Clean Break In Divorce

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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.

Parental Child Abduction In Divorce

Hong Kong is home to many expatriates and in a divorce, the issue of where a child will reside and grow up after a divorce is a distinct area of discussion among parents.  Whilst the majority of parents do come to an agreeable conclusion as to a child’s future place of residence, there are those few highly litigious cases when removal of a child from the jurisdiction of Hong Kong can occur without the permission of one parent and without leave of the court.

When this occurs, it comes within the realm of parental child abduction and the courts take this very seriously as many countries are members of the Hague Convention; a multilateral treaty developed by the Hague Conference on Private International Law and which provides an expeditious method to return a child internationally abducted by a parent from one member country to another.  Hong Kong is a member of the Hague Convention and The Child Abduction and Custody Ordinance (Cap. 512)(CACO) was enacted on 5th September 1997 to give effect to the Convention in Hong Kong.  It is important to note that the People’s Republic of China itself is not a contracting state to the Convention, but yet Macau, another Special Administrative Region is.  Thus, at this time there is no mechanism in place between Hong Kong, Macau and Mainland China for the return of abducted children to China.

In Hong Kong, removal occurs when a child who was previously in the country of his/her habitual residence is taken away to another country.  Retention occurs where a child who has previously been for a limited period of time outside the country of its habitual residence, is not returned on the expiry of that limited period.

In the event that you are concerned that your ex-spouse may unilaterally remove a child from the jurisdiction of Hong Kong, there are steps you can take to prevent this from occurring:

First and foremost, speak with a family law solicitor to discuss the filing of an application to restrict the removal of the child from Hong Kong.  This application should be made within the main divorce suit and can be made on an ex parte basis, which is essentially an emergency hearing.  If you are successful in obtaining an order restricting the removal of a child, be sure to speak to your solicitor about ensuring this order is adhered to including providing a copy of the removal restriction order to Hong Kong’s Immigration Department who will then have notice of this removal restriction should your ex-spouse attempt to leave Hong Kong with your child.

If you believe that your ex is plotting to remove your child from Hong Kong, be prepared and take preventative measures such as notifying your child’s teachers, babysitters and other caretakers of a possible threat.  Record any and all threats made by your ex-spouse and keep updated photos of your child.  Gather all documents related to your child such as passports and birth records and make sure you have copies of all documents and that the originals are safely stored in a secured place, accessible only by you. It may also be worthwhile to keep the lines of communication open between you and your ex-spouse, as it may help reduce any potential flight risks that you may be concerned about.

If your ex-spouse has already left Hong Kong with your child without your permission and/or without the leave of the court, it is imperative that you take immediate steps including the following:

  1. Contact Police: Contact local authorities to report parental child abduction. This is especially important if you are concerned about the safety and well-being of your child and/or you’re concerned that your ex-spouse will be going into hiding with your child.
  2. Seek Legal Counsel: As this is a situation which requires immediate attention, get into contact with a solicitor who can assist you with the return of your child.  You will want a solicitor who is well-versed in Hague Convention related matters and one who has previously successfully obtained the return of a child from a foreign jurisdiction.  Once a child is taken out of Hong Kong, there are many hurdles a parent must go through and if you are not properly armed with an outstanding legal team, it will be that much more difficult.  If you are concerned about the whereabouts and well-being of your child, it is very important to keep your solicitor apprised of all communications with your ex-spouse and your child.
  3. Make An Application: Once you have reached out to your solicitor, he/she may suggest that you file an application for the return of your child, but may also suggest that you make a request directly to the Secretary for Justice by filling in the necessary paperwork from the Department of Justice.
  4. Do Your Own Research About The Hague Convention Treaty: Read up on The Hague Convention Treaty and become familiar with it so that you are knowledgeable about what situation you are dealing with.  Not all countries are part of the Hague convention so it is vitally important to initially determine whether the country holding your child is a party to the treaty.  Do your research and do not be afraid to ask your attorney tough questions about how the Hague Convention Treaty will affect your case and the likelihood of success of having your child return to Hong Kong.

It is important to note that a court will have discretion to refuse the return of a child to Hong Kong.  The courts will consider factors such as consent, acquiescence in a removal, grave risk for a child’s return both to physical or psychological harm and/or the court may even consider a child’s maturity and his/her views about a return.

If you are the parent who wishes to remove your child from the jurisdiction of Hong Kong, the route is of course is to go through the legal system which includes negotiating and resolving issues related to child custody and access in your divorce case through mediation or having it resolved by a court order.  It is understandable however that many parents find this to be a frustrating process as the courts in Hong Kong are dealing with backlog of cases resulting in delay before there is an adjudication of matters and even then, one parent may not be happy with the result. It goes without saying however, that at no point should a parent take matters into their own hands and resort to parental abduction of a child which can have detrimental effects especially on a child.

If you wish to remove your child from the jurisdiction of Hong Kong, speak to your solicitor about filing an application to remove your child permanently from the jurisdiction.  If you and your ex can agree, a consent summons can be filed with the court.  Remember, an ill-thought-out plan with little research and planning will not convince a judge that it is in a child’s best interest to be removed from the jurisdiction of Hong Kong.

Spotlight Profile: Madeleine Booth, Barrister at Bernacchi Chambers

In this Spotlight Profile, we are talking to Madeleine Booth, Barrister at Bernacchi Chambers in Hong Kong.  Madeleine was recently named as one of the leading family and divorce law barristers in Hong Kong for 2021 by Doyles Guide.

Over the next year, we will touch base with Madeleine to discuss various hot topics in the area of matrimonial law and delve deeper into each subject and gain insight from her, as a barrister with expertise in the family law arena.

Madeleine, we spoke to you in September 2019 (pre-Covid) and you gave us a great rundown and overview of your work as a barrister in Hong Kong, pointing out the differences between a barrister and solicitor and the work that you do.  Can you tell us how you have been since pre-Covid days and whether you have seen any changes in the matrimonial sector since the Covid-19 pandemic? 

Since the last occasion, there’s certainly been a shift in the matrimonial sector as a consequence of the pandemic. To give just two key examples, there’s firstly been an unforeseeable, dramatic impact to various industries, which has had a knock-on effect on people’s income and perhaps even resulted in one or both spouses losing their job. Due to this, there’s been a marked increase in applications for variation of maintenance (monthly sums payable from one spouse to another, and/or for the benefit of the children of the family), as payments are no longer affordable or sustainable, either because of the loss of a job or a dramatic cut to an individual’s income.

Secondly, the situation caused by the pandemic has generally been a stressful, demanding time for families; both parents and children alike in many respects, and for a drawn out, extended period of time. Tensions and frustrations, exacerbated by limitations on travel and economic pressures, have led to fractures in marriages and co-parenting difficulties that have reportedly led to an increase in applications to the Family Court, whether it be for divorce, custody applications, relocation applications, or other relief. Unfortunately, the rise in cases coupled with the Family Court’s reduced operations for several months due to Covid-19 has resulted in an increase in delays for hearings. However, the judiciary is now working harder than ever to help clear the “backlog” caused.

What types of matrimonial disputes are you seeing more of with the changing social and economic climate in Hong Kong with the Covid-19 pandemic?  Do you anticipate any changes post-Covid?

As I alluded to earlier, there’s been an increase in variation of maintenance and interim maintenance applications, meaning requests by one spouse to (generally) reduce the amount of periodic payments made by them to the other spouse and/or paid for the benefit of the children of the family. This is usually due to a change in the applicant spouse’s earnings or sudden loss of work. Hand in hand with this is the rise in enforcement procedures as, when one party can no longer afford to pay, they begin defaulting on payments as they fall due. As a result, the other spouse may take out an application to enforce these arrears of payments, whether it be by an Order 45 Rule 6 application, judgment summons procedure, or seeking a prohibition order (which prevents a party from leaving Hong Kong until the sum owed is paid).

I would also say that there’s been a rise in relocation applications, where one spouse wishes to leave Hong Kong and relocate to another jurisdiction with the children of the family. Again, these cases are on the rise because of the global shift in socio-economic environments caused by the pandemic. A party may need to relocate because of the loss of work opportunities in Hong Kong and the better prospects of work in another country. If a party loses their job, Hong Kong may no longer be affordable and they may need to relocate back to their country of origin to seek familial support, or where costs of living are lower, or for education opportunities/better quality of life for their children.

It’s been predicted that Covid-19 is here to stay for the foreseeable future. It is uncertain at present what changes will occur once the pandemic is brought under control, but hopefully greater stability for families in Hong Kong.

We want to continue our discussions with you on several hot topics in the area of matrimonial law, which we will do over the course of this upcoming year.  To begin our series discussing hot topics in matrimonial law, let’s first tackle an area of great interest for those living in Hong Kong: marital agreements.

In Hong Kong, marital agreements are taken into consideration by the courts, but it’s not a guarantee that it will be followed.  Do you see that changing going forward, especially as other jurisdictions rely heavily on these types of agreements?

There have been no developments that would suggest that the interpretation of marital agreements in Hong Kong will change in the foreseeable future. Hong Kong often looks to other commonwealth jurisdictions, predominantly the United Kingdom, when considering evolutions in the law. The shift in Hong Kong’s approach to marital agreements followed the 2010 landmark decision of Radmacher v Granatino [2010] UKSC 42, in the UK (adopted in Hong Kong in the Court of Final Appeal decision SPH v SA (2014) 17 HKCFAR 364).

Currently, the approach to marital agreements in Hong Kong is that, whilst the Court is not obliged to give effect to nuptial agreements, they should give weight to them in circumstances where it is fair to do so. What will be considered “fair” depends on the facts of the particular case. In appropriate cases, the Court will hold the parties to their agreement and will not impose terms that it would otherwise have ordered were it not for the agreement. This is consonant with the current approach of the Courts in England.

Do Hong Kong courts take into consideration cross-jurisdiction agreements?  For example, what happens if an individual who is married overseas, moves to Hong Kong and subsequently gets divorced in Hong Kong and a marital agreement prepared and signed overseas is at the center of the dispute?

The same considerations would apply to a nuptial agreement whichever jurisdiction it is made in. The Hong Kong Family Court will consider whether it is fair to give the agreement weight in accordance with the principles set out in Radmacher, including but not limited to (1) whether the parties to the agreement were properly advised; (2) whether there was full financial disclosure prior to the signing of the agreement; (3) whether there was any duress exerted on one of the parties to sign the agreement; and (4) whether any unforeseen circumstances have arisen since the agreement that would render it unjust to hold the parties to it.

Have you ever had to argue before the Courts in Hong Kong regarding a marital agreement dispute?  In order to avoid future disputes with respect to marital agreements, what tips or advice can you give to those entering into these types of marital agreements? 

Yes, I have been involved in cases regarding marital agreement disputes. A nuptial agreement is generally more likely to be accorded weight if it can be shown to be both substantively and procedurally fair. Three foundational suggestions in respect of pre-nuptial agreements would be as follows:

  • Discuss the terms of the nuptial agreement well in advance of the marriage date (at least 28 days if not longer), which will assist in demonstrating that there was no duress or pressure on either party to sign the agreement in a hurry before the wedding date.
  • Both parties should receive independent legal advice (the parties cannot share one lawyer to advise them) on the agreement and should enter into it with full understanding and appreciation of its terms.
  • There should be sufficient disclosure to illustrate that the agreement was an informed decision.

It is very important to seek legal advice for a nuptial agreement from a qualified solicitor to ensure that its terms are substantively fair to both parties.

Thank you so much Madeleine for all your insight into this important topic.  We look forward to speaking to you again to discuss other key topics of interest!

About Madeleine: 

Madeleine’s practice encompasses both civil and criminal law, with a particular specialization in matrimonial work. Madeleine was recently named as one of the leading family and divorce law barristers in Hong Kong for 2021 by Doyles Guide.

In the Family Court, Madeleine has experience in contested financial and child related matters, and family related company and trust cases.

Having represented clients at Financial Dispute Resolution hearings, Children’s Dispute Resolution hearings, as well as at trial for preliminary issues (third party interests/property/companies), financial issues (MPS applications, ancillary relief trials) and child related matters (such as custody disputes, and applications under the Guardianship of Minors Ordinance), Madeleine’s experience is broad.

Madeleine is often called upon to make applications under s.17 of the MPPO, setting aside dispositions or applying for injunctions, on an urgent basis.

Madeleine also has experience in a number of other areas of legal practice, including civil litigation and criminal law. She has assisted senior counsel, and acted as sole legal counsel, in multiple hearings and trials at each level of court in Hong Kong, from its magistracies to the Court of Final Appeal. Madeleine appears in the High Court of Hong Kong regularly with respect to civil litigation matters, including trust related cases, injunctions, torts of harassment, intimidation, and unlawful means conspiracy, as well as summary judgment applications.

Madeleine’s experience extends beyond advocacy to include providing written opinions and legal advice, as well as assisting in mediations and arbitrations.

Round-Up of Divorce News

Spring has arrived and what better way to ring in the Spring season than to summarize some of the few highlights from Divorce news stories circulating the Web.

Gender and Diversity In Divorce

South China Morning Post published a story about a decision by a Court in Beijing, China ruling that a Husband should compensate his Wife for housework she had done over a period of five (5) years.  The penalty? US$7,700.  Whilst there may be some housewives out there that might scoff at the idea that 5 years’ worth of housework was only worth a penalty of US$7,700, it is in fact an interesting ruling as it places a monetary value to chores and housework.

According to the SCMP article, there has been and continues to be a larger debate in China about the role of women who stay at home rather than enter the workforce.  This is the first ruling of its kind in China since a marriage law came into effect on January 1, 2021.  With the new law in place, it will be interesting to see how this plays out and how women (who continue to mostly be in charge of housework in China) will be compensated as they are now entitled to request relief from the Court.

Chasing After The Sun

In a recent Miami Herald article, it was declared that Florida is fertile ground for love such that divorced men are choosing the state of Florida as their primary destination to move to after a divorce.  Could it be that it is perhaps the sun and that sun-kissed glow attracting newly single men to flock to the sunny Florida state?

According to the article published by the Miami Herald, a study by MagnifyMoney confirms that Florida is welcoming nearly 2,581 men in the 12 months after a divorce.  The study states that the real reason men are choosing Florida over other states is due to job opportunities and career advancement along with the lower cost of living offered by Florida as an incentive to move.   Given the current state of affairs around the globe, it also would make sense for individuals to move where space is a luxury, as is outdoor recreation activities.  After Florida, men are choosing California, then North Carolina as their second and third best destination option.

If men are heading to Florida, then where are women heading? According to the study, women opt for Texas, followed by Florida, then Georgia.

Divorce and Daughters

In a new article published by The Economist, there are several studies conducted in America which confirm that having a female first-born does in fact increase the risk of the child’s parents divorcing, particularly in America and the Netherlands.   This study conducted by Jan Kabatek of the University of Melbourne in Australia and David Ribar of Georgia State University in Atlanta, Georgia, USA also states that “daughter-divorce” risk emerges only in a first-born girl’s teenage years.  According to the researchers, the primary reason behind the “daughter-divorce” risk is based upon the fact that parents quarrel more over the upbringing of teenager daughters versus teenage sons.

Covid-19, Depression and Divorce

In unsurprising news, the BBC reports that due to the Covid-19 pandemic, there has been a rise in depression and stress among parents resulting in fears, worry and anxiety.  This has led to frequent arguments among couples, thus placing additional stress on the relationship and opening the door to couples considering separation and divorce.  Demands faced by parents are becoming increasingly stressful as parents not only are dealing with Covid-19 related fears, but the resulting effects of Covid-19 including lockdowns, home schooling mixed in with the pressures of work commitments.

According to the report, Oxford researchers are now tracking both children and parents’ mental health throughout this crisis.

Those are some of the more interesting stories hitting the web.  Stay tuned for additional summaries of interesting stories circulating the web related to divorce.

 

 

Pet Custody and Crafting Pet Parenting Plans

In this modern world, there is a growing trend of couples choosing not to have children.  This is especially the case when individuals are more inclined to focus on careers and other responsibilities.  For those couples who still wish however, to add to their family unit, there may be an inclination to add furry friends to the family nucleus.  As more households include pets, it is no surprise that pets can and do become a central focus when couples split in their divorce proceedings.  So, who gets the pets in a divorce? What can courts do when “dividing” a pet in matrimonial proceedings and what part should you play in resolving this dispute regarding your family pet?

Legally, pets are not afforded the same rights as a child and whilst you may consider your pet to be your child, the courts will not see it that way.  Instead the court will look at pets as property and so, since pets are considered property, there is no “custody” issue to be resolved.   This does not mean you and your ex-spouse need not be creative when resolving disputes related to your pet.

Here are some things to consider:

Brainstorm a pet parenting plan: There is no limit to creativity when it comes to the idea of crafting a pet parenting plan. Brainstorm a pet parenting plan that allows you and your ex-spouse to have regular visitation with your family pet. Similar to a child custody and visitation agreement, you and your ex-spouse can agree on who pays for vet bills, who is responsible for visitation travel, and the date and time for regular visitation. Ask your solicitor to assist in formalizing a contract to crystalize the pet parenting plan that you and your ex-spouse have agreed to. It is important to remember that the courts have no power to make orders regarding pet custody since pets are considered “property.” The same custody rights that children are afforded are not the same with your pet.

When brainstorming a pet parenting plan, it is important that both you and your ex-spouse be mindful and sensitive towards the needs of a pet.  You may want to discuss with your ex-spouse the time each of you spend with the pet, as the pet will certainly be bonded to one individual over the other.  Who has more time to spend time with the family pet on a daily basis? Who travels frequently? Who takes the family pet to the vet and to pet playdates? Who has care and control of the children and does this affect a pet parenting plan as the children may be closely bonded to the family pet?  These are all important considerations to be mindful of when brainstorming a pet parenting plan.

Pet Timeshare/Visitation Schedule: Similar to a child sharing plan, a pet parenting plan can outline the visitation times you and your ex-spouse will share your beloved pet. You and your ex-spouse can be creative in how you want to divide time with your pet, as long as you both agree to a suitable timeshare. Need some ideas?  How about:

  • Every other weekend and one night a week
  • One week on, one week off
  • 2-2-5-5 schedule: Parent 1 has the pet for two days. Parent 2 has the pet for the following two days. Parent 1 has the pet for the next five days. Parent 2 has the pet for the next five days and so on.

The above pet parenting schedules are just a few examples of how pet parenting can be divvied up between you and your ex-spouse. But ultimately, a pet parenting schedule should be crafted so it is tailored to what works for you and your ex-spouse. You both may also want to consider pet timeshare during major holidays, which can also include Mother’s Day, Father’s Day, pet birthdays and long-weekends. What happens if your ex-spouse wants to move away to another city? Have an open discussion with your ex-spouse about who will get primary custody of the pet and consider allowing the other pet parent to have time with the pet for the entire summer. If your pet is involved in extra-curricular activities, the party that is responsible to take the pet to these activities should be memorialized in your agreement. These days, there are so many activities that pets can become involved in, including pet play dates with other pets and their owners or even “Yappy Hours” that allow pet parents to meet, mingle and drink with other pet parents and their pets.  In the USA, they even have “Hoppy Hour” for those who are bunny parents and where bunnies can mingle and play including agility classes where bunnies learn to hop over obstacles and compete in races!  Be creative, it is up to you both as dedicated pet parents!

Shared Costs For Your Pet: Another issue you and your ex-spouse may want to weave into your pet parenting plan is how costs will be shared between the two of you. Having a pet is expensive. There are vet bills to consider, in addition to costs for food, maintenance and grooming. If you have a dog, there may be dog walkers and doggy daycare costs to be considered too. There will also be transportation costs to calculate into the equation when you and your ex-spouse have to transport your pet to and fro from each household.

Assign The Ultimate Decision-Maker: Generally, when parents fight for child custody in Hong Kong in a divorce, one (sole) or both parents (jointly) will be assigned custody over the child, with one parent having care and control and the other parent access. Although pets are not treated with the same legal considerations as a child, this is something that you may want to discuss and consider when sharing a pet with your ex-spouse. For example, who will be the ultimate decision maker when your pet becomes ill?  Who will make decisions related to your pet’s death, burial and costs associated with your pet’s death? These are all things you definitely should consider if you and ex-spouse are committed to sharing your pet after a divorce.

Finally, here a few more things to consider when crafting a pet parenting plan which focuses on the mental health of both yourself and your pet!

Talk to a Solicitor, Talk to Your Veterinarian: Pet custody is a real issue, especially now that pets are no longer considered just “pets” but are quickly becoming valuable members of a family. In the event that you establish a pet parenting plan, you may also want to consider consulting with your veterinarian so he or she can give you tips on how to make the transition easier for your pet now that your furry four-legged friend is being shuttled between two households. Like children, pets undoubtedly require a level of consistency between two households.

Consider Talking To A Therapist: In the event your ex-spouse has “custody” of your pet, you may want to consider speaking with a therapist. In a divorce, there is truly a sense of loss and a grieving process that each member of the family must go through.  The grieving process may be magnified if you no longer have access to the family pet especially if a close bond was established with the pet during the marriage.  It is for this reason why brainstorming a pet parenting plan may be something to consider, especially if it helps lessen the sense of loss you may feel and experience during the divorce process. 

Remember to be creative when drafting a pet parenting plan.  Like children, focus on what is in the best interests of your pet!

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