“The recent judgment of WLK by MYW her next friend v. CCIW & Others , where the applicant was successfully represented in a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481) (“IPFDO”), reaffirms the Court’s “divorce standard” approach when handling a claim made by the surviving spouse of the Deceased.”
The facts
The Deceased was the late husband of the Applicant, and they were married in Mainland China in 1953 under a customary marriage. They gave birth to 10 children over the years. The Deceased worked as a minibus driver and was the sole breadwinner of the family. They managed to pay for the children to receive education in the United States, and some of them settled there afterwards.
Because some of the children settled in the US, the Applicant would split her time between the US and Hong Kong. The Deceased did not like living in the US so he remained in Hong Kong throughout.
The Deceased’s and Applicant’s marriage was formally registered in Hong Kong in 1984, and they remained married until the Deceased’s death in 2018 i.e. a marriage of 65 years.
The Deceased made a Will in 2013 leaving his entire estate to the 10 children, and nothing to the Applicant.
After the Deceased passed away, 7 of the 10 children agreed to use the Estate’s funds to support the Applicant financially (who was mentally incapacitated by that time), with the other 3 opposing. Given this dispute, a claim under the IPFDO was commenced on the Applicant’s behalf.
Grounds of Application and Opposition
The Applicant’s case was that as the Deceased’s Will disinherited her entirely, there was no reasonable financial provision being made for her from his Estate. Also, since she was making the claim as the Deceased’s widow, the size of her claim should be treated on a “divorce standard” i.e. her claim should be assessed as if the Applicant was undergoing a divorce with the Deceased, and is not necessarily restricted to what is necessary to meet her financial needs.
The 3 opposing children (“Opponents”) contended that financial provision should not be given, or at least should not be given on the “divorce standard”, because:
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The Deceased’s marriage with the Applicant had become “fossilized” since 1974. At the time, the Deceased was serving a prison sentence and the Opponents alleged that the Applicant had entered into an extramarital relationship. Subsequently, the Deceased and the Applicant lived apart and not as husband and wife; this included the Applicant supposedly no longer looking after some of the children.
Therefore, they argue that notwithstanding there was no formal divorce, the marriage had effectively broken down after 1974. The registration of the marriage in Hong Kong in 1984 was only for the purpose of facilitating the children’s emigration to the US rather than due to any actual love and affection between them.
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To support their claim of the marriage having broken down long ago, the Deceased had allegedly given HK$1 million to the Applicant (held for her by one of the children) as a “clean break” settlement payment in 2009. After this payment was made, the Deceased no longer owed any financial responsibilities towards the Applicant.
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It was never the Deceased’s intention for his Estate to be used for financially maintaining the Applicant, and this is reflected by the contents of his Will which disinherit the Applicant entirely.
The Court’s findings
The Court considered the Opponents’ arguments above and determined the 3 issues thusly:
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The marriage had not been “fossilised” or broken down as alleged, citing the following examples among others:
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After the Deceased was released from prison, he moved back together with the Applicant. There were also photographs showing that they travelled together in the 1980s. Even if there was an extramarital affair on the part of the Applicant, she and the Deceased reconciled by the 1980s and reformed the family.
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After the Applicant started splitting her time between the US and Hong Kong, she stayed at the Deceased’s home whenever she was in Hong Kong.
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If the Deceased and Applicant considered their marriage to have broken down, they could have divorced either after their children obtained US residency and/or citizenship, or after the alleged HK$1 million “clean break” payment in 2009. This did not happen.
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In 2013 the Deceased purchased a joint burial plot for himself and the Applicant in the US.
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Not only was there insufficient evidence regarding the existence of the alleged HK$1 million “clean break” payment in 2009, there was also no evidence that the Applicant accepted this money for the purpose of a settlement or “clean break”. A settlement requires consent from both parties, which has not been shown here.
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Regarding the Deceased’s Will, the evidence from one of the children present during the preparation process was that the Deceased expected, and was reassured by one of the Opponents, that the 10 children would look after the Applicant financially after his death. The Deceased therefore signed his Will based on this expectation.
The award
Having established the Applicant’s capacity as the widow of the Deceased, the Court confirmed the approach provided by the IPFDO, namely that the Court must also consider as a reference point what the Applicant would be expected to receive from the Deceased if there was a hypothetical divorce (and asset split) at the time of death. This becomes one of the factors (of several others) to be considered when determining the size of the Applicant’s award.
As to how the Applicant’s award in a hypothetical divorce would have been calculated, the Court relied on the well-established principles in LKW v DD and section 7 of the Matrimonial Proceedings and Property Ordinance (Cap. 192) (the so-called “divorce standard”).
The Court thus awarded 50% of the Estate to the Applicant, after considering the following matters:
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The Applicant is bedridden in hospital, and will require full-time medical care for the remainder of her life.
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None of the children (being the beneficiaries under the Will) have financial needs requiring urgent distribution of the estate.
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The Deceased had continuing financial obligations towards the Applicant given there was no breakdown of the marriage. Conversely the Deceased had no such obligations towards his children at the time (who were all adults).
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The marriage had been ongoing for 65 years at the time of the Deceased’s death, a very long marriage.
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The Applicant was a housewife and her contribution to the family was to act as a carer for the 10 children, plus acting as a sponsor for their emigration to the US.
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Awarding 50% of the Estate to the Applicant would be consistent with the “divorce standard”.
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As the Applicant did not have a Will of her own, nor did she have the capacity to make one in future, the operation of the intestacy rules meant that any part of the award unspent by/for her would eventually be left to the 10 children.
Takeaways
The Court has reaffirmed the applicability of the “divorce standard” in IPFDO cases for applicants who are surviving spouses.
Further, this case illustrates how the intentions of the testator are relevant to IPFDO cases. Here, reliance is placed upon the expectation and reassurance by the Deceased’s children to use the Estate’s assets to financially maintain his widow.
Therefore, in terms of estate planning it is essential that if a spouse or other dependent is intended to be disinherited, the reasons for doing so should be recorded either in the Will itself or in a contemporaneous document that would ideally be kept in the same file.
Finally, while the Court had determined that the marriage between the Applicant and the Deceased had not been “fossilized”, it has yet to lay down a specific definition as to what constitutes a “fossil” marriage; it will be interesting to see if guidance would be provided in future cases.
The article was originally published on Hong Kong Lawyer
