Category Archives: financial resources

Child Maintenance And Access If One Parent Leaves Hong Kong

Hong Kong is a cosmopolitan city with people from all over the world. Over the years, many expats have chosen to settle down and start a family in the city. When relationships breakdown and parents separate, this can have a huge impact on the family dynamic. This is even more so when one parent chooses to relocate overseas either to return to his/her home country, for work opportunities or because of a new partner.

What happens to access arrangements when a parent relocates?

Upon divorce, orders will be made by the Hong Kong Court regarding child maintenance and access arrangements. Generally, the parent who does not have day-to-day care of the child (the ‘paying parent’) will have to pay child maintenance to the parent who does (the ‘receiving parent’). When separated parents continue to live in the same city, access with the child can be arranged fairly easily. However, this will be complicated if the paying parent relocates while the receiving parent and child continue to remain in Hong Kong.

Once the paying parent moves to a different country, it will be more difficult for the paying parent to maintain contact with the child and the paying parent’s access with the child will inevitably decrease. Flying back on forth between countries frequently to see the child may not be economically viable especially if the paying parent has moved very far such as to the United Kingdom or Canada. While social media and online modes of communication such as WhatsApp and Skype have made it easier for families to stay connected, the time difference may make it difficult to arrange a mutually agreeable time that fits into the child’s school schedule especially as the child grows older and has more extracurricular activities. Ideally, both parents should be able to agree to the relocation and access arrangements so they can be adjusted to accommodate the move.

Enforcement of child maintenance if the paying parent relocates and stops paying maintenance

The paying parent still has a duty to maintain their child regardless of how much time they get to spend with the child or what country they live in. However, if the paying parent stops paying maintenance after relocating, the receiving parent may encounter very real difficulties in trying to enforce an existing child maintenance order. The receiving parent will have to go to the Hong Kong Court to try to take enforcement action. The enforcement of Hong Kong maintenance orders overseas is governed by the Maintenance Orders (Reciprocal Enforcement) Ordinance. Whether a child maintenance order made in Hong Kong can be enforced overseas will depend on the country which the paying parent has moved to and whether it is a reciprocating country. Currently, only 15 countries and places are designated as reciprocating countries:-

United Kingdom
Bermuda
Manitoba, Canada
Saskatchewan, Canada
Ontario, Canada
Isle of Man
Australia
British Columbia, Canada
Brunei
Malaysia
New Zealand
Singapore
Solomon Islands
South Africa
Sri Lanka

If the paying parent has moved to any of the above reciprocating countries, the receiving parent can apply in the Hong Kong Family Court for the child maintenance order to be sent to that country for enforcement.

Parents cannot enforce an arrangement made informally between them, it must be made an order of the court first. Moreover, the receiving parent will need to provide the overseas address at which the paying parent can be found. Enforcement can be further complicated if the paying parent moves to another country with the intention to avoid having to pay child maintenance and the receiving parent does not know where the paying parent is living.

Enforcement of maintenance orders overseas can be complicated. If you are seeking to enforce a maintenance order overseas, it is important to seek legal advice from a family lawyer.

Unmarried Parents and Child Maintenance

An increasing number of individuals in Hong Kong are choosing not to get married. For unmarried couples who have children, many are unaware of their legal rights for financial support should the unmarried couple split. Indeed, the financial obligations of unmarried parents after separation are not as clear cut and certainly not the same as married couples.

When unmarried couples separate, they are not entitled to claim for maintenance for themselves from their ex-partner. An unmarried parent may find him or herself without accommodation or adequate funds to maintain the same standard of living he or she enjoyed while together. The only form of financial support an unmarried parent can obtain is child maintenance under the Guardianship of Minors Ordinance.

What financial support can an unmarried parent claim for the benefit of the child?

It is always desirable for unmarried parents to try and reach an agreement on how to support their child upon separation. However, if an agreement cannot be reached, an unmarried parent may apply to the court for the following forms of financial support for the benefit of the child:-

Lump sum payment for the immediate and non-recurring needs of the child or for any liabilities or expenses previously incurred in relation to the child
This can cover the one-off needs of the child within the immediate future such as medical treatment, school uniforms and equipment.
Maintenance payments
Secured maintenance payments
Transfer of property
Settlement of property

In determining the amount to be paid for the benefit of the child, the court will consider what is reasonable, bearing in mind the paying parent’s financial situation. The Court will not force the paying parent to pay an amount he/she cannot afford. Moreover, when deciding what orders should be made, the court will have to keep in mind what is in best interests of the child.

How is child maintenance calculated for unmarried parents?

An unmarried parent can claim child maintenance to meet the reasonable needs of the child until the child reaches 18 or finishes full-time education. The child maintenance can cover expenses for the child’s normal activities and necessities such as food, clothes, medical/dental expenses, school fees, tuition/extracurricular activities, school buses and entertainment/presents. It can also cover the costs of hiring a domestic helper. The paying parent is usually required to pay the education expenses including tuition fees and school bus fees directly.

Crucially, the unmarried parent can seek child maintenance to cover rental which more often than not is the largest expense an unmarried parent will incur particularly in Hong Kong where property prices can reach unaffordable levels. However, all of this has to be within the means of the paying parent taking into account how much he/she earns per month and his/her personal monthly expenses.

In determining what amount of child maintenance is reasonable, the court will also consider the standard of living of the paying parent such as the size of his/her flat, whether he/she was a member of any clubs and how often he/she travelled. For instance, if the paying parent enjoys a comfortable standard of living, eating at good restaurants and going on frequent holidays overseas, the court will not expect the child to live on a shoestring budget.

An unmarried parent may also claim a ‘carer’s allowance’ to support him or herself in raising the child. This ‘carer’s allowance’ will cover the unmarried parent’s basic needs when looking after the child, in particular, when it limits his/her ability to work, and would increase the total amount of child maintenance payable to him/her. It can cover the expenses incurred to maintain the home such as utilities and other general household expenses. However, this allowance is usually a lot less than the maintenance a married parent would receive and the Court will take into account whether the unmarried parent can start working part-time or gradually return to full time work as the child grows older.

For many, the rights of an unmarried parent for financial support of children are not well understood. If you are considering making a claim for child maintenance as an unmarried parent it is important to seek legal advice from a family law professional.

Relationship Generated Disadvantage

In this article, we will look at the principle which is referred to as “relationship generated disadvantage.”

So what is relationship generated disadvantage in divorce? In divorce, a spouse may request compensation for relationship generated disadvantage and it is most often applied when one party has given up a lucrative career to care for the children of the family. As seen in Miller v Miler; McFarlane v McFarlane [2006] UKHL 24, this concept recognizes that one party, usually a wife, may have seriously damaged his/her ability to earn money for the sake of the family. This is even if the party’s future needs have been met generously.

It should be emphasized that this principle has only been seen in exceptional circumstances so before you believe you can receive such compensation upon divorce, it is important you read through this and most importantly, speak with your solicitor so he/she can advise you properly.

Now that we have clarified the meaning of a “relationship generated disadvantage” let’s talk about a recent UK ruling whereby Mr. Justice Moor stated that a couple who had been married for approximately 10 years and had two children together should split their assets but then added that the wife, a graduate lawyer from Cambridge University who had sacrificed her career to raise the parties’ children should be awarded an additional £400,000 as compensation. It is important to note that this additional £400,000 award was on top of an equal split of the matrimonial pool of approximately £10,000,000.

In his ruling the Judge reasoned that there was a relationship generated disadvantage because the husband, also a lawyer, had enjoyed a “stellar” career and the husband’s career took precedence whilst the wife remained at home as the primary carer of the children.

According to reports from the UK, the couple met in September 1999 when the husband was an associate solicitor and the wife was a trainee. After the wife qualified and made an associate in March 2001, the two individuals became a couple and shortly thereafter the husband became an equity partner at a law firm. The wife worked as a solicitor and in 2006 was promoted to be a managing associate and later moved to a bank to become an in-house lawyer in 2007. After the couple married in 2008, they moved into a large home valued over £5.8 million. Like many couples with children, the pair decided that she would take a step back from her career to raise the children whilst her husband continued to advance in his law career.

According to the reports, the wife returned to work in a part-time non-legal role after her 1^st maternity leave but then was made redundant in December 2016 and has not worked since then.

In awarding the wife £400,000 in a relationship generated disadvantage compensation award, Judge Moor calculated this based upon the husband’s future working life of 4 more years at his firm (before an encouraged retirement after 20 years of practice) and that wife had earned approximately £100,000 a year both at the firm and the bank.

Following this ruling, the wife’s UK lawyer provided a comment to the UK press stating that they were delighted at the outcome for their client and emphasized that their client had sacrificed a potentially lucrative career to raise a family.

It is important to note the UK Judge’s statement in his ruling where he emphasized that “[I] accept that it is unusual to find significant relationship-generated disadvantage that may lead to a claim for compensation but I am clear that this is one such case.” Thus, it is not the usual circumstance where a Family Court will find that a spouse shall receive such compensation.

When a Family Court looks to the distribution of finances, the Family Court will look at factors outlined in Cap 192 Matrimonial Proceedings and Property Ordinance section 7. These factors include:

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
Financial needs obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
Standard of living enjoyed by the family before the breakdown of the marriage
Age of each party to the marriage and the duration of the marriage
Any physical or mental disability of either of the parties to the marriage
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

However, this most recent ruling by the UK courts may be something to discuss with your solicitor if you feel you have suffered a relationship generated disadvantage, as it may be an argument to present to the Family Court in your matter and it is apparent the Family Court may consider such compensation to you.

The Fight for the Family Home in Divorce

A major bone of contention among divorcing couples is the division of the family home. This is understandable given that couples invest considerable time, effort and money in creating a dwelling place and for the majority of couples, the family home is a major asset that a couple acquires during the marriage. Having a roof over your head and over the heads of children is of paramount importance to a court when making decisions related to the matrimonial home. It is for this reason that individuals must have a realistic view of what can happen to this asset during a divorce. One potential change may be the loss of the family home. A party to a divorce may be required to “downgrade” to a smaller place or may even be required to rent instead of own a home, which for some is a difficult change of circumstances.

So, with this in mind, what happens to a family home in a divorce and what options are available? Here are a few things to consider when discussing the family home in a divorce:

Sell the Family Home:

One option that divorcing couples opt for is to sell the family home. Proceeds from the sale of the home are then split accordingly between you and your ex-spouse, the split percentage being agreed upon by you and your ex-spouse or by court order. Prior to the agreement or order for the sale of the family home, you and your ex-spouse may be required to hire an expert valuer to value the property in question, especially in circumstances where you and your ex-spouse cannot agree to the listing price or the percentage split of the sales proceeds of the home.

In Hong Kong, the Family Court has the authority to issue what is called a “Mesher order” which basically is an order to sell the family home but at a postponed time until a named event occurs, such as when a minor child graduates from high school or university. The Family Court will look at the facts surrounding the family before making any such orders but the goal in postponing a sale is to consider the accommodation of one spouse and the children.

Another power of the Family Court is to issue what is called a “Martin order.” This is similar to a Mesher Order, except that under a Martin Order, one party is given an entitlement to occupy the family home for life or until remarriage.

In certain situations, if a transfer of property results in one party having a larger share of the matrimonial pool, the individual who receives the greater share may be required to compensate the other party a lump sum of the gain or the receiving party can hold a legal charge over the property until such time he/she can be later compensated.

It is important to bear in mind that if a Family Court makes an order for the sale of the family home, it can only be ordered after you are divorced (Decree Absolute).

Transfer of Property:

Although not common, the Family Court in Hong Kong also has the ability to order a transfer of the family home to the other spouse or a child of the family.

The Family Court in Hong Kong acknowledges that it is generally desirable for the primary caring parent to remain in the family home, on the basis that the children remain in a home they are used to and close to their school, and the Family Court will do what they can to maintain that status quo. This however does not mean the Family Court will not take into account cheaper accommodation if this means capital can be released from the family home and the family can move into similar and satisfactory accommodation.

One thing to keep in mind in a transfer of property situation, is whether there is a mortgage attached to the property as this could affect a transfer of property. What will become a factor is whether the receiving party can maintain the mortgage from either his/her own resources or from maintenance received by the other party.

Buy-Out:

Another option to consider, if you have the ability and the funds, is to buy-out your ex-spouse’s interest in the family home. If you choose this option, talk to your solicitor and discuss what provisions are necessary in an agreement/order to secure your interest in this property.

Stay in the Home Pending Sale/Transfer:

Some divorcing couples may consider staying in the family home and live together pending the finalization of the divorce. While this might make sense for some families, it could also create an environment of stress and tension, not only for the divorcing couple, but also for the children. Before choosing this option, it is important to have a plan and discuss this with your ex-spouse so boundaries are established and communication tools are in place should conflict occur. Having a plan will eliminate any tension that may occur when living in close quarters.

Tenancies:

In a city like Hong Kong, it is not unusual for couples not to own a home, but instead become renters due to the high housing costs. In a divorce, it is not uncommon for one party to remain in the rental unit until such time the lease has expired, subject of course to whether the parties have the ability to pay the rent.

Adjustments must be made at times and this relates to rental units as well. In certain cases, there may be insufficient income to pay for two rents each month. Such adjustments may include a “downgrade” to a smaller, less expensive rental unit or even adjust the standard of living.

Discuss these options with your ex-spouse, along with your solicitor. Your solicitor can provide you with more detail on what options are best suited for you and your unique circumstances. While it may be uncomfortable and upsetting to divide an important asset such as the family home, this may also be an opportunity to start fresh and create a new home for you and your family.

Child Maintenance And Access If One Parent Leaves Hong Kong

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