We are pleased to bring you a live seminar & webinar on Family Law co-hosted by Hugill & Ip’s Family team and Denis Chang’s Chambers. Our speakers discuss issues related to financial aspects of divorce and maintenance: from the whole family’s immediate to long-term needs and the division of matrimonial pot. A particular highlight focuses on children’s needs.
Show Notes:
00:01:21 Maintenance Pending Suit / Interim maintenance
00:06:45 GMO (Cap. 13)
00:13:45 IPFDO (Cap. 481)
00:29:24 Interim maintenance applications
00:45:10 Q&A – Part One
00:58:50 Determination of ancillary relief
01:13:09 The Sharing Principle
01:21:53 Case Study
01:58:56 Q&A – Part Two
Highlights:
After the launch of matrimonial proceedings, the financially stronger party may choose to stop providing for the financially weaker party or reduce the level of support. In this webinar, Jeremy Chan and Raphael Wong discuss different scenarios in protecting the short-term needs of the financially weaker party by way of application for MPS and/or interim maintenance. Afterwards Alfred Ip and Tracy Chu go on to discuss their long term needs together with brief introduction to the sharing or division of assets in the event of a divorce. Apart from the introducing the legal principles, the speakers also share their experience in how legal principles are being applied in real life.
Key takeaways:
Maintenance pending suit (MPS) / Interim Maintenance
The purpose of MPS and/or interim maintenance are to provide interim financial relief to the applicants pending the determination of the main dispute. Different ordinances govern the different scenarios, in particular :
- Divorce (section 3 of MPPO (Cap. 192));
- Unmarried parent with children of the family (section 10(2) GMO (Cap. 13)); and
- Dependant suing the Estate of a deceased (IPFDO (Cap. 481)).
Although different scenarios derive their rights from different statutes, the legal principles are similar. The Court will look at the reasonable needs of the application with reference to the parties’ standard of living, and also the other side’s ability to pay. It should be decided on a broad brush approach without detailed investigation of the financial positions of the parties. And over or under payment can be subject to adjustment later on. The Courts are ready to draw adverse inference to the parties that failed to give full and frank disclosure.
Usual difficulties in MPS applications
Standard of living and ability to pay can both be hard to proof in some situation. For example, a young family with infant that uses cash heavily. The effect of COVID-19 also plays a big role in recent MPS/interim maintenance applications. It affects application of all spectrum but it also creates new job opportunities (such as the mask factories) and mode of expenses (such as staycation). There is case authority in Hong Kong which accepts staycation as a reasonable needs of a family.
Long term needs and Sharing principle
The case of LKW v DD sets out the five steps Hong Kong Courts will take to determine the parties’ ancillary relief claims.
- Identify the assets or the matrimonial pot;
- Assessing the parties’ financial needs;
- Deciding to apply the sharing principle;
- Considering whether there are good reasons to depart from equal sharing;
- Deciding the outcome.
It is therefore necessary for the court to assess the parties’ respective needs (including the needs of the children of the family). It is only when the size of the matrimonial pot is larger than the capitalized needs of the parties, then the court will apply the sharing principle in order to achieve a “clean break” divorce.
When conducting the exercise, the court must also keep in mind the different factors in section 7 of the Matrimonial Proceedings and Property Ordinances (Cap. 192). One of the most prominent one being the duration of marriage. The longer the duration, the more reluctant by the Court to deviate from equal sharing. If the marriage is a short one, it is more likely than not that the accumulation of wealth is not contributed by the effort of another spouse which then justify departure from equality.
This video is for informational purposes only. Its contents do not constitute legal or professional advice.
