce such as finances and children.  For many couples, a Postnuptial Agreement is a key document to set out terms in anticipation of divorce, thus making the divorce process a lot smoother so that there is no ambiguity over what could be high conflict issues.  Sometimes, couples enter into Postnuptial Agreements because they are considering a divorce but then they decide to reconcile.  Then as a safeguard, they have in place a Postnuptial Agreement in place in the event the reconciliation does not work.  In Hong Kong, Postnuptial Agreements are recognized and considered when dealing with divorce settlements by the Hong Kong Courts.

Deed of Separation:  A Deed of Separation on the other hand, is a separate agreement made between a husband and wife after a decision has been made to legally separate.  Many times, couples enter into a Deed of Separation to outline the terms of their divorce on key issues such as finances and children.  The Deed of Separation is then attached to the Divorce Petition to demonstrate to the Hong Kong Court that an agreement has been reached between the parties and thus, the divorce should therefore move forward without delay.  This extra step in entering into a Deed of Separation may be worthwhile for couples because an agreement can be reached early on in the separation process.  It essentially releases the heat which may arise in a divorce process when disagreements take place between separating couples.

Is A Deed of Separation Similar to a Judicial Separation?:  A Deed of Separation is simply a contract/agreement entered into between you and your spouse outlining the terms agreed to with respect to a separation/divorce.  A Judicial Separation however, is an actual application made to the Hong Kong Court whereby you and your partner are stating that you want to be legally separated but for some reason not legally divorced.  Many times, individuals choose a Judicial Separation for personal reasons such a religion.  Whatever the reason, it is important to remember that if you apply and obtain a Judicial Separation, you are legally separated but it does not mean you are divorced.  Later, if you decide you wish to become legally divorced from your spouse, you will need to commence separate divorce proceedings.  This is something to consider from a cost basis because you will need to spend money both on a Judicial Separation proceeding AND a divorce proceeding if you later wish to become legally divorced.  Another key consideration when applying for a Judicial Separation is that if you obtain a Judicial Separation and are not legally divorced and only legally separated, you are not free to marry under the law.  If you obtain a Decree Absolute in your divorce proceeding however, you are free to remarry upon the pronouncement of a Decree Absolute.

How Do You Choose Between These Options?:  Before you move forward with a Postnuptial Agreement, Deed of Separation and/or a Judicial Separation or Divorce, it is important that you speak directly with a solicitor and explain your special circumstances.  Depending on your circumstances, one agreement may be a better option than another.  Your solicitor will then be able to guide you in the right direction as to what agreement/contract you should have in place and whether a separation or divorce is the better option for you when applying to the Court.  Your solicitor will help ensure you take the right steps for yourself and your family.

HK Divorce:  Helping Your Loved Ones Through Divorce

At Hong Kong Divorce, we have walked you through the many issues you may face going through a divorce and what that journey entails from a legal perspective.  For many of you, a divorce can catapult you into a difficult grieving process which can take as little or as long as you need and it is with the help and support of your loved ones, that you will be able to pull through and lead you to a new life that can be full of joy. In today’s article, we want to focus on your friends and family who are going through this journey with you and provide some practical and helpful tips your family and friends can do to support you through this difficult time.

Tip #1 – Provide A Listening Ear:  One of the most helpful ways to be there for your loved one is to listen to them when they need your support. Providing an open space for your friend or family member to express their hurts not only helps them process through the grieving process but also allows them to understand that they are loved regardless of the circumstances.  At times, you may become frustrated if you feel that the person is not moving on or repeating the same toxic patterns. However, it is important to remember that when your loved one is processing through his/her grief, a consequence of the grief is that your loved one may repeat toxic patterns as a coping mechanism to get through the pain.  As frustrating as it may be, the last thing you want to do is refuse to listen because if you refuse, you may end up pushing your loved one away.  The best thing you can provide is an open ear and provide that support by listening again and again.

Tip #2 – Do Not Judge and Be Supportive: It is also important that when you are listening to your loved one who is going through the stages of their divorce process, that you provide a listening ear that is free of judgment or scorn.  Your loved one is already in a fragile state of mind during a divorce and he/she is not looking to receive additional judgment or scorn from you.  Divorce can be extremely isolating for some individuals and part of the isolation is the feeling that he/she is being judged by the world.  You must remember that the divorce process is a marathon and it requires a lot of your loved one’s time and emotional energy. You therefore want to be the person who can provide that support in a safe space and you can do that by providing a listening ear and advice (when asked) that is free from judgment.   You want your loved one to be completely honest with you about what he/she is going through so that you can support them in the best way possible.  Your friend/family member cannot be completely honest unless they know you are a safe person to divulge their deepest sorrows during one of their most difficult times. It is during the divorce process that your loved one might also go through certain transitions and he/she may make choices that you might not be in agreement with.  However, rather than judge, allow your friend/family member to explore their new normal and figure out what works for them.  They may start dating or take on a new hobby/activity that you do not agree with. Rather than judge your friend, perhaps try and understand their choices and ask them what you can do to support them during this time.

Tip #3 – Assist In Other Helpful Ways:  A good way to support a loved one going through divorce is to simply ask him/her what he/she needs.  It might be a listening ear. It might mean a meal together or helping them with tasks around the house.  Sometimes, your friend/loved one might need financial assistance as the divorce process is not a cheap process to go through.  Consider your loved one’s needs and consider how you can help.  Even if it means delivering a nice meal to their home or helping take care of their children when they need time to go to Court or meet with their lawyers, this assistance will go a long way.

If you have never gone through a divorce, it may be difficult to empathize with a loved one going through a litigious divorce.  For many individuals, they describe divorce as a death in the family.  The grief associated with divorce can loom large in their lives and it will take time for your loved one to move on.  Be there to support your friend/family member in the best way you can and he/she will surely be appreciative of it in the long run.

Questions to Ask Your Solicitor

Many families are back in Hong Kong after a long, extended summer away and the focus is now on settling back into a routine with your family and children.  For some, now that the chaos and fun of summer is over, it is the opportune time to regroup and sit down with your significant other to talk about the hard topics that may have been swept under the rug for the sake of summer fun.  It is during this new season that many couples have considered speaking with a solicitor to get their queries answered about separation, divorce, custody and all the other important topics related to a split.

Before any major decisions are made about a divorce, it is important that individuals educate themselves about the separation and/or divorce process in Hong Kong and education includes spending a good 30 minutes to an hour with a solicitor specializing in divorce to answer all the questions you may have about what a divorce could mean for you and your family.

In this article, we will list out all the questions you should take with you and ask your solicitor in your initial consultation so you have a handy checklist on what information you need to make an informed decision about your divorce.

  1. List of Questions To Ask Your Divorce Solicitor In The Initial Consultation: Here is a list of questions to ask your divorce solicitor in an initial consultation. Please be minded that you may want to add to this list of questions based on your personal circumstances.
  • What is your experience in family law? Can you tell me a little bit about yourself and your experience handling these types of matters?
  • What is the difference between a separation and a divorce in Hong Kong?
  • Who is likely to obtain custody/care of the children? Do the Courts in Hong Kong give preferential treatment to mothers?
  • If I receive primary care of the children, will my partner still have the ability to make joint decisions on issues like religion, schooling and healthcare?
  • I want to move away from Hong Kong with the children, what process do I need to go through in order to obtain this?
  • How will the Courts in Hong Kong determine the division of assets and debts? Is it 50/50?
  • How will the Courts in Hong Kong determine alimony and child support?
  • Instead of going through the Court process, are there other alternative methods to resolve the outstanding issues with my spouse? For example, is mediation or collaborative divorce an option in Hong Kong?
  • If I go through the divorce, can I speak directly to my spouse and negotiate with my partner on my own?
  • How much will you charge me for a divorce? What about extra fees?
  • What do you anticipate/estimate my fees will be to finalize the divorce?
  • Will you be handling my case or do you have a team/associate assisting as well? How much do you charge per hour?
  • If this becomes a litigated case, do I need to also hire a barrister?
  • Can we ask that my spouse pay for or contribute to my legal fees?
  • Based on the information provided, what would be your suggested strategy for my case?
  • How long do you think it will take to resolve my case on the divorce, children and finances?
  1. List of Questions To Ask Your Divorce Solicitor During The Proceedings:  is important that during the divorce process, that you are fully informed of your case and the progress being made.  Questions that you pose to your divorce solicitor will vary depending on your own unique circumstances.  Here is a list of questions you may want to ask throughout the proceedings so that you are on top of your case and fully informed of its progress.
  • Can we review the progress of my case to date and discuss the strategy going forward?
  • How much longer do you think it will take to conclude my case?
  • How much have I paid in costs thus far? Can you provide an estimate of how much it will cost further, to conclude my case?
  • Is there anything you can do to move this case forward faster?
  • I am not happy with the result/progress of my case, is there anything we can do?
  • Do you think it is time to send out a settlement offer?
  • I have moved on and want to remarry, can I do that even though my divorce is not yet concluded?
  • My financial situation has changed since the commencement of my case. How can alimony be adjusted due to the change in circumstances?
  • Now that my children are older, I want to spend more time with them and they want to spend more time with me. Can I adjust custody/timeshare now that they are older?

You are now armed with important and key questions to assist you in the process of your divorce with your solicitor.  Each case is different so you will have your own specific questions unique to your own circumstances. Your solicitor should always be available and willing to answer any and all questions you may have.  If there is a lack of communication between you and your solicitor, this should be considered a concern as you should always be aware of the progress of your case and the direction it is headed.  If there is a breakdown of communication with your solicitor, it may be time to have a difficult conversation with your solicitor or move on with another solicitor to support you on your journey.

What To Expect At A Divorce Trial

For some couples going through a divorce, key decisions about finances and the children may end up being decided by a judge at trial.  This happens if you and your spouse cannot agree on how to resolve issues between you both or with the help of a mediator.  For many couples entering the world of divorce, trial is the last thing on their minds and many individuals cannot believe that their divorce has to be decided by trial.  The reality though, is that if you and your spouse cannot agree on key issues, your case will proceed to trial in Hong Kong and these decisions will be made by one person: a judge. So, let’s discuss trial and what you can expect leading up to trial:

1. How Did You Get Here?
The first question many couples ask, is how in the world did they end up going to trial in a divorce?! When couples cannot agree on key issues mainly related to ancillary relief (finances) and the children, they will have no choice but to continue through the Court process in Hong Kong which ultimately will end up at trial if decisions/agreements cannot be reached by the parties in the meantime.  For many couples, trial is burdensome not only because it is extremely expensive, but also because it is emotionally taxing on the couple, but also the children and the effect on them of having parents who have to endure the lead up to and during the trial. Many solicitors will thus encourage couples to try and mediate during the divorce and come to an agreement on issues by way of a Consent Summons, so that the decision related to the breakup is made by the couple and not by a judge.  Unfortunately, this is not necessarily an easy feat for many couples as divorce can bring out a lot of resentment and anger. However, if you are able to put the anger and resentment aside and come up with a compromise between you and your soon-to-be ex-spouse, this will always be encouraged to avoid trial.

2. Preparations for Trial
Prior to trial, your solicitor and barrister team will be hard at work preparing all the necessary documents to be filed with the Court ahead of the trial. Many times, the trial judge will hold a Pre-Trial Review hearing, to get a better understanding of the issues to be decided at trial and what work needs to be done ahead of time. At a Pre-Trial review hearing, the judge will provide each side with deadlines for filings and any other deadlines the judge sees fit.  Your solicitor and barrister will need to adhere to the deadlines set out by the court and it will require a lot of discussion with the other side so that both sides are fully prepared by the trial date.  Closer to the trial, your solicitor and barrister team will also hold several meetings with you to prepare you for trial and the testimony you will be giving.  They will run through the types of questions the other side may ask you on examination and how you should conduct yourself whilst on the witness stand.

3. What to Expect at Trial
Your solicitor and barrister team will handle each day with expertise and ease so as to make you feel comfortable and in good hands.  The trial will be emotionally taxing as you and your spouse will be taking the stand and will be examined not only by your barrister but by the other party’s barrister as well.  It is important for you to remain in constant communication and in step with your solicitor and barrister team so that you understand what is happening each day and talk to them about how the trial is proceeding. It is important to note that the judge will require you to handle the proceedings with respect and dignity.  This means wearing clothes that are conservative and respectful.  It is also important that you do not burst out with your thoughts and comments when your ex-spouse is on the stand or when his/her barrister is asking questions. You should answer questions directly and succinctly and not make personal attacks on your spouse as it is not the forum to do so, rather the judge simply wants each party to present their side so he/she can make the best and informed decision for you and your family.

4. Costs For Trial
What many couples do not realize, is that trial is extremely expensive. Leading up to the trial, there are hours upon hours of preparation by your legal team. Your legal team will often include a team of solicitors which can include partners, associates and trainees all assisting on the case. Your team may also include senior and junior barristers, depending on the complexity of your case and barristers will require their fees to be paid well in advance of the trial.  Depending on your case, you and your spouse may be responsible for fees related to experts and reports by experts on issues related to finances and the children.  There are also fixed costs to consider as well, including fees for document preparation such as photocopying and filing of documents and the related court fees. Finally, if you are unable to succeed at trial and are the losing party, you may also be responsible for the fees and costs incurred by the other party.  Thus, you could potentially be responsible not only for your own fees and costs, but the fees and costs of your ex-spouse.  The costs for trial can be overwhelming and should not be taken lightly.  You should also consider that if you or your spouse lose at trial, you may have an opportunity to appeal and this too will be extremely costly as you will remain in the litigation process and continue to incur fees for an appeal.  Thus, it is something to carefully consider before deciding to move forward with trial.

5. Can You Stop Your Trial?
Like a divorce, a trial can also be stopped before it goes forward. Your solicitor should be speaking to you about options to prevent the trial train from moving forward at epic speed.  Other options that you could consider to stop a trial from going forward, is mediation, private dispute resolution with a judge or retired judge, or even sitting down informally with your ex-spouse and coming up with an agreement that works for you both preventing potential loss as a result of a trial.

Sometimes trial cannot be avoided especially if you are in a heavily litigious divorce and are dealing with a difficult ex-spouse. However, if there are certain issues you can compromise on and work on resolving with your ex-spouse, do so and put as much attention and effort into a resolution as trial can have devastating emotional effects on you and your children.  The time spent to prepare for trial is also time that cannot be returned to you so it is important to consider all of this before you forge ahead with a trial.

Offers of Settlement

Divorce can be overwhelming for each individual involved, to the point where it can sometimes feel as if you’re on a bullet train and cannot get off. It is important for you to know however, that despite where you are at in your divorce, there is always opportunity to come to an agreement with your spouse and settle differences without Court intervention.  One option to consider during any stage of the divorce process is an offer of settlement.  Let’s take a look at offers of settlement and what you should consider before making an offer:

1. What Is A Settlement Offer?
A settlement offer is a letter sent to your spouse in a divorce setting out proposals for the resolution of issues that are in dispute. This can include issues in dispute including ancillary relief, custody and division of property and any other issues that are specific to you and your spouse.  A settlement offer can be sent as an “open” offer which means it can be submitted to the Court at any time or it can be sent “Without Prejudice” and are not admissible in evidence in Court proceedings.  If your settlement letter is marked “Without Prejudice, Save as to Costs” it is not admissible in evidence in Court proceedings except when it’s related to the issue of costs.  This is discussed further below under “Calderbank” offers.

2. Why Are Settlement Offers Beneficial?
Sending a settlement offer to your spouse can be beneficial because it sets a basis for resolving issues in dispute. Even if your spouse does not agree to the proposals, it can be a starting ground to discuss the issues further and try and come up with a resolution that you can both be happy with.  Settlement offers can also be beneficial if you and your spouse want to attempt to resolve issues in dispute with or without continuing to move forward with the Court process which can be timely and very expensive.  It is important to remember that when sending out settlement offers, that you speak to your solicitor to assist in preparing an offer that is reasonable and practical.

3. What Are Calderbank Offers?
You may have heard about “Calderbank” offers. Calderbank offers are sanctioned offers and refer to “Without Prejudice, Save as to Costs” offers of settlement.  This means that when a case is brought before the Court, a Judge in his or her discretion as to costs, may take into account an offer expressed as a “Calderbank” or “Without Prejudice, Save as to Costs” letter.  It is important to discuss this with your solicitor as to the timing of Calderbank offers as they can play into your litigation strategy during the divorce proceedings.  Many times, Calderbank offers are sent by a party before a substantive hearing where issues will be dealt with by the Court.

4. Offers in Good Faith:
A settlement offer should be reasonable and practical and more importantly, made in good faith. The Court in Hong Kong stress the importance of negotiating in good faith and an offer of settlement is your attempt to negotiate. Negotiations should be done in a constructive manner and it could result in adverse consequences including costs if it is not conducted in good faith.  Good faith includes cooperation between the parties, exploring reasonable settlement options and engaging in constructive discussion.  Ignoring settlement letters or failing to provide substantive responses is not helpful and could result in adverse consequences.

Finally, If you have a solicitor who does not encourage good faith in your settlement attempts, it may be time to consider a new solicitor as solicitors can play an important role in encouraging settlement and resolution.

Spotlight Profile: Crypto Assets in the Matrimonial World – Featuring Barrister Madeleine Booth

In this Spotlight Profile, we are speaking with Barrister, Madeleine Booth of Bernacchi Chambers in Hong Kong about cryptocurrency and what it means in the matrimonial world.  Cryptocurrency is a relatively new type of asset that is increasingly appearing as a key focus in matrimonial cases.

Madeleine was part of a panel discussion with The Hong Kong Family Law Association on cryptocurrency in the matrimonial world.  Today we speak to her about this area and what individuals should know about cryptocurrency when they are going through a divorce.

Madeleine, it is a pleasure to have you back at Hong Kong Divorce and wonderful to discuss such an important and relevant topic such as Cryptocurrency.  First of all, we know that many individuals are now invested in the Cryptocurrency market and hold Cryptocurrency assets.  How do the Family Courts define Cryptocurrency? Is it considered property or currency?

Thank you for having me back.

Crypto-assets or cryptocurrency have all the indicia of property and sufficiently meet the definable qualities of property. This has been confirmed in a few cases: see for example the UK decision AA v Persons Unknown [2020] 4 W.L.R and also the Singapore International Commercial Court decision in B2C2 Ltd v Quoine PTC Ltd [2019] SGHC (I) 03.

Having said that, the approach of the Hong Kong Family Court to crypto-assets has yet to be established. As of July 2022, no Hong Kong Family Court judgments have been handed down touching on crypto-assets in notable detail. But there is a growing body of case law in other jurisdictions and outside of the family law sphere, which consistently indicate that crypto-assets are treated in the same way as traditional assets such as cash, shares or gold and therefore subject to similarly applicable orders, including freezing injunctions preventing dissipation.

There is a belief out there that Cryptocurrency is not even real and that there is no need to disclose Cryptocurrency because it is so volatile and not “paper” money.  What’s the danger about this view and how it’s played out in the divorce arena?

Crypto-assts are very much “real” and fall well within the realms of being disclosable. In Hong Kong, parties undergoing divorce have an ongoing duty of full and frank disclosure. They must be honest with each other and the court about their financial circumstances, including investments or the holding of crypto-assets. The disclosure process in Hong Kong includes the exchange of a financial statement known as a “Form E” whereby both parties are required to provide details on their assets held globally (e.g., cash in bank, properties, stocks, insurance policies), amongst other things. Crytpo-assets are disclosable under part 2.11 of Hong Kong’s current Form E. A party must verify the contents of a Form E with a sworn statement of truth. Parties who attempt to hide assets face very severe consequences from the court.

If the court finds that a party has deliberately sought to avoid disclosing assets, adverse inferences will likely be drawn against that party. The court may consider it appropriate to “addback” a certain sum to the matrimonial pool of assets for division.  The court will also likely consider such behaviour a form of litigation misconduct which will result in an unfavourable costs order being made against the non-disclosing party. The court’s approach in such situations is dependent on a host of variables which cannot fairly be set out summarily above: a topic for another article, perhaps!

Practically speaking, in Family Law disputes, will the Hong Kong Family Court consider Cryptocurrency as income when determining issues such as ancillary relief for the other spouse and child support?

Cryptocurrency is considered an asset akin to any other property, not income. There may be instances where a spouse trades cryptocurrency to generate income, and the Hong Kong court has no reason not to recognise this. Unfortunately, there has yet to be a Hong Kong case explicitly enunciating this point. It is possible, however, to look to the approach adopted in other common law jurisdictions. For example, in the relatively recent Canadian case Hauber v Sussman, 2020 ONSC 6695 (CanLII), the court acknowledged that a spouse may rely on cryptocurrency to generate income to fulfil maintenance obligations.

At what point in a divorce is Cryptocurrency valued? For example, is it valued at the time of separation or at the time of division of assets?

It is settled law that parties’ assets are valued at the date of trial: see Cowan v Cowan [2001] 2 FLR 192, cited and applied in Hong Kong. This is the general approach, even with respect to volatile assets, such as businesses, property and, by extension, crypto-assets.

Given that the purpose of valuations is to assist the court in fairly determining the outcome of a case, it is foreseeable that some parties, owing to a sharp increase/decrease in the value of the crypto-assets, may wish to argue for the court to use another valuation date (e.g., the date of separation, the date of petition). It remains to be seen whether the Hong Kong courts (or the UK courts) will entertain a departure from the date of trial. If another valuation date is sought, it may be worthwhile to explore entering into an agreement with the other party, mutually agreeing on another valuation date. There are a few cases outside of Hong Kong where a different date of valuation has been adopted, but these are rare anomalies where the court concerned opted to do so for exceptional reasons.

What are some potential issues that individuals could come across when dealing with Cryptocurrency in a divorce? 

Three readily identifiable issues come to mind:

Disclosure: (1) As mentioned, a duty of full and frank disclosure applies. In Hong Kong, there are rules in place dictating the extent of disclosure in divorce proceedings. One party may need to seek additional disclosure to properly assess the other party’s financial situation. If the other party does not agree to provide the information sought, an application for specific discovery may need to be made.

(2) Crypto-assets are inherently volatile and known to potentially fluctuate enormously within short periods of time. While the party who does not hold the assets may be concerned with keeping updated on such developments as frequently as possible, the other party’s ongoing duty of disclosure must be balanced against imposing what may be considered an onerous or unfair burden to provide disproportionate levels of disclosure.

New territory: Crypto-assets are relatively new, can be complex, and are not necessarily universally understood as yet. How they are dealt with in the family law sphere is very much an evolving area. As such the court may likely require the assistance of an expert to provide information on the issue to fairly determine the case. Similarly, a party involved in a complex case may benefit from the advice and assistance of a forensic accountant (although costs may be an issue). This could be particularly key in instances where one party is attempting to hide assets as a forensic accountant familiar with crypto-assets could identify gaps in disclosure and potentially quantify sums of money not properly accounted for.

Arguments on risk/volatility:  It is not uncommon for one party to argue that the other party’s unwise and/or speculative investment justifies an “add-back” to the matrimonial pot of the sum that has been spent. The court does have the discretion and power to order the adding back of certain sums, but this is contingent on it being established that a party’s dissipation of assets was wanton and/or reckless spending of a very flagrant and exceptional standard. For example, gambling and drug and alcohol misuse have been held to constitute “reckless and wanton spending” justifying an add-back order. Unwise, risky and/or speculative business decisions, however, have not: see, M v M (Third party subpoena: financial conduct [2006] EWHC 2250 (Fam)).

There seems to be a sense of belief that Cryptocurrency can be hidden in a divorce. First of all, how difficult/easy is it to trace Cryptocurrency?  Is it possible for individuals to “hide” these assets and if they do, what could be potential consequences in a divorce?

As has been expressed above, any belief that one can hide assets of any nature in a divorce, including crytpo-assets, is misguided and not to be encouraged. It will not be entertained by the court. Deliberate non-disclosure of an asset is unlikely to be successful and will attract serious consequences, which have been set out above already.

Cryptographic or cryptography means encrypted in code. Inherent in the use of cryptocurrency is the concealment of identity; both the public and private end utilize encoded data. Cryptocurrencies are not an entirely anonymous system, however.  While it’s not possible to identify someone from a cryptocurrency address alone, depositories or third party cryptofinanciers (Bitfinex, Coinbase, etc) are often involved. This is important as those companies are required to maintain KYC (“know your client”) documents about their account holders (passport/identification information, etc). This is therefore a useful route to information about the owner of the wallet, as an example.

On the ability to trace, as with many things, this is a question of degree dependent upon the particular facts of the case and the assets involved. There are multiple cases concerning crypto-assets in Hong Kong and other jurisdictions where injunctions have been obtained together with discovery orders enabling the successful tracing of assets.

Cryptocurrencies present an exciting opportunity for new developments in law to address a changing financial landscape; it will be interesting to observe how the Hong Kong Family Court responds.

About Barrister Madeleine Booth: 

Recognised as a “Rising Star” in the area of Family and Private Law by the Legal 500 (2022) and as a leading junior barrister in “Family & Divorce Law” by Doyle’s Guide (2022) Madeleine’s practice is primarily civil litigation based, with a particular specialisation in family/matrimonial law.

“An exceptional barrister. Intelligent, articulate and incisive. She reads the court well and is nimble on her feet.” – The Legal 500, Asia Pacific Hong Kong Bar (2022).

Madeleine has broad experience in the Family Court and High Court regarding all manner of contested financial and child related matters, including financial dispute resolution hearings, children dispute resolution hearings, maintenance pending suit and litigation funding applications, ancillary relief trials and preliminary issue trials (trusts, properties, companies etc.), custody, care and control disputes, relocation applications, and applications under the Guardianship of Minors Ordinance). Madeleine also has experience in urgent ex parte applications (s 17 MPPO, DVO) obtaining various reliefs, and probate and inheritance (including applications under the Inheritance (Provision for Family and Dependents) Ordinance) cases.

In addition to family law, Madeleine has experience in civil litigation matters, including actions in tort and trust related cases. Madeleine’s experience extends beyond advocacy to include providing written opinions, legal advice, and participating in mediation.

Spotlight Profile – Dr. Wing Kit Choi, Psychiatrist

In this spotlight profile, we are speaking to Dr. Wing Kit Choi, a forensic psychiatrist based in Hong Kong at Alpha Clinic. Dr. Choi is a former deputy chief of service in forensic psychiatry at Castle Peak Hospital and is currently working as a private psychiatrist at Alpha Clinic and is also an honorary clinical associate professor at The University of Hong Kong.

Dr. Choi, thank you for taking the time to speak with us today.

Can you tell us a little bit about your background and training?

I am a specialist in psychiatry. I graduated from Hong Kong University (“HKU”), and also have a Master’s Degree in Criminology. Thereafter, I obtained my membership at The Royal College of Psychiatrists and became a fellow of The Hong Kong College of Psychiatrists and specialist in psychiatry in 2006. Throughout my career, I have received intensive local and overseas training in forensic psychiatry.

Apart from practicing as a private psychiatrist at the Alpha Clinic in Hong Kong, I also teach medical students at HKU and The Chinese University of Hong Kong (“CUHK”) as an Honorary Clinical Associate Professor. I am also the Subspecialty Spokesperson in Forensic Psychiatry at the Hong Kong College of Psychiatrists and was the Consultant Psychiatrist and Deputy Chief of Service at the Department of Forensic Psychiatry at Castle Peak Hospital.

I am approved by the Hong Kong Hospital Authority for the purpose of Section 2(2) of the Mental Health Ordinance (Cap. 136) (“MHO”) as having special experience in the diagnosis or treatment of mental disorders or having special experience in the assessment or determination of mental handicaps. My clinical practice involves psychiatric risk assessment, management of mentally-disordered offenders, conducting psychiatric assessment and writing psychiatric reports for medicolegal purposes. I have been repeatedly appointed as a psychiatric expert witness in the High Court and have prepared psychiatric reports to different levels of Courts and law enforcement agencies. Other than criminal cases, I also provide medical assessments and reports for civil matters and have experience of acting as an expert witness in matrimonial proceedings.

That is an impressive resume and it is such an honour to speak with you given your extensive experience.

We are in a very sensitive era and globally it is estimated that 1 in 7 adolescents are experiencing a mental disorder with many teens citing depression and anxiety as a key issue of struggle.  What have you been experiencing in your private practice with respect to adolescents in Hong Kong and the issues they are struggling with?

Adolescents in Hong Kong are facing a wide range of mental health issues, as Hong Kong is a fast-paced society, schools in Hong Kong are demanding, not only in terms of academics but also on all-rounded development for students.

Children and youths in Hong Kong tend to grow up with a busy lifestyle, with lots of extra-curricular activities on top of academic requirements. Many children and youths do not cope well and it becomes very stressful for them in terms of chaotic time management which results in anxiety, worrying about not meeting deadlines due to heavy workloads and not doing their best in terms of academic performance. Children and youths also experience stress which can come from parents and also competition with peers /siblings on academic results or other areas of achievements. This can result in depression. Some youths may find themselves not doing their best which makes them question his/her own ability.

Coinciding with the pandemic in recent years, and lots of disturbances to the school learning mode and curriculum, youth anxiety and depression have become more prominent. The number of changes and uncertainties make it difficult for children and youth to adapt. For example, the suspension of face-to-face teaching has narrowed youths’ social circle and it results in the feeling of loneliness and it affects his/her social development.

What are the consequences of failing to address adolescent mental health conditions?

There are many consequences. Children and youths may not know how to detect one’s own anxiety or depressive symptoms. Some individuals tend to cover up their problems. Parents, teachers, or peers may not easily notice his/her issues which then intensifies a child/youth’s mood problems. This also can then result in a deterioration of the relationship between parent and child. The worst case is that a child/youth becomes suicidal or exhibits self-harm behaviour.

What impact have you seen with adolescents in terms of divorce and the breakdown of the family unit?

Through my experience, I have seen many adolescents struggle due to divorce. Some of the impact which rises up to the surface include:

  • Anxiety and distress
  • Emotional turmoil which results in a deterioration of family relationships
  • Depression
  • Deterioration of academic performance
  • Behavior issues including impulsive behaviour, delinquency and conduct disorders
  • Rebellion including risky behaviour such as early sexual activity and substance abuse
  • Problems that could extend into adulthood and result in substance abuse problems, mental health issues, negative impacts on romantic relationships, family and work.

What can parents do to help their children through divorce?

It is important for parents to keep a strong positive relationship with their children to assist them to cope with a divorce. It’s important not to argue in front of your children and try to avoid custody or visitation disputes altogether. It is also important to remind your children that they did not cause the divorce.

Parents can be open to children’s feelings, keep up on daily routines, and generally keep a close eye on any behavioral changes throughout the divorce process and beyond.

I also recommend parents to try to let their children know that those feelings are completely normal. For the most part, children simply need to understand that parents acknowledge their emotions about the situation.

If your children are angry, allow them to express that and validate those feelings. If they’re confused and full of questions, answer them in a neutral manner without letting any hostility about the divorce seep through. They may not want to verbalize their emotions.

It’s common for daily routines to become more irregular over the course of a divorce or separation. Regular pick-up and drop-off times for school, bedtimes, mealtimes, and other relevant routines will keep children in a range of familiarity, which helps to compensate for the level of change brought by the family divorce.

It’s also crucial to identify any signs of detachment or behavioral change in children. It lets parents know that intervention is necessary. Occasionally, parents can ask their children about their thoughts on the divorce, and reassuring them that they’re still loved and cared for all the same. If children stray from their usual behavior and don’t return to normal after six to eight weeks, it could be time to seek professional help through a child therapist.

In certain litigious divorces, children are asked to provide their input/testimony in divorce. Is this a good idea in your opinion? What negative or positive impact could this have on an adolescent and its potential impact on the relationship(s) between the parents?

It depends on the situation of each case. It may be beneficial that the children’s views or feelings can be taken into account. This is more effective if the child is of sufficient age and capacity. The child must also be able to form an intelligent opinion on the issue of custody.

Sometimes, children giving testimony in divorce might not be effective as a child might advocate for the more permissive parent, as opposed to the one who sets rules and limits.

Testimony in court may bring stress that a child might well avoid. They have to publicly and officially take sides in a divorce case which adds additional stress to a child already having to overcome.

Dr. Wing Kit Choi, PsychiatristAbout Dr. Wing Kit Choi, Forensic Psychiatrist:

Dr. Choi is a forensic psychiatrist at Alpha Clinic in Hong Kong. He is also an honorary associate professor at The University of Hong Kong. Forensic Psychiatry is a subspecialty of psychiatry in which scientific and clinical expertise is applied to legal issues in legal contexts.

Spotlight Profile – Caroline Langston, Global Executive Coach

In this spotlight profile, we are speaking with Caroline Langston, a global executive coach for high performers specializing in the banking, fintech, financial services, family office and law practices.

Caroline has been an executive coach for high performers for more than 12 years and assist individuals change and transition in their careers and lives for performance excellence and purpose.

In her role as a global executive coach, Caroline’s mission is to help high performers improve leadership, communication, focus, clarity and reduce stress.

Thank you for speaking with us today, Caroline.

Can you tell us a little bit about your background and training and how you became an executive coach?

I was an Executive Search Consultant, relocating very senior people into new jobs globally. When there are high stakes, such as relocating a global executive and their family into a new role, company, and country this requires staying close to them, executive coaching them and often their family into their new role and a new way of life. These moves can be very stressful for the spouses and children of the executives. I was coaching more and more often. I loved helping these individuals and their families, eventually taking on the role as an Executive Coach full time. I finally started my own business in 2019.

I did my neuro linguistic programming master practitioner and coaching qualifications 12 years ago, and over the last 3 years completed my International Coaching Federation (ICF) qualifications. I have a Certificate in Coaching Mastery, am accredited by the ICF as a Professional Certified Coach and am also a certified Team Coach.

As a global executive coach, can you explain to readers what your job entails and your role in these individual’s lives?

People come to me to make changes in their lives and careers. This might be career acceleration or change via performance coaching. It may be creating a more harmonious work/ life balance, by managing these elements more effectively. It may be to reach a personal development goal they have not managed to achieve themselves. We may work on emotional management as well throughout this. I am their unbiased partner to help them make this change and keep them on track to hit their goal.

This is carried out by a range of conversations, exercises and work which my clients will do in between sessions, such as exploration of possibilities as well as practicing and implementing new strategies to move towards their desired goal/s. They come back to me with the work they have been done, we assess this together and they decide what works, what does not and how to move forward towards their goal effectively.

One aspect of your role as a global executive coach is “divorce prevention.” Can you explain this further and how you assist clients in preventing divorce?

Globally there is higher and higher pressure to perform. Especially in Hong Kong where we have many senior executives working very long hours, there is pressure on the spouse as well as the other family members. I help people who are trying to resolve relationship disparity and imbalances. Coaching them through time and emotional management, helping them with communication and often looking at where they can borrow time to spend with their families. This has been life-changing for many of my clients.

Just to clarify, as an executive coach you are not teaching clients but rather talking to them as an unbiased partner?

This is correct. I am here to ask them those difficult questions they may not want to ask themselves. As I do not have that emotional connection like friends and colleagues, I am not afraid to dive into areas which others may not want to because of those personal relationships. I am completely unbiased and this helps.

You mention “reflective inquiry” – What do you mean by that?

Reflective enquiry is repeating back what they have said. I reflect verbally their words and ask them if this is what they really mean? For example, they may say “I just never seem to get a break to be with my family”. I may reflect back “I hear you are saying you NEVER get a break to be with your family. Is that really true?”. This may help them think about when they DO get a break albeit very short, what is happening during that time and how we can either create more time like that or maximise the time they have. It also helps them hear how hard they are working and how they really need to make that change and take that break.

What’s the difference between executive coach work and therapy?

A therapist may offer solutions to problems and actions to take. I will brainstorm with my client, but they are the ones who choose the solution or action they want to take. A therapist may also decide to talk about the problem in more depth, I move towards goals and outcomes. I help my clients clearly see the action they may need to take to move forward to their desired outcome.

Based on your experience it would then seem to appear that there can be much said about divorce prevention and working hard to make necessary adjustments. Is that correct?

Absolutely. The key is addressing any issue as soon as it arises. Ensuring there is great communication and finding out what the best possible outcome is for the whole family. Sometimes it just takes a conversation with your spouse or a slight change in time management. Sometimes it is setting that clear intention to make the change and then acting on it. This can be key to saving a relationship or a marriage.

About Caroline Langston, Global Executive Coach:

Caroline is a certified and accredited Global Executive Coach and has over 12 years’ experience of working with high performing individuals. Caroline specializes in the financial services, banking, fintech, family office and law practices.

Caroline’s mission as a global executive coach is to improve leadership, communication, focus, clarity and reduce stress and ultimately assist individuals to find purpose in their career/life.

Caroline uses a combination of traditional coaching, mindfulness-based coaching and neurolinguistic programming practices.

Caroline is based in Hong Kong but originally hails from the United Kingdom.

Spotlight Profile – Dr. Bryan Ho, Psychologist

In this spotlight profile, we are speaking to Dr. Bryan Ho, a Chartered Psychologist. Dr. Ho was formally trained in Hong Kong and California, USA and received specialization degrees in Clinical Psychology and Trauma Psychology in Hong Kong and US. Dr. Ho’s practice is based in Hong Kong but he has psychologist qualifications both in the United Kingdom and Hong Kong.

In addition to his clinical practice, Dr. Ho has extensive experience in the areas of mental health. Dr. Ho has been a teaching faculty of psychiatric nursing at The Hong Kong Polytechnic University since 2012 and is now the Deputy Program Leader of the Bachelor of Mental Health Nursing at The Hong Kong Polytechnic University.

Dr. Ho, thank you for taking the time to speak with us today.

Can you tell us a little bit about your background and training?

The reason I started my career in nursing as an undergraduate degree was due to a family issue. Nursing allowed me to lead a good quality of life at that time as it was during the 1997 financial Tsunami that Hong Kong had faced and it was revealed that there was need for nurses in the workforce.

After I graduated, I worked as a nurse for many years but then decided to pursue a second career in psychology as I had always had such a strong interest in psychology since I was very young. Psychology is an interesting line of work because it allows you to study the mind of a person and to understand.

You received a specialization training in Trauma Psychology. Can you tell us more about this and how it has expanded into your practice in Hong Kong?

Scientific research provides a clear explanation on how trauma psychology helps in healing a person who experiences trauma and loss. For example, Eye Movement Desensitization and Reprocessing (EDMR) therapy is a form of evidence based intervention specifically developed for reducing the power of traumatic memories.

When it comes to my professional practice, I will tailor approaches differently depending on my patient’s physical and mental condition and will find ways that could maximize the benefits towards them.

I undergo a comprehensive clinical interview with the client and get him/her to reacquaint themselves with the trauma and may revisit it to help the patient understand the trauma. This could help to alleviate their stress.

Despite from my training in cognitive therapy and psychodynamic therapy, I also enjoy helping my client from the perspective of bio-psychology. For example, taking a deep breath. An autonomic nervous system helps to regulate certain body processes, including rate of breathing and heart rate as such, this could help to relieve the problem and your mental health through regulating your emotions effectively.

If you are experiencing a complicated relationship or have broken up with your partner, stay in the “here and now” and talk to someone, whether it be a friend or a professional and before it gets worse.

Many individuals go through divorce and unfortunately, for some, this could be considered a life trauma as many describe divorce as going through a family death. How do you counsel those struggling with issues related to divorce?

I will try to engage in conversation and develop a therapeutic relationship with the clients, and of course to develop trust. This first allows me to understand the situation and to facilitate the process of therapeutic changes.

In case an individual is having a hard time during the divorce process, and they are desperately in need of some resources to support themselves, I would highly recommend them to seek assistance from a professional. These professional helpers include but are not limited to psychologists, psychiatrists, counselors, social workers, psychiatric nurses, and pastors (with relevant training). In the event that they are less comfortable in speaking to a professional and prefer to do some online research, I would suggest that they only look for those reliable resources prepared by reputable institutions, such as The National Health Service, The Family Planning Association of Hong Kong or materials from educational institutions.

An important area of discord between parents is how to raise the children and co-parent after a divorce. What key issues do you see between parents during such struggles?

Divorcing parents can be irrational because of the emotions wrapped up in a divorce. It is wrong to use children as a weapon in divorce or separation and it is important for parents to understand that this harms the child in immense ways.

Children can sense a parent’s emotions and detect tension in the people who care for them, even as young as toddlers. If a parent cannot control their emotions and it erupts into an argument in front of a child, it is suggested to take a deep breath and calm down yourself, before carrying on the discussion. We should have the ability to manage our emotions, but we just forget to use these abilities temporarily. This means that we are able to undergo a discussion in a peaceful manner when we resume our control over our emotions.

What advice do you have for parents who are trying to co-parent amidst a divorce? What do you recommend for parents so that they can successfully navigate healthy parenting post-divorce?

Parents must try to understand each other’s limitation and strengths. They should also be rational and avoid using their children as weapons in a divorce. And parents should also remember that it’s okay to reach out to professionals when in need and that includes mediators, psychologists, psychiatrists, social workers, psychiatric nurses, counselors, and religious professionals.

About Dr. Bryan Ho, Chartered Psychologist:

Bryan HoDr. Ho is a Chartered Psychologist and focuses on health care.

Dr. Ho received an undergraduate degree in psychiatric nursing from The Hong Kong Polytechnic University and received postgraduate degrees in Trauma Psychology and Clinical Psychology in Hong Kong and US.

Apart from his role as a chartered psychologist, Dr. Ho has extensive experience in teaching psychiatric nursing at The Hong Kong Polytechnic University since 2012. Dr. Ho is now the Deputy Program Leader of the Bachelors of Mental Health Nursing at The Hong Kong Polytechnic University.