Following trial for ancillary relief, on 28 August 2023, HHJ Ivan Wong handed down judgment in the case of 丘及張 [2023] HKFC 169 (judgment only in Chinese).
On the unique facts of this case, despite a 7-year marriage, the Court did not make an order for equal sharing of the Parties’ matrimonial home, being the only disclosed and substantial asset of the Parties.
Facts
The Parties met in 2007/2008 and were married in 2010 in Hong Kong. The Wife (aged 43) was from the Mainland and the Husband (aged 45), a construction worker, was from Hong Kong.
For the first 6 years of the marriage, the Parties did not cohabit, as the Wife and her son lived in Shenzhen, whilst the Husband lived in Hong Kong, in a Kwun Tong Property (“Property”), inherited by the Husband from his late father.
The separate living arrangements continued until November 2016, when the Wife was granted a permit to settle in Hong Kong to join the Husband. The Wife and her Son moved into the Property.
Within around 1 year of having moved in, the marriage crumbled and it was agreed that their relationship ended in December 2017.
The Husband filed a Petition for divorce on January 2018.
Findings
The Husband was ordered to pay the Wife a lump sum HK$1,102,500 representing 35% of the value of the Kwun Tong Property. Pending the same or until the Wife remarries or until the death of either party, the Husband was to pay the Wife a monthly sum of HK$2,000, being the shortfall in her reasonable earning capacity and financial needs.
Reasons
The Court was critical of the Wife’s disclosure and inferred that the Wife had likely ran a business in the Mainland which provided her with some undisclosed income. Otherwise, the only asset of the Parties was the Property, inherited by the Husband.
The total assets and earning capacities of the Parties were sufficient to cater for their respective needs. Therefore the Court turned to consider whether there were reasons for departing from equal sharing of the Property, constituting the matrimonial pot.
Counsel for the Husband put forward three reasons:
- The nature of the relationship: as the Parties only lived together for 1 year of the marriage, the Wife did not make as much “contribution” to the marriage to justify equal sharing;
- The Wife’s conduct: in addition to allegations of domestic violence and gambling debts (which the Court rejected on the evidence), the Wife demanded the Husband for money for her business during the relationship;
- Source of the Property: The Property was acquired by the Husband as an inheritance before the marriage, a source extraneous to the marriage and.
The first two points can be dealt with quickly. They did not meet the threshold of “stellar” contribution and “gross and obvious” conduct required for such matters to be taken into account – recall the 4th principle in LKW v DD on the rejection of minute retrospective investigations. The Wife had also “contributed” to the marriage in its first 6 years by making the effort to travel to Hong Kong to visit the Husband.
On the third point, notwithstanding the Property being used as the matrimonial home for the 1 year that they lived together, there were three reasons for the Property not to be divided equally:
- the source of the asset was acquired by the Husband independently, before the marriage from a source wholly external to the marriage;
- the Property was only used as the Parties’ full-time matrimonial home for about 1 year; and
- the adverse inference drawn against the Wife that she had undisclosed assets.
Comments and Key Takeaways
Wilson LJ’s passage in K v L (Non-Matrimonial Property: Special Contribution) [2011] 2 FLR 980 at §18 is often-cited, which gave three examples of situations where the importance of the source of assets would diminish over time:
“… I believe that the true proposition is that the importance of the source of the assets may diminish over time. Three situations come to mind: (a) Over time matrimonial property of such value has been acquired as to diminish the significance of the initial contribution by one spouse of non-matrimonial property. (b) Over time the non-matrimonial property initially contributed has been mixed with matrimonial property in circumstances in which the contributor may be said to have accepted that it should be treated as matrimonial property or in which, at any rate, the task of identifying its current value is too difficult. (c) The contributor of non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, although vested in his or her sole name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.”
Limb (c) specifically recognises the unique nature of the matrimonial home. The home they live in would usually be regarded by the parties over time as a central item of matrimonial property. Duration of the marriage is therefore relevant – see the first sentence in Wilson LJ’s passage.
This Judgment is a reminder that it is not only the duration of the marriage that is important, but also the duration of the property as their matrimonial home. This 7-year marriage was by no means a “short marriage”, but the Parties only regarded the Property as the matrimonial home for a “short” 1 year. This, coupled with an inference that the Wife likely had undisclosed income or savings, warranted the Court to depart from equal sharing of the Property, in the proportions of 65/35.
This article was authored by Terri Ha.
