Ch 2 Divorce

Mais où sont les neiges d’antan?

François Villon

Introductory Remarks

Those who choose to bring any matter to law and litigation or who find themselves, however unjustly, named as a respondent or defendant need to be in a rational frame of mind. They must also have realistic expectations as to the prospects of success and the consequences of failure along with the costs involved – both financial and emotional. Unfortunately, the area of law where this is least likely to be true is divorce and often, remembering the snows of yesteryear, no amount of cajolery, coaxing or sweet-talking by lawyers or judges can change this fact.

In 2015, according to Family Court figures, there were around 20,000 matrimonial causes issued (i.e. petitions) and 4,000 joint applications for divorce. And this figure has been rising for many years – see here. Whilst not every one of this total ends in divorce (due to applications being withdrawn) this is as close as makes no difference to a potential figure of 24,000 divorce cases in 2015. That is 48,000 people being affected by marital breakdown in Hong Kong and this also obviously excludes the many children of these couples and their wider families. Divorcing couples who find themselves caught up in legal proceedings, whilst the majority settle without a trial hearing, need to understand from day one that the legal system is not there to make the parties feel better about the situation they find themselves in. It merely offers a process to dissolve a marriage swiftly and cost effectively on terms which, although never guaranteed, are fair to both parties and any children involved. Whilst lawyers and judges are invariably professional and courteous the parties should never be surprised to learn that counselling is a specialised profession and that most lawyers and all judges, unless set down in a legally binding prenuptial agreement, are unmoved by protestations concerning romantic promises or numinous vows – nor are they moved, with the possible exception of provable criminality or brutality – by dishonourable or shameful conduct.

The initial legal advice given – which includes managing clients’ understanding and expectations on the facts of their particular case – is arguably the most important duty of a legal advisor. Failure to do so at this initial stage often sets the tone of the litigation – either by encouraging unrealistic expectations or worse hostility – which invariably leads to protracted proceedings, mounting costs and lawyers with larger homes. Family lawyers who find themselves moved from professional empathy to ‘sharing their client’s pain’ far too often are also those responsible for allowing highly inflammatory correspondence to be sent out to the other side which serves no purpose whatsoever other than to ratchet-up the drama and anger and lengthen proceedings. Lawyers who allow their clients to continue their marital arguments via correspondence or pleadings lack judgement and are never acting in their best interests. Those who encourage it or hide behind ‘client’s instructions’ either out of a misguided sense of loyalty or – as is more often the case – to pump-up the legal fees, are simply negligent and should have no place in the legal profession.

The law governing divorce in Hong Kong remains more or less the same as that in England and Wales. Here as elsewhere, whilst there are an almost infinite number of reasons why a husband or wife would wish to end a marriage the law and procedure governing divorce is narrow and circumscribed by statute. This is the case even when both Petitioner and Respondent are agreed and wish to dissolve the marriage by consent. Although parties to a marriage – especially where it is a long one or young children are involved – often take the view that justice equates to being able to settle on terms based on who caused the breakdown, the law governing the division of matrimonial property and finance takes little, if any, account of this.

Grounds for Divorce

In fact there is only one ‘ground’ for divorce. Confusion often arises over the statutory basis for annulment and the law that governs matters ‘ancillary’ to the main suit, viz the marriage being dissolved. Most obviously this relates to the division of money and property, know as ‘ancillary relief’, and the custody care and control of any children. It would be pedantic but incorrect to argue that Hong Kong has a ‘no fault’ divorce procedure because satisfactory reasons have to be established before a marriage can be dissolved.  The only ‘ground’ for divorce is established by section 11 Matrimonial Causes Ordinance  (Cap 179) – see here – whether by Petition or Joint Application and is a finding by a court that a marriage has broken down irretrievably.  In a Petition the ‘proof’ of this sole ‘ground’ may only be established if a Petitioner can satisfy the court of one or more of five ‘facts’. These are listed in the statutory provision – see here –  and one or more of these facts must be expressly pleaded in the Petition and approved by the court.

Although rare – and ultimately futile and costly in any event – a Respondent has a right to defend the divorce or more usually to contest the ‘facts’ set out in Petition where amended, more ‘neutral’ facts cannot be agreed. If contested the Respondent is left to argue, in effect, that, pace the Petitioner, that the marriage has not broken down irretrievably as pleaded. Although many today would not no longer wish to express it as a ‘fault’ nevertheless, public policy demands that even a divorce by ‘Joint Application’ – where the parties apply together – will not succeed unless both husband and wife can satisfy the court that they have lived apart for a continuous period of 12-months and have put the court on notice of their intention to dissolve the marriage.

However, save in exceptionally rare cases the conduct of the parties and who is to ‘blame’ for the breakdown of the marriage is now all but irrelevant to the division of assets and to a lesser extent – what is regrettably still referred to in the various statutory provisions as –  the ‘custody’ of children. The view of the courts in Hong Kong is no different from that in England and most other common law jurisdictions. Moreover, this has been the case for almost half a century. Save where behaviour has been ‘obvious and gross’, the approach of family judges here is as Lord Denning MR observed in Wachtel v Wachtel  [1973] EWCA Civ 10:

‘ … Parliament has decreed:- “If the marriage has broken down irretrievably, let there be a divorce”. It carries no stigma, but only sympathy. It is a misfortune which befalls both. No longer is one guilty and the other innocent. No longer are there long contested divorce suits. Nearly every case goes uncontested. The parties come to an agreement, if they can, on the things that matter so much to them. They divide up the furniture. They arrange the custody of the children, the financial provision for the wife, and the future of the matrimonial home. If they cannot agree, the matters are referred to a Judge in chambers.

When the Judge comes to decide these questions, what place has conduct in it? Parliament still says that the Court has to “have regard to their conduct” … Does this mean that the Judge in chambers is to hear their mutual recriminations and to go into their petty squabbles for days on end, as he used to do in the old days? Does it mean that, after a marriage has been dissolved, there is to be a post mortem to find out what killed it? We do not think so. In most cases both parties are to blame – or, as we would prefer to say – both parties have contributed to the breakdown.

It has been suggested that there should be a “discount” or “reduction” in what the wife [0r husband as the case may be] is to receive because of her supposed misconduct, guilt or blame (whatever word is used). We cannot accept this argument. In the vast majority of cases it is repugnant to the principles underlying the new legislation … There will be many cases in which a wife (though once considered guilty or blameworthy) will have cared for the home and looked after the family for very many years. Is she to be deprived of the benefit otherwise to be accorded to her … because she may share responsibility for the breakdown with her husband? There will no doubt be a residue of cases where the conduct of one of the parties is in the Judge’s words “both obvious and gross”, so much so that to order one party to support another whose conduct falls into this category is repugnant to anyone’s sense of justice. In such a case the Court remains free to decline to afford financial support or to reduce the support which it would otherwise have ordered. But, short of cases falling into this category, the Court should not reduce its order for financial provision merely because of what was formerly regarded as guilt or blame. To do so would be to impose a fine for supposed misbehaviour in the course of an unhappy married life … Criminal justice often requires the imposition of financial and indeed custodial penalties. But in the financial adjustments consequent upon the dissolution of a marriage which has irretrievably broken down, the imposition of financial penalties ought seldom to find a place.’

In a contested case, the good news for lawyers and their bank managers – although never the children and family themselves – is that divorcing couples too often affect to find it easier to understand the law of quantum mechanics than to understand the law as expressed by Lord Denning in Wachtel. Indeed, in many cases explaining the former would be an easier undertaking.

Nevertheless the position in Hong Kong is now crystal clear with Wachtel being cited with approval in the Court of Final Appeal in LKW v DD. As Cheung JA has reiterated in SJH v. RJH [2012] 4 HKLRD 308, at para 9:

The issue of behaviour i.e. the wife’s adultery also has no impact on the more substantial dispute of the parties namely, the question of custody of the children and ancillary relief.  Specifically in respect of ancillary relief, the Court of Final Appeal has in at 540 stated that, ‘ Conduct, or more accurately, negative conduct, is therefore only to be regarded as a material factor if it is “obvious and gross” in the sense explained in Wachtel v Wachtel or, which comes to the same thing, if it is such that it would in the opinion of the court be inequitable to disregard it.’ I am of the view that the same reasoning would apply to the issue of custody as well.  The adultery by the wife, which is denied by her, cannot amount to anything like gross misconduct which may affect the husband’s position on these two issues now that the divorce, custody and ancillary relief applications will be addressed in Hong Kong and not elsewhere.

The task faced by many divorce lawyers, initially at least, is less often about offering advice on how to move the case forward and more about managing a client’s anger and disbelief once the law has been explained. This is not to make light of a very real problem but it is one an experienced professional lawyer must be able to manage. True, the procedure is often akin to managing the expectations of a client whose mood can best be described, as PG Wodehouse once remarked, as being like that which might have occurred to Ibsen in one of his less frivolous moments – but it has to be addressed.

Of course even the best lawyers cannot persuade a terminally unreasonable or irrational client who has, in many instances, become mentally unhinged – sometimes as a result of many years of bitterness in the run-up to the divorce – that Lord Denning’s views will almost certainly prevail if the matter comes to trial.  Such people do exist and regrettably they often also have money to burn (for robust comments by Lord Justice Thorpe of the English Court of Appeal see here).  In such cases it is often unfair of the courts to hold legal representatives responsible for protracted proceedings, always provided that proper and accurate legal advice has been given. Such clients are entitled to effective, professional legal representation too.

Chinese Customary Marriage

For a full discussion of the history and status of Chinese customary marriage see the Court of Final Appeal’s judgment in Suen Toi Lee v. Yau Yee Ping; (2001) 4 HKCFAR 474; [2002] 1 HKLRD 197 and Keith Hotten (Ed) Hong Kong Family Court Practice, LexisNexis 2010, Chapter 2, pp 25ff.

Per Lord Millett NPJ: ‘Concubinage as a legal institution was abolished in Hong Kong with effect from October 1971 – “the appointed day” – by section 5 of the Marriage Reform Ordinance (Cap 178). Section 5(1) provided that as from that date “no man may take a concubine and no woman may acquire the status of a concubine.” Section 5(2) expressly preserved the legal status and rights of concubines “lawfully taken” before the appointed day and their children whenever born.

The Ordinance formed part of a major reform of the law of marriage in Hong Kong carried through by the Marriage Reform Ordinance, the Marriage Ordinance (Cap 181), the Married Persons Status Ordinance (Cap 182), the Legitimacy Ordinance (Cap 184), and the Intestates’ Estates Ordinance (Cap 73)  – which was also brought into force on the appointed day. The Marriage Reform Ordinance continued to recognise the validity of Chinese customary marriages entered into in Hong Kong, but no longer permitted the husband to take a concubine. By virtue of section 4 every marriage, including a Chinese customary marriage, entered into in Hong Kong on or after the appointed day implied the voluntary union for life of one man with one woman to the exclusion of all others. The Ordinance did not define the term “concubine”, which was well understood, though “for the avoidance of doubt” it provided that the expression “parties to a customary marriage” did not include a concubine.’

Costs

Nevertheless such cases do take up a massively disproportionate amount of (publicly funded) court time – informally estimated to be 10% of cases in the family court lists taking up around 80% of a family court judge’s work-load. On the plus side for the tax-payer, there is limited public funding – see Choosing a Lawyer – for litigants in private law and so, in most cases, usually the only people who will suffer financially and emotionally as a result of such excessive behaviour are the parties and, regrettably, their children. On the matter of costs the judges have raised a judicial eyebrow and in some instances have gone further in recording their astonishment and incomprehension at the parties ability to squander marital assets on futile litigation. As Mr Justice Mumby took pains to point out in his ‘parting observations’ in A v A [2007] EWHC 1810 (Fam) at 268

Before leaving this litigation I want to make two final observations. The first relates to the overall costs. Directly or indirectly this family has incurred costs amounting in all to £1,113,207.29 (see paragraph [186] above) in fighting over matrimonial assets which at the end of the day I have found to amount to only £2,669,715 and which even if the wife’s case on sham had succeeded would still have been worth only £4,290,315. So some 41.5% of the matrimonial assets have gone in costs.

It may be that the ‘mega’ rich can afford to squander grotesque sums in costs. The allusion is, of course, to Moore v Moore [2007] EWCA Civ 361, [2007] 2 FCR 353, at para [6]. Lesser mortals cannot. Costs in too many so-called ‘big money’ cases – in modern conditions many such cases do not in truth involve ‘big’ money at all – are, as here, grossly disproportionate to either the amounts or the issues at stake. I have had occasion before to deplore the expenditure – one is tempted to say the waste – of money in such cases: see, for example, Re G (Maintenance Pending Suit) [2006] EWHC 1834 (Fam) at para [46]. Other judges have also expressed their concerns. A very recent example is provided by Wood v Rost [2007] EWHC 1511 (Fam), where, speaking of a case which had been conducted at “vast expense,” the Deputy Judge lamented that the late Mr Charles Dickens was no longer alive to write a 21st century sequel to Bleak House. The simile, if I may say so, is all too apt. The accusatory finger which in the 19th century was appropriately pointed at the High Court of Chancery is, in the modern world, more appropriately pointed at the Family Division.

The other point relates to the impact of all this on the wife. The wife, out of her award of £1,339,650, has to meet her own costs of £510,531.10, thus reducing what she is left with to £829,118.90, or 61.89%, of her award. On top of that she has to pay the husband and the trustees costs which (see paragraph [264] above) will swallow up a further £244,281.25 [Postscript: this figure has now been agreed (see below), subject only to deduction of the sum of £2,065.19 referred to in paragraph [202] above] thus reducing what she is left with yet further to only £584,837.65, or 43.65% of her award. (The husband does not escape lightly, for he is left having to pay the balance of his costs – some £275,000.) That is a heavy price for the wife to have to pay, but it is the consequence of the misplaced zeal with which she chose to conduct a case built on exiguous foundations. I only hope that others will pay heed and that similar cases will in future be pursued with more circumspection.

Civil Justice Reform

On the other hand the extensive Civil Justice Reform that was first mooted in March 2000 and came into force on 2nd April 2009 was, inter alia, meant to encourage and empower judges to take a far more robust approach to case management. As to how much this has had any effect is perhaps too early to say but certainly the stated underlying objectives were to:

(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to civil proceedings before the Court; (b) to ensure that a case is dealt with as expeditiously as is reasonably practicable; (c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings; (d) to ensure fairness between the parties; (e) to facilitate the settlement of disputes; and (f) to ensure that the resources of the Court are distributed fairly.

As was stated at the time the Civil Justice Reform ‘applies to civil proceedings of the High Court and the District Court, except for specialist lists to which the application of the new rules will be determined by the Judges concerned. Some of the new rules and procedures also apply to the Lands Tribunal and the Family Court with necessary modifications.’ (emphasis added). These ‘modifications’ encompass the relevant amendments to the High Court Ordinance (Cap 4); the District Court Ordinance (Cap 336) and there respective subsidiary Rules (Cap 4A) and (Cap 336H). Whilst the only direct amendments to a Family Court Ordinance related to changes to the Matrimonial Causes (Fees) Rules (Cap 179B), the full list of those ‘reforms’ affecting the Family Court were eventually set out in Practice Direction 15.12 : ‘Matrimonial Proceedings & Family Proceedings’ – which became effective on 2nd July 2011.