Category Archives: Form E

Form E Disclosures

When you file for divorce in Hong Kong and proceed through the court system, there are a number of steps and forms you need to fill out as part of your divorce. One of the key disclosure documents you must fill out is a Form E. A Form E is a disclosure document which outlines your assets and liabilities thus providing your ex-spouse and the court with full transparency of your financial status with supporting financial documents. In the Form E, you will need to fill out all the details of your financial status including your income, property, assets and liabilities. This document is signed under oath so it must be a true statement as a false statement may then be a contempt of court. In the event you and your spouse come to an agreement over the finances without court intervention, you both may be spared from exchanging a Form E if it is mutually agreed to waive the exchange of such disclosures. If however, you proceed through the court system and litigate your divorce, a Form E will be mandatory and you will have to exchange this disclosure document with your ex-spouse.

Let’s go through a Form E so you have a better idea of what is asked in the document and what information you must provide:

Part 1: General Information: In Part 1 of the Form E, you will need to provide general information such as your full name, birthdate, date of marriage and employment information. In this section, you will also need to provide your date of separation, whether you intend to remarry and information about your children such as their birthdates and whom the children currently live with. It is in this section that you can provide the current educational arrangements for the children and what you propose for future arrangements and if there are any maintenance arrangements or orders for maintenance between you and your spouse.

Part 2: Assets and Liabilities: In Part 2 of the Form E, you will need to provide information about your place of residence and specify whether you rent or own the property. You will need to provide information on whether you currently live with others including your new partner and children, whatever is applicable. If you own property in Hong Kong or elsewhere outside of the jurisdiction, you must provide this information including any details about the property such as mortgage/legal charges against the property, your estimate of the current property value and title information. As part of your assets, you will also need to provide bank details in Hong Kong and in any other jurisdiction, investment accounts, shareholding/beneficial interest in companies, directorships or any other businesses and also any insurance policies and pensions/MPF which you may have an interest in. Valuable personal items are also part of your asset pool so you will need to detail these items such as cars, boats, art and jewelry. It is important to note that if you hold cryptocurrency, this is also disclosable and you must provide information/supporting documentation about any and all crypto accounts. In addition to assets, you will also need to detail liabilities in detail including loans, revolving credit and credit card charges.

Part 3: Income: In Part 3 of the Form E, you will need to provide details of your income including base salary, bonuses, commissions and any allowances provided by your work. If you receive income from any other source, this is where you will need to provide the information and supporting information.

Part 4: Current Monthly Expenses: Part 4 of the Form E is where you will need to provide a complete breakdown of your monthly expenses. In this section, the Form E guides you through each area of expenses and lists out different types of general expenses that you will likely have such as meals at home, transport, insurance premiums and other expenses related to the children such as tuition, holidays and clothing/shoes. In this section, you are also asked to provide a list of anticipated future expenses and this is a good opportunity to list out what changes are in store whether there will be an increase or decrease in expenses.

Part 5: Other Information: In Part 5 of the Form E, you will be given an opportunity to provide details as to whether there has been any significant changes to your assets during the last 36 months and this includes assets both in Hong Kong and elsewhere. This is where you will have an opportunity to explain any major changes that you have experienced with your income or loss of assets through special circumstances. You will also be given an opportunity to explain whether the conduct of either party should be taken into consideration. It should be noted that this is only taken into consideration in exceptional circumstances however, the court does provide you an opportunity to provide such details in this section. Additionally, you can also explain the standard of living during the marriage enjoyed by yourself and the children and any other circumstances which could significantly affect the extent of financial provision that should be made by or for you and the children. In Part 5 of the Form E, this is your opportunity to provide as much narrative detail as possible as to the financial circumstances of your family and what you expect/anticipate is needed in order to maintain the status quo.

Part 6: Orders Sought: In Part 6 of the Form E, you will be able to list out what orders you seek from the court. If you have hired a solicitor, this is the time to discuss with your solicitor your expectations as to what it is you seek from the divorce.

Part 7: Schedule of Attachments: Finally in Part 7 of the Form E, you will be provided with a checklist of all the supporting documents you must provide with your Form E. It is important you go through each item so that all required supporting documentation are provided as attachments.

Filling out a Form E will be daunting especially if you have representing yourself in a divorce. It is recommended that you seek the assistance of a solicitor to help you fill out this financial disclosure as this will be a key document in your divorce and will be referred to many times throughout the court process. You should be reminded that you will need to sign the Form E under oath. Thus, the document must be truthful and you must provide full disclosure. Before you submit a Form E, be sure to speak with a solicitor so you can be sure that all information has been correctly listed and that you are not missing anything of great importance.

Clean Break In Divorce

When you divorce in Hong Kong, the term “clean break” may be floated around when discussing ancillary relief or financial provision (or more commonly known as “maintenance” in USA jurisdictions). So what is a clean break in a divorce? Clean Break simply refers to the distribution of property and/or payment of a lump sum to settle all financial matters, allowing the parties to move forward with a fresh start and without having to be reminded of the breakdown of the marriage by being tied to ongoing payments.

Under section 7 of the Matrimonial Proceedings and Property Ordinance (Cap. 192), the courts in Hong Kong are under a duty “to have regard to the conduct of the parties and all the circumstances of the case” including the following matters:

The income, earning capacity, property and other financial resources…;
The financial needs, obligations and responsibilities…of the parties…;
The standard of living enjoyed by the family before the breakdown of the marriage;
The 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…’
…the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution…of the marriage, that party will lose the chance of acquiring.

In Hong Kong, the courts are not under any duty to consider whether a clean break is appropriate or not but it may be considered. Generally speaking, a clean break is only an option when there is sufficient monies in a matrimonial pot which would allow the parties to move forward after the payment of one lump sum payment/distribution of property which would settle all financial claims.

In one such case, C v F [2008] HKFLR 1, the parties had a long-term marriage which began in 1965 and a Petition for divorce was filed by the Husband in February 2000. Throughout the marriage, the Husband’s business had grown to the extent that he valued his assets at approximately HK$36 million with an income of approximately HK$800,000 per month. The Husband alleged he had considerable debts as he was heavily indebted to the company and to his business partner. The court ordered a transfer of the former matrimonial home, mortgage free, to the wife and a clean break lump sum to her of HK$15 million.

In YN v NA [2014] HKFLR 517, the court stated that “in big money cases, where the matrimonial assets are sufficient for a clean break to be achieved, a wife with ordinary career prospects is likely to have been compensated by an equal division of the assets and consideration of how the wife’s career might have progressed is unnecessary and should be avoided.”

It should be noted that once a clean break is achieved, a party cannot come back to the court and make an application for maintenance. This in itself is the benefit and advantage with respect to a clean break: it allows the parties to move on with their lives, without being tied to each other by having to make monthly payments to one party and allows each party to live independently without any burdens of the past.

If you are going through a divorce, speak to your solicitor about a clean break and whether it’s the right option for you. If there is a possibility of self-sufficiency, a clean break should be considered an option. If you are concerned about an immediate clean break, discuss alternative options such as a deferred clean break or even consider nominal maintenance which would then allow you an open door to make an application for periodical payments in the future if need be, but at the same time lift the financial burden on the paying party at the current moment.

Spotlight Profile: Kyra Cornwall, Barrister, 1 Hare Court

In this Spotlight Profile, we are talking to Kyra Cornwall, Barrister at 1 Hare Court in London, England. Kyra specializes in high profile matrimonial matters and has extensive experience working on family law matters involving international jurisdictions including Cayman Islands, Singapore, France, Russia and Hong Kong.

Kyra, it is such a pleasure to speak with you today as I know you run a very busy practice in London, England as Barrister to many high-profile matrimonial clients. Kyra, this is your first spotlight profile here on Hong Kong Divorce, can you tell our readers more about yourself and the work that you do in the matrimonial arena in London?

Thank you so much for inviting me. It’s a pleasure to be involved!

I am a Barrister practising at 1 Hare Court, the leading matrimonial finance set in England and Wales. We are based in the heart of legal London, in the middle of the Temple, and specialise in matrimonial finance cases. In my ten years at the Bar, I have developed a practice involving lots of international families, both representing them directly in England and Wales, and offering English advice where proceedings are taking place abroad.

Your practice extends to international jurisdictions. Can you tell us the link that you have to matrimonial matters here in Hong Kong and your experience working on Hong Kong cases?

In 2017, I was awarded the Pegasus Scholarship by the Inns of Court which enabled me to spend that summer in Hong Kong working firstly at Withers then at Temple Chambers (with Richard Todd QC) and finally sitting in on cases at the Family Court with Her Honour Judge Melloy. The purpose of the scholarship is to enable lawyers to build their international awareness and forge links abroad. I had a particular interest in Hong Kong as my father’s family are from Hong Kong originally, and so had been looking for a way to develop international links on a professional basis as well as personally. That summer certainly gave me the ability to do both of those things.

Over the course of my stay, I was fortunate to meet a huge number of family law practitioners and was given a real insight into a legal system that is so similar to that in which I practise in the UK. Since returning to the UK, I have maintained a Hong Kong focus to my work from London, continuing to advise on cases which include connections to Hong Kong.

Have you noticed any changes or differences in your practice as a result of Covid-19 and the ongoing pandemic?

Absolutely. When the pandemic hit in London, many practitioners were still working from hard copy papers and almost all court hearings were in person. Suddenly the courts were closed and the legal world had to take a giant leap into the 21^st century. Within a matter of weeks, papers were being sent electronically and court hearings were taking place via video platform. Although there were some teething problems at the outset, in my view this has been transformative for life as a lawyer and at the Bar particularly.

Prior to the pandemic, a significant portion of my life was spent travelling to Court, waiting around at Court and travelling home again. Being able to operate remotely has virtually removed this, enabling people to work more efficiently and improving work life balance for practitioners.

Beyond this, for those cases involving parties based internationally or where a party has to travel a lot for work, the advent of video platform hearings has also made it much easier for them to be involved without disrupting their working lives so much.

That’s not to say that there have not been problems: there have been technical glitches along the way and there are difficulties when a party does not have more than one screen available to them, but for the most part I think that the pandemic has forced the legal profession to take positive steps that I hope will remain in place moving forward.

One of your areas of specialty is marital agreements. Hong Kong follows the United Kingdom landmark decision as seen in Radmacher v Granatino [2010] UKSC 42. Do you see the law evolving or changing in the future with respect to marital agreements in the UK?

Since the landmark decision in Radmacher, the courts have had to grapple with the questions of whether the parties had all the information material to their decision(s) to enter into a marital agreement, whether each party intended that the agreement should govern the financial consequences of the marriage ending and whether in all the circumstances this is fair.

Whilst the 2010 decision was followed by the Law Commission report in 2014 which suggested that marital agreements should in essence be upgraded to “Qualifying Nuptial Agreements” – i.e. enforceable contracts – in an attempt to provide more certainty to parties, this has not been made into law.

The current approach in the English courts is to focus on the circumstances in which agreements were reached and where they leave the parties in real terms financially, based on all the circumstances of the case. The recent reported decisions demonstrate a reluctance for the court to uphold agreements which are unfair or which do not meet needs objectively (see for example Brack v Brack [2018] EWCA Civ 2862, Ipekci v McConnell [2019] EWFC 19, IU v OS [2020] EWFC 98). The existence of an agreement does not automatically drive a case into needs territory only; it is one of the factors that weighs in the balance. Equally, a lack of legal advice does not automatically render an agreement unfair (see for example Versteegh v Versteegh [2018] EWCA Civ 1050).

That said, anecdotally I would say that a marital agreement that, for example, excludes sharing or fixes provision, does often have the impact of reducing a party’s claim where otherwise they might achieve more.

In Hong Kong, we see many expatriate couples with questions on whether to file in Hong Kong versus their home countries. What advice would you give to those individuals who have a connection to both Hong Kong and England & Wales in terms of jurisdiction in regards to their divorce?

If I were to meet with a new client who had the option of getting divorced in both Hong Kong and England & Wales, I would suggest that they take local advice in both jurisdictions before making a decision. Where the outcome is likely to be similar (as between Hong Kong and England & Wales), it is likely to come down to questions of practicality.

There is one change coming in England & Wales however that may benefit one or both parties. No fault divorce is due to be brought in from April 2022 (i.e. being able to get divorced without having to plead any allegations of blame). This will hopefully help to drive down tensions and therefore reduce some of the distress that divorce proceedings can bring.

There’s sometimes an ongoing belief that England is a better forum to divorce because of the higher potential in terms of ancillary relief (finances) and costs. Is this true or is this simply a misconception?

Both England & Wales and Hong Kong adopt bespoke outcomes on divorce, applying the concept of sharing, and the homemaker is seen to contribute just as much as the breadwinner. On that basis, assets in both jurisdictions are divided on a sharing basis if needs are met. Yes, the numbers are big, but England & Wales and Hong Kong are broadly similar in their approach to outcome.

To that extent, whilst London has the reputation of being generous on divorce, I think that is more due to the system that we apply (i.e. very similar to that of Hong Kong) as compared to the rest of the world. Broadly the same principles apply between England & Wales and Hong Kong when dividing assets and awarding maintenance, but other factors will play into needs-driven outcomes, such as the cost of living, parties’ abilities to work (e.g. visa issues), and access to the courts (Hong Kong grants jurisdiction where parties have a “substantial connection” at the date of petition/application, England & Wales operates a more stringent test).

This was such an interesting chat Kyra, thank you so much for your time. We look forward to having you on board again to discuss other interesting and key topics in the area of matrimonial law!

About Kyra:

Kyra is a barrister at 1 Hare Court in London, England. Kyra specializes in financial remedies, claims after foreign divorce, nuptial agreements and jurisdiction disputes. She is a member of the Family Law Barrister Association (FLBA) and the Inner Temple.

Kyra is described as a “a star in the marking, super clever, slick, elegant and professional” and “a smiling assassin” by both clients and peers.

Kyra’s practice is concentrated on high profile and international matrimonial cases, specifically issues dealing with forum disputes, cases with international trust and company structures, cases with complex issues of enforcement, issues of privilege and cases involving the enforcement of nuptial agreements. She regularly represents husbands and wives in high value and prominent matters, both led and alone in the High Court. She advises clients nationally and internationally, from jurisdictions including the Cayman Islands, Singapore and France, and has a particular interest in cases with links to Hong Kong, having undertaken the Pegasus Scholarship there in 2017.

Kyra is a contributing author of Rayden and Jackson on Divorce and Matrimonial Matters, a comprehensive and key guide for family law practitioners

For more information about Kyra and her practice, you can visit her Chambers’ website: https://www.1hc.com/people/kyra-cornwall/

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.

What Is Spousal Maintenance And How Is It Calculated?

Upon divorce, it is open to the Court to make various financial orders between the parties. This article addresses spousal maintenance, namely periodical payments upon divorce from one spouse to the other (either wife to husband, or husband to wife), and explains the general reasoning behind the determination of the amount of such award.

Periodical payments are the payment of regular maintenance from one spouse to the other, usually on a monthly basis. Periodical payments, if awarded, are usually ordered to last until the receiving spouse remarries, or for the duration of their life. Periodical payments may also be expressed to cease once the receiving party begins permanent cohabitation with another partner, although this would be in the form of an agreement reached by way of consent, it is not an order open for the Court to make.

As periodical payments can last for many years, they may be “index linked”, meaning that the maintenance will increase to reflect the effects of inflation over time.

When considering the appropriate figure for spousal maintenance, the Court will take into consideration the factors listed in section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192:

Therefore, the Court will consider the overall financial position of each party both at the time of proceedings and in the foreseeable future. Generally speaking, the lifestyle enjoyed by the parties during the course of the marriage is also a relevant reference point.

There is no one size fits all application of the above factors, and the Court’s determination of the appropriate amount of spousal maintenance, if any, is inherently subject to judicial evaluation of the circumstances of the case.

Also important to consider is the marital pool of assets for division. How this may be divided will also affect the amount of monthly maintenance that may be awarded.

Generally speaking, if the parties’ marriage has been of a medium to long duration (7 years or more), the Court is inclined to ensure that both parties walk away with financial parity, and neither is left in a financially detrimental position because of choices made throughout the marriage, or without the means to support themselves (for instance, if one spouse gave up their job to be the primary carer of the household and any children of the marriage).

If maintenance is awarded by the Court, it is always open to either party to apply to the Court to vary the amount of maintenance being paid. This may usually be due to a change in circumstances, e.g. one party being made redundant or a change in living circumstances.

In addition to periodical payments, a divorcing spouse may also seek/receive:

A lump sum payment; and/or
The transfer of property.

These other forms of financial maintenance are covered in separate articles here on hongkongdivorce.com

Form E Disclosures

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