Category Archives: Resolution

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.

Deed of Guardianship: Do You Need One?

The world is struggling with the Covid-19 pandemic and as a result, many individuals are taking into account the legal paperwork needed in the event of a “worst case scenario.” One legal document that parents may want to consider is a Deed of Guardianship, which sets out guidelines for the caring and well-being of minor children in the event of both parents passing away.

A Deed of Guardianship is a legal document signed by both parents and two witnesses. It is a document separate from a Will and unlike a Will, a Deed of Guardianship will set out specific guidelines regarding the care of your minor children in the event of passing. A Deed of Guardianship will set out the minor children’s primary caretakers and can also identify temporary guardians until such time the minor children can be in the care of their permanent guardians. Many times, individuals will also choose to create a separate document called a Temporary Deed of Guardianship, allowing parents to set out clear guidelines on who will be the children’s temporary guardians to assist in the care of the minor children and set out the intention of the parents pending a permanent move to the permanent guardian’s household.

Deed of Guardianships may be especially important to expatriates living in Hong Kong, especially when family members are not in the same jurisdiction. For many expatriates, there is a concern that in the event of both parents’ death, the minor children would then be taken into government custody (eg. Social Services). If this occurs, the government then makes a decision on who will be the appointed guardian. Any disagreements among potential family member guardians can cause delay and result in the child/children remaining under the care of Social Services. By having a Deed of Guardianship, the parents can have assurance on how and who the children will be taken care of should the death of both parents occur.

It is important to speak with a solicitor who can draft a Deed of Guardianship on you and your spouse’s behalf. You may also want to consider establishing not only the guardians, but also alternate guardians in the event the guardians pass away before your child/children reach the age of 18 (which is the age when the guardianship terminates) or if the appointed guardians is unable or unwilling to act as a guardian for the children.

Deed of Parenting

When you speak with your solicitor, you may also want to consider discussing a Deed of Parenting as well. What is a Deed of Parenting? A Deed of Parenting simply states that you and your spouse are the legal parents of the children. This is important in circumstances where you and your spouse are traveling cross-border and there is any question by immigration and customs officers as to the parentage of your children and whether they are with appropriate caretakers. Many times, customs and immigration officers may question parentage when you and your spouse have a different surname than that of your child/children.

Speak with your solicitor about whether a Deed of Parentage is something to consider, especially as customs and immigration agents are becoming much more critical about travel and the necessity to have essential travel documents requirements.

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/

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 5^th 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:

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.
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.
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.
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.

Children’s Views In Divorce Proceedings

In litigated custody battles, clients frequently ask if their child can testify before the judge. However tempting this is, there are many factors to consider before placing your child into the front lines of a bitter divorce battle.

In Hong Kong, family court judges are cautious and historically, children’s views are only accepted through a social welfare report and/or any expert evidence such as a child psychologist. However, similar to what is being seen in the USA, Hong Kong courts are now recognizing the importance of a child’s view and it is being promoted.

In Hong Kong, as part of its obligations under Article 13 of the United Nations Convention on Rights of the Child, the court will acknowledge that where a child’s interests are affected, a child’s viewpoint can be taken into consideration if that child is capable of forming his/her own views whether it be in person or through a representative. In practice, a child’s viewpoint is taken in the form of the following:

Judicial Interview: Under his/her own discretion, the judge may grant an interview and the mechanism for conducting an interview of a child. This interview is not for the purpose of gathering evidence (which is the responsibility of the social welfare report) but rather it is to enable a judge to listen to the views of a child.
Appointment of Legal Representative for the child: This is similar to what has been seen in California cases where a minor’s counsel is appointed under California Family Code section 3151 which allows the appointment of an attorney to look after a child’s best interests. Here in Hong Kong, the appointment of a legal representative for a child is pursuant to Rule 72 and 108 of the Matrimonial Causes Rules and the purpose is to reflect a child’s interests and not necessarily a child’s wishes. A legal representative for a child is not an automatic right and an unlikely appointment if a child’s view is adequately reflected and evidenced in a report before the court.

Whether a judge will allow your child’s views to be heard or not is dependent on a number of factors including: whether a child is suffering from harm due to access disputes; cases which are exceptionally difficult and involve foreign elements such as immigration or removal; an older child is opposing a proposed course of action; where there may be parental alienation from one or both of the parents; cultural and/or religious differences affecting a child; complex medical/mental health issues that need to be determined; serious allegations of physical, and mental or sexual abuse or in circumstances where neither parent seem to be suitable guardians.

Before a consideration is made with respect to allowing your child to testify or express his/her views to a court, you may want to ponder upon the following:

Is Your Child’s Testimony Necessary? Ask yourself tough questions including why you want your child to testify. What is the real reason? Can your child truly assist the judge to understand the circumstances in your home and how the custody arrangement is affecting your child? Generally speaking, there should be a strong reason behind having your child testify against the other parent rather than simply you wanting more custody time and/or harboring resentment/revenge against your ex-spouse.
What Are The Long-Term Effects On Your Child? Consider the long-term effects testifying will have on your child. A divorce is already a traumatizing experience for most children. It is even worse if the parents are engaged in a bitter and litigated custody battle. Consider factors such as whether it will be difficult for your child to testify because it will make him/her feel guilty for picking sides. You need to consider the psychological effects this will have on your child and how it will affect his/her relationship with your ex-spouse.

Remember that it is in your child’s best interests to have a healthy and communicative relationship with your ex-spouse, who is, after all, your child’s other parent. Allowing your child to testify will undoubtedly affect the relationship dynamic between you and your ex-spouse and your child. Also, try and determine why your child is expressing an interest in testifying.

In making any decision relating to your child, be sure to focus on what is in your child’s best interests and the right decision will follow.

Clean Break In Divorce

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